Research On Environmental Risk Caused By Utilizing FDI To Undertake Industrial Transfer In The Central And Western Regions

With the rapid flow of international capital on a global scale, issues between foreign direct investment and environment condition gradually bring much concern to us. Especially to a country like China with a large population and relatively poor resources, it is particularly important for the government to deal with the relationship between FDI and the environment in order to promote sustainable economic development of China.In recent years, as the cost of factors increased substantially and the pace of industrial upgrading accelerated in the eastern region, some traditional industries have been gradually transferred to the less developed central and western regions. By using FDI to undertake industry transfer, the government can optimize the structure of investment and industry of central region and western region, narrow the regional development differences among eastern region, central region and western region and promote the balanced regional development in building a harmonious society. However, utilizing FDI will make the central and western regions to face a huge risk of environmental degradation. If the risk can't be effectively prevented and promptly resolved, the bad consequence will affect the economic development of the central and western regions. Therefore, researching control methods of the environmental risk caused by utilizing FDI to undertake the industrial transfer in the central and western regions not only help to explain the environmental impact of foreign investment in central and western regions, but also help the central and western regions to develop a reasonable level of capital policy, so as to promote a green and harmonious development of its economy.The paper made control of the environmental risk caused by utilizing FDI to undertake the industrial transfer as a research topic. In the theoretical research, the paper thoroughly elaborated the effects and action mechanism of FDI to environment and provided recommendations for the introduction of FDI. In the empirical research, first the paper established the evaluation system to measure the degree of pollution by using a hierarchical model. Second the paper established a simultaneous equations model from three dimensions, scale effects, structure effects and technology effects by using the time series data of20provinces or cities in central and western regions from2000to2010. Finally, the paper studied the relationship between FDI and environmental pollution of the central and western regions by using three-stage least squares method to estimate parameters. Specifically, this paper made some general review and comment on the topic-related FDI, industrial transfer and environmental theory and policy. Then a lot of statistical data and the corresponding statistical charts reflected the foreign direct investment position of central and western regions. The paper analyzed the pollution status and characteristics which appeared in the process of industry transfer by using FDI in China's central and western regions and researched the mechanism associated with industry transfer and environment risk. Second, the paper concluded the type of pollution in the industrial transfer, analyzed the potential environmental impact from different projects in industry transfer and developed general evaluation principles. Finally the paper explored the access threshold of industry transfer and guidelines for industry layout of sustainable developed economy, designed monitoring and warning system for environment risk in industry transfer of central and western regions, and provided environmental risk control suggestions.