Fdi Impact On Income Distribution Of China's Industry

Inter-industry income distribution is an important branch of income distribution, and it has a very important theoretical and practical significance for the development of distributional theory and the formulation of allocation policy to research the factors and decision mechanisms of inter-industry income distribution. Therefore, many experts and scholars at home and abroad carried out a lot of research and produced important results in this field. So far, however, scholars have not formed a consistent view on the factors and decision mechanisms of inter-industry income distribution.After 30 years of reform and opening up, our country has been making noteworthy achievements in both economic construction and social development, the opening up has achieved prominent development, in particular, we have been making significant achievement in absorbing foreign direct investment (FDI), now we have become one of the most attractive countries for FDI. Meanwhile, the imbalance of income distribution in our country is growing, and the imbalance is reflected in different regions between urban and rural areas as well as among different industries. Nowadays, the imbalance of income distribution in different industries in our country has been higher than international average level, and with further development of the economy, the imbalance is also expanding.The coexistence of the rapid inflow of FDI, the rapid increase of the residents' income and the rapid widening of income imbalance among different industries in our country has been increasingly concerned.Therefore, the problem that whether the inflow of FDI raised the overall income of our country and whether it expanded the income gap among different industries have gradually become a topic of concern. In view of this issue, this paper conducts an in-depth theoretical and empirical study through related data between the year of 2000 and 2006 of our country.The empirical research shows that FDI and wages are positively correlated in every sector but it has different impacts for various industries, leading to different rates of raise of income in different sectors, resulting in the widening of income imbalance among different industries.On this basis, the paper argues that in the future utilization of FDI, we must continue to improve the investment environment and increase the intensity of FDI absorption, and give full play of their positive impact in increasing residents' income. In the mean time, we must make rational policies in using FDI to guide FDI to invest reasonably among different industry sectors, and try to avoid the negative impact of FDI in expanding the income gap among different sectors.