The Economic Analysis On International Direct Investment

The theory of international direct investment mainly includes Marx's theory of capital output and international investment , direct investment theory of economists from western countries and the theory of direct investment in foreign countries in developing countries. International direct investment has been developing with unprecedented speed and scale since the 1980's ,which produces profound effects on the economic development of invested countries , hosting countries and even the whole world. It promotes the establishment and development of international production system, speeds up the technique progress of the whole world, accelerates the flow of international capital and the formation of international money market, and boosts the financial innovation and financial deepening of the world, which has played an important role in financing capital in many countries.International direct investment mainly presents the following characteristics: it is growing with rapid speed and the investment scale is expanding; the main source of capital is from developed countries while developing country's direct investment to foreign countries develops rapidly; International direct investment chiefly flows into developed countries; the departmental structure of international direct investment upgrades further, with the service industry the NO.1. International direct investment enters the market of invested countries in two ways: new construction of investment and cross-border mergers and acquisitions. Since the middle of 1980's, cross-border mergers and acquisitions has developed rapidly, and becomes into the main way of International direct investment.International direct investment influences greatly on invested countries' economy with the effect of international income and expense, the effect of industry motivation and the change of industrial structure, the effect of employment and source allocation. International direct investment can increase theinvestment on hosting countries, promote export, increase employment, exploit international market, transfer modern technology and management experience, exploit source of personnel, develop relevant industries, promote the adjustment of industrial structure and industry upgrade. Foreign direct investment, as one of the main engine of national economy development, has become an important part of the national economy and is a new developing pole of national economical growth. Foreign direct investment has capital effect on Chinese economy, promotes the technology advancement and the upgrade of industrial structure in China and while it brings about some negative effect on Chinese economical development, so it is necessary to form a set of competitive multinational enterprises and famous brand by encouraging and supporting enterprises of kinds of ownership which have comparative advantages to invest to foreign countries in order to promote commodity and service export, and it is the object need to participate in international economic technology cooperation and competition in a larger range, broader field and higher grade, and it is new situation to adapt to the economic globalization and the entry into WTO. In order to make Chinese enterprises start oversea investment rapidly and steadily, the government should issue a series of policies that facilitate enterprises' multinational management and support oversea investment greatly; at the same time enterprises should deepen reform, accelerate system and technology innovation, dare to exploit foreign market; in addition, the inlands and Taiwan should strengthen the economy and trade contact in order to make Chinese more flourish.