Study On The Effect Of China’s OFDI In The EU To Independent Innovation Ability Of Home Country

With the constant expansion of China’s foreign direct investment, domestic enterprises pay more attention to the EU. After the euro zone’s sovereign debt crisis, the international political and economic situation undergo profound changes, the EU’s technological and industrial advantages, China’s financial and market advantages as a new bright spot of EU-China trade cooperation and bilateral investment. However, Chinese non-financial direct investment stock is up to $23.7 billion in the EU to the end of 2012, accounting for 0.42% of the total EU foreign stock($5,687.31 billion), which form a great contrast to the huge volume of trade(its bilateral trade amounted to $546.04 billion in 2012) between China and the EU, so China’s investment in the EU countries still has great potential. Furthermore, the advanced technology and management experience of EU countries can be used to guide the development of investor. Thence, China’s Foreign Direct Investment to EU can be close to the knowledge, access to their knowledge spillover, which can improve innovation capability.Firstly, this paper analyzes the present situation of China’s direct investment to the EU and domestic independent innovation capability. And found the feature of the investment, investment field, investment mode and investment area during China’s direct investment to the EU. While in the aspect of independent innovation of input and output needs to be improved. And compare to the EU in terms of R&D, patent applications and research subjects using statistical analysis methods, then find that there is a big gap between China and the EU on the innovation environment. Secondly, in the mechanisms and paths from China’s direct investment to the EU, through the spillover mechanism and feedback mechanism that China’s Foreign Direct Investment to EU can promote independent innovation and China should choose the investment model for Cross-border mergers and acquisitions, building overseas R&D institutions and multinational coalition. Further, with the example of Huawei to discuss how to use the mechanism and path to improve the independent innovation ability. Then, using the measurement methods empirically analysis from both macro and micro levels, and all show that China’s OFDI in the EU can promote the independent innovation ability. Finally, making recommendations from both the government and enterprises based on these studies to make better use of China’s direct investment in the EU to improve the independent innovation ability.