Nanshui Development Strategy For The Foreign Direct Investment Introduction

On the southwest, Nanshui town is about 50 kilometers away from the downtown of Zhuhai. It has the population of about 10 thousand. In the past, traditional Chinese agriculture and fishery have played an essential role in its backward economy. Since Mr.Deng Xiao ping's inspection tour in the south China of 1992, Zhuhai has been carrying out the turn-to-the-century development strategy, which will turn Zhuhai Harbor into the motive engine in the economic development of Zhuhai. Nanshui has benefited a lot from the growth of Zhuhai harbor industry and great changes have taken place accordingly. Nowadays, there are not only agriculture and fishery but also processing, storage, chemical industry and tourism industry. The biggest changes is the inflow of foreign direct investment (FDI), which contributes a great deal to the adjustment and improvement of its economic structure and then of its development. And the government has realized the significance of FDI, and called on everyone of Nanshui to pay much attention to investment introduction, and recognized it as the core of the governmental routine work.However, this is not easy and the work does not go very well. As a matter of fact, the introduction is in trouble and its future is bleak. For instance, the attraction for FDI seems not competitive enough. Very few project contracts are finally concluded and fewer fulfilled. The amount of FDI flowing actually to Nanshui remains small. The sources of FDI are very simple, most of which come from Taiwan, Hong Kong and Macao. There are some reasons for the difficulty. First, to deepen and widen the reform and open, to apply the international principle and practices, the central government is adjusting and reducing the special favorable treatment to the Economic Special Zones(ESZ). As a result, this kind of political advantage on which ESZ used to depend mainly to attract and introduce FDI is fading away, which would have a negative effect on the inflow of FDI. Secondly, in the middle of 1990's, Zhuhai municipal government forced the kind of FDI of processing industry out by various unfair treatments in order to develop high-tech industry. The image of Zhuhai was destroyed. The economic time-leg effect is making the destruction influence badly every aspect of the FDI introduction. Potential investors have been losing the confidence in Zhuhai. Thirdly, Zhuhai municipal government is short of the ability to macro-manage and coordinate effectively the related units that are independent on each other in the introduction. Additionally, bureaucracy dominates the government and its agencies. Fourth, Nanshui has its own problems such as the uncertainty of its ownership in administration, the weak base of economy and industry, the lack of necessary public facilities and various levels of labors and the intellectual. In the new century, Nanshui is getting new chances and facing new challenges in the introduction. It is now at a crucial moment that Nanshui must work harder to find the solutions and walk out of the trouble. A development strategy for the FDI introduction should be accordingly worked out.The background of the establishment of the strategy should be considered in the first place. In 1990's, there have been new changes in the international economic and political relationships: peace and development being the main subjects of the world, market-oriented economic system being established and reinforced, knowledge economy coming, economic globalization being deepened, the mode of continuous growing economy having been accepted and secured. Under the circumstance, changes have also taken place in the development of FDI. First, there have been some new things in international distribution of labor, the base of FDI. Owing to the surprising advances of science and technology, knowledge is becoming a crucial factor in the distribution whose system will be the one where knowledge and technology are the center part. The distribution is now mainly performed in intra-multinational companies, in which the international pro...