The United States And Hong Kong To Mainland China Fdi Motivation Of Comparative Study

In2010, China’s total GDP has been over six trillion U.S. dollars, surpassing Japan as the world’s second largest economy. China’s economic growth can not be divided with China’s active policy of attracting foreign investment. FDI flows to the Mainland of China can be divided into two categories by the sources. One category is the emerging economies represented by Hong Kong, Taiwan, Korea, and the other category is the developed economies represented by Europe, the United States and Japan. Among the six economies, the determinants of the FDI into Mainland China from U.S. and Hong Kong are specifically chosen for the comparative study.Firstly the history of the development, organization structure, industry distribution and geographical distribution of the FDI into Mainland China from the United States and Hong Kong is conducted by a qualitative analysis. And then a preliminary conclusion is reached, that the FDI from the United States is more in line with market-oriented FDI characteristics and the FDI from Hong Kong is more in line with export-oriented FDI characteristics.Then a model is made in this paper, using1986-2008data, to give quantitative analysis of the impaction of the exchange rate, market capacity, market openness, the relative labor costs, tariff rates, foreign policy changes after joining the WTO, political stability variable to the inflows to the United States and Hong Kong FDI in the Mainland of China. During the course of the quantitative analysis, this paper firstly use the ADF method to do the unit root test, and then use the EG test method to do the cointegration test, and then the outcome of the model is got by using least squares regression, and the results are given interpretation by the economics sense.Finally, the paper concludes that the FDI flow into Mainland China from the United State is influenced mainly by the market capacity, market openness and tariff rates, policy changes. And the inflow of FDI into Mainland China from Hong Kong is influenced mainly by the exchange rate, market capacity, and relative labor. Generally speaking, the FDI flow into China Mainland from the United States is more in line with the characteristics of the market-oriented FDI, while the inflows of FDI in Mainland China from Hong Kong is in line with the characteristics of both market-oriented FDI and export-oriented FDI but more in line with the characteristics of export-oriented FDI...