On China's Foreign Direct Investment

With the development of globalization of the world economy and the further opening-up of our country, expanding the FDI-out (foreign direct investment -out) becomes more and more necessary to boost our economy. Concretely, expanding FDI-out is an initiative method to tackle the development of the internationalization of the production division; it is a powerful lever to promote the structural adjustment of our national economy and the restructure of our enterprises; it is an effective means to make best use of "the internal & external resources and the markets abroad & at home" and it is helpful to foster new economic increasing- points; furthermore, it is the only way to put our enterprises into the international competition." To implement the strategy of 'go outside' is a significant act in the new phase of opening-up to the outside. By encouraging and supporting enterprises of different ownerships with comparative advantages to invest outside, we can drive the export of merchandise and work service and foster a series of transnational corporations with strength and famous brands ", which is put forward definitely in the report of the 16th plenary conference of the Communist Party of China.But the existing theory of FDI-out focuses on the developed western countries and is unsuitable for the practice of our country. The FDI-out of our country lacks systematical theory as its guidance.Currently, we are transferring our traditional economy to modern economy, most sectors of industry are labor-orientated, capital-orientated and tech-orientated sectors seriously lag behind the developed. The economy development theory indicates that to achieve the advanced level the undeveloped should seek truth from the facts, utilize the latent advantages and adopt the leapfrog strategy, namely, apply the advanced technique to cope with all concrete problems of the economic development, promote the social productive forces by upgrading the tech skills and restructure the whole economy as well. This is the only way for the undeveloped to narrow the gap and catch up with the developed.It is reckoned in the traditional theory that adopting the import-substituted strategy is the main way to upgrade the industrial structure for an undeveloped country; some others voice that implementing various favorable systems to attract foreign capitals and tech skills as much as possible is an important strategy for the undeveloped to surpass the developed. But as a matter of fact, for the undeveloped, in a passive way, executingimport-substituted strategy and attracting foreign capitals is essentially accepting the backward industries that the developed abandoned. To a certain degree, it is beneficial for the undeveloped to boost new tech and uplift traditional sectors, but it cannot shake off the inherent grade's difference. In another word, adopting these two policies cannot help the undeveloped achieve its goal.. To upgrade its tech skill and develop its high-level industry, the undeveloped should break the passive accepting pattern and adopt the strategy of "catch up forthwith" &"the early bird catches the worms", facing the international market initiatively. Thus, to realize its "catch up and surpass" strategy the undeveloped should break the theoretical limit, take its inland facts as its starting-point, adopt suitable ways to extend "athwart grads" FDI-out, strive for the newest tech in the world and enhance the development of its inland high-tech industry and upgrade its industrial structure.The impact of the FDI-out upon national economy has been given much attention. The analyses of this dissertation show that the export-substituted effect of the FDI-out is not apparent, it lays positive effect upon the international balance of payments, it is favorable for inland investment under the present exchange rate principle. Taking the characteristics of the current investing outside and the state of the inland macro-economy into consideration, with regard to the employment, the advantages of developing the FDI-out general...