Analysis On The Environmental Effect Of FDI In An Hui Province

Following with, recent years, the increasing improvement of environmental protection consciousness, public attention has been paid more to the interacting relationship between global capital flows and environmental issues. FDI, as the principal form of international movement of capital, exerts profound impact on both economy and environment. Influx of global funds one facet accelerate the development of local economy and adjustment of regional industries structure, and then triggering fast changing of intensity and efficiency of utilization of environmental resources; economic globalization on the other hand promotes the transmission of high-tech, as results local technology level arises and then decreases intensity of utilization of environmental resources and pollution drain. Environmental protection pressure, however, might shift from one country to another with capital movement, that’s great number of environment issues come with rise of wealth. Alone with the goal of "creating three great province, constructing sweet Anhui" (namely economic great Anhui, cultural great Anhui, ecological great Anhui)put forward, it request the province grasp the gold opportunity of "twelfth five-year plan", actively employ foreign finance, accelerate great-scale industrialization, and speed urbanization. Nevertheless, there surely are lots of problems referring to economy and environment under such development, in special to the environmental pressure shift issues following with great deal of influx of capital. Consequently, how to more reasonable and effective usage of foreign investment becomes the principal problem government should solve.The paper based on combination of norms and empirical analysis method studies the environmental effect of foreign direct investment in Anhui province. First comes norm approach:the summary influence mechanism of how FDI impact on environment and then providing theoretical fundament for subsequent analysis; to perfect an hui province foreign direct investment policy and the government’s environmental regulation, and then to achieve more reasonable and effective use of foreign investment, reduce the pollution of the environment to provide policy recommendations. Empirical analysis mainly concerning statistical analysis, and simultaneous equation model analysis is in order to study environmental effect of foreign direct investment in Anhui province, in which statistical analysis the general effect of the environmental effects by utilizing data, for instance, current situation of foreign investment, the situation of environment, pollution discharge conditions and foreign investment in pollution intensive industry, from 1998 to 2012; simultaneous equations models, by constructing index of pollution intensity, economic structure and technical structure, decompose the factors affecting pollution intensity into economic structure and the technical condition, and divide channels that FDI effects pollution intensity into the following four:the economic structure, technology, economic development level and environmental regulation. Finally regression analysis found that there is trend that FDI in Anhui prefer pollution industries and thus economic structure in Anhui is with the trend of transition to pollution. However, the introduction of foreign capital has brought the advanced environmental pollution control technology and with a technology spillover effect, foreign funds also can influence the quality of environment by affecting the level of economic development of Anhui province and the government’s environmental regulation intensity. Therefore as a whole, a positive environmental effect of foreign direct investment exists in Anhui province. Yet it should further strengthen environmental regulation, the limitation on the transfer of polluting industries, foreign investment in Anhui province as the upgrade of industrial structure adjustment in Anhui province.Hence, this paper puts forward the following Suggestions:First, guiding the direction of foreign investment, and actively adjusting the economic structure.Second, to limit foreign backward technology, and improve technological overflow effect.Third, improving the system of environmental regulation, and exerting environmental regulation effect.Fourth, developing sustainable development plan, and realizing the positive scale effect.