Chinese Access To Foreign Direct Investment, Technology Spillover Effect

Technology development is a main contributory factor for world's economic growth, and no country can make technology innovations on its own. Therefore, international technology diffusion is becoming an important shortcut of technology progress for all the countries. Foreign direct investment (FDI) has been playing a more and more important role in economic development and technology progress of developing countries amid economic globalization. Since the reform and opening up to the outside world, our investment environment has improved and our country have made a tremendous achievement in the exploitation of FDI. Since 2003, foreign capital volume has reached a historic break, ranking itself first in the world. However, unlike the initial stage of the reform and opening up to the outside world in which attracting foreign capital is to resolve the capital problem, at present, the primary purpose of utilization of FDI is to exploit its advanced technology to enhance our whole technical level.The paper expands the concept of technical spillover, and analyzes its traits, mechanism, and factors etc., then put forward that the extent of technical spillover depends on the interaction of both the provider and the receiver of technical spillover and technical spillover should be a major channel for developing host countries to enhance their technical level. Furthermore, the paper analyses the spillover effect of present stage on China and the internal and external factors that restrain the technical spillover. Moreover, this paper also analyses the Korean experience on its growth of electronic industry esp. some meaningful measures Korean government takes. Finally, this paper gives some countermeasures for consolidating the spillover effect that point out the policies for foreign capital should be focused on our technology advancement.