A Study Of The Location Choosing Factors Of FDI In China

FDI becomes one of the most conspicuous economic phenomenons of the world economic activities nowadays. These years, FDI has played a very important role to the economic growth of the host countries especially in China.Because of the great effect of FDI, our government has promulgated many preferential measures to attract FDI, and the scale of FDI expanded gradually, China has attracted the most number of FDI in the developing countries. However, at the same time, the distribution of FDI is not balance over China.Such a phenomenon will lead to the difference of the economy among eastern China, middle China and western China and increase the difference in many aspects such as GDP, employment and earnings and so on thus have a bad effect to the economy of the whole country. Therefore, make a study of the distribution of FDI in our country is of important practical significance in adjusting industrial policy, improving every area's environment, guiding foreign capital flow direction and boosting area balanced development.The location choosing is an important study in regional economics and FDI theories. The existing theories are mainly about the location choosing between countries but not inside a specified country. Although the former can explain some of the problems, but the location choosing inside one country is different with it. This study is not significant for attracting FDI in China in practical way, but also good for the development of the location choosing in theory way.At first, this article makes definitions for some concepts discussed in this paper. Then, the study recollects the theories including location theories and FDI theories. After that, the article finds out that the distribution of FDI is not balance in China and analyze the characteristics of the eastern China, middle China and western China. Based on that, the article brings forward some factors which affect the FDI in China. Then the article analyzes the three areas respectively. In the following chapter, the article analyzes the factors in multi-linear regression models with the effective data from 1995 to 2004, the result shows that, the six factors are relative with FDI, but the result is different in different areas. Then the article makes analysis to the three areas respectively and detailed. At last, the article brings forward some suggestions for the improvement of attracting FDI in middle China and western China mainly from the aspects of government and policies, infrastructures, labor quality, cost and open in order to attract FDI better and more effectively, thus to make contributions to the economy development of our country.