Contributions To Chinese Economic Growth Of Foreign Direct Investment

Nowadays, the foreign direct investment has already become the main power to impulse economy globalization, like the international trade and the international technology transfer. Since the reform and openness policy, the foreign capital has been positively introduced. We have had taken it as an important economic policy, hoping that it can bring in the foreign direct investment through our giant attraction of market, and bring us the advanced technology and the managerial experience, thus our economy would burn in wind. Abort to May 2007, the Chinese absorption of foreign merchant direct investment have reached 7225.35$ billion totally, which stands head of developing countries and areas for several years.But in recent years, along with the changes of domestic economical situations, especially a series of negatives which foreign direct investment possibly predeceased are considered, the question that shall we continue to expand the absorption foreign direct investment or not comes out. The cognitive to this question contains the following two aspects, not only the relationship between the foreign direct investment and the economy growth needs to be analyzed, but also how the foreign direct investment could affect the economical growth needs to studied. Therefore, it is well worth in studying on contributions to the Chinese economy growth of FDI from the theory and practical aspects, according to which, we could make better use of foreign capital.In the beginning of this thesis, through the analysis about effects to our country economic growth of the foreign direct investment, the standard thought which foreign direct investment effect on our country economic have been ascertained. Apply the method such as Granger causal relation test and the co-integration test to do correlativity analysis on the capital formation, the technology advancement, the foreign trade and the employment creation.Accordingly, we can discuss that whether the FDI has contributions or how about the contributions to Chinese economic growth. Be to make the concrete contribution of FDI to Chinese economic growth clearly, then the relationship between foreign direct investment and every influencing factor is analyzed synthetically, and the error correction model is established. The analysis results indicated that they have co relational relation, the inflow of foreign direct investment have promoted economic growth of our country notably. Then the idea that we should improve the level of making use of the foreign capital and continue to promote the economical growth is put forward.