On The Coordinated Use Of Foreign And Domestic Capital

The early stage of reform, China adopted various preferential policies to attract foreign capital faster economic development, with remarkable results. However, in the process of using foreign investment to promote economic development , foreign investment and domestic savings "double overflow" phenomenon has become increasingly conspicuous. Incompatible with the use of foreign capital is bound to affect China's sustained and healthy economic development, and therefore, this article will address the issue under review.This paper researchs by combining with an history analytic approach and an logic analytic approach,qualitative empirical method and quantitative method,substantial evidence method and norm analytic approach,western economic method and political economic method. Scholar's ideas on the usage of domestic and foreign investment are the theoretical foundation, and American experience on that is the basis for practice. The author analyses the domestic use of the overall situation of foreign direct investment. The innovation is through the establishment of a model of China's introduction of foreign investment efficiency level of screening. In one particular industry, if the foreign investment is useful to promote the entry of foreign-funded enterprises in the development, we imported a large amount of foreign investment. Or, we will limit foreign investment on a larger scale. We find that foreign investment is useful for the total development of our country's high technical industry. However, it's bad for the development of the domestic enterprise. At the same time, if the foreign companies increase the expenditure on R&D, it will be good for the development of the domestic enterprise. The writer solves the problems from macro view,industry and enterprise, and gets the final conclusion. Foreign investment should be screened though validity policy. Foreign investment should be introduced into some industries which foreign investment can bring the development of domestic enterprise. A model is established to moderate the usage of domestic and foreign investment. Then we can clearly master the change of the domestic and foreign investment .It will format a economy system which the usage of the domestic and foreign investment is moderate. That will raise the national economy ability and make the national economy safely.