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With the further deepening of opening up and market economy reform, China's utilization of foreign capital policy objectives will appear four major changes: First, the focus of foreign capital from the introduction of foreign capital to the introduction of foreign advanced technology, modern management and specialists to change; Second, the use of foreign capital in the field of processing industries to the service sector to vigorously promote; Third, the use of foreign capital in the absorption of foreign direct investment at the same time to the expansion of multi-modal capital; Fourth, the government's management of the use of foreign capital from administrative approval to the regulation, guidance and supervision in accordance with the law. Third, the use of foreign capital in the absorption of foreign direct investment in the main at the same time to the expansion of multi-methods of attracting capital; Fourth, the government's management of the use of foreign capital will be from the administrative approval of the main, to the law to regulate, guide and supervise the change. It should be said that the "four changes" are the overall direction of China's foreign investment policy adjustment under the new conditions of opening up to the outside world. In order to achieve such a goal, from the need to match the economic restructuring, it is necessary to re-understand the absorption of foreign capital on the industrial structure of the upgrading effect, give full play to the guiding role of industrial policy, to maintain the necessary policy control measures.

First, to guide foreign investment in capital-intensive and capital output efficiency is relatively high in the industry, to improve the industrial sector as a whole

the level of technological equipment

The degree of technological equipment of the industrial sector workforce is to reflect the level of industrialization and structural optimization of the degree of an important symbol. Analysis shows that for a long time, foreign investment has been mainly concentrated in labor-intensive industries, and structural factors have instead had a negative impact on the upgrading effect of industrial structure. Therefore, if foreign investors can be guided to invest more in industries with a higher degree of capital equipment, the capital-intensive advantage of foreign investment combined with the multiplier effect of such structural factors will have a significant upward effect on the overall level of technological equipment. On the other hand, as a populous country like China, capital is the most scarce factor among the various factors of production, therefore, improving the output efficiency of capital should be one of the main signs of the upgrading of the overall economic structure. From the results of empirical analysis, ferrous metal smelting, non-metallic mineral products, electronic and communication equipment manufacturing, chemical fiber manufacturing, non-ferrous metals, pharmaceutical manufacturing, transportation equipment manufacturing, electrical equipment manufacturing and other industries, the level of per capita assets, the output efficiency of the unit of assets is significantly higher than the average level of the industrial sector, and if foreign investment is encouraged in these industry sectors, various related industries and the The degree of technological equipment and capital output efficiency of the industrial sector as a whole will be significantly improved. In addition, the growth of investment in these industries will generate a large demand for equipment and production technology means, can provide more opportunities for domestic equipment industry production to participate in market competition. The results of China's input-output table analysis show that in final demand, the induced effect of fixed asset investment on aggregate demand growth is higher than that of other final demand items. Therefore, if the development of the above industries drives the demand growth of domestic equipment industry, it will largely increase the growth level of aggregate demand.

According to the results of industry analysis, in some countries should encourage investment in capital-intensive industries, the comprehensive tax burden is higher than the average industrial tax burden level, and has long been a negative factor affecting foreign investment decisions toward these industries. On the other hand, investment in equipment and technology in capital-intensive industries accounts for a rather high proportion of investment, and in the absence of sufficient substitution capacity in the country and under the condition that the tariff level of equipment imports is still relatively high, the imposition of tariffs on investment equipment imports and value-added tax on imports will obviously increase the cost of investment, seriously restricting the growth of capital-intensive industries in absorbing foreign investment and structural adjustment. In order to solve this contradiction, the tax structure of the industry should be adjusted appropriately to reduce the level of corporate tax burden of the state to encourage the development of the industry; on the other hand, the equipment imported for foreign investment projects listed in the encouraging industry directory to continue to implement the preferential policies of tax exemption and reduction, in order to maintain the effectiveness of policy regulation.

Second, through the attraction of foreign investment to transform and upgrade the traditional industrial sectors of the technical level, product quality

In the future a considerable period of time, the textile, general machinery, metallurgy, building materials, petrochemicals, chemicals and other traditional industries as the basic materials and investment materials in China has a wide range of market demand in the overall industry still occupies a large proportion. These industries are the foundation of the country's industrialization and where comparative advantages lie. It is no longer possible for the government to put out a large amount of funds for structural adjustment in these areas, and it should make great efforts to attract funds, including foreign investment, to participate in the upgrading and transformation of these traditional industries. Since most of the products of these industries are already oversupplied in the market, and the industries have a large proportion of Chinese-owned enterprises, the progress of technological transformation and equipment renewal is relatively lagging behind. Therefore, the addition of new projects should be minimized, and emphasis should be placed on the technological transformation of existing enterprises, the addition of new technologies and new varieties, the improvement of product performance, quality and labor productivity, and the upgrading of process technology and equipment. In order to achieve such a purpose, we should combine the characteristics of these traditional industries with a strong foundation of state-owned economy, improve the environment of property rights trading and mergers and acquisitions of state-owned enterprises, and encourage foreign investors to participate in shares, mergers and acquisitions and asset reorganization by means of technology and equipment. To create conditions for the traditional industries to realize technological upgrading as soon as possible.

Third, foreign risk capital is allowed to participate in entrepreneurial enterprises to promote the development of high-tech industries

Accelerate the development of high-tech industries is to adapt to the trend of economic globalization, to lay the foundation for long-term economic growth and improve international competitiveness needs to be differentiated between different areas of technological development of the status quo to adopt a different way of using foreign capital. For the efforts can be independently developed and the formation of advantages of high-tech, to attract foreign investment to introduce cutting-edge technology, to enhance the independent development of research and technological means and capabilities, for a certain strength and market prospects of technology industries, should cooperate with foreign-invested enterprises, seeking *** with the development. For industries with huge investment, technologies that are not easy to introduce, and industries that are difficult to achieve rapid development by relying on their own capabilities, restrictions on equity and scale should be liberalized to allow wholly foreign-owned enterprises to obtain development in China. At present, countries around the world have taken many positive measures to improve the investment environment for high-tech venture enterprises, among which playing the role of capital market entrepreneurial plate as well as venture capital funds is an important part of improving the venture capital environment. At present, the scale of China's venture capital funds is limited, the mechanism is not flexible enough, and the venture capital segment of the securities market has been delayed, especially in the policy and institutional environment for foreign capital to participate in venture capital has not yet been formed. In order to encourage foreign capital to actively participate in high-tech industry investment, the introduction of advanced technology and management personnel, these aspects of the problem should be resolved as soon as possible.

Fourth, the relaxation of market access restrictions, to attract foreign investment to promote the reform and upgrading of monopoly industries

As a result of the long-term impact of the planned economic system, some of China's infrastructure and social public **** services sector formed a large number of monopoly industries, greatly increasing the social costs, and constraints on the improvement of overall economic efficiency. With the accession to the WTO and the deepening of the reform of the market economy system, the market-oriented reform of the monopoly sector has become an important element of the future reform of the economic system. In order to meet the needs of opening up to the outside world and economic restructuring, market access restrictions in monopolized sectors should be gradually reduced, allowing foreign investment in such areas as finance, insurance, securities, tourism, energy production and supply, construction of transportation facilities, and environmental protection. In this way, foreign capital can be fully utilized to develop basic industries and social infrastructures, and to improve the supporting and service capacities of industries and economic development. In some infrastructures and fields can be more through BOT and other project financing methods or other financial innovation means to raise funds, in improving the supply capacity of social infrastructure at the same time, to ensure that the interests of investors and consumers to achieve the greatest balance.

V. Continue to encourage foreign investment in tertiary industries and labor-intensive industries with a high degree of capital equipment to expand the employment base of the society

China is a large country with a large population, and solving the problem of employment of the labor force will be a long-term issue. Since the reform and opening up, foreign investment has provided China's labor force with a large number of opportunities to combine with capital elements, and has played an important role in the transfer of rural labor to the industrial sector. According to the basic goal of China's sustainable economic development, this approach will remain one of the main ways for China to absorb excess labor for a considerable period of time in the future. For this reason, continued encouragement of increased foreign investment in traditional labor-intensive industries such as garment, textile, and furniture manufacturing, stationery and sporting goods, and leather and fur products will obviously have a good effect on expanding demand for employment. But from the perspective of improving industrial technology level and other long-term goals of structural adjustment, or should choose some with a certain technical content, while the labor force to absorb the effect of attracting foreign investment in the industry, which is conducive to increasing employment opportunities for the labor force, to ease the structural adjustment and reform of state-owned enterprises brought about by the pressure of unemployment, and at the same time contribute to the industrial technology and structural upgrading.

For example, the electronic communications equipment industry is the industrial sector with a high technological content of the industry, at present, this industry "three-funded" enterprises accounted for 11.5% of the total number of "three-funded" enterprise employment, in terms of absorbing the scale of employment In terms of the scale of employment absorption, it ranks second only to the garment industry at 11.9%. Electrical machinery, transportation equipment and metal products also have similar characteristics. Because these industries, whether it is the assets and equipment or the scale of absorption of employment are more than other industrial sectors, labor demand for every 1% increase in the number of new jobs brought greater than the average level of other industries. Therefore, encouraging foreign investors to increase investment in these industries is conducive to expanding the scale of total employment, while at the same time helping to raise the overall level of technological equipment in the industrial sector. In addition, from the perspective of market demand, complex or deep-processed products, due to their long production chain, the need for more supporting production and other characteristics, the combined (direct and indirect) induced effect of each additional unit of demand on the demand for labor may be higher than the industrial average. For example, according to the results of input-output analysis (Zhao Jinping: "The industrial linkage structure of China's labor inputs - a comparison with Japan" Asian Economy (Asian Economic Research Institute, Japan), No. 7, 1994), the employment brought about by the increase in aggregate social demand The industries with the greatest demand-induced effects include capital-intensive industries such as general machinery, metal products, chemicals, and electrical machinery, in addition to typical labor-intensive industries such as textile manufacturing and construction materials. The main reasons for this are: firstly, the scale of employment in these industries themselves accounts for a relatively high proportion of all industries; and secondly, because the final triggering effect includes an indirect triggering part for other upstream supporting industries. Therefore, to encourage foreign investment in the above products as the main raw materials, components, means of production and export commodities source of industry sectors, will increase the market demand for these products, and produce obvious labor absorption effect.

In China's "Tenth Five-Year Plan", the strategic goal of vigorously developing the tertiary industry and upgrading the industrial structure has been clearly put forward. At present, the service industry is one of the areas where China's economic development has the weakest foundation and lacks international competitiveness. Therefore, by encouraging foreign investment in the service industry, it is not only a need to adapt to the development of economic globalization and fulfill the commitment of accession to the WTO, but also a necessary measure for China to achieve the goal of structural adjustment, improve the quality of service and environment, and enhance the overall strength of the economy. On the other hand, most service industries are labor-intensive, and expanding the scale of these industries is conducive to providing more employment opportunities for the labor force. Also according to the results of input-output analysis, the labor induced demand generated per unit of total demand is relatively high in all service industries. Commerce and catering rank high, followed by education, research and medical sectors, transportation, social services, etc. The relative labor absorption effect of these major service industries is generally higher than that of the labor-intensive industries in the industrial sector, i.e., the growth rate of labor demand generated by each unit of growth in investment in these industries exceeds the average level of the industrial sector. If you can absorb foreign investment in the tertiary industry, to solve the labor force from the primary industry to the tertiary industry will play a very effective role in the transfer.

Sixth, to encourage foreign investment in demand-induced effect of the industry, the effective use of multinational corporations of the global network and market resources, to expand foreign trade and exports

Different industries demand growth on the total demand of the pulling effect of the society there is a clear difference between some of the industries due to the production of parts and components, raw materials required for the production of longer supply chain, the demand growth of the unit of the demand for various industries, the ripple effect is higher than the average level of the society. Ripple effect is higher than the average level of society. In the input-output analysis generally reflecting the growth of demand for a certain product on the growth of demand for various sectors of the degree of influence of the index is called influence coefficient, the influence coefficient is greater than 1 of the industry is called the former associated industries. Stimulating demand growth for these products is often the focus of aggregate demand policy. According to the calculation results of China's 1997 input-output table, the influence coefficient of the bicycle manufacturing industry, daily-use electronic appliances, non-ferrous metal rolling processing, electrical machinery, cultural and office machinery, electronic computer manufacturing industry, agricultural and forestry machinery manufacturing industry, automobile manufacturing industry, metal products industry and other industries is higher than the average level of the society, which has obvious characteristics of the former related industries. Therefore, by encouraging transnational corporations to invest in these areas and expanding product exports by taking advantage of their marketing networks and internationalization, the effect of driving the growth of related industries and total social demand is significantly greater than that of other industry sectors. In order to achieve such a purpose, attention should be paid to cultivating the supporting capacity of parts and components of the former associated industries, and extending the domestic industrial chain through the import substitution of intermediate products.?

In addition, from the point of view of the proportion of exports per unit of sales revenue, leather fur products, furniture manufacturing, machinery, metal products, plastic products, textiles, food, clothing and other industries have the highest export content, indicating that the degree of outward orientation of these products exceeds that of other industries, and that the ability to enter the international market is more competitive. Expanding the scale of foreign investment in these areas will be conducive to promoting an increase in the proportion of overall industrial exports and to expanding the share of Chinese industrial products in the international market. In order to realize the policy objective of promoting long-term sustained growth of exports, should further improve the trade management system, in accordance with China's WTO commitments, as soon as possible, the implementation of a comprehensive foreign trade registration system, and to restore the export of "zero-rate" normal tax rebate system, which will be conducive to the import substitution of parts and components exported by the processing trade, and to drive the development of related domestic supporting industries. The development of the relevant domestic supporting industries.

Seventh, improve the policy environment for foreign small and medium-sized investment, improve the supporting capacity of the leading industries

According to the general characteristics of the division of labor, large multinational corporations need a large number of small and medium-sized production and processing for its supporting. Therefore, how the local supporting capacity is also one of the important reference factors for TNCs to choose their investment destinations. At present, many leading industries, especially those with a high concentration of foreign-invested enterprises, rely on imports of a large number of parts and materials from abroad, one of the main reasons being the lack of domestic existing SMEs to meet the requirements of the supporting capacity. Therefore, the gradual formation of large-scale production and processing bases of transnational corporations requires supporting capacity, which is not only conducive to reducing production and processing costs and improving the international competitiveness of leading industries, but also can provide many domestic small and medium-sized enterprises with direct access to the international market, prolonging the industrial chain, driving the development of related upstream industries, and increasing employment opportunities. It can be seen that how to promote the development of small and medium-sized enterprises is one of the important topics of China's industrial policy in the future. In order to form the supporting capacity of the leading industries, on the one hand, we can give full play to the role of local small and medium-sized enterprises, especially private enterprises and township enterprises, and cultivate the supporting capacity through market orientation and policy support. In recent years, many foreign investors have shown strong interest in private enterprises. If we further liberalize the market access restrictions on private enterprises, establish and improve the property rights trading market, and allow foreign funds to form assets or strategic alliances with private enterprises through equity participation and mergers and acquisitions, it will be conducive to the promotion of small and medium-sized enterprises. On the other hand, attracting foreign small and medium-sized enterprises to invest is an effective shortcut to form the supporting capacity of leading industries as soon as possible. According to the survey, the main purpose of many SMEs to invest in China is to continue to engage in supporting production and services for large multinational corporations with supply relations. However, objectively speaking, the difficulties faced by SMEs in financing, taxation, cross-border operation, hiring local labor force and technical and managerial personnel are far more than those faced by large-scale enterprises, and the country currently lacks the necessary policy support for SMEs. Therefore, to create a favorable investment environment for foreign small and medium-sized enterprise investment, encourage and support these enterprises for the development of multinational corporations within the territory of the processing base to provide support to expand the "industrial agglomeration effect" (industrial agglomeration effect refers to the process of formation of a particular industrial group in some areas of China. For example, in terms of a certain region, the initial stage is only by some foreign-invested enterprises to enter the region, the establishment of processing and assembly enterprises; due to the demand for parts and components of these enterprises to attract a number of related foreign parts and components manufacturers to enter the region to invest in the establishment of parts and components production enterprises; due to the local began to have the ability to support the parts and components to further attract new processing and assembling enterprises to enter the region, and then again, the formation of a complete production of a certain product in the region. As a result, a complete production system for a certain product is formed in the region, and a large number of enterprises are gathered, forming a huge production base that includes both local and foreign enterprises. (See (Japan) Kuroda Atsushiro, "Made in China", Toyo Keizai Shinbun, May 2001), should become an important part of the adjustment of industrial policy on the use of foreign capital.

As a concrete measure to promote the development of small and medium-sized enterprises, in order to solve the difficulties of foreign-funded small and medium-sized enterprises in financing, and to help these enterprises avoid investment risks. Can draw on the experience of other countries, belonging to the state to encourage the development of key areas, especially in favor of extending the industrial chain of supporting industries and high-tech entrepreneurial foreign small and medium-sized enterprises in accordance with the amount of investment, invested a certain percentage of working capital to provide credit guarantee support in China.

VIII, play a guiding role in industrial organization policy, and promote the link between multinational corporations and local enterprises

The division of roles of enterprises in a certain production chain reflects the organization and configuration requirements of different enterprise resources. In the current international investment activities, TNCs are keen to establish links with local suppliers out of their own interests, while the host government can also play an important role in promoting the linkage, through the promotion of the linkage between local enterprises and TNCs, to provide more market opportunities for local enterprises, and through the linkage with the TNCs to learn and master the new technology, new technology. Specific measures to promote linkages include the provision of information, matchmaking, encouraging foreign firms to participate in solutions aimed at upgrading the technological capabilities of domestic manufacturers, cooperating with foreign firms to develop training programs for domestic suppliers, and facilitating access to financing programs for domestic suppliers. Countries such as Singapore and Malaysia have established comprehensive programs to promote linkages, selectively targeting a number of industries or enterprises with different supporting policy programs, and have achieved great success. The experience of these countries suggests that often targeted government interventions are beneficial in increasing linkages and thus facilitating the transfer of knowledge from TNCs to the dynamic enterprise sector in the host country. The more closely linkage promotion programs can be aligned with small and medium-sized enterprise (SME) development and targeted foreign investment policies, the greater the likelihood of results. In China's current situation, restrictions on market access for private enterprises, inadequate laws and regulations on mergers and acquisitions, property rights transactions, and the traditional system of regional and sectoral fragmentation are the main negative factors affecting such linkages. It is necessary to refer to the successful experience of Singapore and other countries, and to take more active measures to promote linkages as an important part of industrial organization policy and as a concrete manifestation of the government's service function under the new market conditions. One of the effective ways to promote linkages is to set up a mechanism for regular dialogues and consultations between government authorities and large multinational corporations, so as to communicate the cooperative relationship between local enterprises and multinational corporations. Through such a mechanism, it is possible to listen to the views and opinions of foreign-invested enterprises on the formulation and implementation of the Government's industrial policy, to publicize the Government's industrial policy, to recommend to TNCs local supplier enterprises and service providers, and to create opportunities for small and medium-sized enterprises (SMEs) to be able to receive training in the technology, quality management and management capabilities of large TNCs and to become supplier enterprises for these large firms. In addition, there are through the establishment of intermediary organizations and other ways to provide information and consulting services for both supply and demand.

Nine, maintain the continuity of the policy of attracting foreign investment, continue to improve the investment environment

"Tenth Five-Year Plan" period, the government's policy of absorbing foreign investment will face several tasks: First, in accordance with the multilateral rules of the WTO and China's commitment to remove or modify the trade and investment system that contradicts these rules, commitments and policies, such as removing restrictions on foreign-funded enterprises in terms of export ratios, foreign exchange balance and domestic procurement requirements. Second, to establish and improve the macro-control system in line with the opening up of the domestic market and the marketization of trade and investment activities, such as strengthening the economic control tools of interest rates, exchange rates and tax rates, and gradually reforming and reducing the approval procedures for market access for foreign investors. Thirdly, it is necessary to make full use of the institutional and policy autonomy that can be enjoyed under the multilateral framework, and it is necessary to maintain the continuity of the policy on the utilization of foreign investment and enhance the attractiveness to foreign multinational corporations during the historical period when the market mechanism has yet to be further improved. These adjustments are obviously conducive to reducing the transaction and institutional costs of foreign investment, improving the investment environment, and having a positive effect on the stable development of utilizing foreign investment. In the long run, if, with the deepening of market-oriented reforms, the institutional cost factor is gradually eliminated and comprehensive strength truly becomes the decisive factor in enterprise competition, the conditions are naturally in place for a shift from policy-led to market-led and for the realization of a level playing field in the full sense of the word. As a transition, in many of the new national industrial policy objectives, there is a need to give special concessions and support in the field, should be gradually implemented unlimited corporate identity incentive policy, such as the state to encourage the development of high-tech, environmental technology application and promotion, backward areas of the development of the field should be implemented in the general concessions of industrial policy.

It should be noted that, since the 1990s, most of the annual inflow of foreign direct investment in China's growth rate is lower than the world average, China's foreign capital absorption, industrial structure, regional distribution and the degree of openness of the capital market, compared with the developed countries and many developing countries there is a big gap, especially in the face of the increasingly fierce competition between the countries to attract investment, in order to achieve the sustainable economic growth and structural adjustment. In order to realize the long-term goal of sustained economic growth and structural adjustment, it is necessary to adhere to the basic policy of actively attracting foreign investment. The survey shows that although China has achieved obvious results in improving the infrastructure and other "hardware" environment, but such as the lack of transparency in policy making and frequent changes, policy implementation is not uniform and arbitrary, the government's work efficiency is low and lack of service consciousness. However, the "soft" environment is still strongly criticized by foreigners, such as the lack of transparency in policy making, frequent changes in policy implementation, lack of uniformity and arbitrariness in policy implementation, low efficiency and lack of service consciousness of the government, ineffective market supervision, proliferation of counterfeit and shoddy commodities, and serious arbitrary fees. Many law-abiding enterprises, especially large multinational corporations, do not face a "fair" competitive environment that is internationally compatible. Therefore, the government should continue to improve the investment environment as a top priority for the absorption of foreign investment.

Tenth, improve the market supervision mechanism, through the competition policy to maintain normal market order

With China's opening up to the outside world continues to deepen, some industrial sectors in the total output of foreign-invested enterprises, fixed assets and absorbing the proportion of employment in the industry as a whole has increased dramatically, and in some areas and even become a matter of the direction of the overall development of the industry's dominant force. The emergence of this situation is the objective need of our country to accelerate structural optimization and upgrading and achieve the goal of sustained and rapid growth of the national economy through the effective use of "two markets and two kinds of resources", and it is also a normal reflection of the increasingly accelerated process of economic globalization and the continuous adjustment of international division of labor and competitive relations. However, due to the great changes in the structure of the subjects of interest in the industrial sector, conflicts and contradictions between different subjects in terms of national consciousness, cultural traditions, business habits, values, morals and ethics, etc. will naturally occur frequently, and it will be correspondingly difficult for the government to carry out effective management and supervision to ensure that the national interests will not be jeopardized and to maintain a normal market as well as the social public **** order. Therefore, under the new conditions of market opening, the core of China's foreign investment policy should be gradually shifted from market access management to encouraging competition, improving and maintaining a fair competition environment, and regulating the market and social behavior of foreign-funded enterprises by legal means. First, in order to prevent large multinational corporations from taking advantage of their own technology and brand names, scale of production and other advantages to form industry monopolies, and to promote the effective allocation of resources and full competition in a diversified market, the Anti-Monopoly Law and other relevant laws and regulations should be enacted as soon as possible, and the Anti-Unfair Competition Law and other laws should be strictly applied to constrain the monopolistic and unfair competition behaviors of enterprises. Secondly, under the condition that China's capital account has not yet realized free conversion, foreign-funded enterprises should carry out necessary supervision on the cross-border transfer of capital by using the current account; in addition, China implements strict foreign debt management at this stage, but foreign-funded enterprises' external debt is not included in the scope of foreign debt management, and foreign-funded enterprises should be required to improve the transparency of their assets and liabilities, so as to facilitate the government's supervision and management of debt risks. management. Once again, joint annual inspections should be effectively utilized to supervise and guide foreign-funded enterprises on environmental protection, labor conditions, consumer rights and interests, and local communities in accordance with the law and public **** standards. At present, there is a new trend in the international arena in which non-governmental organizations (NGOs) and civil society groups are actively participating in the discussion of issues related to the investment of multinational corporations and have formulated various forms of "standards of conduct" to regulate and constrain the behavior of multinational corporations and their subsidiaries, so as to maximize the balance of interests between the enterprises and the local people, as well as those of the host country. The standards do not have a coercive effect, though. Although such standards are not mandatory, they often serve as references for government policymaking. These experiences are useful for our country to strengthen the supervision of enterprises, including foreign-funded enterprises, in the future.