Research On China 's Environmental Effect On Introducing Foreign Capital Based On Spatial Perspective

After China’s economic reforming, the introduction of foreign direct investment(FDI) has become an extremely important power of China’s economic growth. At the same time, the influence which the FDI brings to the domestic environment has also drawn the attention of people. Many scholars have studied the correlation between the FDI and the environment, but failed to reach a consensus. So Does the FDI increase or decrease the environment pollution?This paper divided into theoretical and empirical analysis parts. In theoretical part, we build model based on the relevant theory between the FDI and the host country environment and add the factor of the official promotion tournament into the model. In empirical part, we do exploratory spatial data analysis(ESDA) and spatial econometric analysis.The exploratory spatial data analysis shows the space distribution of the FDI and environment pollution in our country by the Geoda software, observing the spatial clustering and correlation intuitively, then test the spatial autocorrelation. The space distribution of the FDI and environment pollution shows the spatial clustering that the region which has high FDI has low environment pollution, and the Moran’s I index shows a significant spatial autocorrelation.The spatial econometric analysis did the whole sample test and sub-sample test based on China’s FDI inflow and environment pollution between 2004 and 2013. the overall sample choose China’s 31 provinces and cities as the research object, the sub-sample has three parts:the region sample, the industry sample, the FDI source sample. The region sample choose China’s three economic regions as the research object, the industry sample choose agriculture, manufacturing and real estate industry as the research object, the last sample choose China’s three source s of FDI as the research object, which are the Offshore Financial Center, the East Asian countries, the Occident. We uses the spatial lag model and the spatial error model to do spatial econometric test for each samples, for variables which have high correlation, we do the separation regression, and the data of environment pollution is the environmental pollution comprehensive index, which calculated by the entropy weight method based on the data of atmospheric pollution, water pollution and solid waste. According to the results of spatial econometric tests, the overall sample indicate that FDI inflows doesn’t make China become the pollution heaven, but reduce the environmental pollution in our country because of the advanced technology, management experience and environmental capacity from the FDI; the region sample indicate that the FDI flows to the east and middle region can reduce the environment pollution, but the FDI flows to the west region will worsen the environment pollution; the industry sample indicate that the FDI flows to the manufacturing and real estate industry will improve the environment quality, but the agricultural use little FDI and doesn’t has a significant result; the last sample shows that three sources of FDI has the same results, all good to the environment. The result of the variable for the official promotion tournament shows the official will increase the financial investment for the examinational project to pursue promotion, reduce the financial investment for the environmental management, lead to augment of environment pollution.Finally, this paper put forward policy recommendations corresponding with the econometric test results from the macro and micro level. From the macro, the official promotion tournament makes the local officials pursuit economic development excessively but ignore the pollution treatment, so the government should optimize the official promotion system, bring the green GDP into the promotion assessment indicators. Introduce the FDI of high quality, limit the enterprises of high pollution to enter, guide the FDI flow to the high-tech industry and modern service industry. At the same time, the government of different regions should strengthen communication and cooperation, to improve the regional environment quality together; from the micro, enterprises should confirm their social responsibilities, improve their environmental protection consciousness and ability, strengthen the environmental protection cooperation between domestic enterprises and foreign enterprises.