China's Utilization Of Foreign Direct Investment Effect

In July 1979 the foreign and Chinese enterprises operation law of People's Republic China was officially released, which remarked the reopening to foreign investors after 30 years closing. Under the highly growing economy background, there is a breakable improvement in the utilization of foreign capital.After 1992 the FDI began to flow into china in a large scale, in the utilization of foreign capital, utilization of FDI has become the main measure. From 1992 the ratio of FDI scale to the really utilized foreign capital exceeded the ratio of foreign loan, FDI was maintaining his leading position, then in 1994 the ratio of FDI had reached 78.14% and kept stable nearly 80% from 1994.With the increasing of the scale of FDI in our country, the effect of FDI to our national economy is becoming stronger day by day and playing an important role. Absorbing and utilizing FDI has a positive effect on the development of our national economy, inducing a lot of positive results, which makes us benefit a lot from the utilization of FDI; while at the same time it also brought some problems and made some negative effect. In general, the positive effect is more than negative effect, however, we should not neglect the negative effect.How to utilize FDI effectively and rationally and expand the positive effect of FDI in a high degree makes us get all kinds of predicted benefits from absorbing and utilizing FDI and control the negative effect of FDI to a minimum limit. All these depend on the operation and management of FDI. This article stresses on the situation of the utilization of FDI and analyzes the positive and negative effects to our national development and concludes experience, absorbs lessons, discusses strategies in order to expand the advantages and get rid of the disadvantages.The article takes the method of positive analysis and stands on the comprehensive systematic data in order to analyze the effect to Chinese economy comprehensively, including the effect of investment, growth, technology,employment, structure promotion, export enhancement, district location, and system reform.The whole article can be divided into five parts: the first one is the prelude that presents the definition, function and relative theory of FDI; the second part is on the analysis of the current situation of the utilization of FDI in our country; the third part talks about the positive effects of the utilization of FDI; the forth part analyzes the negative effects of the utilization of FDI; the fifth part on the base of the above analysis puts forward the suggestions of utilizing FDI.