Regional Differences Analysis On China's Use Of FDI

Before China's reform and opening, foreign direct investment was very little. After reform and opening up, China's utilization of foreign investment achieved rapid growth. By 2006, China's use of foreign direct investment amounted to 630.21 billion US dollars. China has attracted the most FDI in the developing countries for many years. The average annual growth rate of FDI is more than 10%. Through accelerating capital formation, technology transfer, industrial promotion and employment effect, foreign direct investment speeds up China's economic development. This paper firstly analyses on the status of China's use of FDI, including the development stage of FDI, regional policy and distribution of FDI, and the impact of China's economic development.Traditional international direct investment location theory introduces main influencing factors of international direct investment location. In all of these theories, Dunning's Compromise theory on international production is most famous. But it only makes a summary analysis on the whole factors. It only makes a study without taking account of every different region realities. Therefore, it doesn't interpret specific and thorough the problem, that is regional differences on china's use of FDI.In response to these questions, the paper introduces International direct investment location theory and the outcome of the study of some domestic scholars, identifies a number of variable factors. Then, make a system analysis on the relationship between FDI and these variables. Then, through empirical analysis, we find that the influence factors that lead to China's regional differences in the use of FDI, these factors are market conditions factor, environmental factor and investment expenditure factor. This paper also ranks the provinces (municipalities and autonomous regions) of utilization FDI, and makes comparative analysis. Finally, in response to the above analysis, from macro and micro perspective, this paper presents a number of specific policy recommendations.