| 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 had become the leading country that attracted the largest amount of FDI in 2002. It's predicted that the inflow of FDI will continue to grow in the future. However, FDI in China appears a huge imbalance in regional distribution. Most MNCs concentrate in eastern coastal areas of China, while the MNCs in western China are very limited. Differences in the endowment in different regions and government policies are the main reasons for the imbalance of FDI in regional distribution. :Firstly, with the analysis of panel data model, the conclusion indicates that policy variable (POL) and market scale (GDP) offer the most significant impact on the distribution of FDI. Other factors such as tertiary industry (TER), number of home and foreign industrial factories (FAC), wage of labors (W) and the length of road among a square kilometer (ROAD) are very important as well.Secondly, achievement index and potential index are used for the comparison of achievement and potential of FDI absorbing between different areas. Through the comparison, we find out that eastern China is much better than western China both in the achievement and potential of using FDI.Thirdly, the comparison of investment environment between eastern China and western China shows that eastern China has better investing endowment, which explains the imbalance of FDI distribution in China. However, western China has comparative advantages in energy and chemistry, mining, agriculture, equipment manufacturing, hi-tech industry, tourism.Finally, several suggestions are made to improve the investing environment of western China, including the fostering of industrial clustering, development of tertiary industry, construction of transportation facilities, cultivation and bringing in human resources. |
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