Judging from the sources of foreign direct investment in China, Hong Kong, Macao and Taiwan funds have always accounted for a large proportion of China's foreign direct investment. Before 1990s, investment from Hong Kong, Macao and Taiwan accounted for about 80%. Since the early 1990s, large multinational corporations from other developed countries have significantly increased their investment in China, and the proportion of funds from Hong Kong, Macao and Taiwan has decreased year by year, but it still accounts for nearly 60%.
Third, the empirical analysis of foreign direct investment and economic growth in China.
The neoclassical economic growth theory holds that a country's output is a function of capital, labor force and comprehensive factor productivity. Foreign direct investment affects economic growth by acting on the above variables. Starting with the relationship between foreign direct investment and domestic investment, employment and technological progress in the host country, this paper studies the mechanism of foreign direct investment on China's economic growth under the framework of Solow's growth model.
1, foreign direct investment and GDP of China
Figure 1 shows the changes of China's economic growth rate (GGDP) and dependence on foreign direct investment (FDI/GDP) from 1983 to 200 1. Professor Shen Kunrong (1998) chose 1990 to calculate the real GDP at constant prices and convert it into US dollars when analyzing the dependence between economic growth rate and foreign direct investment. The author believes that FDI, as an investment in the host country, must be accounted for according to the current year's price when purchasing various raw materials and paying workers' wages. Therefore, it is more scientific to take the proportion of FDI calculated at the current year's price and converted into US dollars as an indicator to measure the dependence on foreign direct investment. As can be seen from the figure 1, before 1990, the proportion of FDI in China's GDP was less than 1%, so,
Its relationship with economic growth is not obvious. After 199 1 year, China's utilization of foreign direct investment has achieved rapid development, especially in 1992 and 1993, the proportion of foreign direct investment in GDP increased almost linearly, and FDI/GDP reached 6.22% in 1994.
Source: Statistical Yearbook of China (1984-2000), 2000 and 200 1 Data taken from Macroeconomic Research (200 1, No.3, 2002).
Note: The coordinate on the left indicates GGDP, and the coordinate table on the right indicates FDI/GDP.
GGDP stands for the real growth rate of GDP, and the average trade exchange rate is used when converting GDP into US dollars. As mentioned above, there are usually two methods to quantitatively measure the contribution of foreign direct investment to domestic economic growth: one is to make regression analysis with economic growth rate as the explained variable and foreign investment level and foreign capital accumulation as the explained variables; Another method is to study the contribution of foreign capital to domestic economic growth through the growth equation derived from production function. Considering that the China production function is difficult to estimate, this paper makes a quantitative test on the time series data of 1990-200 1 with reference to the multiple regression model (Fry, 1995) established by Maxwell J.Fry:
YG = a+b * YG(- 1)+c * IG-d * IY(- 1)+e * FDIY+f * FDIY(- 1)+g * IF+h * XKG+ε
Among them, YG stands for the growth rate of real GDP, IG stands for the growth rate of domestic investment, IY(- 1) stands for the proportion of domestic investment in GDP, FDIY stands for the proportion of foreign direct investment in GDP, FDIY(- 1) stands for the proportion of foreign direct investment in GDP, IF stands for the inflation rate, and XKG stands for the proportion of exports in GDP.
Using EVIEW software package, the estimated results are as follows:
According to Maxwell J.Fry model, we get the regression equation ①. Regression equation ① considers many economic variables, such as the growth rate of domestic investment, the proportion of early investment in GDP, the inflation rate, the proportion of total exports in GDP, etc. From the results, although the goodness of fit of the equation is relatively high, the t-test value of each parameter is obviously small and the significance is not high. Based on this, the author selects the economic variables with high significance for regression analysis, and after many trials and adjustments, a satisfactory regression equation ② is obtained. From the regression equation ②, we can see that the economic growth rate of China is positively correlated with the investment growth rate of that year, the proportion of foreign direct investment in GDP in the early stage, and the proportion of export in GDP, with high correlation coefficient and good significance. that
At 95%, the overall regression equation is significantly established, and the growth rate of domestic investment is significantly 1%, FDIY(- 1) and XKG are significantly 10%. It is related to the burden of early investment in GDP, but the statistics are not significant. Therefore, from the perspective of econometrics, foreign direct investment has promoted the economic growth of China at least as a whole, while the previous FDI has promoted the economic growth of China more significantly, mainly because China has always restricted the mergers and acquisitions of multinational companies. Foreign investment mainly appears in the form of newly established enterprises, and the investment in that year often cannot be put into production and operation until the next year or even longer. With China's accession to the WTO and gradual relaxation of the restrictions on mergers and acquisitions of multinational companies, this situation will change, and there will be the following kind of FDI that only takes domestic enterprises from the domestic market without increasing the total domestic investment. "
The phenomenon of "crowding out", this merger has not increased the production capacity of the host country, and its negative impact on China's economic growth can not be ignored.
2. Foreign direct investment and domestic investment in China.
Generally speaking, a country's domestic investment consists of two parts: domestic investment and foreign investment. As a part of the total domestic investment, foreign direct investment has different effects on the total investment. Generally speaking, FDI used to merge existing enterprises does not actually increase the total domestic investment, but only replaces domestic enterprises with foreign-funded enterprises or joint ventures and "squeezes" domestic enterprises out of the domestic market. Reisen (1996) made a comparative study on the absorption of international capital in Latin America and Southeast Asia, and found that in Latin America, most foreign investors invested in the acquisition of existing enterprises, and FDI existed in the form of debt-for-equity swap and privatization of state-owned enterprises, without forming new production capacity. Referring to the equation established by Professor Shen Kunrong (1999) when studying the influence of foreign direct investment on the economic growth of Southeast Asian countries, the author makes a quantitative study on the relationship between foreign direct investment and domestic investment in China.
Iy = a+b * yg (-1)+c * iy (-1)+d * fdiy+e * rexl+f * ir+g * if+ε, where Iy represents the proportion of investment in GDP, YG(-65438).
As the proportion of GDP, FDIY stands for the proportion of foreign direct investment in GDP, REXL stands for the real exchange rate of RMB against the US dollar, IR stands for the one-year loan interest rate in the domestic financial market, IF stands for the domestic inflation rate, and ε is a random term.
Using EVIEW software package, the regression results are as follows:
IY = 30.78+0.20 yg(- 1)+0.8 iy(- 1)+2.72 fdiy-3.62 rexl-0.95 IR-0.0.36 if③
(0.62) (2.66) (2.77) (-2.73) (-3.33) (-2.55)
R2 = 0.9896 Adj-R2 = 0.9689D-W = 3.5 1 F = 47.67
IY = 32.79+0.88 iy(- 1)+3.27 fdiy-4.24 rexl-0.95 IR-0.4 if④
(3.35)** (8.99)* (-5.26)** (-3.6 1)** (-3.38)**
R2 = 0.9883 Adj-R2 = 0.9737D-W = 2.65 F = 67.6 1
According to Professor Shen Kunrong's regression model, the regression equation ③ is obtained. Considering that the economic growth rate YG(- 1) of the previous year was not significant enough to pass the test, we abandoned this explanatory variable and got the regression equation ④. It is not difficult to see from the regression equation ④ that the goodness of fit of the equation is high, and all parameters can pass the t test, among which IY(- 1), REXL, IR and IF are significant at 5% level, and FDIY is significant at 1% level, so the regression equation is really effective. According to the results of regression analysis, China's domestic investment is negatively correlated with domestic interest rate and positively correlated with the previous year's investment, which is consistent with the theory that domestic investment should be negatively correlated with domestic interest rate and positively correlated with the previous year's investment. But in theory, the correlation coefficient between domestic investment and real exchange rate and inflation rate is uncertain, while for China, domestic investment is negatively correlated with real exchange rate and inflation rate. It can be seen that China's utilization of FDI contributed to the increase of domestic investment in that year, and did not "crowd out" domestic investment, mainly because China's utilization of foreign direct investment mainly appeared in the form of newly established enterprises, but rarely realized through it.
3. Foreign direct investment and domestic employment in China.
China is a typical surplus labor economy, and a large number of surplus labor are deposited in rural areas. Accelerating the development of the secondary and tertiary industries and expanding the absorption capacity of non-agricultural industries for surplus labor force is the fundamental way to accelerate the transfer of rural surplus labor force from agriculture to non-agricultural industries and solve the problem of rural surplus labor force, and it is also one of the core issues to maintain long-term sustained and stable economic development and social stability in China. The inflow of foreign capital not only promoted the economic development of China, but also created a large number of employment opportunities, which directly or indirectly promoted the transfer of rural surplus labor to non-agricultural industries. Since the reform and opening up, the number of employees recruited by foreign-invested enterprises has increased year by year, from 60,000 in 1985 to120,000 in 1999 (the number of 5438+0 in 2000 and 2006 should be higher, but only in 2006.
Can be collected1999); Judging from the number of new jobs absorbed by various economic types in different periods, the number of jobs absorbed by foreign-invested enterprises is also considerable. For example, during the period of 199 1- 1999, foreign-invested enterprises added 5.46 million employees, while the number of employees in the state-owned economy and the collective economy decreased by 1774 and18.37 million respectively.
We made a quantitative analysis with the number of foreign-invested economic employees as the explained variable and foreign direct investment as the explained variable.
N = 99.03+0. 13 foreign direct investment
(3.47) ( 12.29)
R2 = 0.9497 Adj-R2 = 0.9434D-W = 1.54 F = 15 1.08
LNN = 1.63+0.57
(3.56) (9.06)
R2 = 0.92 14 Adj-R2 = 0.9 102D-W = 2.09 F = 82. 14
Among them, n represents the number of employees of foreign-invested enterprises (unit: 10,000), LNN is the natural logarithm of n, and the unit of foreign direct investment is 100 million yuan. It is easy to see that the above regression effect is very good. Judging from the results of the reunification, every increase in foreign direct investment of 654.38 billion yuan will increase the number of employees in foreign-funded enterprises by 65.438+0.3 million, and every increase in foreign direct investment by 6543.8+0% will increase the number of employees absorbed by foreign-funded economy by 0.57 percentage points.
4. Foreign direct investment and total factor productivity in China.
Solow's growth model explains the remaining output that labor and capital investment can't explain with total factor productivity. Total factor productivity covers institutions, resource structure and technology, among which resource structure has great influence on the initial level of total factor productivity, but has little influence on the change of total factor productivity, while technological progress and institutional change can significantly affect the change of total factor productivity. Foreign direct investment mainly promotes the improvement of comprehensive factor productivity in China through the spillover effect of technology and the demonstration effect of system. The technology spillover effect can be realized by the hard way of technological progress caused by technology transfer and the soft way of technological progress promoted by direct investment accompanying the process of technology transfer. He Jie and Xu Rodin (1999) used the measurement method of Fred (1982) for reference, and constructed it with production function.
The regression equation is established, and it is concluded that the technology spillover effect (that is, the increase of output) of domestic-funded industrial enterprises in China will increase by 2.3 percentage points every time the technology level brought by foreign direct investment increases by 1 percentage point. In another study by He Jie (2000), he found that the overall quality of foreign direct investment introduced by China's industrial sector has not been substantially improved since 1990s. Compared with the domestic industrial sector in China, the marginal productivity of foreign-funded enterprises in the industrial sector has no obvious advantage, which shows that it is not very helpful to improve the overall resource utilization efficiency in China. Of course, the overall spillover effect of foreign-funded enterprises on the domestic industrial sector is realistic, and this positive effect is still expanding with the pace of China's opening up. Professor Shen Kunrong, when analyzing the correlation between the total amount of foreign direct investment in each province and the comprehensive factor productivity in each province, also came to the conclusion that every increase in the proportion of FDI in GDP 1 unit can bring 0.37 units of comprehensive factor productivity growth. Considering that the quantification of TFP requires very professional technology and complicated econometric analysis methods, this paper does not make an econometric analysis of TFP's contribution to China's economic growth, but selects the research results of He Jie and Shen Kunrong, and holds that FDI has improved China's comprehensive factor productivity at least in general from an empirical point of view.
Fourth, further discuss the advantages and disadvantages of foreign direct investment on China's economic growth.
This paper makes an empirical analysis of the role of foreign direct investment in China's economic growth by using econometric tools, and draws a general conclusion that foreign direct investment has made outstanding contributions to China's economic growth. The following attempts to analyze the advantages and disadvantages of FDI on China's economic growth in detail.
1, the benefits of foreign direct investment
The positive impact of foreign direct investment on China's economic growth mainly includes six aspects: 1, increasing domestic investment and promoting capital formation; 2. Absorb the labor force for employment; 3. Improve the total factor productivity; Comprehensive factor productivity; 4. Promote the upgrading of industrial structure in China; 5. Expand the scale of China's foreign trade, improve China's foreign trade structure and promote the development of foreign trade; 6. It is an important source of tax revenue in China. First of all, the direct effect of a large amount of FDI inflow is to increase the capital stock of China and effectively make up for the double gap between savings and foreign exchange proposed by Chenery and others. As of 1999, the actual inflow of FDI into China accounts for 17% of China's total fixed assets investment, and this capital formation effect is more obvious if domestic supporting investment is considered; From the quantitative analysis of the relationship between domestic investment and FDI, we can clearly see that FDI has played a significant role in increasing domestic investment and promoting capital formation at the level of 95%. Secondly, foreign-invested enterprises have absorbed a large number of labor employment in China. According to relevant statistics, during the period of 1.990- 1.999, 5.65 million new employees were employed in the foreign-funded economy, which eased the employment pressure in China, directly or indirectly promoted the transfer of rural surplus labor to non-agricultural industries and promoted China's economic growth. Thirdly, foreign direct investment has improved China's comprehensive factor productivity. From the research results of He Jie and Shen Kunrong, it can be seen that FDI has indeed improved the comprehensive factor productivity of China as a whole (although the latter analysis will talk about the damage of foreign-funded enterprises to China in conservative advanced technology). This is mainly because foreign direct investment is a package of creative investment. With the transfer of funds, ideas, research and development, technology, management, marketing and market networks will also be transferred to recipient countries. Fourthly, as mentioned in the second part of this paper, from the industrial structure of China's utilization of foreign direct investment, foreign direct investment is mainly concentrated in the secondary industry. In 2000, 72.75% of foreign direct investment projects and 73.72% of contracted foreign investment in China were concentrated in the secondary industry. By the end of 2000, 72.99% of foreign direct investment projects were utilized in China, and 60.87% of contracted foreign investment was concentrated in the secondary industry. Judging from the industrial structure of utilizing foreign direct investment in China, FDI is mainly concentrated in manufacturing. Judging from the changing characteristics of China's industrial structure after the reform and opening-up, the proportion of the output value of the primary industry has increased during the period of 1978- 1983. In other years, the proportion of the output value of the primary industry has decreased year by year, and the proportion of the output value of the secondary industry and the tertiary industry has been increasing. Therefore, the influx of foreign capital into the secondary and tertiary industries is an important factor to promote the transformation of China's industrial structure. At the same time, the advanced production technology and management technology accompanied by foreign direct investment, as well as its diffusion effect and demonstration effect, promoted the technological progress and relative improvement of labor productivity of domestic foreign-funded industries, and indirectly promoted the transformation of industrial structure. Fifth, the import and export ratio of foreign direct investment enterprises is much higher than that of other domestic enterprises. According to customs statistics, the total import and export volume of foreign-invested enterprises in 1745. 1 1 in 1999 accounted for 48.39% of China's total import and export volume, of which imports accounted for 53.5% and exports for 44.0%, which effectively promoted the expansion of China's foreign trade import and export scale. The contribution of foreign direct investment enterprises to optimizing China's trade structure is mainly manifested in enabling China to enjoy the benefits of global division of labor, promoting exports and upgrading the structure of import and export commodities. During the period of 1998, the proportion of manufactured goods imported and exported in China was 83.59% and 88.79% respectively, and the proportion of manufactured goods imported and exported by foreign-funded enterprises was 90.70% and 94. 18% respectively, both higher than the domestic average. Finally, foreign direct investment enterprises have also increased considerable tax revenue for China.
2. Disadvantages of foreign direct investment
Because foreign investors are mainly optimistic about China's huge market and cheap labor, the most fundamental motive is to pursue profit maximization. Foreign direct investment inevitably has a negative impact on China's economic growth, and with China's accession to the WTO, the influx of large multinational companies and the gradual liberalization of mergers and acquisitions, this negative impact has become more and more obvious, and we have to attach great importance to it.
First of all, as mentioned in the second part of this paper, since the 1990s, more and more foreign direct investment has adopted the sole proprietorship mode, and foreign investors in Sino-foreign joint ventures have also actively controlled the equity of enterprises in various ways. On the one hand, with the continuous advancement of domestic system reform, China's market economy system environment is taking shape, and the environment for foreign investors to operate solely in China has obviously improved, so foreign investors no longer rely on China investors to cooperate with them to adapt to many characteristics of the traditional planned economy; On the other hand, in order to keep its technical secrets to maintain its competitive advantage. The more important attempt of foreign investors to adopt sole proprietorship is to control China's industries and monopolize the market. According to statistics, from 65438 to 0997, foreign businessmen have occupied more than 30% of the market share in electronic and communication equipment manufacturing, clothing and leather fur and down manufacturing, cultural and educational sporting goods manufacturing, food manufacturing and other industries. Secondly, since the 1990s, foreign investors have invested in factories to acquire more state-owned enterprises and brands, and started to acquire state-owned enterprises in a decentralized and random way, purposefully and planned to acquire large and medium-sized state-owned enterprises with good benefits or to acquire key enterprises in the same industry in different regions. As the third part of this paper analyzes, if foreign direct investment does not appear in the form of newly established enterprises, but in the form of equity replacement or privatization of state-owned enterprises, then this kind of investment will not improve the production capacity of the host country.
Thirdly, foreign-invested enterprises often strictly control the diffusion of their technology, especially high and new technology, and the purpose of exchanging market for technology in China has not been well realized. Over the years, China voluntarily gave up market share in exchange for second-rate and third-rate technology. Although China, as a developing country, should consider choosing appropriate technology to attract more workers, if China is always in a backward position in technology, especially in strategically important industries, China will not be able to compete with foreign countries, and it will also endanger the industrial security of China and even the economic security of the whole country. Finally, many foreign direct investments transfer enterprises whose home products have been eliminated or seriously polluted to China, which has brought great harm to the sustainable development of China's economy.
Verb (abbreviation for verb) short conclusion
Through the above empirical analysis, we know that foreign direct investment has made remarkable contributions in promoting capital formation, absorbing employment and improving China's comprehensive factor productivity. At the same time, in our regression analysis of economic growth rate and foreign direct investment, we can clearly see that foreign direct investment has significantly promoted the economic growth of China as a whole. From our further analysis of the positive impact of FDI, we can also see that FDI has directly or indirectly promoted China's economic growth by upgrading China's industrial structure, expanding foreign trade, optimizing the structure of import and export commodities, and paying taxes. However, as mentioned many times above, with China's accession to the WTO and the gradual liberalization of restrictions on foreign investment, there has been a new trend of foreign direct investment enterprises aiming at maximizing profits, purposefully and planned to control China's industries, monopolize the market and block advanced technologies. Therefore, this paper holds that China should pay enough attention to it while actively attracting foreign investment and creating a good investment environment for foreign investors.