Study On The Tactics Of Attracting FDI In The Perspective Of Strategic Motivation In China

China's rapid economic growth has brought dramatic boost to FDI all over the world, achievements on FDI attracted world attention in recent years, and climbed to a new level continuously. Inflowing FDI is providing us a powerful impetus in economic growth and developing foreign trade. We offen pay more attention to FDI double strategic motivations: cost-guidance and market-direction. FDI is mainly through cross-border M&A to reduce costs and penetrate markets,and influence the FDI enterprises'selection of export geographic direction. We study FDI double strategic motivations so as to attract FDI for our country much more rational and effectively.Confronted with the above problems, To FDI double strategic motivations as the main object of study, this paper does some innovative and exploratory study on theory and empirical. The main contents are as follows:1. Firstly, for factors affecting FDI double strategic motivations, this paper uses CES production function, and establishes theoretical model between FDI double strategic motivations and the exchange rates. Using the theoretical model, this paper analyzes the effects of FDI double strategic motivations to the currency's appreciation. On this basis, with the application of econometric methods, combining with actual datas from 11 economies, considering RMB exchange rate factors, this paper tests FDI double strategic motivations about 11 economies in China. The empirical results show that: firstly, foreign investors value huge consumer market in China; secondly, they value cheap labor and abundant natural resources. Due to cost-guidance FDI and market-oriented FDI in a relatively balanced state in China, RMB appreciation would likely adversely affect China's absorption of FDI.2. M&A of FDI has become one of the major forms of investment. The research on the major factors of double strategic motivations to M&A of FDI is very important. In this study, the factor analysis of multivariate statistical methods is used to study the major factors of double strategic motivations to M&A of FDI in China. We consider the role and affecting degree of the advances in technology, the domestic economy and international economic prosperity at different times. We select them as major reference motivation factors of double strategic motivations affecting M&A of FDI. Then, we establish the extended gravity model to do empirical test using panel data of Germany, China, Hong Kong, Korea, India, Japan, and the U.S. during the period of 1991 to 2007. The empirical results show that technological progress, the domestic economy and international economic prosperity play an important role in M&A flows of FDI.3. The FDI double strategic motivations is often related to the geographic direction of domestic exports trade. We first do cointegration test using the data of Hong Kong, China Taiwan, Japan, the European Union, and the United States since the nineties of 20th century, and analyze long-term cointegration relationship between the FDI double strategic motivations and the geographic direction of domestic exports trade. Then we use VAR model analyzing the impact of exporting countries selection to FDI, and explore the trends of geographical direction of export trade in China.4. For FDI double strategic motivations, considering the impact of regional geography, combining with actual data of Eastern, Central and Western China, we use econometric models and methods to analyze differences in absolute terms and relative size and growth rates of FDI in Eastern, Central and Western. This can provide reference for our country to better attract and use FDI. On this basis, we take Guangxi province as the research object, and contrast with Guangdong province to analyze their differences. Also, this can provide reference for the less developed regions to attract and use FDI.5. As the scale of FDI in China is growing and effectively make up for lack of funds in China, FDI is conducive to the healthy development of China's economy. On the other hand, due to the FDI double strategic motivations and itself, FDI also bring some inevitable problems. Confronted with the problems bringing by the FDI double strategic motivations, considering the appreciation trends of the RMB exchange rate, combining with the conclusion of this paper, we put forward the corresponding policy recommendations.