Foreign Investment And Industrial Safety In China

China's reformation and opening-up in the past 30 years has been accompanied by the introduction and utility of foreign capital. So far, China has been the one using largest foreign capital among developing countries for continuous 14 years. On the one hand, the mass inflow of foreign investment has made great contributions to Chinese economic development in various aspects, such as capital, technology, trade, management, and tax. On the other hand, foreign investment has made China pay a high cost; one fact we can't neglect is: foreign investment presents a potential threat to China's economic safety and industrial safety.First of all, this paper summarizes current theories of foreign direct investment and industrial safety. Secondly, this paper analyzes industrial safety problems posed by foreign investment in the framework of industrial economics (theories about industrial structures and organizations), illustrates the influence mechanism of foreign investment on safety of industrial structures and organizations, and approaches the problem with an empirical analysis. Thirdly, this paper establishes a model to calculate the degree of Comprehensive Industrial Safety, with indexes of Industrial International Competency, Industrial Export Dependency, Industrial Foreign Investment Dependency, and Industrial Foreign Capital Share Percentage; with this model, this paper proceeds with an empirical analysis of safety of China's three major industries and primary industries, and calculates the indexes for each industry and their degrees of Comprehensive Industrial Safety, and respective safety states and levels. The results remedy the subjectivity of qualitative evaluations, and provide quantitative evidences for future policy-making.In conclusion, this paper proposes four actions to avoid risks in foreign capital introduction: Establish and improve national laws and regulations on industrial safety, e.g. Anti-monopoly Law, and improve present industrial and ministerial laws and regulations; Control scale and structure of foreign investment, and judge it from both perspectives of quantity and quality; Establish scientific precaution mechanism with Chinese characteristics for industrial safety; Strengthen crisis management and reserve management for China's industrial safety.