The Analysis Of The Relationship Between Chinese Business Environment And FDI Inflows

The World Bank group established the doing business project team in 2002. It introduced the index system of doing business to carry on the inspection for the global economy’s business environment and promote the economy to improve their regulatory efficiency. It is clearly pointed out that China has to build the international business environment in the third plenary session of the 18. A better business environment will undoubtedly increase a country or region to attract foreign investment and guide the flow and accumulation of high-end elements. In recent decades, China’s FDI inflows have been a steady growth. In 2014, it reaches around ＄128 billion and has the moderate growth of 3%. It is the first time for China to exceed the United States as the biggest recipient in world. Finally, we can easily draw a conclusion that creating a favorable business environment is vital for the development of a country or region.In order to explore the relationship between Chinese business environment and the FDI inflows, we use the combination of the theoretical analysis, statistical data analysis, empirical analysis and other methods in the essay. Firstly, the essay does the analysis on the connotation of the business environment, construction of index system, the present situation of Chinese business environment and FDI inflows. And then it introduces the FDI inflows and the "distance-to-frontier" of the seven indicators respectively as variable to the empirical analysis. Therefore, using generalized least squares (GLS) through Eviews7.0 systems to build the initial model. Model test using the T statistic test, F statistic test, D.W. statistic inspection, ADF stationarity test, E-G two-step methods of inspection and so on. Last but not least, the final estimate of the regression equation is obtained.The results indicate that some problems do exist in the construction of Chinese business environment. The empirical analysis shows that the registered assets and cross-border trade have a significant role in promoting FDI inflows in the explanatory variables. Finally, aiming at the problems of Chinese business environment and the conclusion of empirical research, the essay puts forward some suggestions from how to build the rule of law and international business environment two aspects to improve the business environment friendliness, promote trade facilitation and investment facilitation and speed up the economic development.