Analysis On FDI Technology Spillover To China’s Auto Industry

China’s auto industry has been very productive in the last three decades,the output and sales volume have grown rapidly.It also attracted foreign investment into China’s auto industry. Chinese and foreign enterprise and joint venture cooperations have important influence in promoting the development of China’s auto industry.But comparing with other developed auto companies,China’s auto industry has very big disparity.It has a lack of core technology and independent innovation ability is not strong along with other problems which are still outstanding. The question that of the idea that market trading directed in technology brings a certain technology spillover effect, leading to the question as to whether the technology spillover effect plays an important role on the development of China’s auto industry, which is very worthy of our study.Based on the above perspective, this paper first stated the present situation of China’s auto industry, analyzed it’s developing characteristics and found that foreign direct investment occupies a large part of the domestic auto market. Then looking into an analysis of FDI spillover effect on China’s auto industry from a theoretical perspective, and building the basic model of FDI technology spillover, combining the data for empirical research. Finally coming to the conclusion that FDI into China’s auto industry identifies the existence of the technology spillover effect, and that the domestic auto industry development has played a important role for sure. In the end, the article puts forward corresponding suggestions to our countries auto industry on how to absorb FDI technology spillover better.