The Effect Of FDI’s Flow On China’s Economic Space Reconstruction

With the global economic cycle fluctuates dramatically, international capital flows accelerated. FDI is one of the main manifestations of international capital, which it flows rapidly, making the use of FDI in China into a new stage of development. Meanwhile, FDI is an important external factor for alteration of region structure, industry structure, urban and rural structure. And international economic cycle fluctuations will inevitably lead to inflow and outflow of FDI in China’s industrial and space, resulting in China’s economic space reconstruction.Under this background, the paper researches on the relationship of FDI flows and economic space reconstruction, and then gives a comprehensive analysis on the effect of China’s economic structural imbalances, strengthen of dual economic structure, and expansion of regional disparities from FDI flows. With the result of theoretical and empirical analysis, the paper strives to give reasonable suggestions from the point of adjustment of economic structure and reduce regional disparities through absorbing FDI. In theoretical research, the paper builds a new analytical framework through FDI and spatial economics theories:flow of FDIâ†'alteration of region, industry, urban and rural structureâ†'economic space reconstruction. In empirical research, the paper firstly measures current situation of China’s economic structure and the distribution of FDI in the economic space by Gini coefficient, Theil index, and secondly it builds distributed lag model from two aspects of economic structure and employment structure by the data since China’s reform and opening, which is to inspect the effect of FDI’s flow on China’s economic space reconstruction scientifically and completely.This paper is divided into six chapters. The first part is introduction. It mainly focuses on the research background, research purposes, research significance, the research ideas, the framework and domestic and foreign research status on FDI and economic space. The second part defines the related concepts which appeared in this article, and integrates the theory of FDI and economic space to form a new framework for theoretical analysis. The third chapter is a description on current situation of dual economic structure. It selects different quantitative indicators to analysis the current situation of China’s economic structure from regional structure, industrial structure, urban and rural structure. The forth chapter describes the status of FDI’s distribution in China’s regions and industries, and measures the difference among regions and industries by Theil index. Chapter five is the part of empirical analysis. This chapter gives a deeply study on the relationship between FDI and China’s economic space reconstruction, with a large number of time-series and cross-sectional data, from the three aspects of the region, industry, urban and rural structure, two views of the economic structure and employment structure. Chapter six is the end of this article. It summaries the effect of FDI’s flow on China’s economic space reconstruction on the basis of the first chapter to the fifth chapter, and give reasonable suggestions from the point of adjustment of economic structure and reduce regional disparities through absorbing FDI.