The Strategic Policy On Foreign Direct Investment Of Small And Medium Enterprises

Nowadays small and Medium Enterprises (SME) in China are playing more and more important roles in sustaining the country's stable economic growth. However, during the process of SME development, it came across a lot of problems in different fields, such as capital, technology, management and human resource. In such circumstance, taking the advantages of the foreign direct investment (FDI) should be a good way out because it is the most effective factor in developing and maintaining SME stability. So far, China has not yet provided any favorable investment climate for SME, and its own ability is not strong enough, that's why the effect of FDI was neutralized a lot. Based on references and data collected, this article will analyze the functions and characteristics of SME's direct investment. Moreover, it will discuss the obstacle factors of SME's direct investment and will basically focus on promoting strategic policy. At last some proposals will be presented in the following aspects, strengthen the establishment of legal system, consummate social service system, actively facilitate financial support, adjust SME favorable tax policy and complete the strategic framework for SME's self-development.