Study Of Regional Differences Of Multinational Investment In China

Since the end of 1970s, especially in the 1990s, Foreign Direct Investment (FDI) in large quantities poured into China, which made China become one of the most importing FDI countries. However, almost 87% of the FDI imported to China were assembled in the east of China while under 10% of FDI in the middle of China and more or less 4% of FDI in the west. Many research show that it is FDI that enlarged the development gap between the East and the West. This paper will show the reason for this situation and the influence on Chinese economic development. According to the present stage of coordinating regional economy development, this paper will give some advices about foreign investment policy and regional economy development in China.Through fact and standard research, comparative analysis and combine with reference and innovation research method this article will achieve systematic ness and completeness study. International investment, economics of development theory and econometric analysis are the major theories used in this paper.the paper introduced the present regional structure of Multinational Corporation's investment in China and several basic characteristics about the regional structure of Multinational Corporation's investment briefly. From regional distribution, foreigndirect investment is clearly show that high in east and low in west; fromdifferent provinces, foreign direct investment mainly is in a few regions along the coast; from comparatively scale, levels of foreign direct investment are different in several different regions; from changing speed, foreign direct investment increasing rate has noticeable diversity and great changing range in different regions. And then ,the reason of regional distribution of foreign direct investment in China is analyzed by two ways of theory and demonstration. There are wide ranges of facts which influence the unbalanced regional distribution of foreign investments in China. But the main facts are conglomeration effect, central favorable policy on FDI, industry and infrastructure facilities and labor cost.Last but not least, this paper discusses that the regional differences of multinational corporations investment influence on Chinese economy development. The main economy effects, which are caused by Multinational Corporation's investment in host country, are capital form effects, technology distribution effects, industrial structure effects and employment effects. Meanwhile, foreign investments have dramatic influences on regional capital form, regional economic development, regional industrialization, regional trade and regional innovation, and the influence has different effects on eastern, middle and western China. The paper also shows the present states of unbalanced economy development, society development, science and technology development and regional open degree, and multinational corporations can contribute great effects on coordinating regional economy development. The paper also points out that we should attract foreign investment, while promote them to move from southeast region along the coast to north region and vast Midwest region of China.