Research Of "Immiserizing Growth" Based On The Welfare Effects Of FDI

Since the reform and opening, actively using foreign capital has become China's a core elements to develop export-oriented economy. From 1979 to 2009, we actually utilized 942.646 billion dollars of foreign direct investment in accumulation, becoming the most be populared host country of developing countries to attract foreign direct investment. The massive inflowing of FDI become important force to promote the development of our country's economic. However when we focused on the positive role of foreign direct investment play in the growth of economic we actually ignored the negative role of foreign direct investment play in the pollution of environmental .If these negative effects more than positive effects, the whole national welfare will fall, even cause"immiserizing growth"."Immiserizing growth"is the considerations of positive and negative effect of international trade's behavior .Since the birth of theory, does FDI make host country"immiserizing growth"is becoming one focus of scholars'study. This paper firstly from the traditional theory to analyze the possibility of FDI to cause our country"immiserizing growth", then expand the"immiserizing growth"theory, combining the effects of FDI and the changes of Chinese combined social welfare, set welfare function, construct welfare index system of FDI comprehensive effect .Using empirical research to study the effect of FDI comprehensive effect on the welfare index in China. We do regression analysis in general, sub-regional, sub-time of FDI comprehensive effect and welfare index to thoroughly inspect wheater FDI can cause"immiserizing growth".Research result shows that, FDI can significantly improve the welfare in quantity, but the impact on the quality different sides have different results, positive or negative big or small. Thus show that the effect of FDI is diversity and uncertainty, it is also the root cause of"immiserizing growth". To prevent FDI brings"immiserizing growth", we should thoroughly inspect the comprehensive effect of FDI. When we bring FDI we should consider both the quantity and quality of FDI, we should change to chose but not just bring FDI. Only on condition of that can FDI to promote better health for our economy and sustainable development.