China's Utilization Of Foreign Capital In The "super-national Treatment" Problem

This thesis aims to bring to light the unfavorable effects for China's economy and social development as result of the "Super National Treatment" granted by the government to the joint ventures (mainly manufacturing enterprises), analyze the favorable factors for China's taking advantage of foreign capital in the domestic environment and international environment as well. It is suggested that necessary adjustment of current policies should be made for the purpose to better absorb and use foreign fund.The first chapter explains the definition of "Super National Treatment" and the relationship between it and developing country's using foreign fund. "National Treatment" is one of the basic principles prevailing in international foreign direct investment and requires general compliance of all the countries. Almost all the developed countries have adopted it. " Super National Treatment" often is found in developing countries because of historical and realistic reasons. The methods & objectives usually are similar from one country to another. It did make contribution to help those developing countries to attract foreign capital at different historical stages. However, its negative effects overweigh its effectiveness and cannot be ignored. The situation is obvious in China.The second chapter is to make comparison between the attributes and features of the policies adopted by developed countries and developing countries during the course of their attracting foreign fund. The conclusion is the policy should be adjusted along with the demand of economic & social development; "Super National Treatment" will gradually fade out. In addition, it is also suggested that China should take "TRIMs" (WTO) seriously, the policy maker does need to study it and then make use of it.The third chapter expounds that favorable effects of "Super National Treatment" is very limited for the time being in China. Meanwhile, the current situation and international environment is relatively favorable for an adjustment in policy. Fade of "Super National Treatment" will bring about benefits to continuous, healthy development of China's economy.The fourth chapter discusses some problems, which should be paid attention to during the course of super national treatment's fading out. Some important principles are set forth and appropriate methods are put forward as well. It is asserted that policy maker's decision depends on the trade-off of harm and benefit considering the actual situation and kinds of factors that matter.The fifth chapter discusses how to better attract and more efficiently use foreign fund under the condition of overall fairness. With a view to the present situation, to continuously improve investment environment, deepen the reform of financing system & develop the capital market, encourage foreign capital's participation in M&A and domestic enterprises' investment overseas are the cruxes of the matter.