The Study On Foreign Direct Investment And Environmental Quality In The Urbanization Process

Globalization has led to the rapid growth of world trade and investment,which is obvious to promote the industrialization and economic growth of developing countries.The scale of FDI to China has been expanded since the reform and opening up.In 2014,the scale of FDI reached 119.6 billion US dollars,surpassing the United States as the largest host country to attract FDI;the actual use of FDI of 2015 has reached 126.27 billion US dollars with an increase of 5.6 percent;according to the United Nations Conference on Trade and Development,China's FDI of 2016 reached 139 billion US dollars with an increase of 2.3%,ranking the top three positions of global foreign capital inflow destination.Industrialization and urbanization are synchronized,China has experienced the world's largest urbanization process in the last decade,the proportion of urban population increasing from 17.92%in 1978 to 56.35%in 2016.China's economy has experienced high growth period with the world's attention,but the high economic growth accompanied by the same world-renowned environmental degradation.In 2015,only 73 cities' environmental air quality was up to standards,accounting for 21.6%,265 cities' environmental air quality is unqualified,accounting for 78.4%.In addition,due to the characteristics of China's dual economic structure,the quality of urbanization in China is not high,there is not full employment,stable income in the urbanized population.The Fifth Session of the 12th National People's Congress was opened in Beijing on March 5,2017.Premier Li Keqiang made a report on the work of the government.The report made it clear that "We need to further refine our strategic plan for opening up,make big moves to improve the environment for foreign investors and build 11 high-standard pilot free trade zones.Meanwhile,we should Effectively strengthen environmental protection effectively,make our skies blue again,make sulfur dioxide and nitrogen oxide emissions cut by 3 percent.In the procession of urbanization,we should take solid steps to pursue a new type of urbanization,deepen the reform of the household registration system,registered at least 13 million new urban residents as permanent urban residents." Therefore,in the new normal period,China has to been involved in globalization to further attract FDI,promote the upgrading of industrialization and improve the quality of urbanization.From the perspective of the theoretical and empirical research of domestic and foreign scholars,most of them discuss the environmental effects of FDI and the environmental effects of urbanization.In view of the characteristics of China's dual economic structure,this paper divides FDI,urbanization and pollution into dual-economic structure,analyzing FDI,urbanization and the synergistic effect of FDI and urbanization on pollution.At first,This paper analyzes the correlation of FDI and urbanization,FDI and pollution,and then analyze the influence of FDI on urbanization and pollution on the basic of Harris-Todaro's dual economic model and Copeland-Taylor's model.In order to further analyze the effect of FDI on the environment,we used Grossman&Krueger and Copeland&Taylor's model framework to analyze the effect of FDI on environmental quality.Then,We use 210 Chinese prefectural panel data from 2005 to 2014 to empirically study the impacts of FDI on environmental pollution in the process of urbanization.The estimated results show:First at all,as FDI improve the development of urban industries and lead to population agglomeration,it raise the level of urbanization.Second,the entry of FDI into the environment has the scale,structure and technical effect.In China,because of the small technical effect,the entry of FDI weakened the quality of the environment.Third,there is a synergistic effect between urbanization and FDI,and the increase of FDI in areas with higher urbanization has a greater negative effect on the environmental quality.Fourth,the urbanization process will lead to Industry and population agglomeration,so it deteriorate the environment.Fifth,the city's minimum wage level is benefit to urbanization but is harmful to the environmental quality.Sixth,the cross-effects of urbanization and the minimum wage are worthy of attention,although it is positive to the environment,but addicts that China's industrial structure is not optimized in the process of urbanization.Finally,this paper puts forward the corresponding policy recommendations.Firstly,still have to introduce foreign capital actively,especially in the central and western regions;secondly,the introduction of FDI should pay more attention to "quality",especially the technical effect of foreign capital;thirdly,the government should be cautious about the minimum wage level,and it should support environmental policy and enhance the quality of urbanization rather than only the pursuit of urbanization rate.