The Research On Fujian's Agricultural FDI Environment

Foreign Direct Investment (short for FDI) is an effective external force in raising funds, improving technology and introducing advanced management experience. It could well compensate the lack of capital, technology and advanced management experience in developing agriculture, influence the transformation of China's agricultural labor force concept and promote an early realization of the modernization of China's agriculture, industry, and international goals. During the past five years from 2004 to 2008, the CPC Central Committee issued the Central Document No.1 as a guidance in agriculture and rural for five consecutive years. With a sharp increase in the prices of agricultural products for two years, a better environment for agricultural development has considerably attracted FDI on agriculture, which demonstrates an unprecedented opportunity in the history of agricultural use of FDI. As the frontier area of the reform and opening up and peaceful reunification of the motherland, Fujian attaches great importance to the development of modern agriculture, fully avails of national support for building the economic zone on the west coast of Taiwan Straits, accelerates modern agriculture development and deepens agricultural cooperation in the utilization of FDI. Yet considering its utilization of FDI in the second and tertiary industries, Fujian is weak in its use of agricultural FDI. The scale of utilization of FDI on agricultural is directly subject to the pros and cons of agricultural investing environment. Thus research on Fujian's agricultural environment remains an important subject of great theoretical and practical significance.The author starts first from the international investment theory, then straightens out the flow of international capital, and in the meantime of analyzing the status quo and effectiveness of Fujian agricultural FDI, tries to discuss FDI motives and special motive on agricultural FDI by raising an investment decision-making model of agricultural FDI. On the basis of this model, from the investors' perspective, raises a provincial evaluating system of investment environment. To differentiate from settings of the universal investment environment assessment system, the author sets up 37 indicators under three standards to reflect different aspects of the investment environment and agriculture information, public opinion and policy guidance in the outside world (the host country or region), experiences in the success or failure on investment and positive and negative comments on the investment environment in this area. An overall score based on this investment environment assessment system will be an objective and pragmatic result for FDI judgements.This paper, by referring to a constructed assessment system of FDI on agriculture, with the application of AHP,accessed to relevant data in 2006 and made a comprehensive comparison between Fujian and other six provinces, namely Shandong, Guangdong, Jiangsu, Hubei, Yunnan and Liaoning, which successfully introduced FDI on agriculture. During the empirical process, the author proved that the assessment system was highly related to the actual FDI on agriculture in other provinces and made a horizontal comparative analysis on varied sub-factors of Fujian FDI environment. Finally, the author raised his thoughts in improvement on Fujian agricultural FDI environment.