On The Positioning Of The Functions Of Local Governments In China To Attract Foreign Investors

Investment promotion, a kind of social and economic activity come into being for the rapid growth of market economy, play a vital role to boost the economic growth. Since reform and opening up, due to the shortage of capital and needs for economic development, local governments at various levels have taken the investment promotion as their primary task and played the major role in investment promotion. Such a government-dominated pattern has indeed played important role in the development of local economy. The investment promotion in nature, however, is a kind of market behavior and falls into the competitive arena, and should be conducted by the enterprises and other market entities in accordance with business and market rules and laws. The fact that the governments are leading the investment promotion efforts directly is not only inappropriate but also shows the wrong positioning of local governments in terms of their roles and functions, as well as the immaturity of relationship among the government, market and society. With the gradual improvement of market economy system and progress of society development, it turns hard for the government-dominated investment promotion mode to meet the current demands. How to emplace the positions of local governments in fields of investment promotion and bring their functions into full play has become an issue needs to be addressed urgently for the healthy development of local economy.The author has been working as a government employee engaging in investment promotion for more than 6 years and has involved in working-out and implementation of investment promotion policies. Through more than 2 years theoretic study on public administration and based on the earlier study published, the author holds the view that the traditional government-dominated investment promotion mode no longer meets the current demands and it is an important and pressing subject for local governments to explore the proper orientation of government functions in investment promotion and to establish a scientific and market-oriented investment promotion system, so as to promote the sustained, healthy and stable development of local economy.The author believes that the traditional government-led investment functions of the position can not adapt to the needs of the times, how to respond to competitive pressures in the right position to attract foreign investors in local government functions, to create a set of scientific and market-oriented investment mechanism This is to ensure that the local economy for sustained, sound and stable development of local governments at all levels need to break through an important and urgent issue.This thesis expounds and analyzes the evolution and development of Chinese investment promotion work, summarizes the functions, characteristics and achievements of the current local government dominated investment promotion mode, explores the negative effects brought about by the government dominated mode to the government, market and society and discusses the necessity of transforming the functions of local governments on investment promotion. Base upon these, this thesis conducts case studies drawn from the investment promotion practice by the New District of Wuxi, proposes the mode of government-guided investment promotion and elaborates in details on how to define and establish the government-guided investment promotion mode from the four independent yet inter-related perspectives, namely the multi-channel guidance, all-round service, overall coordination and professional supervision, which may provide reference to the local governments for their proper positioning in investment promotion.