Study On The FDI’s Influence On The Economic Growth Of China

Since reforming and opening up, China regards the use of FDI as one of the maincontents of opening up. Now, China has entered the development stage of surplusfunds, which rely on the intensive growth pattern to drive the industry upgrading.With the accelerating economic globalization， the level of integration amongindustries has been increased. It brings unprecedented opportunities for futuredevelopment of Chinese economy. At the same time, the introduction of foreigninvestment has played a positive role on promoting the development of Chinesescience and technology, improving the improvement of employment issues andpromoting the rapid economic growth. However, there is no comparative advantage ofscience and technology when compared with developed countries.The existence ofthe extensive development, the imbalance industrial structure, labor shortage and theemployment issues, environmental pollution, unbalanced regional economicdevelopment, wealth gap and other issues are need to be solved.In such a situation, get a reasonable way to attract FDI, take advantage of theforeign capital and avoid the negative effects. Try to modify the factors that bringingnegative effects to increase the positive effect of foreign investment. By taking fulladvantage of FDI, it will promote the economic growth continuously and steadily.The paper has got an afresh re-sort and summarize of the economic growththeory and researched the mechanism action of FDI. Through the way of collectingand organizing relevant data and information, the paper reviewed the history ofChinese political, economic, cultural and social development in the use of FDI. Thenuse the empirical analysis to analyze FDI, domestic fixed investment, human capital,export data to found out that FDI is significant to the economic growth. Also, theinteraction with human capital, labor force and marketing have made FDI take anindirect action to economic growth. The higher the domestic human capital andmarket levels are, the higher increasing effect of FDI to GDP is. Also, further analysisof national data shows that in the process of FDI promoting economic growth, thereare differences among regional. The empirical regression results indicate that FDI inpromoting economic growth is becoming more and more useful in the central region.Through empirical research, I believe that improving the environment offoreign direct investment, enhancing the attractiveness of FDI， promoting theinteraction between FDI and domestic fixed investment, improving the human capital level are powerful sources to promote economic growth.