A Study On The Environmental Effect Of Foreign Direct Investment In Shaanxi Province

With the acceleration of opening to the outside world and the optimization of trade structure,the steady growth economy,the abundant labor and the capital resources,the completed infrastructural facilities and the support of various policies,which makes the plenty of Foreign Direct Investment(FDI)flowing into China.However,the FDI increases the consumption of natural resources and the emission of pollutant.The decrease of air quality,especially the haze,makes a huge stress on the environment.As the beginning of the ancient Silk Road and the important hinge of Eurasia,Shaanxi Province plays the significant role in Silk Road economic belt because of the strategy of“One Belt One Road”.Shaanxi Province will attract more foreign-funded enterprises.At the same time,will further boost the development of economy.This paper analyses the environmental effect of FDI,in order to pay more attention to the environment during the attracting capital.In short,holding the sustainable development route will achieve the development of Green economy.Based on the relevant research of different scholars,this paper analyzes the mechanism in theory.The result shows that there are three main aspects: the scale effect,the structure effect and the technical effect.The capital of foreign enterprises will expand the economy scale and promote the local economic development.While the rapid expedition will certainly increase the consumption of resources and pollution.At the same time,the improvement of living standards will enhance the environmental awareness,which has a positive influence on environment.The different industries have different proportions of FDI.The influence on industry structure will impact the environment.The technical scale can drive the development of local enterprises even the whole industry,also make for initiative change and the improvement of technique.This can change the original production mode and update the equipment of decreasing the waste,aiming at improve environment.Through the status analysis of FDI and environment of Shaanxi Province,we can know that the scale and total quantity are still small compared with other provinces besides the rapid progress.FDI focuses on the second industry while the first and thethird industry accounted for little.This results in imbalance of industrial structure and emission of pollutant.This paper uses panel data of cities of Shaanxi Province to make empirical analysis.One side,this paper verifies the EKC Effect.On the other side,this paper analyzes the FDI’s environmental effect of Shaanxi Province.The results show that,the foreign capital makes the environmental curve move so that causes the threat on the environment.The increase of FDI leads to the increase of emission of industrial waste gas and industrial sewage in different degree.In order to improve the environment during the attracting foreign capital and developing economy,this paper offers the following suggestions based on the analyses above.Firstly,the government should adjust the strategy of foreign capital,insist the concept of sustainable development,transform the development view,establish the system of Green GDP and emphasis on the pollution.At the same time,we should increase investment,optimize the foreign capital in structure,enhance the percentage in third industry,which updates the industrial structure.Secondly,the government should raise barriers to entry,prohibit the pollution industry entering,pay more attention on the quality rather than quantity.Thirdly,the government ought to improve the ability of absorb to make full use of technology spillover of FDI and play a positive role in improving environment.Finally,the government should establish the system of protecting environment,strengthen the supervision,add the environmental consciousness.The government,combined with enterprises and civil organization,plays the key role in the progress and promotes the economic development in the way of healthy and harmonious.