Research On The Impact Of Coordinated Development Of Two-way FDI On The Optimization And Upgrading Of China’s Industrial Structure

In the environment of globalization,the links between regions are becoming more and more frequent.The cross regional flow of investment is not only an important way to participate in international economic exchanges,but also an important way to learn international advanced technology and transfer marginal industries.In the process of engaging in division of labor and competition,China is both a host nation and an investing nation.The scale of imported and outward foreign investment is increasing,and the coordinated development of the two is also advancing in an orderly manner.At present,under the new pattern of double circulation,making efficient use of high-quality and high-level two-way direct investment and participating in the global resource market and factor market is conducive to ensuring the effective supply of the industrial chain,improving the national industrial chain and cultivating the competitive advantage of the industry.However,as the largest developing country in the world,China’s industrial development still has the problems of "Insufficient innovation" and "Large but not strong",and the innovation ability and industrial structure need to be further improved.Based on this,it is meaningful to deeply examine the influence of coordinated development of two-way FDI on the optimization and upgradation of industrial structure.With the above background,according to the related theories and influence mechanisms such as international direct investment and industrial structure,this article uses the rationalization and supererogation of industrial structure as the dependent variable and the coordinated development of two-way FDI as the independent variable.By using data from 30 provinces in China for the period 2003-2020,a dynamic panel SYS-GMM model is used to empirically test the impact of the coordinated development of two-way FDI in China on industrial restructuring.In order to further examine the relationship between the both,taking into account the impact of the 2008 financial crisis,the sample is divided into two periods: 2003-2008 and 2009-2020.Considering the in-depth opening-up policy,according to the setting of free trade zones in different provinces after 2013,the samples are divided into free trade zones and analyzed again.At the same time,based on the mediating mechanism of technical progress and non-linear path of economic development,this paper explores the impact of coordinated development of two-way FDI on industrial restructuring and upgradation.The empirical results show that:(1)On the whole,the coordinated development level of two-way FDI has significantly improved the rationalization and supererogation level of China’s industrial structure.And the industrial development of the previous period will positively affect the current industrial structure.(2)In terms of stages,the impact coefficient of coordinated development on the rational structure of production after the financial crisis is less than that before 2008,and the impact coefficient on the industrial structure supererogation is significantly positive and greater than that before 2008.This indicates that China’s two-way FDI is gradually coordinated in depth and breadth,driving the industrial structure from coordination to a higher level.(3)In terms of subregions,the coordinated development of two-way FDI in the provinces where the free trade zone is located can significantly promote the optimization and supererogation of industrial layout,but has a negative influence on the rationalization of industrial structure in non-free trade zones.(4)There is a partial mediating effect between the coordinated development of two-way FDI and industrial structure,with technological progress playing a positive bridging role in both.(5)There is a significant threshold effect of economic development between the coordinated development and the upgrading of China’s industrial structure.If the level of regional economic development exceeds the threshold,it can strengthen the positive role of the coordinated development of two-way FDI.Based on the above conclusions,this paper puts forward that we should pay attention to the coordination of "Bringing in" and "Going out",and explore the coordinated and in-depth development mechanism of two-way direct investment.We should earnestly implement the strategy of developing the country by relying on science and technology and assist industrial transformation & supererogation and steady economic development by coordinating the quality and level of two-way FDI.Attach importance to policy support,reinforce the establishment of FTAs(free trade areas)in combination with regional characteristics,implement the concept of sharing,and provide institutional guarantee for coordinating twoway FDI and helping the optimization and supererogation of the country’s industrial structure.At the same time,we should pay attention to strengthen the construction of supporting facilities in attracting foreign investment and outbound investment,create a good environment from soft and hard conditions,and improve the local economic strength and attraction.