The Effect Of FDI On Chinese High-tech Industrial Competition

Since 1990s, abundance of foreign capitals has been flowing into our country, especially to the manufacturing industry, as Foreign Direct Investment (FDI). At the same time, the export structure of our country has been upgraded. Especially in recent years, the export of high-tech products has been greater and greater, gained a large percent of the total export, and been further upgrading the export structure. It seems that FDI has increased the export of high-tech products, however, this thesis is to study the contribution of FDI to the high-tech industry, and whether FDI has promoted the competitiveness of domestic high-tech industry or not.Theoretically, this thesis studied the effect of FDI on the industrial competition from two sides——the spillover effect and crowd-out effect. Empirically, this thesis analyzed the effect of FDI on the domestic sector, by comparing the coefficient of spillover effect and crowd-out effect, drew the conclusion that spillover effect is greater than crowd-out effect, FDI promoted the industrial competition of domestic sector. Finally, some relative suggestions based on government and corporations were given according to the above empirical studies and the situation of development of high-tech industry.