Interaction Between FDI Flows And Financial Market Development

Statistics demonstrated that FDI (foreign direct investment)of China reached 12.08 billion dollars in 2013, which covered the second in the worldwide and first place in the developing countries and,at the meantime, the latest economic report showed the FDI of China in January 2014 increased sharply as 16.11% compared with 2013.Upon the analysis of the above, the investment attraction of China remained the high status.In terms of the policies, which creating a great economic atmosphere,China government transferred its functions as simplifying administrative procedures and delegating power to lower level,and also, promoted the trade facilitation.The recent research on FDI mainly focused on the financial market development of host country and the influence of FDI towards financial market of host country. However, the study was one-sided,with insufficient consideration of mutual impact which between FDI and financial market.Above that, the author conducted the study on scholar reports and concluded the mutual influence theory.The thesis regarded panel-data of 30 provinces and municipalities of China as the sample from 2003 to 2011, and analyzed the indexes and results.Finally,put up the suggestions on how to promote FDI quality and perfect native financial market.