Research On Influences China Environment Mechanism On FDI Investments

Since China’s reform and opening up, FDI has become a critical contributor to the economy soar. According to the 2015 world investment report, the world FDI of 2014 is 1.22 trillion US dollars. The FDI of China is 129 billion US dollar, accounting for 10.49% of the total. China, for the first time, becomes the largest inflowing country of FDI. With the inflow of FDI, environment problems are being exposed. Environment is the focus in this year’s NPC and CPPCC, and premier Li Keqiang announced an report relating to emission reduction and environment protecting. The most attracting thing in this report is the environment tax, indicating that we will internalize what is external. Now china is at a crucial juncture of economic development, so balancing environment and economy is vital. Environmental institution such as “environment tax” will definitely effect the inflows of FDI and economy growth. This paper explores the influences environment regulations on FDI investments, and how this regulation becomes the driving force of the economy at this stage of development. Scholars have diverged opinions upon this research and few of them have their eye upon the research of an economically transferring China. Papers focusing on the economy propelled by environment regulations are rare. This paper, through the integration of documentary analysis method, normative analysis and empirical analysis method, analyzes the influences environment regulations on FDI investments, and how this regulation becomes the driving force of the economy. Data form 2000 to 2014 which echoes with present economy are picked to examine the outcome with software Stata. Other factors are also added to examine the relations. The conclusion is that environment regulations and FDI investment positive correlated and they can play a positive role to economy increase.This conclusion will enrich this aspect of research. The method which is making use of Stata software is rare in China. China, at present pays high attention to environment protection, and raising the threshold of environment will not damage the economy and FDI inflow. This shows that environment regulations accords with the economic development and attracts foreign investment, which is constructive to an economically transferring China which is striving to build an environment-friendly and resource-conserving society.