A Research On The Spatial Effect Of FDI On Employment In China

Nowadays,while the international situation is volatile and the domestic economy is under obvious downward pressure,COVID-19 has further aggravated this situation.Chinese central government,in order to deal with the current complex and changing situation,put forward "six stable" and "six protection",which includes "Stabilizing employment","stabilizing foreign investment" and "preserving employment of residents".At the beginning of the reform and opening up,the inflow of FDI did give impetus to China’s economic development and created more jobs.However,as China’s economy slows down and enters the stage of pursuing high-quality development,it remains to be seen whether FDI inflows can achieve effective technology spillover and improve the domestic employment skill structure.In addition,the unbalanced development between regions is also one of the issues that need to be solved.FDI flowing into a certain region will not only impact the province,but also leads to the flow of resources between provinces.Therefore,FDI may influence the employment of both local and surrounding areas,and whether this spatial effect is positive or negative also needs to be further studied.This paper takes the panel data of 30 provinces from 2010 to 2019 as the research sample,based on the spatial durbin regression model and the inverse distance spatial weight matrix,we find that the FDI inflow in China has a positive boosting effect on the expansion of employment in both local and neighboring areas,and the spatial spillover effect of FDI inflow on employment growth in neighboring areas is almost twice as large as that on the promotion of local employment.FDI inflow has a negative impact on the upgrading of employment skill structure in both local and neighboring areas,and the negative impact on the employment skill structure in neighboring areas is even greater,implying a certain siphoning effect on high-skilled talents in neighboring areas;the level of transportation infrastructure negatively adjusts the positive boosting effect of FDI on employment scale in local and neighboring areas,which means when the level of transportation infrastructure enhances,the promotion effect of FDI on employment scale in the region will be reduced.It is thus proposed that while further strengthening the efforts to introduce foreign investment,the government should focus on attracting investment to less developed regions to drive their industrial and employment development and narrow the regional wealth gap.It should also focus on attracting investment to high-tech industries and give full play to the driving effect of high-skilled talents on low-and middle-skilled talents to optimize the skill structure of domestic employment.Cooperation should be reached between provinces to coordinate the planning of FDI policies and to carry out reasonable overall layout and management of FDI in the region,then greater effect is likely to be achieved than working separately.