The Influence Of Foreign Direct Investment On The Second Industry Of Hebei Province

The international economic situation is complicated, the domestic economy downwardpressure still exists, the labor, raw materials, transportation costs continue to rise, which arebad for the actual use of foreign capital of Hebei province. But China has the comprehensiveadvantages of attracting foreign direct investment, and it is still the world’s most attractiveinvestment destinations, Hebei province facing development opportunities inBeijing-Tianjin-Hebei synergy, it is good for attracting investment from famous companies athome and abroad, producing a positive effect on utilization of foreign capital. The secondindustry in Hebei province is the largest industry, the actual use of foreign direct investmentaccounted for more than70%, under the background of the global economic crisis andChina’s economic growth is slowing, Hebei province is dissolving excess capacity andadjusting the industrial structure, It has important significance to pay close attention to foreigndirect investment’s prominent influence on the second industry in Hebei province, maintainthe stability of foreign direct investment inflows and guide foreign capital flow effectively topromote the sustained and healthy development of the economy in Hebei province.Foreign direct investment’s effect on the second industry in Hebei province directlyreflect in the second industry added value and employment, this article selects three timeseries data from1995to2012,the foreign direct investment in Hebei province, the addedvalue of the second industry, employment, build a vector autoregressive model to analyse.Research results show that the second industry in Hebei province employment can affectforeign direct investment inflows to a great extent, the added value of secondary industry isnot necessarily can drive the growth of FDI increases, combination of the added value of thesecond industry and employment have obvious promoting effect on attract foreign directinvestment inflows, and foreign direct investment has certain leading role in the added valueof to the second industry in Hebei province and the employment, but not dramatically.In the current tough economic times and environmental pressures, Hebei province shouldbe fully aware of the environmental factors, combined with the local development advantages,applying scientific and effective policies to attract high-tech research and development ofmultinational companies and high-end of value chain. In order to promote employment, boostthe local economy development, Hebei should guide labor-intensive foreign direct investmentflows to the relatively backward area in the province.