Performance Analysis Of The Use Of Foreign Direct Investment In Guizhou

The scale of foreign direct investment of Guizhou Province is on the rise since1984 when Guizhou Province had the record of foreign direct investment, and ingeneral the process can be divided into the following stages: the initial stage, themassive growth phase, the adjustment phase, and the steady phase of growth. Due tothe impact of policy factors, as well as geographical factors, the scale of investment inthe initial stage is small with slow growth rate; after Comrade Deng Xiaoping’ssouthern tour speech, the large-scale growth stage began; the actual utilization offoreign direct investment has greatly improved of Guizhou Province in this stage;affected by the impact of the Asian financial crisis, the adjustment phase, the growthrate of foreign capital scale had been greatly reduced compared to the previous phaseand foreign capital inflows became slower than before; In the stage of steady growth,China joined the WTO formally, the reform and opening policy had become moresophisticated in this phase, and the amount of the actual utilization of foreign directinvestment of Guizhou Province rose steadily.From the form of enterprise, foreign direct investments in Guizhou investmentare generally divided into three types: joint ventures, Sino-foreign cooperativeenterprises and foreign enterprises. Initially, the main part of foreign direct investmentis joint ventures. with the deepening of the degree of openness , confidence of foreigninvestors on Chinese market continue to increase, the main form of foreignenterprises transformed from Sino-foreign joint ventures into wholly foreign-ownedenterprises, while the scale of the Sino-foreign cooperative enterprises has beenrelatively small. From angle of source structure, foreign direct investment sourcestructure of Guizhou province is also relatively single, mainly from Hongkong , TheRepublic of Mauritius and the British Virgin Islands, basically belonged tolabor-intensive foreign investment , Technology and advanced equipment brought inare relatively limited . From the regional distribution of Guizhou Province, the use offoreign direct investment, the top cities has always been Guiyang, Zunyi, SouthwestGuizhou Buyi and Miao Autonomous Prefecture and Liupanshui City; the foreigndirect investment of Guiyang City accounted for more than 50% of Guizhou Province,followed by the Zunyi and Anshun area, accounted for 14% and 12% of GuizhouProvince foreign direct investment in 2010. Analysis of the performance of foreign direct investment in Guizhou Provincemainly started from the six aspects: the effect of economic growth, trade effects,industry effects, technology spillovers, employment effects, and the tax effect. Withthe use of data 1984-2010 use empirical analysis methods, after analysis of the sixeffects we reach the following conclusions: 1.Foreign direct investment has positiveeffect on GDP of Guizhou Province, but after 1999, foreign direct investmentcontribution to GDP have reduced in Guizhou Province, 2.foreign direct investmentcan promote Guizhou Province import and export growth , but the pulling effect isstill relatively low compared to the national level; 3. Foreign direct investment issevere Unbalanced among the three industries structure in Guizhou Province, 4.Foreign direct investment brings advanced technology and management experienceinto the Guizhou, but because of weak foundation, technology spillover effects islimited; 5. Foreign direct investment has a role in promoting the employment offoreign-funded enterprises; 6. Foreign direct investment contributes little to the tax ofGuizhou Province, but the contribution has been on the rise.In Future, specific measures to enhance foreign direct investment in GuizhouProvince are as follows: improvement of the investment environment, enhancement ofinvestment-attracted capacity; strengthening of industry orientation, promotion ofindustrial restructuring; strengthening of technology spillovers to raise technical levelin Guizhou.