Correlation Analysis Of Foreign Direct Investment And Carbon Emissions

The foreign direct investment have a great role in promoting acounty’s economy，by introducing money and management talents foreconomic construction, especially for those developing countries. Theamount of FDI is growing fast since the reform in nineteen seventies. Toattract foreign capital has become an important part of China’s basicstate policy of opening to the outside world. The actual utilization offoreign capital in2011had reached116.011billion, ranking the firstamong developing countries. But with the introduction of foreign directinvestment, some international pollution intensive industry has graduallyshifted to China. China has become the pollution haven for somewestern countries. In this harsh environment situation, we need to take into account the influence of foreign direct investment on China’senvironment, so as to optimize the structure of foreign investment,reducing carbon emissions and pollution of the environment. This articleanalyze relationship between the foreign investment and China’s carbonemissions，and then give some suggestions on how to optimize thestructure of foreign direct investment.The first chapter is the introduction part, through an overview ofthe current economic and environmental situation, proposed thenecessity and purpose of research on the relationship between carbonemissions and foreign direct investment, and then reviews empiricalanalysis and correlation literature. The second chapter proposed theinfluence of foreign direct investment from four aspects, the scale effect,structure effect, technical effect and the effect of regulation, thenexplained them in detail via EKC curve theory, marginal industryexpansion theory, the Potter hypothesis and the pollution havenhypothesis. The third chapter analyzes the total size and industry structure and regional structure of foreign direct investment in Chinathrough the data and graph. The fourth chapter calculate the carbonemissions according to the Kaya identity and emission evaluation modelby Xu Guoquan. The fifth chapter is the core part of empirical analysis,calculating the empirical relationship of foreign direct investment andcarbon emissions， using eviews6.0software. According to theregression equation, China’s actual FDI is positively related to carbonemissions. The sixth chapter proposed some suggestions based on thebasic theory and empirical results as mentioned above.Through the empirical analysis of FDI and carbon emissions, wecan draw conclusion that the using of foreign investment has increasedcarbon emissions in China. From the industry perspective, changes inChina’s second industry are the main reason for the increasing of China’scarbon emissions. From the regional perspective, the FDI in easternregion has largest impact on China’s carbon emissions. Therefore, weshould actively adjust foreign strategy, promote industrial upgrading, increase R&D efforts, improve environmental control threshold toachieve low carbon economy development goals and realize sustainableeconomic development.