Investment In Local Government Functions

Since reform and opening up, under the unified leadership of the central government, localgovernments at all levels, one after another, take economic construction as the central task, makeinvestment attraction as the major task for regional economic development and overalldevelopment and play a leading role on investment attraction at all times. It has been found thatthe government-led investment attraction has its certain rationality and necessity and has gotsignificant achievement in promoting local economic development. However, with constantimprovement and development of global economic integration, government-led investmentcannot adapt requirements of our times, which has gradually exposed many drawbacks and newproblems during practice processes and has negative effects on economic, political and socialaspects.In contemporary market economy conditions, investment attraction which belongs tomicroeconomy activity in essence shall be given to enterprises or other market entities whilegovernments shall be mainly in charge of policy-making, market supervision and society service.However, various factors lead that many local governments set forth preferential policies ofviolation and occupy farmland indiscriminately and make many eager behaviors for success inorder to scramble for projects and make vicious competition, instead of conforming to therequirements of market economy development and government function transformation that theyshall be phased out from investment attraction. On the one hand, local governments continueplaying a principle role on investment attraction; on the other hand, they are ignorant of softinvestment environment construction and overlook the enhancement of service level and theeffective supply of public products. All the above problems are blamed on local governmentsthat have inaccurate self-positioning in investment attraction and exist dislocation, bypass andabsence, which reduce promotion function of economy development by investment attractionand block the regional economy development. Therefore, in the context that market economyand society development degree are improving gradually, how to position the function of localgovernments in investment attraction is of necessity and urgency, which is of great significancefor promoting function transformation of local governments, making investment attraction morescientific, systematic and normative and ensuring local economy to develop in a healthy, rapidand steady way.This paper first research and analyze references both domestic and abroad aboutgovernments roles in investment attraction, summarize research achievement around the world,and elaborate the content, means and innovative aspects about the research at the same time. Second, it defines investment attraction, discusses development of investment attraction in Chinaand then analyzes the meaning of local government-led investment attraction. Starting fromdisadvantages in economic, political, social and other aspects triggered by local government-ledinvestment attraction, it again analyzes that the reasons for these disadvantages are various.Although such government-led investment attraction in China has historical reasons and certainrationality, it violates law of market economy in essence and is unreasonable. The improper rolespositioning for dislocation, bypass and absence in investment attraction for local governments isthe root cause for such disadvantages, and improper leadership’s assessment mechanism andassessment standard for political achievement are the direct cause. Finally, it points out that thecore of function positioning for local government in investment attraction shall be creation andoptimization of investment environment. Specifically, the local governments shall be thepolicy-maker and performer, market regulator, economic order maintainer and provider forpublic products and service to achieve dialectical unity between limitation and effectiveness ofmodern governments. On that basis, it puts forward countermeasures to regulate functionpositioning of local government in investment attraction, mainly including accurate positioning,transforming concept of investment attraction, building scientific outlook, changing assessmentstandard for political achievement and the body of investment attraction, cultivating intermediaryinvestment and optimizing investment environment.