The Development Condition And Industrial Upgrading Effects Of Foreign Companies Of Zhejiang Province

After China particpant in the world trade organization, it started to face the more open global business environment and more and more foreign direct investment has swarm into China, which must be paid attention. The international industrial structure has been adjusted with the several industries have been transfer into the other countries. This is the significant moment for China to make good use of FDI to adjust its structure. In 2008, China has cancelled the tax preferential policy to foreign companies. In addition, the environmental issues of foreign companies have also appeared. So China has made some regulations to manage the foreign companies’operations, which caused them not easy to survive in Chinese business environment. The manufacture industry of Zhejiang province has been in the industry chains’downstream, so it is badly in need of the advanced technology and management pattern to help it to adjust and upgrade the industry structure.This article will combine the theories with the case studies to analyze the specific countries in Zhejiang province about the influence of FDI in their industries structure adjustment First, the article will analyze the relevant theories reviews to show the fundamental theories which are useful for this article. Second, the article will compare the foreign companies with the private enterprises in China to show their current development conditions. Third, this article will analyze several specific industries in Hangzhou, Ningbo and Jiaxing to show how FDI influence these industries and make the industrial upgrading. At last, the article will give the suggestions for Zhejiang province about how to make good use of FDI. The conclusion of this article is FDI has really promoted the upgrading of industrial structures in Zhejiang province, on one hand, by increasing the competitions, on the other hand, by technology spillover effect, demonstration effect and learning effect.