Investigation Of Utilizing Foreign Direct Investment In China: Problems And Solutions

Since the middle period of 1990s, with the development trend of globalization integration and information of intenational economy day by day, the Foreign direct investment(FDI) have increased at full speed no matter in the quantity or on the scale. It has very important effect on the global economy and the economy of each country or region, and makes their relationship more and more close. That means every country or region should take account of theirs when it makes some policies of development. China is without exception. Since 1987, china has a huge increase in economy and FDI. Now China is a member of WTO, and is getting more and more benefits from the development trend of globalization and the open economic policies. Furthermore,China is becoming an important country over the world. If China wants to keep or promote its position in the global econommy,it must know the trend of the FDI.Then it can do the good job in the economy development under the FDI trend.The purpose of this article is to give a systermatic research and analysis to the problem of china making use of foreign capital. It strives to take the theory of the movement of internatioal capital as a guidance. After fully absorbing the rational part of direct of overseas direct investment research of some transnational corporation domestically and abroad, through applying a way of qualitative and quantitative analysis combined with the theory and case analysis, this article tries to give an analysis and discussion of necessity, characteristics and problems of china making use of foreign capital and problem of how to choose policies.This article includes five chapters altogether.The first chapter, introduction. The introduction clearly points out that when China actively uses FDI to drive economic development, we should also find the problems in the process of utilizing foreign investment. So, studying the new trend and quality of FDI in China is very important theoretically and practically. This chapter also classifies the research result of FDI theories and comments on current theories and the development of them. Based on the comments, this chapter points out that current theories are not systematic and comprehensive, which should be extended and enriched.The second chapter, the summary and new trend of the international direct investment.The chapter refers to the definitions of FDI from several authority institutions in the world firstly, then introduces the different types of FDI, which are mainly Green Ground investment, Mergers and Acquisitions (M&A). This chapter mainly studies the contemporary development trend of FDI and the economic influence systematicly. From the research, this chapter figures out that the FDI of multinational companies has remarkably effect on the economic globalization and world economic development, but the influences on the invested countries are either positive or negative. The chapter points out that the new trend of international capital flow gives the direction and emphases of investment attraction for countries. The developing countries must make effort to improve investment environment and enlarge open districts, and do more things on the open levels to attract foreign capital flow and improve the quality of foreign capital.The third chapter, the current condition and the development trend of FDI in China. Based on the large data analysis, the chapter discusses the current condition of foreign capital utilization and the new trend of FDI in China. The chapter mainly analyses the current condition of foreign capital utilization and the new trend of FDI in China by studying the characteristic of FDI. This chapter points out the following conclusions: the utilization of FDI in China keeps steady development; the research activities of foreign companies begin to be carried in China; M&A becomes more and more important mode when foreign capital comes into China; the high capital and technology industries become the new hot-point of foreign investment; the laws and regulations becomes better and better and the operation condition of foreign invested companies is good.The fourth chapter, the several problems in the FDI used in China which should be resolved immediately. This chapter analyses several problems of the current use of FDI in China. First, from the aspects of district structure, industry structure and capital source, the chapter analyses the problem of structure imbalance of utilizing FDI in China; Second, the chapter analyses the problem of industry monopoly caused by the better treatment given to foreign capital and the problem of intermedia capital flight; third, the chapter analyses the problem of laws, regulations, management and policy of utilizing foreign capital.The fifth chapter, the discussion of countermeasure to improve the quality and level of FDI utilization in China. This chapter analyses and studies how to improve the quality standard of the utilization of foreign investment. From the analysis of problems of foreign investment utilized in China, this chapter, according to the current reality in China, puts forward suggestions on the adjustment of foreign investment policy to improve the quality and level of FDI used in China. This chapter points out that, in the process of attracting foreign capital, China should follow the guidance of scientific concept of development, pay attention to the unification of economic benefit, society benefit and environment benefit, guide FDI flowing to right direction, create fair competition environment for foreign and domestic capital, follow the new trend of FDI, change the investment mode to M&A, improve investment environment more and more to exert district advantages of China.