Chinese Foreign Direct Investment Determinants Of Research

Thirty years of reform and opening up of China has improved that foreign direct investment (FDI) has made great contribution to capital formation, employment, exportation and upgrading of industry structure, therefore, it played a huge role in promoting the development of China's economy. However, by the worldwide economic crisis, foreign investment in China shrank for two consecutive years. In 2009, 23,435 invested directly firms were approved by Chinese non-financial sectors, 14.8 % lower than in 2008. Actually utilized FDI is 90 billion U.S. dollars, which decreased by 2.6%。State council make some comments on how to introduce FDI in mid April,China should further strengthen the advantages of foreign direct investment decisions factors to realized foreign capital utilized in the optimization structure, improve the quality, encourage foreign investment enter high-tech, energy saving, high-end manufacturing, modern services and modern agriculture, especially in the field of new energy development and utilization, promote industrial restructuring, and eventually achieve sustainable economic development. Against this background, it has become a key for China to successful use foreign direct investment that the decision how to determine the main factors of foreign direct investment, finding out the problem of foreign direct investment, using the advantages of current determinants of Foreign Direct Investment in China and effectively avoid the unfavorable factors.This paper reviews the related theory of foreign direct investment. Combined with the circumstance of China's Foreign Direct Investment and its effect on the promotion of economic growth, the paper will show the DFI determinants of theoretical and empirical analysis. In the theoretical analysis part, supply and demand theory, equilibrium theory and the World Investment Report 1998 in the host country determinants of foreign capital have been used to analyze the equilibrium value of foreign direct investment decisions and determinants of foreign direct investment in China. In the empirical analysis, this paper takes part in development of foreign direct investment in China since 1990 as the research object and use eviews6.0 software to do the regression analysis through variables factors: FDI and its market potential, infrastructure, cost, economic, risks, agglomeration, trade development level. Regression results indicated that the higher opening degree, the more perfect infrastructure, the lower cost level, the greater potential market, the lower economic risks and the more FDI. In addition, trade development level of variable regression results describes that there is a substitution effect between international trade and inward FDI.Based on the theoretical analysis and empirical research results, this paper introduces FDI in China and its internal and external problems in detail with the method of SWOT. Furthermore, the paper proposes specific measures to promote China's FDI.