The Evaluation And Policy Analysis Of FDI Based On "National Welfare"

From the1990s, the use of foreign direct investment (FDI) in China has expandedrapidly; this greatly promoted the development of China’s economy and society. However,with foreign enterprises continue to expand the scale of investment in China, some newproblems presented, such as environmental pollution etc. So we not only need to see thepositive effects of FDI, but also should notice the negative effects arising from it.Meanwhile, we should use FDI reasonably and evaluate the “national welfare” effects ofFDI correctly.This thesis will build out the FDI “national welfare” effect evaluation index systemof China, that based on the critical analysis of “national welfare” effect of FDI fromdomestic and international research literature, and under the principle of systematic,scientific guidance, the feasibility and accuracy. This include the economic growth,income and consumption, trade expansion, employment and environmental these fivemajor effective indicators. The author selects the relevant statistical data of China’ssocio-economic development from1992to2010, using the method of factor analysis toanalyze the reasonableness of the index system from empirical point of view andcalculating the comprehensive effects evaluation index of FDI “national welfare” ofChina. The study will do a deep research on the relationship between FDI and the“national welfare” of China, using unit root test, cointegration test and error correctionmodel. Then based on the indicator data above,the level of FDI will be evaluated fromthe “national welfare” view, at the same time, each effect indicator will be studied andexisting problems will be found.Finally, suggestions to improve China’s FDI “national welfare” effect level are madeas following: First, the government should combine the comprehensive effect of FDIwith each effect of evaluation in the first place, and then attract the foreign investment;Second, optimizing the trade structure and enhancing the level of employment; Third,strengthening technology spillovers and improving the technical level of China; The last but not the least, we should both stress the economic utility and insist the sustainabledevelopment. Ultimately, we can achieve the comprehensive and sustainabledevelopment of China’s economic.