China has been successful in attracting foreign direct investment (FDI). Attracted by China's investment opportunities and its huge and growing domestic market, China has attracted about 20% of FDI in developing countries in the past 10 years, and over 100 billion US dollars in 2008. In terms of the proportion of foreign investment in GDP and investment, foreign direct investment accounts for about 2.5% of China's GDP in the past 5 years. Although this proportion may be relatively low, it is easy to explain from the overall scale of the economy: China is the third largest economy in the world, second only to Japan and the United States.
Foreign direct investment plays an important role in promoting the development and export of China's economy. According to the statistics of China's Ministry of Commerce, foreign-funded enterprises contribute more than half of China's total import and export volume, providing 30% of China's industrial output, creating 22% of industrial profits, and employing 10% labor force only because of its high productivity. The evidence for technology spillover effect is relatively limited, but the increase of foreign capital ratio is also higher than that of other industries. What is important is that foreign investment has promoted China's economic reform. In combination, these contributions support China's record growth rate of up to 10% for the most part of the 1980~2010 year period.
With the improvement of the level of economic development and the enhancement of institutional capacity, China's foreign investment policy has also evolved. China has taken a gradual and prudent way in the process of opening up. In the 80s and 90s of the last century, when the market mechanism was not yet fully established, China selectively launched pilot projects for foreign investment in coastal cities, special economic zones and industrial parks, with a focus on attracting FDI in the field of export-oriented manufacturing. As China's development goals shift from emphasizing GDP growth to promoting more balanced and balanced development, China has made a major commitment to open service industry at the time of entry into WTO, which has led to the gradual transformation of FDI to service industry. By the year 2009, foreign direct investment in the service industry increased by three times than in 2000, while China's manufacturing industry attracted only 81% in the same period. The regional production network in East Asia has been developing rapidly in recent years, which is largely linked with China and takes it as the center, and the result is very significant. Thousands of multinational corporations have come to China to invest. The latest report on the awareness of World Investment by the UNCTAD (UNCTAD) will be the first place for China to be the 15 preferred investment place. The Hongkong Special Administrative Region (SAR) and Taiwan, China, have traditionally been the most important sources of foreign investment, but in recent years, investors in Japan, the United States and Europe have been increasing. China Gold Investment Network
Almost all manufacturing and most of the service industries in China are fairly open to foreign capital. However, China has always taken a gradual and open approach to keep it in sync with the construction of institutional capacity. It can be said that this is a good way to help China through the financial crisis. Looking forward to the future, it may be possible to consider further opening up the backbone services such as finance and telecommunications in the near future.
The approval and implementation of foreign investment in China mainly depend on local governments. This creates opportunities for local governments to compete with each other for foreign direct investment. This competition is generally healthy and healthy, but it can also be the root cause of excessive formalities and corruption. In such a decentralization environment, the transparency of the regulations and the honest communication between the government and the business community are particularly important. To this end, local governments have been paying great attention to ensuring the administrative and operational efficiency of the examination and approval process. The most common practice is to set up a "one-stop" service facility to allow investors to go through all procedures in one place.
The World Bank Group recently released the 2010 report on transnational investment. The report is a new comparative study on the regulation of foreign direct investment in 87 countries from four aspects. The indicators provided by the report are limited to national laws, regulations and practices that affect foreign companies' investment in various industries, enterprises, industrial land and commercial dispute arbitration. The report intends to limit the scope of the study. The report does not cover all the circumstances related to foreign investors. As mentioned in the report, it is well known that in addition to laws and regulations, investors also attach great importance to the economic scale of the host country, the domestic market and whether they are close to important foreign markets, innovative potential, the level and quality of government services, the cultural and skilled labor force and so on. Moreover, from a host country's perspective, we need to weigh the risks brought about by the positive externalities of foreign investment and the risks implicit by negative externalities, such as environmental and social harm, especially if the poor are affected. This background should be remembered in the interpretation of the profiles of the countries in the report.
The challenge China is facing now is to attract appropriate foreign investment, thus helping the restructuring of the economy, the improvement of the environment and the upgrading of the industry. Therefore, the recent foreign investment strategy pays more attention to the choice of the foreign capital into the energy-saving and environmental protection and advanced technology industries. China is setting up a fair competition environment for all enterprises, both at home and abroad, so that they are in line with their ranking in the global economy.