The Impact Of Labor Force On The Selection Of FDI Location In China

According to the report of OECD,China has surpassed the United States as the largest recipient of FDI for the first time in 2016.As one of the main channels to integrating into globalization,FDI makes great impact on our economy,but at the same time some problems occurs.For example,it's not reasonable for foreign enterprises to invest in the region and the industrial structure in China,which causes incoordination of the regional economic development and the deformity of the industrial structure.The fifth plenary session of the 18th Communist party of China proposed to promote regional coordinated development and economic and social development.At the same time,the year of 2017 is the second year of the 13th five-year plan in China.The economic development of our country enters the new normal and is in the key strategic stage of building a well-off society in a all-round way and moderately developed countries.As a result,the help of foreign enterprises' region selection in China makes sense to the regional coordinated development of China's economical society.Among the many factors influencing the FDI location selection,labor force is one of the most controversial aspects.According to the traditional theory,the cheap labor force is the comparative advantage of our country in international trade,which attracts a lot of FDI inflow.With the development of China's economy,the cost of labor is gradually increasing,but in general the scale of foreign investment in China can still be stable.In 2016,China actual used foreign capital of 813.22 billion RMB,up 4.1 percent compared with the same.So what impact does labor standards have on the inflow of FDI needs the help of empirical method.The research content of this paper can be divided into the following six parts:The first part mainly expatiates the research background,significance,the main content of the research and the literature review in the process of the research,and introduces the innovation points and deficiencies of the paper.The second part elaborates the basic theory of FDI,labor force and other factors which influence FDI location selection in China systematically.The third part narrates the current situation,characteristics and existing problems of FDI using in China on the realistic level.From the perspective reality,this paper analyzes the current situation and characteristics of labor force in China in terms of cost and human capital,thus summarizing the defects and shortcomings of labor force in China.From the theoretical level,the fourth part introduces the influence mechanism of the proxy variable of labor cost and human capital level affecting FDI location choice,which provides certain theoretical basis for the following measurement results.From the empirical point of view,the fifth part analyzes how the labor force and other factors influence the FDI location choice in China and concluded that the labor force and other factors have different impacts on the foreign capital enterprises when they make investment decisions in the east,west and middle of China.Therefore,the government should formulate different policies to attract FDI and make different policy adjustments in different regions.According to the empirical results,the six part suggests that different policy should be proposed from the level of FDI and the market of labor.