The Research About The Effects Of Foreign Direct Investment On China

With rapid increasing of direct foreign investment in China, one of the most important problems is how to utilize spillover effects from direct foreign investment effectively to accelerate the establishment of national independent innovation and technology system.The important reason why China attracts direct foreign investment energetically is to reduce the gap between overall national technology level of every industries and international level by attracting technology spillover effects of foreign investment. It aims to quicken the establishment of national innovation and technology system. However, in some national important industries, for example motor industry, our enterprise have only achieved few spillover effects from foreign investment project, at the same time, our enterprise have lost original technology abilities and marketing share. This text is based on real data, adopted the way of Game Mode and Regression, modeled on the basis of Neoclassical Function and stated the problems existed in technology creation system among national enterprises. It is indicated that the main factors that foreign investment in some national industries caused negative affection is distempered information mechanism, inconsistent industry lay out, lack of competition and errors in policy of attracting capital. By theoretical analysis and using experience from both here and abroad for reference, this text is pointed out that the measures, such as strengthening constellation effect of national enterprises, enhancing the government function of harmony and service and extending the national value chain of processing trade, etc. can quicken the steps of establishment of technology and creation system.There are four parts in this text. First part is the statement of theoretical base for the spillover effects of direct foreign investment and competition effects. Second part is the analysis of the real spillover effects for foreign industries depart, using relative data, on the premise of Neoclassical Function. Third part is about the necessity and effects for adopting this policy, according to national and international circumstance at that time. Especially, it takes Chinese motor industry as example to state the affection of spillover effects of direct foreign investment and competition effects to Chinese motor industry. Forth part is the relative policy suggestion on the basis of above analysis.