Research On The Relation Between Fdi And Industrial Structure In Shanxi Province

With the scientific and technological progress and the acceleration of circulating capital, opening to the outside world plays a significant role in a country's economic development under the economic globalization. Being rich in resources and energy, Shanxi introduced the first foreign-funded project in the initial stage of the reform and opening up, which is Shuozhou Antaibao opencast coal mine. Since then with the continuous improvement of the country's reform and opening up policy and industrial policy, Shanxi's foreign direct investment has transformed from quantity to quality and from a single-system to multi-system, achieving the large-scale growth and promoting Shanxi's economic growth greatly.This paper studies the relationship between the foreign direct investment and Shanxi's economic growth and find the existing problems of using foreign investment in Shanxi Province, through the status quo analysis and the comparision with other five provinces of the middle region. Based on the wide range of data collection, we carry on the in-depth analysis of this issue utilizing the method of qualitative analysis and empirical analysis's combination, and get the conclusion that is consistent with the expected basically. Foreign direct investment and economic growth is cointegrated. But in the early introduction the driving force of foreign direct investment to economic growth is not obvious. As the impact is slow, the contribution of foreign direct investment to economic growth will take some time to be reflected. economic effect analysis of foreign direct investment, we get that as the technology transfer Shanxi undertook majorly came from Hong Kong, Macao, Taiwan, South Korea and other Asian countries or regions, the technology gap is not evident, the technology spillover effect of foreign direct investment is significant. Capital effects of foreign direct investment was not significant, the crowding-in effect is not obvious although pushing forward domestic investment to a certain degree . Finally, this paper put forward the suggestion how to use foreign direct investment to promote economic growth in Shanxi Province. First, strengthen the environmental construction of introducing foreign capital, enlarge the use of foreign capita. Second, guide foreign capital to invest on agriculture, infrastructure, basic industry, high and new technology industry, service industry, improve traditional industries by introducing high and new technology, develop modern service industry, promote the upgrading of industrial structure, accelarate the economic growth. Third, adjust ways of introducing capital, strengthen the relationship between foreign enterpriseand domestic enterprise, actively explore investing approaches such as foreign chartered right project which complies with international conventions, project financing, issuing shares etc, improve the diverse ways of using foreign capital, optimize Shanxi's industrial structure, promote the economic growth of Shan xi province. Fourth, achieve diversity of foreign capital and rationalize the foreign capital structure.