The Affect And Countermeasure Of Foreign Direct Investment On Our Country's Economic Security

With the depth of economic reform and open door policy in China and the transformation of market-oriented economic system, China has become one of the most ideal investment places. In 2002,China exceeded America and became the number one country that absorbed investment. It's sure that FDI contribute a lot to economic development in China and become the important strength in economic development.With FDI accelerated the economic development, it also threatened economic security increasingly in China. This paper demonstrates the influence of FDI to economic security by means of extrude effect of FDI , industrial structure problem and the location distribution of FDI. The empirical research of extrude effect of FDI demonstrates: the influx of FDI make up for "investment gap "at the beginning of economic reform and open door; foreign exchange reserve, domestic savings and FDI continually increased at the same time from 1992;FDI has crowded out domestic investment. Our country use encourage and restriction policies to absorb FDI. On the one hand we give privilege to FDI and restrict FDI flowing into some industries on the other hand. It leads to illogicality in industry structure and location distribution of FDI. This paper illustrates that the illogical of industry structure influence economic security from three aspects. They are technology management, market management and environmental disruption. It also tells us the illogical of distribute structure influence economic security. On the long run, this kind of illogicality leads that FDI crowd out the domestic investment. The empirical research of three different period of location determination prove: privilege policy play an important role in location determination, at the same time market scale also play an important role in location determination.How to make a good use of FDI? This is a very important economic security problem. This article tells us from six aspects. Firstly, implement neutral policy, that is to say be fair to FDI and domestic investment. Secondly, the scale and structure of FDI should be available. Thirdly, adjusts the industry structure of FDI and maintains the economic security. Fourthly, optimizes local structure of FDI and spurs the economic growth on. Fifthly, boosts the form of the endogenous economic. Finally grasp the pace of finance open and treat well of finance liberalization.