Changes and Prospect of China’s Foreign Direct Investment

（Institute of International Economics，University of International Business and Economics，Beijing 100029，China） Abstract：Since reform an opening up，there has been great changes in the development of China’s foreign direct investment (FDI) in the aspects of concept，policy，institution，environment，terms of trade，advantage，industry and region. Reviewing these changes will be helpful for us to correctly understand the development trend of China’s FDI，and its position and function in China’s economy. In terms of concept，our understanding of FID has changed from suspicion and debate to seeing it as the important components of China’s economy；and its positive role in promoting the development of socialist market economy is identified，In terms of policy，China’s FDI related polices has changed from taking income tax as the core to guaranteeing the rights and interests of FDI with the help of law and regulation ，guiding the flow of FDI with the help of industryoriented policy，and promoting the equal national treatment for both domestic and foreign enterprises. In terms of institution ，the administrative approval system of FDI has been abolished ；the market access system，which is the integration of preestablishment national treatment and negative list ，has been adopted；the negative list has been gradually simplified ；and the access scope of FDI has been continuously expanded. In terms of environment ，in a comparatively long period of time，the international environment is beneficial to China to absorb FDI ；many countries encourage the capital to flow to China ；but，with the rapid growth of China’s economic strength，the United States and its allies significantly changed their China policy ；trade protectionism has been strengthened ；economic globalization is faced with great challenges ；and the international environment of China’s FDI has changed to be more complicated. In terms of terms of trade ，China’s national economic growth has changed from rapid development to high-quality development ；the industrialization has changed from accelerated expansion to structural adjustment；market shortage has be supplanted by over- capacity ；and the advantage of factor cost has been weakened，and market advantage has been formed. In terms of advantage，the advantage of efficiency- seeking FDI has been decreased ；the advantage of market-seeking FDI has been increased ；the advantage of resource-seeking FDI has been changed from the aspect of structure；and the advantage of strategic-asset-seeking FDI has been gradually improved. In terms of industry ，the proportion of FDI in manufacturing has been decreased ；the proportion of FDI in service has exceeded that of FDI in manufacturing ；and FDI in higher-end manufacturing and higher-end service is increasing rapidly. In terms of region ，FDI used in the easter region is still the primary part；the scale of FDI used in the central and western region has been gradually expanded ；and in absorbing FDI， different kinds of special economic zones are playing more important roles. As the important connection between domestic and international circulation，FDI is expected to gain more business opportunities in China’s economic high-quality development， maintain its steady trend of growth，and play the unique role in establishing the new development pattern.

Key words：foreign direct investment；business environment；structural change；dual circulation