Research On The Impact Of Foreign Direct Investment On China’s Industrial Foreign Dependence

According to the website of the Ministry of Commerce statistics, in the end of2013, the total of foreign-invested enterprises is786051, and the amount of actual use of foreign capital is1393.7billion dollars. It can be said that the deepening of reform and opening up process is also the process of national industry facing of the increasingly fierce competition of foreign capital. The huge amount of foreign capital brings the irreplaceable role to promote the economic development of our country. At the same time, it also brings the hidden trouble of safety to our industry. The increasing of foreign direct investment will affect China’s industrial external dependence. The industrial external dependence is one of the industrial security evaluation indexes. And high degree of external dependence will make the export and the domestic economy not closely related. The upgrading structure of export has little effect on the domestic industrial structure upgrading. The technological progress of Co., trade has little effect on stimulating economic growth.In this paper, the empirical analysis found that there is a cointegration relationship between the degree of import trade dependence and foreign direct investment and the real effective exchange rate index. There is a cointegration relationship between the degree of export trade and foreign direct investment and the real effective exchange rate index. By Granger causality test, we find that foreign direct investment and the real effective exchange rate index is the Granger reasons of industry’s dependence on foreign imports and the industry’s dependence on foreign exports. Foreign direct investment and real effective exchange rate index changes can cause changes in the industry’s dependence on foreign imports and industry’s dependence on foreign exports. Long-term equilibrium results show that the increase of foreign direct investment can reduce the export external dependency, largely increase China’s import external dependency. The error correction model shows that in the short term, the lag of FDI has a positive effect on external dependency of import and export, and lag of phase ii of FDI has negative effect on the current external dependency of import and export, and the influence degree should be greater than the influence of the lag issue of FDI. In general, in the short-term FDI has negative impact on import and export external dependency. This article uses comparative analysis method to study FDI impact on capital and technology dependency. Through the comparison, found that although foreign direct investment can promote the growth of economy in our country, but because the elasticity coefficient of the influence of FDI on economic growth is less than1, so the increase of FDI will increase the capital of the external dependency. In technology external dependence, we will calculate the foreign capital enterprise’s R&D for R&D in China, the foreign capital enterprise R&D for technology import costs two situations, although technology has a downward trend year by year, but the technology dependence of considering the foreign technology dependence than did not considering the foreign capital enterprise technology is very big, change were relatively moderate. To foreign capital and technology namely real dependence is larger with the increase of foreign direct investment. In our country, Industrial foreign dependence is very high, although in recent years in slow decline, but still would be hidden danger to our country industry security, so we need to be careful when introducing foreign direct investment to China.