There are many literatures on studying the determinants of foreign direct investment in China,but almost all of them only discussed the issue from the point of view of investor.They forgot that the quantity and regional distribution of FDI also determined by the demand of the host country.Our view is that the demand constraint can’t be neglected when studying the FDI in China.And the government relation,especially the relation between central government and local government,decides mainly the demands of FDI.From government relation viewpoint,local governments were always "investment-hungry" during the reform era of China.The demand of FDI would increase if local governments get more right relative to central government.So,we can infer that there are direct correlations between local government’s right and the growth and regional distribution of FDI.In this thesis,we testify the two propositions using the statistics data of 1982～2002 by empirical method.
