Study On Influences And Effects Of Foreign Investment On China Western Area

Since the Reform and Open door policy adopted, with deepening of the unification of the world economy, China has made remarkable progress in attracting foreign investment. So far, China has became one of the most active countries in absorbing foreign direct investment, currently China is the largest recipient of FDI inflow. The experience in the past 20 years indicates that, attracting FDI has a remarkable influence on China's economic development. This behaves in some aspects as compensating the capital insufficiency, promoting domestic technology advance and management, propelling industry adjustment and up gradation, creating employment chances, increasing state tax incomes, accelerating foreign trade, enhancing international market competence ability of the host economy, etc. Foreign investment has played an important part in economic development and system evolvement. However, foreign investment in China shows obvious regional imbalance for gradual implementation of the China's reform, open door policy and other environmental factors. There is an east high and west low situation in foreign capital utilization with an ever-growing east proportion. To gain rapid growth in economy, west China needs to introduce lots of foreign capital to fill the gap of fund. How to invite more foreign investment to the west then grows to be one of our government's main concerns.Based on the theory of location, the economics of MNEs, the paper collects and processes a great deal of real data for foreign investment especially FDI and take out an experimental test on the correlation between FDI and local economic increase, calculating the contribution of foreign investment to the western region, set up a analytical framework from the two aspects of effective mechanism and influence factor, also put forward some countermeasures to the issue.The thesis consists of seven sections: Section 1 is an introduction to the background, goal and significance of the study, illustrates related concepts and presents a research review. Section 2 analyzes the present state of foreign investment utilization of the west, from the aspects of history course, current situation, and main problems. In Section 3, the empirical test shows the result of foreign investment on west economy, on the basis of which, examine its contribution to west economy. Section 4 analyzes and evaluates the advantages and disadvantages as well as effective mechanisms of foreign investment on the west economy, furthermore, states the influencing factors of those effects. That is one of the core contents of the study. Section 5, from the aspect of regional condition, discusses the main factors which influence the distribution of foreign investment. That is the other core contents of the study. Section 6 raises some proposals for foreign investment utilization. Chapter 7 summarizes the result of the research that foreign investment especially FDI has remarkably promoted the west region economy increase through filling up fund gap, promoting technology progress, industrial optimization and foreign trade, etc; The scale and efficiency of foreign investment depend on a series of composed factors such as system, economic development level and structure, human capital, infrastructure of the area, therefore the western region should pay attention to raise foreign investment structure and quality, change utilization way and place emphasis on policy readjustment.