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Strategic Research on Shanxi Equipment Manufacturing Industry Utilizing FDI

Author HouMengZuo
Tutor ZhouXinSheng
School Shanxi University of Finance
Course International Trade
Keywords Shanxi Equipment Manufacturing Industry Foreign DirectInvestment Industrial Clusters Technological Innovation
CLC
Type Master's thesis
Year 2014
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Foreign direct investment has been the focus areas of scholars at home and abroad,theory researches on foreign direct investment and development have never stopped.Since the reform and opening up of China, FDI has made great contribution toequipment manufacturing industry of different provinces and the country’s economicdevelopment. It has made Guangdong Province and Liaoning Province becomes theworld’s factory, walking in the country’s economic development forefront. However,although the development of equipment manufacturing industry in Shanxi has a longhistory and experienced glorious moments, it did not become a pillar industry forShanxi economic development."Twelve Five" period, Shanxi traditional coal, cokingcoal prices continued to decline as the industry and the economic transformation hasbeen unable to cross the requirements continue to add momentum to sustained economicgrowth in Shanxi, Shanxi equipment manufacturing industry is one of the emergingalternative industries. Compared with other emerging alternative industries, equipmentmanufacturing industry is strong in terms of advantages and industry base. Obviously, itwill become the strategic industry in maintaining sustainable economic growth.Nowadays, Shanxi Province is facing a more open market and environment, thetraditional development reliance on domestic market will lead to Shanxi’s economicbackwardness. Therefore, the development of Shanxi equipment manufacturing industryrely solely on their own internal resources are not enough, how to use large financialresources to strengthen Shanxi equipment manufacturing industry has become animportant topicFirstly, through analysis on the international investment theories, FDI effectsassociated industries, and FDI and industrial agglomeration effect of the interactionstudies, we conclude that FDI will be invested to improve the host business innovationthrough direct and indirect ways; FDI will lead to the association through its aftereffects on the development of an industry’s downstream businesses, thereby improvingthe industrial chain; industry cluster is one of the important factors affecting foreigndirect investment location choice, while FDI will promote industrial agglomerationformation and development, the two influence each other and promote each other.Secondly, through the analysis of the international and domestic economicsituation of the new changes in Shanxi equipment manufacturing industry, I reach theconclusion that Shanxi equipment manufacturing industry is facing new opportunities for the international transfer of manufacturing and industrial restructuring brought ineastern China. The construction of the "Silk Road economic zone" brings a broader,open market for the development of Shanxi equipment manufacturing industry.Base on a lot of statistical data on the status of the equipment manufacturingindustry in Shanxi, studies show that although the development of equipmentmanufacturing industry in Shanxi has reached a certain size right now, but equipmentmanufacturing industry’s profitability, technology, industrial agglomeration force is stilllow. Because clusters able to compensate the lack of development of Shanxi equipmentmanufacturing industry. Therefore, it is urgent and essential for Shanxi equipmentmanufacturing industry to utilize foreign investment. On the basis of analysis of thenecessity of Shanxi equipment manufacturing industry, through Shanxi material, humanand policy advantage analysis, the equipment manufacturing industry in Shanxi has thecapability to utilize foreign direct investment.I adopt case analysis approach, through the analysis on the practice of differentprovinces’ equipment manufacturing industry. I conclude the revelation of Shanxiequipment manufacturing industry utilizing foreign investment. Finally, after analysis ofprevious study, I think Shanxi equipment manufacturing should innovatively use FDIand I will give you3different strategies: In order to enhance the attractiveness toforeign investors, we need to optimize the investment environment and improve theutilization of foreign capital; we also need to develop competitive enterprises, expandindustrial clusters; lastly, we should increase research investment to strengthenequipment manufacturing and technical team.

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