First, the positive effect of utilizing foreign capital on the economic development of the host country.
(A) the micro-effects of economic development.
The absorption and utilization of foreign capital is conducive to making up for the shortage of domestic construction funds and promoting investment growth.
(B) the use of foreign capital on the macro-economic development of China.
Generally speaking, the use of foreign capital has a positive impact on domestic macroeconomic policies: it promotes economic growth and relieves our employment pressure to some extent. It has also brought some impacts on monetary policy and foreign exchange policy, and these adverse effects can be avoided and minimized as long as they are handled properly.
In 1980s, the proportion of foreign direct investment in GDP was less than 1%. Since 1990s, the proportion of foreign direct investment in GDP has increased rapidly. 1994 has reached 6.5%. With the development of China's economy, the scale of utilizing foreign capital is constantly expanding, and the role of foreign capital is gradually enhanced.
The output value of foreign-invested enterprises in manufacturing industry has increased year by year, accounting for only 4.38% in 1990 and only 13.55% in 1994. From the perspective of development speed, during the four years from 1990 to 1994, the growth rate of national industrial output value was 3.2 1 times, while the growth rate of output value of foreign-invested enterprises was nearly 10 times, which promoted the growth of domestic industrial economy.
Second, the negative impact of the use of foreign capital
Foreign monopoly
Foreign capital has formed a de facto monopoly on some departments and industries in China through mergers and acquisitions, which has caused China to lose or is losing its economic control over these departments and industries. For example, in the beverage market in China, "Coca Cola" and "Pepsi Cola" have occupied most of the market share of carbonated drinks; The washing industry is also controlled by American, German and British companies in various ways. Among the pharmaceutical industry 14 enterprises, 13 is controlled by foreign capital, and so are many other industries.
Some large state-owned enterprises are also controlled by foreign investors, such as Shanghai Renmin Machinery Factory, the largest printing machinery factory in China, and Harbin Bearing Factory, the largest bearing factory in China. There are also some industries, such as automobiles. Even if the Chinese side has the controlling stake, the foreign side has mastered the key technology, so the foreign capital also has the actual controlling stake. Judging from the above situation, the safety of some industries in China is being threatened by foreign-funded enterprises.
(B) market segmentation
Foreign-funded enterprises have occupied the China market and seized market share through brand-name strategy and low-price dumping. Some high-tech products and their markets in China have been eliminated in the competition with foreign mergers and acquisitions and imported products. For example, Motorola, Ericsson and Nokia in the communication market almost carved up the wireless communication product market in China. Fortunately, we can still see the hope of the recovery of some national mobile phone brands. In the color film market, under the impact of Japanese Fuji, American Kodak and German Agfa, domestic brands are only supported by Le Kai. A large number of foreign brands have carved up a considerable market share in China, which has caused excessive competition among domestic enterprises in the domestic market to some extent.
(C) imbalance of industrial structure
A large amount of foreign investment has also affected China's industrial structure optimization and product upgrading to some extent. On the one hand, it makes the original unreasonable industrial structure worse; On the other hand, some of our strong industries have lost their advantages. From the perspective of foreign investment, most of them invest in ordinary processing industries and labor-intensive industries, which intensifies the competition for the use of energy, raw materials and public facilities in China and causes certain tension. From the perspective of regional investment, foreign investment is mainly concentrated in the eastern coast, and the proportion of investment in the central and western regions is small. It has further worsened the regional structure and overall economic structure of China's industrial layout, and widened the gap between the east and the central and western regions.
(4) Operational fraud
In the process of joint venture and cooperation with China enterprises, foreign businessmen embezzled China's state-owned assets in various ways. Mainly manifested in the following aspects: (1) In the joint venture with China, we underestimated or even did not estimate the assets of China, and bought shares at net book value, ignoring intangible assets such as trademarks, patents and goodwill. (2) Deliberately raising the quotation of imported equipment, causing losses to our country. (3) In terms of investment funds, the investment is exaggerated, the investment is not in place, the funds are withdrawn, and a false joint venture is formed. (4) Transfer pricing to avoid taxes and fees. (5) Acquisition and merger of well-known trademarks in China, and then discarded.