Fdi On China's Central Economic Development Influence The Empirical Analysis

Foreign Direct Investment (FDI) was regard as comprehensive product, which contain capital, technology, institute, management and project. As for developing countries, FDI have a persist effect on economic growth, for FDI not only bring the increase of capital stock, but also can transfer technology and manage experience and increase the host countries' human resource capital. In 2003, the FDI flow into China has exceed 50 billon dollar, that has exceed America, and China become the most attracting host country. But for many reasons, such as gradual economic openness, the policies issued by China government to control investment area, the FDI flowed into China has mainly which is about 85 percent, focus on the eastern area. FDI has truly promoted the economic growth , but at the same while, it enlarged the gap of region economic growth diversity and deepens the "tow-spot" economic structure of China. With China's gradual openness and the policy direction to develop China's midland and the western area, FDI begin to flow to above-mentioned areas, about 10 percent FDI accumulated into the midland. So, it is very important to symmetric theoretical and empirical research on the effect of FDI on midland economic growth. The dissertation using midland six provinces as empirical sample, systemic analysis the promote function of FDI on economic growth. Based on the empirical research, I put forward concrete policy suggestions.This paper consists of five parts. The first part presents the study aims and meaning, the main working and structure of the paper. In chapter 2, selectively review theotically and empirical research literatures concerning the FDI and the economic development completely; The three part carried on analysis to the factors that influence and decide FDI niche distribute, in the following, explained FDI to distribute in the district of the our country; Based on it, in the chapter 4, an empirical research is made between FDI and the economic development in the middle region. Tow measurement tests are used in the empirical research: Granger causal test which is based on VAR modle researches on the relationship between FDI and GDP from 1987 to 2004, to see if there is Granger causal relationship; According to the research,we can make the conclusion: the result of cointegration verifies that there is an obvious same directional relationship between FDI and economic growth in a long term in the middle region; both will go on the same direction in the future; the result of Granger causal relationship indicates that in the middle region FDI has an impact on economic growth, and vice verse; it also indicates a bidirectionship exists between them. I make an empirical research on between FDI/GDP, TRADE/GDP and technology development through LS, also make a further analysis about the impact FDI has on economic growth in the middle region. FDI in the middle region does not have a clear connection with technology efficiency, maybe the middle region itself restrain the effect. Compared to the eastern region, the way to fulfill the overflow effect does not go well, it can be seen from the lag of economy system reform, the lacking of transparency of market environment, the lacking of channels of effective overflow of technology and the limit of transmit range and effect, so it cripples the positive effect which FDI has on technology efficiency. In chapter 5, according to the result of the empirical research, I put up some concrete policy advice an the expand ofusing FDI in the middle region.