An Empirical Analysis of the Effects of Agricultural FDI on the International Competitiveness of Agricultural Products in China

Abstract

Under the background of the reform and opening-up, as well as continuous economic growth and development, China’s attractiveness for foreign direct investment (FDI hereinafter) has shown an increasing trend year after year. However, FDI is distributed unevenly in the three broad industrial sectors. Through our investigation to the utilization of agricultural FDI, we find that the size and scale of FDI utilized in agriculture lagged far behind with manufacturing and service sectors and distributed unevenly across geographical regions. The “agriculture, rural areas and farmers” issue has always been one of the most important and difficult issues in the process of China’s economic reform. The main focus of this paper is on what impacts FDI has on the agricultural sector of the macroeconomy and how we should fully utilize FDI in order to alleviate trade deficit in agricultural products and enhance the international competitiveness of agricultural goods in China.