FDI's Impact On The Differences Of Regional Economic Growth In China

Since the reform and opening up,China's economic development has achieved remarkable achievements,and foreign direct investment has played an indispensable role.At the beginning of reform and opening up,China's use of foreign capital was mainly based on borrowing,and FDI was relatively small.With the deepening of reform and the improvement of economic level,the amount of foreign direct investment continued to increase.At the end of 2017,the total investment in FDI was US$131.04 billion.Compared with the beginning of the reform and opening up,it has nearly 60 times.At the Boao Forum for Asia in 2018,President Xi Jinping pointed out that nowadays China's investment in attracting foreign businessmen to China needs to rely more on the improvement of the investment environment rather than relying on preferential policies to attract foreign investment.Combined with the current economic situation in China,it can be inferred that FDI will enter a new chapter.The Chinese economy has also experienced a period of rapid development.Before the reform and opening up,the GDP was 367.87 billion yuan.In 2018,it quickly increased to 90.03 trillion yuan,ranking the second in the world.However,the distribution of FDI in China is not balanced.From the total amount since the reform and opening up,nearly 80% of FDI has flowed into the eastern part of China,and other regions only account for 20%.The imbalance in regional economic growth has become a problem that cannot be ignored.This paper uses the combination of theoretical research and empirical research to analyze the impact of FDI on the economic differences between China's eastern,central and western regions.In the research process,the theory of economic growth and the theory related to FDI are first explained,and the analysis and comparison are made to lay a theoretical foundation for this paper.In addition,the paper analyzes the transmission mechanism of FDI to promote economic growth,mainly from the four aspects of capital,employment,industrial structure and technological progress,and provides a reference for the selection of variables in the empirical analysis.On this basis,this paper takes 31 province-level administrative regions in China as the research object,and divides it into three parts according to the statistics of the statistical office,which is the eastern,middle and western parts,and carries out a statistical description of the regional economic growth level and FDI.Based on the comparative analysis,it is found that the GDP growth and the use of FDI in China's three major regions are significantly different.Then through empirical research to explore its correlation,select the panel data from 1997 to 2017,build an econometric model based on the endogenous economic growth model,and discuss.The empirical analysis methods used include unit root test of time series,Hausmann test and panel data regression analysis.The unit root test proves the stability of the main variableswe selected.The Hausmann test results in the selection of the fixed effect model.The regression analysis measures the impact of different factors on economic growth,resource endowment,human capital level,and industrial structure.The attraction to FDI is also different.This is of great significance for making recommendations to the government and formulating investment strategies.The empirical results show that FDI has a significant impact on the current regional economic differences,and domestic investment has also played a positive role as a core force for accelerating economic growth.At the same time,the policy also played a role.The eastern coastal region took the lead in adopting an open strategy,coupled with policy support and its own location factors,which made it a virtuous cycle mechanism in the introduction of FDI.It has once again increased the FDI introduction gap in various regions,and the economic development gap in each region has also increased.At the end of this paper,in response to the above conclusions,provide policy advice to deal with the impact of FDI on China's economic differences,and provide a reliable reference for regional balance and reduction of regional economic development gap.