Analysis Of FDI On China's Contribution To The Economy

With the growing global integration process, the world economy is increasinglyclose communication. To multinational companies as the main body of the foreign directinvestment more and more show its important role, plays an important role to promotethe development of economy stably. With the development of foreign direct investment,makes the economy of each link, such as research and development, production, sales andother links are more and more internationalized. Foreign direct investment impact on theeconomy is reflected in the impact on the capital formation, technology impact, theimpact on the industrial upgrading, impact on trade as well as the influence onemployment, thus further reflected in the whole economic growth. Here both positiveinfluence, also has a negative impact. So for the impact of foreign direct investment oneconomic analysis and relevant policy evaluation is necessary.Since reform and opening up in the early1980s, the use of foreign capital,especially foreign direct investment has become an important part of our country’seconomy. And with the continuous development of our country’s economy, foreign directinvestment in both the quantity and quality also got great development. Representativesof China as a developing country, is the use of foreign direct investment in developingcountries most populous nation. Due to insufficient funds in the economic construction inChina, the lack of technology, so the introduction of foreign direct investment is quiteurgent, China has formulated a series of positive investment policy, its purpose is to want to improve their productivity and promote economic growth. However, according tomany scholars at home and abroad, the effect of foreign direct investment on theeconomy has both positive and negative, but also for the economy in the developedcountries is quite limited and there will be obstacles. China’s economic development upto now, the domestic economic situation would have, given the other countries experienceand foreign direct investment will produce negative effects, whether to continue toexpand foreign direct investment is in doubt. This not only need theory research andstudy, also need to undertake an empirical analysis of the related research, provide thebasis for better use of foreign capital in our country.The content and structure of the article.This article first established in the foreign direct investment on the basis of thebackground and significance of the research at home and abroad were reviewed andreview of the literature to understand the development trend of domestic and foreignresearch results and the views of different scholars for the study and attitudes. Then in thesecond chapter reviews the relevant theories of foreign direct investment, both in thedevelopment of the concept of foreign direct investment and its related theory, andincluding the related theory of quality evaluation. The third chapter is an overview of theuse of foreign direct investment in China, in this chapter, we through the review processof20years in China to use foreign direct investment, respectively discusses the change ofChina’s use of direct foreign investment, the status of the source structure, regionaldistribution and the characteristics of foreign direct investment, the development trend ofthe domestic situation analysis is the important basis, continue to study this problem hasvery important practical significance. The fourth chapter is an empirical analysis of theforeign direct investment impact on the economy of our country. In the process ofanalysis, this paper use the metering method, including a smooth test, cointegration testand granger causality test, the foreign direct investment on capital formation, technologyspillover, industrial upgrading, trade creation and the influence of employment, finallythe analysis of the growth of the economy. Finally in the fourth chapter, on the basis ofthis article in the fifth chapter evaluation for China’s use of foreign direct investment andpolicy suggestion.