Foreign Direct Investment, Regional Economic Growth And Economic Political

With the ever-accelerating process of economic integration, the quantity of foreign direct investment attracting by China have continuously risen. FDI has been playing an important role in China's economic growth. Although foreign direct investment in China continued to grow, the regional distribution of FDI takes on an uneven spatial pattern. The uneven distribution of foreign direct investment is one of the reasons that the disparity in the level of economic development in the eastern, central and western region, then the regional economic development will be a further uneven growth because of regional imbalances distribution of the foreign direct investment. Therefore, researching the reasonable way to attract investment has become an important topic of development of regional economy.The paper summarizes the theory about foreign direct investment location choice, then establishes an simultaneous equation model to reflect the relation between the location of FDI and regional economic development, and inserts related control variables, utilizes 2SLS and 3SLS methods to do an empirical study on province-level panel date in China. The results show that there is no conditional convergence on the location of FDI, while there is a positive relation between location of FDI and regional economic development, and as an exogenous variable, economic policy has a positive impact on both the location of FDI and regional economic development. Otherwise, the low-cost labor force and flawless infrastructure are propitious to indraught of foreign capital, but industrial convergence and the level of tertiary industry are not its inducement.Based on empirical research, this paper presents policy proposals that the government needs to coordinate its policy with other policies to attract investment and continue to improve the investment environment; furthermore, government should develop human resources in the central and western regions and to give more financial support in order to promote social economic balance and harmony.