Since the reform and opening up, China's utilization of foreign capital has made great progress. Since 1993, China's utilization of foreign capital has been in the world's second place (second only to the United States), far ahead of developing countries. By the end of 1998, China's actual utilization of foreign capital*** had reached more than US$ 300 billion, of which Hong Kong, Macao and Taiwan accounted for 58 per cent. Foreign borrowing accounted for 36.7%, foreign direct investment accounted for 61.6%, and other investment accounted for 1.7%. Before 1992, the main form of China's utilization of foreign capital was foreign borrowing, which accounted for about 60-70%. Later, foreign direct investment was added, and in the period 1992-1998, it accounted for 72%. At present, the development speed is relatively fast, with an annual growth rate of 30%. However, an analysis of the current scale of utilization of foreign investment in China has not yet exceeded the internationally recognized standards of vigilance; the debt-servicing ratio in 1997 was 7.3 per cent, and the debt ratio 63.2 per cent, both of which are lower than the international standards of 20-25 per cent and 100 per cent, respectively. The dynamic scale is also within the reasonable cordon sanitaire standard. This and next year will be the peak years for our country's debt servicing, and it is estimated that its debt-servicing indicators will not exceed the standards. Therefore, the structure of China's utilization of foreign capital is reasonable and the scale is safe. From the current overall flow of world capital to analyze, China's utilization of foreign capital is still small, accounting for only 5%, while the United States accounted for 30%, Germany accounted for 17%, *** accounted for 13%, Britain accounted for 9%, France accounted for 8%, Canada accounted for 6%. World capital flows mainly among developed countries, accounting for 83%, while developing countries account for 17%. Analysis of China's per capita utilization of foreign capital is even smaller, in 1996, per capita utilization of foreign capital in the United States for 231 U.S. dollars, the United Kingdom 511 U.S. dollars, Hungary 451 U.S. dollars, Peru 85 U.S. dollars, Thailand 35 U.S. dollars, China is only 31.5 U.S. dollars. The reason for the small scale of China's utilization of foreign capital is the lack of domestic demand for economic development. The current use of foreign investment in the analysis of the main problems are:
(a) the use of foreign capital idle domestic capital
From the theoretical analysis, the use of foreign capital can only be a supplement to the domestic capital, can not be a substitute for the more conflict can not be idle domestic capital. China's current domestic investment and consumption of effective demand is insufficient, a large increase in residents' bank savings deposits, plus hand-held cash, has reached 7 trillion yuan. This is a huge amount of idle domestic capital, if 1/7 of which can be converted into investment, can greatly alleviate the current economic construction of China's capital shortage. In recent years, although after a number of interest rate cuts, and now has introduced interest tax, but it is estimated that a large amount of idle domestic savings into the economic construction of the number of investment will not be very large. Because China's current financial system reform is lagging behind, the capital market is not developed, the lack of such transformation of open channels. Secondly, China's foreign exchange reserves have also increased dramatically, and have now reached more than $150 billion, more than twice the internationally recognized reasonable standard. These idle foreign exchange can only be used to buy foreign bonds stored. At present, our country has purchased the most United States government bonds, and is the largest creditor of the United States; the remainder has to be deposited in foreign banks in Hong Kong. As a result, some foreigners in Hong Kong to borrow our foreign exchange and to the mainland to invest, was jokingly referred to as the reporter to take the Chinese people's money to earn Chinese people's money ". Therefore, to utilize foreign capital first to make good use of domestic capital. From China's current investment and consumption of effective demand is insufficient, foreign exchange reserves can not be well utilized situation, there is no need to introduce a large number of foreign capital.
(2) preferential treatment of foreign capital undermines the operation of fair competition in the market
In the early stages of China's reform and opening up, the implementation of special preferential policies for foreign capital, which has played a positive role in the introduction of foreign capital to promote economic development. But with the deepening of China's reform, the market economy system is gradually determined today, the preferential policies for foreign investment in the entire reform and market economy system appears to be unsuitable. It destroys the operation mechanism of fair competition in the market and puts domestic enterprises, especially state-owned large and medium-sized enterprises, in an extremely passive situation. Giving foreign-funded enterprises super-national treatment, such as tax concessions, price concessions and production and management concessions. Foreign-funded enterprises rely on their own strong financial strength, and with the help of these special preferential policies given by the Chinese government, the rapid development and growth in China, the formation of unfair market competition conditions, the market, the impact of China's famous brand-name products, digging out the domestic backbone of the technology, so that the domestic enterprises are extremely passive, or even bankruptcy, a large number of workers were laid off, and the social insurance industry is not sound, a serious impact on the stability of the community.
Foreign enterprise brand products have occupied a considerable part of China's market, squeezing the market share of the national industry. From the specific product market share point of view, more and more industries in the foreign enterprise's brand has prevailed. One industry after another, a large area of the market is firmly controlled by foreign companies, seriously affecting and restricting the survival and development of domestic enterprises. After all, China is still a developing country, China's domestic enterprises and foreign competitors with the existence of an obvious gap between the strong and weak, this gap makes us inevitably in a fairly long period of time in an unequal competitive position. Therefore, in a certain period of time, a certain field, the national industry to implement a certain protection policy is necessary.
(C) irrational investment of foreign capital, exacerbating the imbalance of China's industrial and regional structure
Only focusing on the amount of attracted capital, ignoring the attraction of qualifications and the adjustment of China's industrial structure, this irrational attraction of capital mentality, in the current rational use of foreign capital plays a strong misleading role, exacerbating the imbalance of China's industrial and regional structure (see Table 1 and Table 2). Table 1 China's sub-industry utilization of foreign direct investment agreements and the proportion of industry 19951996 amount of $ billion proportion of the amount of $ billion proportion of the amount of $ billion proportion of the amount of $ billion proportion of the amount of agriculture, forestry, animal husbandry, fisheries and water conservancy 17.41.911.41.6 industry 616.567.5504.468.9 transportation, post and telecommunications 17.01.920.02.7 real estate 178.419.5128.517.5 other Industry 83.59.268.59.2 Total 912.8100.0732.8100.0 Source: 1997 Statistical Yearbook From the above table, it can be seen that China's urgent need for the development of agriculture, the use of foreign direct investment in the least, has been hovering around 2%; the proportion of industry accounted for the largest proportion of real estate is also very high, exacerbating the imbalance of China's industrial structure. Table 2 China's utilization of foreign capital of regional differences in the proportion of regional utilization of foreign capital %1985-1995198519901995 cumulative per capita utilization of foreign capital in dollars per person 12 provinces and autonomous regions on the east coast 90.0688.5585.5387.44264.36 9 provinces and autonomous regions in the central region 5.638.0610.698.4929.62 9 provinces and autonomous regions in the west 4.323.393.784.0629.62 9 provinces and autonomous regions in the western region 4.323. 393.784.0622.02 national 31.74
See, China's utilization of foreign investment is mainly concentrated in the eastern coastal 12 provinces and regions, central and western proportion is small, increasing the gap between regional economic development. Foreign investment in the industrial structure and regional structure is unreasonable, indicating that China through the use of foreign capital to optimize the industrial structure, the goal of adjusting the industrial layout to a large extent has not been achieved, on the contrary, it has increased the gap and the imbalance of development.
(4) the introduction of foreign investment in low technological content, insufficient digestion, the phenomenon of repeated introduction of serious
Contemporary economic competition, has shifted from the strength of capital to technological strength, technological progress and innovation is an effective way of industrial upgrading, which is the core of our country's introduction of foreign investment. But preferential policies for small and medium-sized capital direct investment is very attractive, resulting in most of the investment in China is small and medium-sized foreign investors, their technical strength is not strong, limited capital, often focusing on short-term processing projects, low technological content; belonging to the high technological content of the international advanced technology is not much of a large project, in 1995 statistics accounted for only 0.8 percent. Most of the imported technology and equipment is applicable technology, and advanced technology is rare. China's introduction of foreign capital is mainly Hong Kong, Macao and Taiwan, accounting for 58.3%, the United States accounted for 8.7%, *** accounted for 5.8%, Singapore accounted for 1.8%, Germany accounted for 1.4%, Britain, France, Canada and the Netherlands accounted for only 0.4-0.6%. A large number of small and medium-sized capital in Hong Kong, Macao and Taiwan are of low technological grade and have little impact on China's technological progress. Some large transnational corporations have not yet entered our country, and a few of them are only transferring applicable technologies but not developing technologies. We have even introduced some backward technologies, and there are many duplications, such as the duplication of the introduction of railroad steel technology and equipment and the production line of home appliances. Especially home appliance production line, different enterprises from different countries at the same time the introduction of different companies, as many as 20 to 30 sets of production capacity is generally overcapacity, a waste of a large amount of national foreign exchange, very much not in line with our national conditions. At the same time, China tends to focus only on the introduction of technology, do not pay attention to the introduction of technology digestion and innovation, internationally recognized technology introduction and digestion of a reasonable ratio of 1:10; China is only 1:2.5. **** in the period of rapid economic development, also a large number of imported technology, but only the introduction of a set of attention to the digestion of the imitation until the innovation of the introduction of technology to digest the cost of the cost of the ratio of 1:12. **** went through the Technology introduction -- digestion and imitation -- technological innovation -- and finally to the development of technology export road, very worthy of our reference.
(E) management problems
Currently, China's utilization of foreign capital management there are many problems, mainly:
1, a large loss of state-owned assets
China's state-owned enterprises in the joint venture with foreigners do not follow the provisions of the asset assessment, underestimation or even non-assessment; the Chinese side is often only according to the book value of the net commutation of the shares, or only assess the tangible assets do not assess the intangible assets, resulting in a large loss of state-owned assets. China's state-owned assets a large amount of loss. The Chinese intangible assets, brand-name trademark loss is even more tragic. China's existing more than 200,000 " three-funded " enterprises, 90% of the use of foreign trademarks, joint ventures and spend a lot of money on advertising, so that the foreign brand name all over the world, while the Chinese brand has long been squeezed into the corner.
2, the serious phenomenon of tax evasion
Some unscrupulous foreigners take advantage of China's legal system is not yet sound, to take the high price of raw materials, equipment, low-priced exports of finished products to avoid taxes, so that enterprises should be paid to the state tax and the Chinese side should share the profits transferred to the hands of foreigners, resulting in the situation of the enterprise's virtual losses and profits. According to statistics, the loss of foreign enterprises in the country is between 40-50%, of which about 70% belong to the false loss on the books. Some foreigners take advantage of the preferential policy of tax exemption for three years in some special economic zones of our country to engage in short-term investment in small projects, and then transfer them after three years to roam around, evading taxes and levying taxes. There are some foreigners to make use of China's preferential policies to engage in " false investment ", they use the name of foreign-funded enterprises, fraudulent domestic bank loans and foreign exchange investment with enterprise funds to offset the transfer of investment risk, causing serious losses to the Chinese side.
3, in recent years, foreigners have mergers and acquisitions of state-owned enterprises in China, enterprises to reduce their investment costs, save time, the use of China's state-owned enterprises in the original sales channels to open and occupy the Chinese market, causing major losses to China.
Two, the current should take the main countermeasures
(a) should be the first use of domestic capital
From the current analysis of China's investment, savings and foreign exchange reserves, there is no need to use a large number of foreign capital. To utilize foreign capital first to make good use of domestic capital. To this end, to accelerate the reform and innovation of the financial system, accelerate the process of commercialization of banks, improve the capital market, especially the securities market, increase the variety of financial products, broaden the savings into investment channels; should be allowed to allow private foundations in the form of organizations to participate in the financial activities, enhance the vitality of the market, and make full use of domestic capital. Financial reform and opening up, first of all to open up to the domestic, the people can not only the right to deposit, no right to loan; to broaden direct investment channels, rich stocks, bonds and other varieties of issuance, only through a diversified range of investment channels, in order to make the savings effectively transformed into investment, high savings rate into a high investment rate, make full use of China's foreign exchange reserves to ensure that the capital of this scarce resource in our country is not idle and wasteful, but to be Rational allocation and utilization. In the domestic capital has been reasonable, full and effective use of the basis of the economic construction of the capital gap and then made up by foreign capital.
(II) Implementation of the principle of market integration
The essence of the market economy is a competitive economy, the main participants should have equal opportunities to participate in fair competition. Preferential treatment, super-national treatment, contrary to the principle of fair competition in the market, so that the main participants can not be equal access to factors of production and the sale of commodities at a uniform market price, and to bear a fair share of the tax burden. Therefore, our country must gradually cancel all kinds of preferential treatment of foreign capital, the implementation of the principle of market integration, which is also conducive to our country's early accession to the World Trade Organization (WTO). Because, the WTO requires member states to treat domestic and foreign enterprises equally. Now foreign-funded enterprises in the first three years of the special economic zone tax-free, and then only 15 percent of the income tax, while in other areas are 33 percent, from April 1, 1998 onwards, joint ventures to import production equipment no longer enjoy tax-free treatment. In this way, foreign enterprises can be led to more mature and reasonable investment behavior. Because, a sound legal system, stable, fair and orderly market environment for foreign direct investment is far more attractive than the short-term preferential policies for foreign investment. After the Second World War, the growth rate of mutual direct investment between developed countries is much faster than the growth rate of their investment in developing countries is an example.
(3) according to China's industrial policy to use foreign capital, change the current industrial structure and regional structure of the imbalance in the future use of foreign capital should be in line with China's industrial policy and regional investment.
1, the introduction of foreign capital, to focus on improving the quality of the introduction of technology, optimize the industrial structure, should vigorously introduce deep-processing industries and technology-intensive projects, such as electronics, machinery, instruments and meters, industrial equipment, pharmaceuticals, building materials and so on. Efforts to realize the transfer of high technology content, value-added projects, change the current general processing industry and labor-intensive enterprises dominate the situation.
2, to guide foreign investment in agriculture, transportation, energy and other basic industries, investment in chemicals, machinery, automobiles and other pillar industries, computers, communications and other high-tech fields and technological transformation of state-owned enterprises.
3, appropriate relaxation of foreign capital into the tertiary sector. At present, the liberalization of foreign capital access has become the trend of world economic development, we should follow this trend, the introduction of foreign investment, in order to promote the rationalization of China's industrial structure and advanced. In recent years, China's financial, insurance, foreign trade, commerce, communications, aviation, transportation and other tertiary industries, although some foreign investment, but the restrictions are very strict, the degree of openness is very low; there should be a plan, step by step appropriate relaxation, and promote its deepening of the reform, so that China's use of foreign investment in the structural rationalization.
4, accelerate the introduction of foreign investment in the central and western regions to improve the investment environment in the central and western regions, improve its energy, transportation, communications and other infrastructure. Secondly, we should appropriately expand the scope and magnitude of the opening up of the central and western regions, can be used in the central and western regions of the labor force, rich in resources and other characteristics, to guide foreign-funded enterprises in the labor-intensive industries and general processing industries to the central and western regions. Some of the resource-based primary processing and deep processing of large-scale projects, can also be gradually transferred to the central and western regions. Third, in the policy on the implementation of preferential treatment of the central and western regions, to relax the approval authority for the introduction of foreign capital.
5, pay attention to the improvement of China's soft investment environment in the past two decades, China's hard investment environment has been greatly improved, mobilized a large amount of funds to strengthen the infrastructure, transportation and communications equipment have made great progress. The main contradiction of the current investment environment has shifted from the hard environment to the soft environment, some government or law enforcement departments more or less on the foreign-funded enterprises in the phenomenon of indiscriminate charging, indiscriminate apportionment, indiscriminate intervention and indiscriminate law enforcement. Foreign-funded enterprises, especially some