Analysis Of Foreign Direct Investment’s Effects On Employment In China

Along with the continous deepening of reform and the increasingly rapideconomic structure adjustment, Foreign Direct Investment (FDI) as an importantinfluence of macroeconomic variables to promote economic growth and developmentof society of our country economy is continually deepening.From China’s economicdevelopment, China’s current economic growth rate slowed down, labor advantage isgradually weakening, solving the problem of employment is more difficult andurgent.In this paper, we combined the employment and FDI of the China’s currenteconomic hot spots through quantity and quality of employment.By the empiricalstudy, we systematically analyzed influence of FDI on our country obtainemployment. In the part of theoretical analysis, in order to influence the way of FDIas the breakthrough point to analyze the mechanism of effect of foreign investmenton employment quantity and quality of employment, and on this basis, furtherexplains the domestic and foreign employment effect factors. In the part of empiricalanalysis, employing apanel data set for2002-2011from38industries to analysis ofinfluential factors of the total sample and sectors. The results show that, FDI hasplayed the significant role in promoting employment quantity of China’s wholeindustry, but its effect less than domestic investment effect. From the industryperspective, the positive effect of FDI on export-oriented industry employment aremaximum, and there are the positive correlation coefficient in low-technology,capital-intensive and labor-intensive industries, which is higher than its average levelin the whole industry.Through the promotion of scientific research into the foreigninvestment enterprise, FDI has the obvious effect on promoting the level of thewhole industry wages. In addition, domestic investment is also the import factor.Women are still discriminated against in employment in the manufacturing industry.After deep analysis into industry, FDI has the negative significant effect on the wagesof low technology, labor-intensive and introverted industry through the change ofemployment effect. Finally, based on the above analysis and give full play to thegovernment as the impact of FDI in the most important participation main bodyfunction, the policy of utilizing foreign capital to improve the effect ofemployment-oriented have been put forward, which will make our country’economyin the rapid development of foreign economy and more effectively dealing with theemployment problem.