Research On The Impact Of FDI On Regional Income Disparity In China

Since the reform and opening up, FDI has made a great contribution to China’s economic growth, meanwhile, its uneven distribution of quantity and quality among regions aggravated China’s regional income disparity problem. Based on previous theoretical research and empirical analysis, this article concludes the ways FDI affects regional income differences, and from the start of backward linkage and forward linkage in the industrial chain, this article builds a theoretical model, exploring the mechanism that how FDI will affect regional industrial development and income level.On this basis, this article observes the different contribution of FDI to regional income through regression analysis, using the panel data of 31 provinces from 1999 to 2013, by dividing them into three groups in accordance with the degree of infrastructure facilities and the level of economic development. Among the above theoretical analysis, this article classifies the modes of FDI as well as their different effects on technology spillovers and regional income disparity, and analyzes the reasons that give rise to the uneven geographical distribution of FDI, in order to put forward some reasonable policy proposal on conducting foreign direct investment for a better regional income distribution.