Research On Effect Of China’s Outward Foreign Investment On Domestic Employment

As an important part of going out strategy, China’s outward direct investment (ODI) isexpanding rapidly though starting late. Nowdays，China has already been a mainsignificant source of ODI in the filed of international investment, and because ofChina’s unique economic characteristics，it will invest overseas continuously incoming development. With the expansion of the scale of ODI,it certainly will affectthe economy of the home country.Meanwhile,employment is an essence of theprinciple of people’s livelihood. Nowadays, due to multiple factors at home andabroad, the domestic unemployment problem is very severe. Although the Researchon China’s ODI is uncountable, but just a few of them are interrelated to the effect ofit, when it comes to domestic employment, almost none.So,On one hand, theincreasing of China’s outward direct investment is inevitably, on the other hand, thedomestic unemployment problem is pressing, this dissertation analyses theemployment effect of ODI and tries to answer the following questions: Does OutwardDirect Investments have effect on domestic country’s employments? if so,how aboutit? How about the relationship with China’s ODI and its domestic employment. Is itpossible to made ODI an potential path to help lighten the burden of domesticemployment?According to the above problems, On the basis of researches of ODI andcomprehensive analysis of situation onChina’s current ODI and employment,Plus theempirical test of America and Japan, This paper construct a conduction Mechanism ofthe effect of ODI on domestic employment of home country. And based on whatmentioned above, this paper build the model,estimate,amend,and checkout theregression model by E-views software, finally get a conclusion, that is: the direct andindirect effect of China’s ODI on domestic employment are both positive,meanwhilethe indirect employment effects of domestic investment channel is negative,according to the substitutive impact on domestic capital, at the same time, heindirect employment effects of export channel is positive,according to the ODI’spromotes a stimulatory effect on export scale, so the overall employment effect isfinally positive, that is to say China’s ODI promote the domestic employment; Seenfrom the effects of ODI on employment structure by industries, ODI increased theproportion in China’s tertiary industry employment significantly. The employmentshare of secondary industry is also increased, while the share of the primary industryis decreased. in other words, China’s ODI has also helped optimize employment structures; Seen from the effects of ODI on quality of employment, China’s ODI hashelped improve the quality of labor force, but the effect is not significant and withdelay to some extent.With Preceding findings, this paper claims to encourage these Positive facto rs toChoose some high return with low risk Projects to expand our export as well as ourMarket share. This paper also exerts to consummate some policies in investmententity, investment industry allocation and investment positioning to encourage theeffect of ODI to domestic employment.