Impact Of Foreign Direct Investment In China's Technological Progress

Whether a country's economic largely growth depends on the country's science and technology. We can believe that technological progress is strongly supported by economic growth, and it is an important source of which is a country to achieve sustainable development. Simply independent R&D has not caught up the technological level of developed countries, so FDI is used by developing countries for accessing to advanced technologies of developed countries as soon as possible, and eventually achieve its own progress of scientific and technological. Until now, China have been holding the strategy of "using market to trade technology". That is to say that large quantities of FDI have swarmed into China by the attraction of the abundant and cheap labor forces and a series of favorable policies for FDI. But, does this approach essentially help the China economy to achieve long-term development? Can FDI promote China technological progress. Therefore, this thesis researches it based on China's reality, used empirical methods, reaching a correct evaluation of FDI the impact of China's technological, and analyzing on the policies of attracting foreign investment, with a view to achieving the adoption of FDI to promote China technological progress.The thesis begins with the definition of FDI, technology transfer, and spillover effects, followed by analysis of the FDI characteristic and trend. And then the relation between FDI and host countries' technology progress is analyzed. In the following chapter, co integration analysis and Granger test was made by using FDI deposit and R&D intensity. The results are as follows, FDI has long-term equilibrium relation with the technology level: when the FDI increases 1%, the R&D intensity Will increases 0.2132%;When the lag length is 2～4, FDI is the Granger cause of R&D intensity; but R&D intensity isn't the Granger cause of FDI not matter in the short or in the long term, FDI inflow has limited effete in technology spillover. In the last chapter, by analyzing the restrict factor of technology transfer, the thesis Provides suggestion of correct policies for FDI.