Study On Foreign Investment And China's Industry Security

In the beginning of the year 2004, a storm of disputation spread to many fields, such as business, academy and even politics, which caused "worry about developing as Latin America"to be a concern in Chinese economy. Essentially, the author deems that foreign capital is a double-edged sword. After the entry of WTO, with the further opening of China to outside world, a great amount of foreign investment has flooded into China. These funds play an important role in the construction of national economy but they have also damaged domestic industry security. Up to now, however, the theory of State Industry Security has not been well founded, and the domestic research on this issue is just striding the first step. This dissertation aims to explore how to avoid the lessons of Latin American countries and how to utilize foreign investment and maintain industry security as developed countries do for the purpose of meeting the challenge from economy globalization and international multilateral business cooperation. Firstly, this dissertation introduces the current researches on this issue. On the basis of them, the outline and logic framework are presented. In combination of the past theories, this dissertation points out the essentials of the developing countries'economic security and analyzes the various influences of foreign investment on economic security. FDI relates closely to industry security, including security of industry control, security of industry structure, security of industry efficiency and security of industry technology. Then the author reviews the history of utilizing foreign investment in China and makes an empirical analysis based on the above four kinds of industry security. The result shows that foreign investment has negative influences on industry security, such as controlling some domestic industries, enlarging the structure windage, contributing little to optimize the structure, the technology-dependence effect, etc. Then, this dissertation sets up an anticipation model to evaluate the industry security as a whole. Last, this dissertation advances some relevant strategies and suggestions in light of the above research. This dissertation presents the following views: both quantity and quality of foreign investment should be pay attention; not only the positive effects but also the negative effects need to be concerned; both short-term effects and long-term effects demand attention. The best way to ensure the industry security and the long-term development of Chinese economy is to administrate foreign investment as a whole by means of strengthening vigilance and adjusting inappropriate strategies.