Locational Choice Trends Of Foreign Direct Investment In China：1984-2009

Since reform and opening, China has made remarkable economic achievements,absorpting and utilizing a large number of foreign direct investments (Hereinafterreferred to as FDI). But review the history of attracting FDI, we can see China attractslittle FDI in the beginning of the reform and opening, but after the strategy of “marketfor technology” putting forward in1992, attracting FDI has risen sharply. Afterjoining in the WTO, FDI inflow presents a new phenomenon. While the regionaldistribution of FDI in China’s domestic is also very uneven, showing east high westlow; furthermore, in the same area, the situation of attracting foreign investment isdifferent at different times. This paper attempts to research locational factors whichinfluence FDI locational choices, and identify the trends of locational factors affectingFDI locational choices, and then through the relationship of certainty to recommendlocal governments to develop policies to better improve the locational factors toattract more FDI.This paper uses theoretical and empirical analysis, and as a city-sectional studyto explore the relationship between different locational factors and FDI locationalchoice, as well as changes in this relationship. The results of this study show that: Thewhole country: per capita GDP (pgdp), incentives, the number of students in collegesand universities and per capita wages the impact of FDI showed a gradual increasingtrend; wastewater treatment compliance rate (wastewater) and FDI locational choiceof a negative correlation, and this relationship was apparent to the third stage; cargo ofthe FDI locational choice of showing the first increase and then decreased, butremains positive relationship. The GDP growth rate (gdpg) of the FDI locationalchoice has no significant effect. East: pgdp, wage impact of FDI, as the case with thecountry. Policy, student locational choice for FDI influence increases firstly and thendecreased, cargo impact of FDI from scratch and then no process. Wastewater, gdpgon the locational choice of FDI has no significant effect. Central Region: policy,student and wage on FDI locational choice of the positive impact in the graduallyincreasing, pgdp, cargo starting from the second stage of locational selection of FDIhas a positive impact, and this effect in strengthening the relationship. Wastewater,gdpg on the locational choice of FDI has no significant effect. West: all the factors inthe first and second stages of FDI location choice are not affected. The third stage isonly cargo, student on the locational choice of FDI have a positive impact, while thewastewater of the locational choice of FDI have a negative impact. Conclusions of this study has an important revelation to local governments,especially in the economically backward central and western local government, toimprove the location factors to attract FDI to improve the ability to accelerate localeconomic development and narrow the gap between the regions.