Research On The Optimization Of Local Government’s Function In Attracting Investment

Investment is a socio-economic activity to adapt to the rapid development of market economy, it plays a crucial role to promote the economic growth. Since the reform and opening up, Chinese local governments need to develop the national economy in the context of capital shortage, they regarded investment as the primary task. Because of the leading position in investment activities, the local governments played an important role in the development of local economy. However, the investment is essentially a market behavior, it is a competitive field, it should be developed in the enterprise or other market players, and should be developed in accordance with business rules and laws of the market. Actually, the government investment is not intelligent. "Government Commercial Behavior" is due to the wrong position of local governments in economic development, it is the performance of the early market economy. As China’s market economy system has been gradually improved, the degree of social development is always improving, the local government-led investment has been unable to adapt to the real needs. It has been a problem to be solved that what role should the government play in the investment, in order to promote the local economic development.This article is based on the development process of China’s investment, aims to sum up the function of Chinese local government in the investment, and analysis the pros and cons of government’s leading position in the investment. Finally, we want to provide some useful method for our local government by enumerating some successful cases about the investment from domestic and foreign governments.