A Research On The Effects Of Outward Foreign Direct Investment On Eradication Of China's Excess Capacity

How to resolve the risk of overcapacity is an important practical problem whether our economy can achieve steady and healthy growth in the transition period.Since 2012,the Central Economic work Conference has been resolving overcapacity contradictions as the focus of work.In October 2013,the State Council issued its guidelines on resolving the problem of overcapacity,based on which the Ministry of Industry and Information Technology,the Development and Reform Commission,and other relevant ministries and local governments are working hard to eliminate overcapacity.At the 2016 Central Economic work Conference,it was clear that the five major tasks should be laid out,and that Cut excessive industrial capacity would become the first of the five major tasks to defuse the risk of overcapacity.To ensure the smooth operation of the economy in a reasonable range has become the focus of macro-control in China.To resolve the risk of overcapacity in China,most of the researches only put forward the corresponding policy suggestions from the domestic perspective,and often ignore the impact of international market on China's overcapacity in the process of globalization.In recent years,China has been steadily carrying out international capacity cooperation.With the government actively promoting the construction of"Belt and Road" and the continuous improvement of the work system of "going out",the pace of enterprises' active integration into the process of globalization has been greatly accelerated.The scale of OFDI of Chinese enterprises has repeatedly reached new heights.In this context,on the one hand,the existing research literature points out that OFDI can alleviate the current situation of overcapacity in China,but it does not give too much theoretical explanation or experimental evidence on its internal transmission mechanism.On the other hand,some studies hold that OFDI is helpful to promote China's export trade,to replace domestic investment,to promote industrial upgrading and to enhance the innovation ability of domestic enterprises.However,it has not been further studied whether the advantages of OFDI can help to improve the utilization rate of China's production capacity.Based on this,this paper intends to study the transmission path,influence direction and influence degree of overcapacity from the perspective of OFDI,which is not only in line with the current economic reality and also improve the research theory of the influence of OFDI on overcapacity,and provide useful path reference and policy inspiration for further reasonable digestion of excess capacity.The main contents of this paper are as follows:four aspects:First,by combing the existing research literature,starting from the causes,measures and governance of overcapacity,combined with the theory of OFDI and impact analysis,this paper thinks that OFDI will bring a variety of economic benefits for the home country.And these economic benefits can affect the productivity utilization rate of the home country.Second,through selecting the relevant data of 30 provinces and municipalities in the whole country from 2004 to 2016(Tibet is missing more data,so it is excluded),the paper calculates and analyzes the utilization rate of industrial production capacity,foreign direct investment and other variables about China,and the data show that,The utilization rate of industrial production capacity in China is on the low side,while the scale of OFDI has repeatedly reached new highs,and the OFDI of manufacturing industry has increased significantly.Third,four kinds of intermediary transmission mechanisms including export creation effect,investment substitution effect,industrial upgrading effect and technological innovation effect,are set up theoretically.It is believed that China's OFDI will increase the utilization rate of China's capacity through these four transmission paths.Fourth,we select the Mediating Effect Model and the systematic GMM estimation method,and empirically test the four conduction paths of OFDI affecting the productivity utilization rate.The results show that,on the whole,China's foreign direct investment can significantly promote the efficiency of capacity utilization.From the test results of the intermediary model,it can be seen that OFDI enhances the level of production capacity utilization in China mainly through the channels of export creation utility,investment substitution utility and industrial upgrading effect.However,the ability of independent innovation is weak due to the fact that China's OFDI mainly promotes the upgrading of enterprises' products and the improvement of production processes by "imitating" innovative methods.Therefore,the effect of improving productivity utilization level through technological innovation effect is not obvious.Finally,on the basis of theoretical mechanism and empirical test,this paper puts forward some policy recommendations from the perspective of China's OFDI to eradicate domestic excess capacity.