时间：2022-09-23 10:17:48
In1978, China started an economic reform. The promotion of foreign direct investment (FDI) inflow is an important part of the economic reform process. After more than 30 years of economic reform, China has become one of the most important destinations for FDI.
FDI has been at the core of China’s foreign trade expansion. In recent years, foreign-invested firms have become a very important part of the Chinese economy. Foreign capital has played a largely positive role in China’s economic development during the reform. China has also achieved economic growth at an impressive speed. We will assess the impact of FDI in China’s economic.
The impact of FDI inflows on Domestic Economy
FDI is an important element in China’s reform and economic growth. FDI increase from a very level in the late 1970s to more than US$ 40 billion a year the in the late 1990s. FDI and FIEs formed an important element in China’s economic growth in both the national level as well as regional level.
China has succeeded in attracting tremendous FDIs, and foreign firms are the most important part of this for the Chinese economy. FDI flows to China have contributed to GDP growth in several ways: one is that FDI has raised GDP growth by adding to capital formation; another is FDI has contributed to higher GDP growth through its positive effect on total factor productivity. In addition, FDI has contributed to GDP growth directly through the establishment of FIEs and indirectly by creating positive spillover effects from FIEs to domestic enterprises.
FDIs are now major players in China’s international trade. This situation is the result of China’s policy towards FDI which has strongly encouraged export-oriented activities. The growth of China’s trade has been four and a half times that of world trade and China’s share of world trade quadrupled form 0.9 percent in 1978 to 3.7 percent in 2000. (Lardy, 2000)
In short, FDI has a positive and significant impact on provincial export performance. It can be further pointed out that FIEs played a key role in this achievement. Between 1985 and 1999, the share of exported accounted for by FIEs grew from 1 percent to 45 percent. FIEs accounted for half of overall export growth and one-third of import growth during this period. (Tseng and Zebregs, 2002)
The impact of FDI on employment opportunities
Without question, FDI has created large number of job opportunities through the FIEs. It increased the employment rate in China.