The Influence Of Fdi On Low Carbon Economy Development In China

China’s Foreign Direct Investment (FDI) inflows are set up to105.7billion dollars in2010, which is the largest in developing countries. China tops a league table in the investment of the world’s most attractive investor and becomes a popular investment destination for multinational companies. FDI promotes China’s economic growth and meanwhile causes a negative effect on China’s environment. Low carbon economy has become the global focus of attention after Copenhagen climate conference in2009. As the world’s second-largest energy consumer and the biggest carbon dioxide emissions country, China is facing huge pressure in reducing carbon emissions. Therefore, in the current situation of global economic slowdown and China’s increasing economy downward pressure, it has very important theoretical and practical significance to analyze how to making active, rational and effective use of foreign capital and promote sustainable development of FDI and low carbon economy.This paper presents a thorough study of the impact of FDI on China’s low carbon economy by normative analysis and empirical analysis. Although in the short term FDI has a negative effect on the development of China’s low carbon economy, in the long term FDI will promotes the transformation to a low carbon economy. In empirical research, this paper analyzes the impact of FDI on low carbon intensity, energy consumption for unit GDP, carbon emission and usage of clean energy by selecting key indicators of measuring dimension index of the level of a low carbon economy and introducing two indicators of the proportion of new industry (HI) and independent research and development (RD), with the latest data and modified model. The result indicates that FDI has a positive effect on the development of low carbon economy in the long term.There are six chapters in this paper. Chapter Ⅰ is an introduction, which introduces the background, meaning, content, methods, present research and innovation of this paper. Chapter Ⅱ outlines the related theories of impact of FDI on the development of low carbon economy in the host country and introduces relevant concepts of low carbon economy and some mainstream viewpoints of the Pollution Haven Hypothesis (PHH), Pollution Halo Hypothesis, Environmental Kuznets Curve and Porter Hypothesis and so on, which supply the theoretic support for the research. Chapterlll introduces the present situation of FDI briefly, and then uses SWOT analysis to describe the development of China’s low carbon economy. The chapter paves the way for subsequent chapters. Chapter IV analyzes positive and negative impact of FDI on low carbon economy theoretically. It describes positive impact of FDI introduction on low carbon production, consumption and policy systematically and its negative impact of aggravating carbon emissions in the short term, impeding local enterprise development and uneven regional development in China. Chapter V is the empirical research. Based on the econometric models, employing related data from1990to2010, this paper studies the impact of FDI introduction on development of a low carbon economy by selecting four key indicators of measuring dimension index of the level of a low carbon economy, including low carbon intensity, energy consumption for unit GDP, carbon emission and use of clean energy. Chapter VI proposes policy recommendations concerning how to use FDI to develop China’s low carbon economy based on the previous analysis.