Study On The Economic Effects Produced By Full Ownership Foreign Direct Investment

Since its opening up to foreign investors, especially after the entrance to WTO, China has obtained huge success in making use of FDI. As the amount increased, the modes of using FDI have changed from joined ventures(JVs) and cooperative ventures(CVs) to wholly-foreign-owned-enterprises(WFOEs).What caused the changes? And what influences the tendency of increasing wholly-foreign-owned-enterprises will make to China' economic development ? Jiangsu is one of the most important Provinces in making use of FDI. Since 1980s, there have been a lot changes both in the scale and the modes of FDI, too. So this paper investigates the reasons of the tendency of WFOEs in Jiangsu Province, and also analyzed the influences to the economy .Firstly, the emphasis is on the general description of the FDI's whole ownership inflowing process and the general characteristics of FDI' whole ownership in Jiangsu Province.Secondly, analyzed the reasons which coursed the tendency of the FDI sole ownership from two aspects, and indicated that the foreign direct investment sole ownership tendency was coursed by both the investment environment progressive improvement of our country and the adjustment of the investment strategy of the multinational companies.Thirdly, analyses the influences imposed by the WFOEs to the economy of Jiangsu Province. The empirical results indicated that, the tendency of the increasing wholly foreign-owned enterprises has positive effects such as boosting the development of economy, making progress in technology in Jiangsu Province, at the same time it will squeeze out the domestic investment in , reduce the employment and weaken the technical spillover effect.At last, based on the empirical conclusion, the article put forward several suggestions to make full use of the foreign direct investment in Jiangsu Province.