The Contribution Of Foreign Direct Investment In The Wuxi New District Economic Development Study

A represented feature of China's economic development is the great attraction of Foreign Direct Investment (FDI), which has played a significant role in the China's open policies and its strategy of overall economic development. Since the 30 years of opening up to the outside world, especially during the years of 90's of last century, the utilization of foreign investment in China has increased dramatically with the more awareness of the importance of the theory and practice of FDI. Until 2007, China has got the FDI of USD74.7 billion. It is demonstrated that China has been the second largest FDI recipient in the world as well as the largest FDI recipient among developing countries in the 15 consecutive years.It is of great significance of FDI in the China's economy. FDI has made positive effects on the areas like capital formation, export orientation, technology progress and social employment. Meanwhile, the arguments of advantages and disadvantages that FID brings about always exist in the academe. Currently, some popular perspectives are suggested that the positive influences that the excessive FDI made are limited. For example, the FDI has not brought about the expected "technology spillover effect" and it will make negative impacts on economic security of China.With the above background, the paper takes advantage of the real achievements that China and Wuxi New District made in the foreign investment to analyze and evaluate the contributions of FDI to the economic development of Wuxi New District, in order to point out the positive effects are more than negative effects with the application of theory and practice. The paper also suggests the guidance of how to improve the contribution of FDI to the economic growth and regional development. Finally this paper indicates the direction of five transformations, namely, the transformation from the attraction to general foreign investment to the attraction to filtered foreign investment, the transformation of industry from low to high-end, the transformation from the general service industry to the international outsourcing service industry, the transformation from the current industrial park to the innovative and featured park and the transformation from the preferentia??licy to the optimization of investment environment.