Analysis Of The Effect Of Foreign Direct Investment And China's Countermeasures

25 years has passed since 1979 China promulgated the related legal thatallowed our country to introduce and use foreign capital. Especially in 2000 afterour country joined into WTO, the scale of Foreign Direct Investment to China hasbeing climbed considerably, and now our country has become the second drawcapital country only junior to America in the world, moreover it is the biggestdirectly investment land of foreign trader of Asia. The Foreign Direct Investment toour country can promote our economy greatly, but at the same time, Foreign DirectInvestment is also a "double-edged sword", which has certain negative influence forthe economy of our country. Therefore knowing the advantages and disadvantages ofthe FDI to our country correctly will have important realistic meaning for ourcountry how to treat FDI in new period. In this paper, I, with Marxism dialectical materialism as the foundationalmethod, with theory, analytic demonstration and countermeasure as the researchtrain of thought, and with the method of history and logic, by the standardizationalanalysis and demonstrational analysis, put forward my own preliminary view on theproblem of the foreign traders directly invest in to China. This paper includes some parts as follows: Document summary, the analysis ofthe status quo of the Foreign Direct Investment to China, the advantages anddisadvantages of the Foreign Direct Investment to China, "two gaps" theory and therelation of our country indraughting FDI on "two gaps" theory, countermeasures andso on. In document summary part, I will summarize and analyze the production ofdomestic and international experts and scholars about the question of Foreign DirectInvestment to China, it including the "two gaps" theory from an American earlyeconomist H.B.Chenery to many extractive thesis from some Chinese economistssuch as Yu Yongding, Hu Zuliu. This part includes extensive messages and it willtake great guidance role to adopt this topic of this paper. In the part of the analysis of the status quo of the Foreign Direct Investment toChina, I will detailedly analyze the scale of the FDI into our country by data, tables,from which we can find that the scale of the status quo of the Foreign DirectInvestment to China has being going up year after year. In the part, I will give thecontrast of the scale of FDI to our country and to other countries in the same time,from which we can draw the conclusion that our economy depends FDI moreseriously than that of others. In succession, this part analyzes the advantages and disadvantages of theForeign Direct Investment to China. FDI plays important role of acceleratingdomestic capital of our country to form and increasing employment chance andraising the quality of staff as well as enlarging export scale. In the actual benefitanalysis for FDI, we can know that the rate of benefit of the FDI to China is as highas 10% by the analysis of the rate of benefit of the FDI and the remittance of FDIincome, therefore we can say that the remittance of FDI income from our countrycan make great press to the balance of payments crisis of our country. In fact, FDIalso make negative affect to our economy, such as the "extrusion effect" to ourdomestic capital, the small return of "market exchanging for technology" and themonopoly tendency of foreign enterprises and so on, and these questions can not beneglected. Article again utilize the model "two gaps" to analyze that save gap and the gapof foreign exchange of our country, and the result is that in our country the two gapshave not existed. There gives the reason of indraughting sequentially FDI in thecurrent surroundings of our country thought the modification of the model "twogaps", and also points out that our country should pay attention to the quality of theFDI to our country instead of the quantity of that. In the last part of this paper, some advice is given according the current realityof our country, which will tell us how to treat FDI in the future. In this paper, the place of the innovation is the analysis abou...