An Analysis Of The Effect Of International Direct Investment On China 's Economic Growth

In recent years, with the accelerating process of economic globalization, the international influx of direct investment, international capital flows have also become the norm in our country and the world interconnected. In 2001, after the country joined the WTO,we made a series of adjustmentsin attracting foreign investment policies, industrial restructuring, and other aspects of regional competition, making a substantial increase about foreign investment amountin recent years. China has become the country with the biggest foreign direct investment in the world. Since the subprime mortgage crisis led to the financial crisis in 2008, foreign direct investment for the development of stable and sustainable economy brought negative effect gradually emerged, for emerging economies is a serious blow.At the present,China, put forward " the Silk Road Economic Belt and the 21st-Century Maritime Silk Road " strategy,it bring new opportunities for our country attracting international direct invest.not only "going out" strategy as a two-way strategy of opening new era of globalization, but also "bringing in" needing our sustained attention more. The high-quality "bringing in" strategy will better promote economic growth effects of foreign investment in our country.Based on the systematic analysis of the relationship between economic development and inputs,put inputs as a intermediate variable of economic growth,research the impact of the international direct invest on economic growth factors.By combing the literature, we found that existing research does not take into account the impact of all the elements of the system of economic growth, and the absence of mutual influence between the factors analyzed. Therefore,this article put the economic growth factors as a focal point ofresearch, to analyze the interacting mechanism between international direct invest and economic growth factors,and use VectorAuto-regression model to analyze the relationship between International Direct Investment and the elements of promoting economic growth,to analyze the mechanism of international direct invest on China’s economic growth.First, the paper systematically sorts out the development of foreign direct investment in China, analyzing the growth effects of the inflow of economic impacts and feedback mechanisms of international direct investment, using error correction model to analyze international direct investment and macro economic growth;And then for in-depth analysis of FDI on economic growth mechanism of action, the article could use variance decomposition by Vector Auto-regression model to illustrate the investments to various factors affecting economic growth, and thenusing impulse response function to analyze whenever a unit change in FDI, followed by knock-on effects on economic growth factors.And concluded that China needs actively attracting foreign direct investment,and participating in international division of labor and international competition,they are not only the objective requirements of the global development, but also the inevitable choice of supporting China’s economic growth and future development;Finally,through the analysis of conclusion,author come up with strategies about coordinated development between international direct invest and economy of China.