The Impact Study Of China’s OFDI On The Upgrading Of Domestic Industries And An Empirical Analysis

In recent years, the global industrial production and the development of international trade is weak and international financial markets continue to fluctuate. The world economic growth continued to decline slightly. However, the global outward foreign direct investment is relatively active. The Chinese government continues to improve the "going out" policy system and outward foreign direct investment continued to maintain strong growth. China has become the world’s third largest foreign investor in 2013. With the rapid growth of China’s economy, the development of the domestic industry structure is constantly upgrading. Whether the rapid growth of China’s outward foreign direct investment has a certain role in the upgrading of the industrial structure? If there is a promotion, which industry has the greatest impact? Today, the domestic economic structure needs to be immediately transition. Therefore the study of the impact of China’s outward foreign direct investment on the upgrading of local industries has a very important practical significance.This paper has combined the relevant theoretical research about the impact of outward foreign direct investment on industrial structure. On the basis of studying the characteristics of China’s OFDI and the adjustment of industrial structure, this paper constructs the index of industrial structure’s upgrading. Firstly, this paper uses the statistical data from 1982-2013. Then, the paper uses the VAR model, impulse response function, variance decomposition and other methods to study the impact of China’s OFDI on the industrial structure upgrading. Finally, the paper draws a conclusion that OFDI can promote the upgrading of domestic industrial structure, but its role is not very significant. In this paper, I use the 2003-2013 years data of China’s seven major industry OFDI and industrial upgrading indicators to carry out gray correlation analysis. The results show that the top three of the correlation degree is manufacturing, construction, wholesale and retail. They have a great impact on the domestic industrial upgrading. Finally, this paper draws the conclusion and puts forward some suggestions. We hope that we can promote the development of outward foreign direct investment and the upgrading of domestic industrial structure, so it is beneficial to the development of China’s economy.