On China's Utilization Of Foreign Capital On The Domestic Institutional Change

Since China's issue of reform and opening up, economic growth has achieved great success, which largely related to the significant contribution FDI. During the last three decades, the large-scale flow of FDI contributed to the great economic and social development of China, the growth of China's GDP, the increase of employment, the increase of tax revenue, the catch-up of the overall competitiveness of China. The theoretical study of the use of FDI more focused on the economic dimension. However, like many other developing countries, the process of using foreign capital and domestic institutional change has intertwined with one another. After three decades, China has achieves not only the economic prosperity but also accumulated a large number of resources for future economic development. At the same time, China's political development has made substantial progress, which included the positive change of the national development strategies, the improved domestic legal system, changes of the government's preferences and behavior patterns, and the institutional changes of property rights system in the market. Therefore, there is no doubt that the study of the use of foreign capital in China and the domestic political system would imply great theoretical and practical significance.At present, the theorists have paid more attention to the relationship between the use of foreign capital and the institutional change. Some scholars put their interests on "the impact on the domestic institutional change for the use of foreign capital", some viewed "the use of foreign capital as a way to promote the institutional change," some concerned" the impact of the use of foreign capital on the government's actions," and so on. However, these researches limited their topics on the changes after China's entry of WTO, instead of the past three decades. With respect to the literatures and research methods, they lack a more comprehensive review of policies and laws, with respect to the studying object, few has related these changes to the macro-economic perspective.This paper has combined the Comparative Study and Historical Research, the quantitative research and qualitative research, it tried to explore the logic behind the process. The paper includes four parts, the first part is the theoretical establishment of analysis framework ,the second part analyze the context which contains the utilization of foreign capital and the changes of the domestic system, the third part includes a case study of empirical studies, the last part tried to make some theoretical contributions based on case studies.