The Research On The Relationship Between Agricultural FDI And Agriculture Economy Of Shandong

Economic globalization keeps speeding since1980s. Meanwhile, foreign direct investment (FDI) has replaced international trade to be the new engine for economic growth. As the largest developing country around the world, China succeeds to absorb the most FDI. The scale and amount of FDI grows larger day by day, from1.956billion U.S. dollars at the beginning of Reform and Opening-up to111.716billion U.S. dollars in2012. The overall economy also shows strong growth. According to China Statistical Yearbook, the growth rate of GDP has kept an average of9.7%each year since Reform and Opening-up. Even during the global Financial Crisis, China recovered soon and the total GDP has reached second around the worl.However, though our economy is developing rapidly, the contradictions of the imbalance among different industrial structures are sharpening. The agricultural GDP accounts for only about1/10of the total GDP, the speed of which is far below the secondary and tertiary industries. Although FDI had always been encouraged to flow into agriculture, only when <The Catalogue of Industries for FDI> was issued did agricultural FDI begin to rise. The serious lag in using FDI aggregates the imbalance of our industry structure. Besides, the huge domestic agricultural technology gap with developed countries leads to low competitiveness. Therefore, our agriculture economy develops pretty slowly. Even so, the <World Investment Report2009> shows that agriculture suddenly became a dark horse in attracting FDI during the economic crisis, while FDI in other industries dropped rapidly. It seems that agriculture will bring a new round of FDI.Though the studies focusing on non-agricultural industries give different conclusions about the relationship between FDI and economic growth, most of them still agree that FDI will bring in sufficient capital inflows as well as the advanced technologies in theory, which will promote the economic growth in host country. However, as a weak industry in modern economy, will agriculture benefit from the FDI inflows to get a growth? How does FDI affect agriculture growth theoretically? How can the host country and domestic agricultural enterprises get their profits with the use of FDI? These are the problems this thesis is going to explore.The paper begins with the review of relevant theories and literature. Then, it analyses the mechanism of how FDI acts on agriculture economic. It also studies the game process between foreign agricultural enterprises and host country as well as domestic firms, which aims to help them get the "first-mover advantage" to realize more profits. On the basis of the theoretical analysis, we use the model of capital varieties varieties increase to derivate the agricultural capital model. Afterwards, through empirical test between FDI and agriculture growth, we get the conclusions. At last, we propose suggestions in the prospective of enterprise and government separately.