The Research Of China’s OFDI And Industrial Structure Adjustment

OFDI(Outward foreign direct investment) is a necessity as the economy globalization develops, it’s not only an index to measure a country’s relationship with the others, but also a signal where a country’s economy stand in the world. On the other hand, a reasonable industrial structure is the base to develop the economy healthily, it promotes the whole economy increase more effectively, so it is an indispensable part of the growth of the economy development. Under the new economic circumstance, how to optimize the industrial structure by expanding the scale of OFDI has become a practical research. This paper analyzed the impact of OFDI to the industrial structure of China, both from theoretical and empirical ways.The research of this paper contains three parts.Firstly, the paper defined some of the relative concepts in the section1, and together with section2, there are some historical research results of the relationship between OFDI and the industrial structure, which are the base of the following research. In section3, the paper analyzed OFDI of China from several aspects which are the history, the distribution of industry and area. Also the industrial structure of China is analyzed. Based on the theory mentioned in section1and2, this paper analyzed the impact of China’s OFDI to China’s industrial structure from the positive and negative ways.Secondly, based on the analysis in the first part, this paper has developed the "World development model" of Chenerry by add the OFDI into original model as a explanatory variable. The annual data from1979-2011are used in the empirical analysis. The unit root tests has showed that G2,G3,OFDI,Y and TX are integrated of1, and the cointegration test showed that they have a stable long-term relationship. Then the granger test concluded that OFDI is a one-way granger cause to G2, and a bilateral granger cause to G3. The final regression equation suggests that OFDI have a a positive effect to both G2and G3.At the end of the paper, some of suggestions are proposed based of the results of theoretical and empirical analysis:keep increasing the scale of OFDI to optimize the industrial structure of China; keep increasing the third industry to promote the scale of OFDI; make use of different kinds of OFDI to optimize the industrial structure.