Impact On The Employment Of FDI In China

As huge economic impact of FDI, actively attracting FDI in developing countries has become an important policy to develop domestic economy. China has been active in attracting FDI, in recent years, the inflows of FDI grows at the average rate of 23.33%. And in 2003, China became the country which attracted the world's largest FDI. In 2004, inflows of FDI account touch 7% of the total domestic fixed assets. FDI not only has impact on a country's economic growth, technological progress and industrial structure, also has a profound impact on the country's labor and employment. This paper is completed according to this kind of background.Along with the economic globalization, experts and scholars gradually pay more attention to the role of FDI in a country. In the late 1990s, many scholars began to focus on the relation between FDI and employment. But so far, there have not been forming the theoretical system in this area. At the same time, how to take effective measures to solve the employment issue has become the focus of public attention in China which has the huge population. Therefore, this study has immediate significance.This paper is divided into five chapters. Depending on employment situation of China, this paper has in-depth study in three aspects, which is from the volume of employment, the quality of employment and the regional employment structure.The first chapter is about the related theory and the status quo at home and abroad. We can found: the view of Keynesian and Lewis, the gap modes has provided a theoretical foundation in this area; scholars in this area like to emphasize on quantitative research, and there is still much controversy.The second chapter is about the influence of FDI in the volume of employment. By the relevant statistical analysis, we found that: FDI could lead to the increase of employment in foreign-funded enterprises. but the marginal effect of employment showed a downward trend. The article gave rise to the causes of this phenomenon as follows: an external factor (the amount of investment, investment, the sources of investment and the investment structure) and internal factors (investment cost of the organic and technological progress). And in the light of the above factors and China's actual situation, the author attempt to study on the impact of FDI in three level ,from the short, medium and long-term.The third chapter mainly analyzes the impact of FDI on the quality of employment in three aspects, which are labor supply demand, the labor market, and human capital. We draw: the foreign-funded enterprises have had a positive impact on the wages and working conditions of domestic-funded enterprises. In China's business activities, foreign-funded enterprises would transfer their own management experience, operating norms and standards for product quality through their backward and forward linkages. Thus domestic-funded enterprises could promote their concept of products and management, enhance the awareness of international competitiveness and improve the quality of employment.The forth chapter focuses on the relation between FDI and regional employment structure. Relevant information shows that FDI has some similarity with the regional employment structure in the space distribution. The article established a statistical model and use SPSS to make a regression analysis. The reasons for this effect are divided into two aspects: one is the direct effect of the transfer, mainly as follows: the tilt of foreign investment in the eastern part make the labor of central and western region, particularly in the central region, migrate to the eastern coastal areas, so that there is the alternation of the quantity of employment. foreign capital in the eastern part of the move to create new jobs created regional imbalances, create employment increment in the allocation of space to the differences; Another is the indirect effect of the transfer, mainly as follows: FDI makes comprehensive and profound indirect effects of the region's employment by accelerating the process of economic globalization, promoting regional import and export trade, widening the gap between regional economic development.The fifth Chapter is about the summary and the main policy proposals. Attracting FDI is a process, which could create new economic sectors, provide new job opportunities and improve the quality of the labor. Thus, the long-term benefits of FDI outweigh the short-term adjustment costs in China's economic development and solving the existing unemployed problems. The government's future attention should be given on the follow aspects: the concessions and support of employment policy in central and western areas; reducing the number of unemployed, improving the quality of employment, accelerating economic development. This article made the following recommendations: expanding the scale of FDI, creating more employment opportunities; focusing on improving the quality and structure optimization of employment, pursuing economic growth in the center of employment instead of the speed of growth.