Foreign Direct Investment In China's Employment Problem

Foreign Direct Investment (FDI), as one of the most important driving force toChina Economic Revolution, has been playing an indispensable role in promoting theeconomy development of China since 1978. In recent years, there have been lots ofresearches on the relationship of FDI and GDP. But most of them are focused on thesubject that how FDI speeds up the economic growth, and few expatiated the negativeeffects FDI made on the domestic employment. As more and more FDI pours intoChina, its structure and the capital and technology composing are changing a lot. Suchtransformation has been doing more and more passive effects on employment. Thisthesis begins with calculating the practical contribution rate of FDI to GDP and theemployment from 1994 to 2005, to analyze the contribution trend in those years, anddraws the conclusion-the increase of capital compose in FDI, the change of theforeign investment way and the improper government action in sorbing foreigninvestment have do harm to the domestic employment. In order to solve this problemeffectively, the government should work out more practical schemes on improving theeducation level, enhancing the financial system construction, upbuilding thecompetitive code and properly supervising the government's behavior over absorbingthe FDI.