Research On The Location Choice Of Foreign Direct Investent In China

Motivated by the in-depth economic globalization and the deepening of China's reform and opening, the inflow of foreign direct investment (FDI) in China accelerates its pace. China has become the leading country that attracts the largest amount of FDI. However, FDI in China appears a huge imbalance in regional distribution and internal industrial stakes. These differences in the region reflect the strategic consideration of foreign capital to seek the maximum profit, and also reveal the selective use of the environmental features and advantageous resources of each region of China by foreign companies. Therefore, the study of the regional distribution and the investment location choices of FDI in China will be of great importance to understand the relativity of China's regional economic characteristics and FDI, and to improve the conditions of the inferior regions to absorb the foreign investment so as to promote the harmonious development of all regions. Starting from the analysis on present status by using the factor approach, this thesis examines and evaluates the policy and the clustering factors as the main factors which impact FDI location choice from the quantitative method, and analyses the policy implications of the research findings.This thesis aims to study the location choice of FDI in China. Those relevant theories have been acquired in fields of FDI theory, MNCs, regional economics and economics of geography by integrating theoretical research with empirical research as well as comparative analysis and systematic analysis. In theoretical study, on the basis of location theory and FDI theory, this thesis focuses on the location decision factors in location choice of FDI in China. In practice study, according to the local choice of FDI in China in investment history, nationality, regional distributions, and based on this, it comes to the conclusion that there are many factors such as market, clustering, cost and policy. In addition, the author selects GDP, total retail sales of social consumable (SALE), the length of road of each area (ROAD), tertiary industry (THIRD), number of home and foreign companies (CORP), policy variable (POLICY) and finally give a case study on the factors of influencing regional difference of FDI in China.This thesis concludes that the location choice of FDI in China is a common result of many different location factors. Among them, POLICY and CORP offer amore significant impact on the distribution of FDI. The behavior of location choice widens the gap of the economic development level between the eastern region and the central and western regions of China. Therefore, a reasonable adjustment in China's utilization of foreign investment policy and promoting industrial integration can effectively guide the flow of FDI and in a conducive manner to benefit harmonious economic development of the eastern, central and western regions of China.