Study on the Impact of FDI on Urban Development

FDI has played a significant role in the change of China's urban development condition, including urban industry structure, urban economic growth and urban competitiveness, since the reform and open up policy was adopted. By the integrated methods of qualitative analysis and quantitative research, this paper finds out the followings: (1) FDI on a small scale may change only common urban functions, but FDI on a large scale cause transformation of urban nature. (2) Urban FDI scale shows evident correlation with urban economic strengths, while not with urban economic benefits. All of these demonstrate that factors of urban economic strength have strong attractiveness to FDI, and the same time, the direct results of FDI improve the strength and scale of urban economy. (3) Urban spatial structure is influenced by FDI via economic development parks. (4) Urban system is the spatial carrier of FDI, and FDI is the motive force of urban system change. By means of guidance, norm, rectification, service and operation, urban governments must build soft environment, develop industry clusters, change urban functions and natures, and arrange urban spatial organization.