Research On The Impact Of FDI On Urban-Rural Income Gap In China

Since the reform and opening up,China has gradually transformed from a traditional planned economy to a socialist market economy.In order to promote the rapid development of the economy and society,and to overcome the plight of capital shortages,it is urgent to introduce foreign capital for economic construction.Therefore,the government has continued to relax capital projects,increase the introduction of foreign capital.With the continuous improvement of the level of FDI,the uneven distribution of income in China has become more serious,and one of the important aspects is the widening income gap between urban and rural areas.Has FDI inflows widened the income gap between urban and rural areas in China? What is the transmission mechanism of FDI affecting the urban-rural income gap? Does FDI affect the urban-rural income gap in China with regional heterogeneity? Therefore,how to use FDI reasonably to reduce the income gap between urban and rural areas in China is a realistic issue that must be seriously considered under the current new normal economy.This thesis aims at the development status of China's FDI and urban-rural income gap.Based on theoretical analysis,using the inter-provincial panel data of China from 2005 to 2017,this thesis empirically studies the impact of FDI on China's urban-rural income gap and its transmission mechanism.To explore the relationship between FDI and urban-rural income gap at the four regional levels of eastern,central,western,and northeast in China,that is,to examine the regional heterogeneity of FDI affecting the urban-rural income gap in China,this thesis mainly draws the following main conclusions.First,at the national level,FDI and the urban-rural income gap have a significant negative correlation,that is,FDI inflows are conducive to reducing the overall urban-rural income gap in China;Second,at the four regional levels,FDI has significantly increased the urban-rural income gap in the eastern region,while FDI in the central region has significantly reduced the urban-rural income gap,FDI in the western and northeastern regions has a negative correlation with the urban-rural income gap,but neither is significant;Third,in terms of the impact mechanism,FDI has significantly reduced the urban-rural income gap in China by promoting the upgrading of the industrial structure,optimizing the trade structure,improving infrastructure,and increasing the level of scientific and technological innovation.However,the level of education development and government intervention are two major transmission factors to expand the urban-rural income gap.Based on the above empirical analysis results,this thesis puts forward specific countermeasures and suggestions on how to use FDI reasonably and effectively,and how to reduce the overall urban-rural income gap in China and the urban-rural income gap within each region.Including actively guiding the flow of FDI to the Midwest and Northeast,and adjusting the regional distribution structure of FDI;promoting the entry of FDI into the primary and tertiary industries,and optimizing the industrial distribution structure of FDI;encouraging FDI to enter the field of education and infrastructure construction in China,and paying more attention to rural areas Investment in education;strengthen technology introduction and digestion and absorption capabilities,and focus on enhancing independent innovation capabilities.