In China Attracting Fdi Determinants

In the tide of the economic globalization, international capital flows and accelerates, the quantity increases, but maldistribution, most capital flows among developed countries, developing countries in order to absorb the foreign capital launch the keen competition. In recent years, China has absorbed the foreign capitals to occupy and arrange before the world in succession . The foreign capital's entering, especially, foreign direct investment (FDI) has solved the capital to the China's economic development, the development of resource , optimizing in industry and such questions of lacking funds as the synthesized competitiveness and technological progress improving , foreign exchange earning , scientific management , transition in mechanism . Foreign direct investment in China is a great subject what is needed researching continuously and urgently in the realistic situation home and abroad.The improving by a large margin in domestic market-based level opening to the outside world of our country happened in over 20 years of reform and opening-up. The absolute scale and relative scale of the utilized foreign capitals reach or exceed the levels of most developing countries. As the important content of the policies of reform and opening to the outside world of our country, it has already gone on and improved the quality and improved and updated the structure of the foreign capital progressively. Under the new situation, our past policy of absorbing foreign capital, especially the policy in attracting FDI ,needs improving . How to change? This text thinks that should analyse and study our country from the decisive factor of FDI . This question just could hold the adjustment direction that our country attracts FDI correctly.The first part of this text, reviews the course that our country attracted FDI .It cuts the theme of the article in terms from history, and then analyses the basic situation from the angle of direct investment structure of our country receivingfurther.The second part of this text introduces OL model of FDI micro theory, emphasizes that FDI is determined by two factors of location variable and enterprise's variable in the host country. It breaks through traditional FDI theory what considered the single characteristic. Second, It derives out DS model of FDI macro theory on the basis of micro theory and transforms the location variable of the host country and enterprise's variable into the demand and supply in the macro model. We use the important concept of the price of effect to analyse the balance of supply and demand. Then, we discusses the question of supply and demand thoroughly finally. Two kinds of states about demand decision and supply decision put forward. It prepares the theory foreshadowing in analysing the state of FDI of our country and adjusting the direction to do for the ensuing chapters.The third part of this text emphasized two factors determinism in models at first, has analysed the impact on trans-corporation FDI of our country and impact on our country of the trans-corporation FDI behavior. It demonstrates about the pure theory of the foregoing paragraphs in combining the real example of making the China's actual conditions . And then entering the key part of the full text, the model conclusion of combining preceding paragraphs begins to analyse the decisive factor that our country attracts FDI emphatically, finally, we confirm that our country is still in the state that the demand determines at present. There is very large promotion space in the position variable. It has confirmed the decisive factor taking location variable as the core.This text the fourth part proposes China's adjustment direction of FDI in the future.