The Impact of China's Economic Growth and External Debt on China's Foreign Direct Investment (1982-2010)

Abstract

China is one of the most dynamic economy in the world.China's average economic growth rate since 1980 is higher than many countries average economic growth rate due to the China's export based regime.In this article, the impact of China's economic growth and external debt on China's FDI rate measured.It has been found that China's external debts have significant influence on FDI rates in SPSS analysis within the periods of 1982 –2010.Moreover,China's economic growth rates have significant impact on China's FDI rates in the same period.Although both China's external debt and China's economic growth has significant impact on China's FDI, China's external debt forecasting rate is higher than China's economic growth forecasting rate for calculation of China's FDI rates.In addition, according to Granger causality analysis, there is a causality between China's economic growth and China's FDI rates.