The Influence Factors Of Foreign Capital Utilization Research Around The City Of Henan Province

With the increasingly process of economic globalization year by year, the interdependence andcooperation of the world economy has been more strengthened and closely. Today, in economyglobalization times, foreign direct investment has played a more and more important role, and it hasbecome one of the important factors to promote global economic growth. Especially after the1990s,foreign direct investment has gradually become the main form of capital into our country. Many expertsand scholars expounded and proved that there is such a connection between foreign direct investment andthe economic growth in the host country. They generally think that FDI contributed to the economicdevelopment of the host country to some extent in their own research. With the expansion of China’sintroduction of FDI, the role of foreign direct investment has become more prominent in the nationaleconomy. It has become an important force in promoting the sustainable, stable and fast development ofour country’s economy, and the steady development of society. Along with the pace of integration into theworld economy, China has been taking various measures to attract foreign investment and become acountry in the world that makes use of more foreign capital.Under the guidance of reform and opening up policy, according to the provincial government’sinvestment promotion program, and the need to attract foreign investment in Henan Province, Henan hasadopt various measures to absorb and utilize foreign direct investment. Zhengzhou, Luoyang, Anyang,Nanyang and Xinxiang have established national Hi-Tech industrial Development Zone, which is the basefor the development of high-tech industries and the important carrier of independent innovation; also it is acrucial support for rapid economic development. The continued perfection of the investment environmentand industrial parks of Henan Province, contributes to the actual utilization of foreign investment in HenanProvince. With the foreign capital entering into Henan area, the competition in local enterprise is beingmore fierce, which can create a favorable business environment for competition, and it is also playing animportant role to accelerate the Henan enterprise management idea and system to meet international needs,so is to the adjustment of industrial structure upgrade and healthy development of economy in HenanProvince. For a long time, the economic development in Henan Province presents a fast rapid growth, which isclosely related with the use of foreign investment. Use of foreign capital not only can be part of theaccumulation of capital, but also be an important driver of technological progress and innovation in HenanProvince. In recent years, foreign-invested enterprises in each city of Henan Province not only effectivelycompensate for the shortfall in infrastructure investment, but also brings high-tech, cash, equipment andscientific management methods. It promotes the product structure and industrial structure adjustment andupgrade in Henan Province, Besides, the use of foreign investment also helps expand export, increasegovernment revenue, and create local employment opportunities. Henan Province is located in the middleof China, it is a typical inland province, the level of openness of its economy comparing to the easterncoastal city is relatively backward, the economic growth driven by foreign direct investment is feeble. Inaddition to setting aside these factors, there are some problems exist in the actual utilization of foreigninvestment in each city in Henan Province, such as the actual use of foreign capital in the region varygreatly, the actual utilization of foreign investment has limited sources, the city value import quantity anddespite the quality of FDI, and neglects the management of foreign capital into the region.This paper studied the impact of foreign capital utilization factor around the city in Henan province.Therefore, I read a lot of literature relating to the use of foreign investment, and take this as a theoreticalbasis to study the use of FDI, through a review on the history and the current situation of the use of FDI inHenan Province, I wish I can show that using foreign capital can promote the economic development andalso there are some problems in using FDI. After data handling of the quantity of FDI in each city, I wouldlike to explore the influencing factors of FDI in each city in recent years, on this basis, I will state whichefforts need to be made in terms of the actual use of FDI, in order to not only increase the number of actualuse of FDI, but also improve the quality of FDI in each city in Henan. In this paper, after a series ofliterature reading and data collection, I use the statistics of2003-2012in each city of Henan Province tobuild panel data model to explore the factors that influence the use of foreign capital. In this paper, I takethe following several factors as the breakthrough point: the total economy, the opening level of areas, theindustrial structure, labor costs, infrastructure investment and government efficiency. Through thecomparison of different factors around the city in Henan province, I study the influence factors of FDI ineach city to put forward the strategy of using FDI in the current situation, broaden the channels and fields of using FDI, develop pillar industries, form industrial clusters and thereby promoting economic growth inHenan Province.