Analysis Of The Influence Factors Of The Investment From America To China In Different Industries:Based On Grey Correlation Method

It can be said that foreign capital is one of the driving forces of the skyrocketing of the economy of the countries in its growth phase, either in the developed countries like the US, the EU and Japan, or in the emerging economies, such as India and the ASEAN. Because of the reform and opening up policy, the magnitude of the introduction of foreign investment in China increased year by year, the amount of actual use of foreign capital from 6.64 billion yuan in 1983 to $ 113.3 billion in 2012. Some scholars used to measure that when China’s FDI increases by 1% the GDP will increase by 0.38%.The United States is the world’s most developed countries, and American firms spend a lot of money in China, which has a positive influence on China’s economic growth. But the proportion of American investment in China has been much less. This paper focuses on the foreign direct investment in different industries in China to analyse which factors make an impact on it and explores the regularity.Statistics of the home country and the host country both show that investment from the US in China is huge, but the proportion is low, which doesn’t accord with the fact that the United States is the world’s largest economy and China is the world’s second-largest economy.The American direct investment in China may rise a lot. To study factors of direct investment to China in different industries not only enriches theories of international direct investment,but also help the Chinese government related department make decisions to absorb and guide more American multinational enterprises to invest in mainland China, and promote China’s economic development and technological progress.The paper is based on traditional theories about the FDI, using grey correlation method to analyse which factors to affect the investment from America to China in different industries. Besides we make some suggestions to attract more investments from the US in China.This article innovations are firstly considering the characteristics of different industries to adopt foreign investments, which can be a more scientific analysis of the influencing factors, secondly using grey correlation analysis, can better overcome the shortcomings of traditional methods such as trend analysis and multivariate linear regression model analysis method. The paper compares factors from 1990 to 1999 with factors from 2000 to 2012.We find that the market factor and educational factor has a great influence on the manufacturing, also affect wholesale business, information and technology industry except mining. Besides manufacturing industry is d by infrastructure. Mining industry is mainly related to the cost and institutional factors. Cost factor and exchange rate are less important than before.