Foreign Direct Investment In China Change Research

China’s utilization of FDI started after the reform and open. And with theprogress of reform and open,the scale and quality of FDI in China has been upgradedgradually.However, the regional distribution of FDI is not favorable. The distributionof FDI has been unbalanced for a long time. Therefore, this dissertation tries toexplain theoretically the factors that influence China’s regional distribution of FDIbased on existing FDI theories and locational choice theories, and constructeconometric models to test empirically the significance of various locational factorson the basis of which suggestions to promote rational regional distribution of FDI inChina.First, the dissertation studies the process of utilization of FDI in China. studiesthe selected time period is1992-2012years.,Based on the total volume of FDI,China’s utilization of foreign capital can be divided into two stages. Firstly, growingstage (1992-2001). During this period, the capacity to utilize FDI was promotedgreatly. Secondly, stable progressing stage (2002-now). The difference in FDI level inthe all regions was shrinking, with the increasing of absolute FDI scale in each region.Second, this dissertation explained theoretically the factors that affect thelocational choices. The dissertation pointed out that the factors of FDI can be groupedinto cost factor, market factor, policy factor, social environment,agglomerative effects,etc.In addition, these factors are not independent. They are interconnected. Theyconstitute an organic system which decides the regional distribution of FDI.Thirdly, the dissertation constructed econometric models to test empirically thesignificance of the location factors of FDI. The results have reached the conclusion:the economic scale, communication capability, infrastructure, innovation ability,regional policy related positively to the FDI; while labor cost related negatively to it.The result of degree of openness factor is not statistically significant.But throughcomparing the provincial and regional data, we can see that the regions that havehigher degree of openness usually owned the larger amount of FDI. The results of thetwo different stages showed that if we hold constant the normal infrastructure level,the modernness of infrastructure became an important factor for FDI location.Finally, the dissertation brought forward the corresponding countermeasures andsuggestions based on the former theoretical and empirical analyses.