The Effect Of Foreign Direct Investment On Industrial Technology Upgrading In Hubei Province

The arising and development of the economic globalization and the new international industrial transfer has brought about the development of foreign direct investment, which has benefited developing countries the most, such as China. However, the situation of foreign capital absorption within China has a great regional difference, and Hubei Province, which is the typification of the central China, has been showing a visible disadvantage. This situation hampered the implement of the "Rise of Central China" strategy, as well as the enhancement of the whole China's foreign capital utilization efficiency.This article investigates into the connection between FDI in Hubei and the industrial technology upgrading. The study reveals that FDI in Hubei has been promoting the technology upgrading in a certain extent, and it presents a better situation in the long term. However, the effect has not been so remarkable, due to the weak absorptive capability, that a great gap exists between Hubei and developed areas. The problems exist in five aspects, which are the mainland industrial foundation, the size and structure of foreign capital, the form of FDI, the R&D effect and the government service. In order to make it better, this article proposes suggestions in allusion to the problems, which are to strengthen the mainland industrial foundation and improve the technical absorptive capability, to induce FDI in a proper direction and optimize the industrial structure, to extend the form of using FDI and facilitate the indraught of key technologies, to encourage settlement of foreign R&D institutions and enhance the R&D level, and to ameliorate investment environment and boost up trust from foreign investors.