An Empirical Study on OFDI and IFDI in China's Industrial Restructuring

This paper analyzes the roles and impacts of Outward FDI and Inward FDI on domestic industrial restructuring. The study shows that Inward FDI does play an important role in the industrial structure optimization especially for the upgrading of the secondary industry and tertiary industry. However, Outward FDI of China only has impact upon secondary industry adjustment but not upon the development of tertiary industry. As a result, Outward FDI only has a limited impact on China's industrial restructuring. Therefore, it is necessary for the Chinese Administration to issue new policies to guide FDI, especially the Outward FDI, to help promote domestic industrial structure upgrading.