Foreign Direct Investment And China's Industrial Structure Upgrade

Since 20 years of reform and the opening to the outside world, the utilizing of foreign direct investment (FDI) has always been an important strategy in the proceeding of modernization. As our whole economy steps into the industrial stage which labour and investment become the main factor to the economy growth ,the focus of FDI on promoting our economic development has transferred from capital form, technical progress to the upgrading of industrial structure. The theory of FDI holds that the developing host country can draw advanced technology and capital which its country lacks .Utilizing international circulating resources can help our industry to stride across the bottleneck of the supply of the key element ,to establish rapidly the industry which cannot be developed at the present, promote "the upgrading of the old industries of the host country ,enhance the quality of the related industries' capital ,transfer the comparatively inferior industry to the comparatively superior industry, to accelerate the upgrading of the industrial structure .However, the effect of FDI on promoting the upgrading of the host country's industrial structure is decided by the height of the industrial development of the emigrating country, the industrial accepting ability of the host country and the industrial leading' ability formed by FDI's related effect. In this thesis , every stage of the development of the industrial structure and FDI's upgrading effect of industrial structure is analysed systematically,and the effect of FDI on the core of the upgrading of China's industrial structure -technical progress is especially studied. The thesis points the positive effect of utilizing FDI on the upgrading of our country's industrial structure. Since we have entered into WTO, in order to utilizing FDI to accelerate the upgrading of our country's industrial structure, and to promote the modernization of industrial structure, we must further create conditions, improve policies and enlarge the scale of utilizing foreign capital. Furthermore, we must further adjust and improve the industry policies of utilizing foreign capital on both the present situation of our country's industries and the upgrading of our country's industrial structure.