Study On Relationship Between FDI And Chinese Industrial Cluster

Since later stage of the 20th century, the economic globalization has being strengthened constantly. International trade, international investment and transnational cooperation develop at full speed. And the whole world becomes a unified entirety day by day. The transnational corporation has already become the most active, most important, most influential organization in the international activities. The inevitable outcome from the transnational corporation moving in the world is making the international direct investment more frequent and more intensive. During more than 20 years of reform and opening, China has being focuse of foreign direct investment (FDI) all the time. The entry of a large scale of FDI has exerted an enormous influence on industrial structure, overall arrangement and industry's competitiveness of our country. Meanwhile, industrial cluster appears in succession worldwide. No matter in the developed countries or in developing countries, it makes enormous contributions to economic development. Industrial cluster refers to the concentration of organization and enterprises related to one industry on the geographical position; it includes a batch of connected industries and other entities which play an important role in competition. With the development of economy and the promotion of reform, industrial cluster phenomenon becomes the important content in economic development of our country. The coastal areas in the southeast achieve remarkable economic performance relying on industrial cluster. Industrial cluster develops rapidly in our country and has made important contribution to the area and national economic development. Obviously, FDI and industrial cluster have already become the two important focuses in economic research. And there are numerous researches on the two issues. But by looking up the relevant documents, we can find few researches on the relationship between FDI and industrial cluster, which is still in fragmentary state and starting stage. The article which proposes the theory system between FDI and industrial cluster has not appeared and the relevant empirical researches do not have extensive suitability either. The shortcomings have offered extensive space for the research on the relationship between FDI and industrial cluster.This article uses multi-disciplinary theories combined with FDI theory and industrial cluster theory to carry out systematic research on the interacting relationship between FDI and industrial cluster with the method of standard analysis, case study, qualitative analysis and statistical analysis.This article is divided into five parts: the first part retrospects the evolving process and current researches on relevant theories of FDI and industrial cluster. Then briefly introduce the diamond theory put forward by Professor Michael Porter, which is the base of the analysis framework of this article.The second part introduces the standard of industrial cluster in our country and the current types of industrial clusters firstly, and chooses the industrial cluster driven by foreign investment as the focus of research. Then introduce the typical case- information technology (IT) industrial cluster in Dongguan, and show its development speed, scale and impact on local economy with lot of statistical figures.The third part analyzes how FDI affects the forming of IT industrial cluster in Dongguan using diamond theory as analysis framework. Firstly analyze the location factors of why FDI choose Dongguan, and the characteristics of FDI in aspects of size and structure, which has great impact on the forming of IT industrial cluster in Dongguan. Then analyze impact of FDI on the forming of IT industrial cluster in Dongguan thoroughly from aspects of producing element, demands, related industry and enterprise strategy and structure. This article believes that FDI drive the forming of industrial cluster by effect such as capital agglomerating, market demand, technique spillover and etc, while the forming of industrial cluster become great attraction to FDI.The fourth part analyzes the problems in the development of Dongguan IT industrial cluster and the solution. The FDI tends to move north, especially the focus of Taiwanese investment transits from Dongguan to Suzhou. One of the reasons is the development of Chinese market which changes the location advantages of Dongguan and Suzhou. But more important is that the Dongguan IT industrial cluster faces series of problem. Compared with Suzhou IT industrial cluster, this article analyzes these problems, including resource restriction, environment restriction, human resources restriction, technique restriction, lack of localization and government restriction, and gives suggestions of improving producing element quality, enhancing local connection, improving regional technical innovation system and exploiting the domestic market. Finally put forward the interacting relationship between FDI and industrial cluster development.This article believes that the cluster advantage and advanced factor is more important to FDI, and the industrial cluster may decline as FDI moving away unless the organizational mechanism in the industrial cluster is able to drive the development of industrial cluster.The fifth part summarizes the interacting relationship between FDI and industrial cluster firstly. Then based on the experiences and lessons from Dongguan IT industrial cluster, this article suggests the way to develop industrial cluster driven by foreign investment in outward-oriented regions of China by strengthening the thought of industrial cluster during indraft of FDI, advancing local producing factor quality, promoting localization of industrial cluster and building regional technical innovation system.