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The Development Strategy on Utilizing Foreign Investment in Light of China's Increased Economic Power(No.67, 2016)


By Hu Jiangyun, Zhao Shubo & Wang Xiuzhe, Members of the Research Team on “China’s Opening-up Strategy with Increased National Economic Power”, DRC

Research report No.67, 2016 (Total 4950) 2016-5-24

Abstract: Among all developing countries, China has absorbed the largest amount of FDI for over 20 consecutive years, which has greatly shored up China’s development. Though China’s economic strength is growing steadily, absorbing FDI is still of great importance. It is helpful for China to further improve the system of socialist market economy, beneficial for Chinese enterprises to participate in international division of labor, and favorable for Chinese enterprises to implement international rules in their management. With regard to the strategy of absorbing FDI, China should be more concerned about the quality of the strategy and try to play a leading role in actively participating in the formulation of international rules on direct investment. The following issues should be given adequate concern. First, it is necessary to integrate attracting foreign investment with overseas investment. Second, we should further bring into play the spillover effect of foreign investment. And third, we need to improve the business environment for absorbing FDI, strengthen the construction of a legal system and make further reform of government functions, build an integrated national market, ensure fair competition, regulate market order focusing on the protection of intellectual property rights, and promote the facilitation of trade and investment. The above measures are beneficial for China to guide the rules of international trade and investment.

Key words: absorb foreign investment, international rules, business environment, spillover effect