Research On Effect Of Financial Cycle Of China On Foreign Direct Investment Inliow

The inflow of foreign direct investment plays an important and positive role in the sustainable development of China's economy and society.However,with the increase of uncertainties in global economic and financial development,the fluctuation of the financial cycle has become more frequent and the trend of foreign direct investment has been reduced,and the trend of China's foreign direct investment has weakened as well.Therefore,the financial indicators have gradually become the key factors which Chinese and foreign scholars to study the flow of FDI.Under this background,the financial cycle and FDI inflow of China will be linked by this way,in order to study financial factors impact on China's FDI inflow from the perspective of periodic.According to the financial market development classification,the financial cycle is divided into financial market scale cycle,financial intermediary efficiency cycle and financial market price cycle,this paper uses HP filter method to eliminate the long-term trend value,showing the period fluctuation value,and examining the impact of the three types of financial cycles on the inflow and inflow rate of FDI comprehensively.Firstly,the study analyzes the current situation of China's financial cycle and FDI inflow;Then,the paper uses empirical model to calculate the three types of financial cycles,and demonstrate the content of normative analysis through the VAR model and generalized impulse response function.On this basis,examine whether the financial market cycle,the efficiency of financial intermediary cycle and the financial market price cycle have different influence on the scale and speed of foreign direct investment in China.The empirical results show that the inflow scale and speed of FDI are positively related to the China's financial market scale cycle,which is negatively correlated with the financial market price cycle and different responses to the financial intermediary efficiency cycle.Finally,according to the conclusion of empirical research,it is proposed to strengthen the financial reform,strengthen financial supervision and optimize the financial structure to maintain the financial market scale cycle,by strengthening the banking development,expanding financial openness and strengthening product and service innovation to keep the financial intermediary efficiency cycle grow up.By insisting on the implementation of prudent monetary policy and accelerate the interest rate marketization and exchange rate formation mechanism to stable perfect financial market price cycle and so on,in order to maintain stability of the FDI inflows in China under the new normal economic development status,to give full play to the spillover effect of FDI to the national economy,to achieve the goal of stable growth and adjusting structural.