Abstract：China has remarkably achieved a lot since its reform and opening up two decades ago.Nowadays,it becomes the largest funds-flow-in nation of FDI whose stock is far beyond other nations.Meanwhile,FDI has turned out to be an essential element on China's economic growth,employment and technical innovation.Especially from the middle of 1990s,China's government has to introduce substantial foreign funds so as to maintain its highly increased GDP.Therefore,there are two types of substitution effects that not only reduce the efficiency of utilization of foreign funs but also take influence on the China's industrialization materially.
The paper is aimed at the empirical analysis on China's industrialization during the entire 1990s by means of the ratio of manufactory industry to GDP,which is an indicator to the development of China's industrialization. Firstly,it is proper to use the indicator that GDP is weighted by margin output of manufactory to measure China's industrialization.By practice,China's industrialization is in stagnation during the whole period of 1990s.Secondly,the substantial introduction of foreign funds has restrained the dynamics of China's industrialization. This causes two categories of substitution effects.One is substitution effect by foreign capital, which means that introduction of foreign funds failed to facilitate the updating and enlargement of the domestic formal manufactory.On the contrary,China's economy has become foreign funds addicted.Due to the obvious shrinking trend of domestic formal manufactory,China will suffer from deindustrialization,if foreign capital introduction is slow down.This will be very dangerous to developing countries,which is suffering from unemployment.The other factor is substitution effect owing to weak quality,which means that the entire quality of domestic manufactory is not strengthened but weakened with the growth of industry.Thus,there are some defects in the reform policy for state-owned industry by Chinese government in 1990s.
史浩江, 周光友. 引进外资对中国工业化和经济结构变化的影响[J]. 人文地理, 2005, 20(5): 99-102.
SHI Hao-jiang, ZHOU Guang-you. THE IMPACT OF FOREIGN FUNDS ON CHINA'S INDUSTRIALIZATION AND ECONOMIC STRUCTURE. HUMAN GEOGRAPHY, 2005, 20(5): 99-102.
