Assessing the factors that promote foreign direct investment in China

Abstract

It is essential for China to attract foreign direct investment because it usually brings not only capital but also technology and management experience to the local enterprise and makes contributions to Chinese economic development. This study investigates the impact factors of foreign direct investment actually utilized in China. It mainly focuses on the economic, politic and immigration aspects. I established the multiply and simple regression models respectively by using the data of gross domestic product (GDP) and producer price index (PPI), economic policy uncertainty (EPU) from 2000 to now, and the number of Chinese immigrants to the United States from 1986 to now. After analyzing the three regression models, there is the conclusion that economic growth, increasing political uncertainty, and rising migration amount will lead to the growth of FDI. Last, there are some suggests helping countries to keep its competitiveness in the world capital market, such as adhering to the policy of economic restructuring.