Analysis Of The Different Use Of FDI In China's Industry

FDI(Foreign Direct Investment) means investments from abroad and are directly used to establish enterprises.After reform and opening up in 1978, especially after 1990s,FDI flew into China with large amount and became the main form of China's foreign capital utilization.At present,China is in the process of industrialization.Industry,which is in a dominant position in the national economy,is the lifeblood of the national economy.And our industry has aways been absorbing the most FDI of all industries.As a result,the analysis of the different use of FDI in China's industry has a realistic significance.First of all,in this article we introduce the theory of FDI driver,which shows that the fundamental cause of FDI is the pursuit of high profits,and the theory of FDI industry choice,which shows that it is necessary to analyse China's industrial sectors,following which is the status quo of the different use in FDI of China's industry.Accordingly,we arrive at this article's research ideas.And then we introduce the situation about the different use in FDI of China's industrial sectors.The next is the focus of this article,that is the empirical analysis in the following three chapters.First of all,the selection of variables,first is to dicide the dependent variable,in this article that is the total assets of FDI in different industrial sectors,second is to dicide the independent variables,which are overall labor productivity,tax,financial profitability,market capacity,the industry growth rate,profit growth rate,energy consumption per unit output value,total profits by analysing the source of profit,the impact of profit as well as the economic issues;then we give the regression analysis based on 26 industrial sectors between total assets of FDI in industrial sectors and profit-related variables in 2006(that is the horizontal analysis),finding out the represetation independent variables that is relevant to the dependent variable,which is financial profitability,market capacity,energy consumption per unit output value, total profits(which is substitutable to market capacity);base on which we make a cluster analysis,and all of that are prepared for the time series analysis(that is vertical analysis).Doing all of those is because of the large number of industrial sectors,and analysing them one by one would become quite complicated.So, through cluster analysis,we can single out each type of industry for the time series analysis,then we could identify profit-related variables which has relation with the total assets of FDI for each type of industry.In this way,we not only analyse reasons of the different use of FDI in industry from the horizontal aspects, but also analyse reasons of the different use of FDI in industry from the vertical aspects.For the final conclusions,we have given a reasonable proposal for China's industrial use of FDI,so as to adjust China's industrial structure and transform the economic growth pattern quickly.