Impact And Risk Analysis Of FDI In China Magnesium Industry

China is the first largest producer and exporter of magnesium in the world with 22.5% of total world reserves. Since the medium term of 1990's, China's magnesium industry has started to grow up. But China's magnesium alloy appliance market has not yet been half-formed and deep processing technology of magnesium has not been advanced. Magnesium industry has still belonged to the material-exported industry which is at the cost of resources and environment. In order to accelerate the development and appliance of magnesium alloy and change itself from a big country with magnesium resources to a great one, China's magnesium industry open the gate to foreign investment and various local governments have issued plenty of preferential policies to attract foreign capital. On the other hand, china's resources advantage and low-cost labor forces attract plenty of foreign investments. Therefore, more and more FDI have entered China's magnesium industry since the end of 1990's.Because magnesium industry is the emerging sunrise industry, the domestic present science researches have only analyzed the development, existent problem and development prospect of China's magnesium industry. So far there has been no scholars discussed the present investment situation, the impact of FDI on China's magnesium and possible risks with it. In order to fill these research gaps, this paper discusses the influence of FDI on China magnesium industry and possible risk with it by means of qualitative and quantitative analysis through information organ, official stat. department and some reference materials. The conclusion indicates that FDI has four positive influences and two negative ones on China magnesium industry while has potential risks. The positive influence: first, improving the structure of export goods; second, introducing advanced management model; third, developing local economy; fourth, accelerating the development of local enterprises. The negative impacts: (1) Partial local enterprises' competition ability are being weakened; (2) The inveracious of FDI and the blindness of introducing programs bring hidden troubles to the sustainable development of local economy. The potential risks: industry risks; environment and resources risks; lost risks of domestic capital. This paper at last bring out a countermeasure to avoid risks: enhancing the competitiveness of private business; perfecting the law institution and policy of Foreign Capital Utilization; founding market warning system, emphasizing the building of industry assosiation; effectively utilizing domestic capital.