Research on FDI and China's Industrial Structure Upgrading by the Granger Causality Tests

This paper uses Granger causality test method to analyze the role and impacts of FDI on the domestic industrial structure upgrading. We can say that Inward FDI plays an important role in the industrial structure optimization especially for the upgrading of the secondary industry and tertiary industry. And Outward FDI of China only have impact upon secondary industry adjustment but not upon the development of tertiary industry so that the Outward FDI only have a limited impact on China's industrial restructuring.. Therefore it is necessary for Chinese Administration to issue new policies to guide FDI especially the Outward FDI to help promote the domestic industrial structure upgrading.