FDI and Optimization of China Agriculture Structure

This paper aims to discuss foreign direct investment (FDI)'s role in optimizing structure of China agriculture. The paper uses gray relational grade (GRG) analysis to recognize FDI's effect on China agricultural structure evolution, and polynomial distributed lag (PDL) model to test whether FDI promote the growth of agricultural trade and the optimization of export structure. The empirical analysis shows that FDI is closely related to the optimizing structure of farming, forestry, animal husbandry and fishery and has significant role in upgrading crop farming structure, but its effect on the increase of cash crops is limit which means that there exist a space to enhance the efficiency of utilization of FDI to develop cash crops. The study also shows that FDI affect the growth of agricultural trade and the optimization of China export structure of agricultural products greatly.