China's Three Major Regions For Its Use Of FDI Into The Domestic Capital Crowding-Out Effect Study

Since the beginning of reform and opening up to outside world, the foreigners are attracted to reach the continued expansion of investing scales. Along with the deepen impacts toward Chinese economy, it also effects the conformation of our domestic capital. However, we often take an entire country for researches of foreign direct investment toward domestic capital instead of the actual situation of this country. The policy of absorbing capitals, which are drawn up according to the conclusion from this research, will be not suitable for these specific situations in different districts. What is more, it is also not beneficial for making full use of the foreign investments.First of all, this thesis demonstrates the theory of domestic impact from foreign direct investments and experiential study; Secondly, it also analyses the impact of domestic capital from the foreign direct investments. After that, it comparises the general situations in Eastern, Middle and Western parts of China which attracts the foreign direct investments. The following is experiential analysis on our domestic capital environment influenced by foreign direct investments. According to the foreign direct investments data and domestic investments data in East, Middle and West and the entire world from 1985 to 2006, it analysis the crowd-in and crowd-out effects by the time series model. The conclusion shows that in the entire world and eastern districts, foreign direct investment toward our home will have crowd-out effect; toward middle part apparent crowd-in effect; meanwhile toward western part crowd-out effect. Finally, on the basis of different effects caused by FDI toward the domestic capital in districts, this article brings forth corresponding methods: the Eastern part to take forth promoting the quality of FDI; the Middle part to take forth applying the relative influent in this district; the Western part to take forth enhancing the policy reforming and technology innovation etc.