China’s OFDI And Industriai Structure Upgrading

China is an important destination for attracting foreign investment in the world. But in recent years, China’s international capital flows showed new features, namely, the rapid growth of China’s outward foreign direct investment (OFDI). In 2014, China becomes the largest country to attract foreign investment in the world, and at the same time, China’s two-way investment close to equilibrium for the first time in 2014. Changes in China’s OFDI is not only a significant increase in flows and stock, while at the regional distribution of OFDI, industrial layout, the main structure of OFDI have had a change. But these do not cover up the problems existing in China’s OFDI, at the same time, we should recognize that China’s OFDI still remains problem in the structure.China’s "industrial structure upgrading" policy has been put forward for a long time, but it is still facing the pressure of industrial structure optimization and upgrading. Since the founding of the PRC, China’s industrial structure has been continuously changing, this change is in line with the basic theory of industrial optimization and upgrading and the experience of developed countries. This also shows that the process of China’s industrial structure upgrading is reasonable, but it should be seen that the Chinese still have many things can be done in the proportion of the industry. Especially now, China faces serious excess of domestic traditional industries, real estate inventory pressure, frustrated foreign demand, domestic demand and increase fatigue while she also holds a lot of foreign exchange. How to achieve further upgrading of the industrial structure of the country by the international market is an important issue.The experience of developed countries shows that OFDI have a profound effect on the home country’s industrial structure. New changes in China’s outward foreign direct investment have emerged. How can we promote China’s industry structure upgrading through OFDI and both good for China herself and host countries? This is an issue which worth to be focused on. Based on this, this paper studies the impact of China’s OFDI on the optimization and upgrading of its industrial structure. In this paper, we sort out the theories about the influence of OFDI, then summary the empirical literature about this field. On this basis, we do empirical test using date from China and find that:China’s OFDI can indeed promote domestic industrial structure optimization and upgrading. But the influence is different among regions. We should take measures to promote China’s OFDI and improve the statistics index of OFDI. Then continue to vigorously carry out OFDI, and complete "going-out" policy with "going-in" strategy.