China's Foreign Direct Investment Location Choice Analysis

Since China launched its reform and opening up, China’s economy maintaineda sustained and rapid development.Within the30years improvement anddevelopment, China’s GDP has surpassed Japan’s snd become the second largesteconomic group in the world after the United States.Because China adheres to thepolicy of opening up, China foreign direct investment (FDI) is always growing andplays a great role in the development of China’s economy. Although China’sabsorption of FDI is expanding constantly, and made great achievements, but FDI ishighly concentrated in eastern China, Midwest of China can’t attract enough FDI,especially in the west China. China’s regional FDI distribution is extremely unstableequilibrium, which exacerbate the unbalance of Chinese regional economy andseriously impact on the stability and development of China’s economic. Secondly,although the various regions of China pay great attention on the introduction of FDI,some provinces can’t give full play to its advantages and exist some problems suchas low efficiency of the introduction of FDI. Therefore, in order to promote theefficiency of the introduction of FDI in China’s provinces, especially in the Midwestprovinces FDI, and speed the poor areas’ economic development, through advancingtheir urbanization level, it is very necessary to do further research on this problemBased on the national and international research, this paper used combined theoreticdiscuss and demonstration analysis methods to elaborate the issues, made qualitativeand quantitative researches on China’s FDI location choice, to provides the effectivetheory support and policy guidance for China’s FDI location choice.This paper may have the following three aspects of innovation:(1) at present,most of the domestic and foreign scholars have focused on the effect factors of FDIlocation choice and very few refer to how to select the most suitable area for FDI. Sothis paper takes this point as the starting of the study and uses data mining methodsand multi-objective decision-making method to construct a comprehensive dynamicevaluation model for FDI location choice and analysis empirically the FDI location choice of31provinces in China.(2) Whether evaluation index system of FDIlocation choice is rational and scientific which is directly related to foreign directinvestment location choice to assess the possibility of the FDI location choice, butthe academic community doesn’t have a perfect evaluation index system of FDIlocation choice. This paper summarizes the affecting factors of FDI location choiceand gets a a more reasonable evaluation index system of FDI location choice throughthe data mining methods.(3) This paper uses the DEA model to analyze theefficiency of FDI absorbing of China’s31provinces. The author uses DEA-BCCmodel and DEA-Malmquist model to analysis the efficiency of FDI absorbing inChina’s31provinces from both two aspects of dynamic and static, discusses themain reason for the changes of FDI absorbing efficiency and provide policyimplications for improving the efficiency of FDI absorbing.Through research, this paper has the following conclusions: Experimentalresults prove that the dynamic integrated evaluation method proposed in this papercan be effectively applied to solve the problem of FDI location choice. Theevaluation index system of FDI location choice proposed in this paper is also morescientific and practical. There is a positive correlation between the efficiency of FDIabsorbing and FDI location choice. So in order to prove the efficiency of FDIabsorbing, the government is not only to improve the local investment environment,but also should play the important role of the overall planning.