Direct Investment In China With Chinese Technology Progress

The theory of modern economic growth tells us that the technical progress is an important element of modern economic growth, and technical introduction is a major way to shorten technical development period, improve technical level and managerial level, and accomplish technical progress. As the most important carriers of technical transfer and the major spreader in international technology market, transnational corporations monopolize 80% of up-to-date technique and technology in the world, so attraction of transnational corporations' investment is an important way to gain advanced technology and accomplish economic growth, scientific and technical progress and social development.To China, transnational corporations' direct investment brings not only visible resources such as capital, but also invisible resources such as research and development, technology, managerial experience, which promote China's technical progress. But introduction of transnational corporations' technology is not very effective. Guided by classic theory on technology transfer, the paper tries to make a thorough study of the limitations to China's technical progress resulting from transnational corporations' direct investment: the inadequacy of macro policy of government and key technology lock of transnational corporations limit the technical input of transnational corporations; more importantly, inner inadequacy of enterprises and market in China limit the technical diffusion of transnational corporations, which are discussed in detail through existing scale, technical level, property right structure, element and product market. In the end, building close relations with the practice that the deepening of reform and wider opening to the outside world and improving the level of foreign investment, we provide the relevant countermeasures and suggestions on how to make full use of active effect of transnational corporations' direct investment in China after the accession to WTO.