As an important part of the opening up program, attracting foreign investment has an irreplaceable status in economic development in China. For twenty years, China has achieved strong economy growth, social development and impressive improvement of living standards, which were witnessed by the world. China has become a popular country for foreign investment.

By the end of May 2000, 349,537 companies were set up in China by foreign investors from over 180 countries. The contractual value of total funds invested is 632.3 billion US dollars and the actually utilized capital is 320.6 billion US dollars. In 1998, though influenced by the financial crisis in Southeast Asia, China still achieved a record actual utilization of foreign funds of 45.5 billion US dollars. The actual utilization of foreign funds in 1999 is slightly lower than in 1998; however, it still reached 40.4 billion US dollars. China is the third largest country receiving foreign investment after the United States and the United Kingdom.

Nowadays China has joined WTO, so Chinese government made new strategies to challenge the competition in the future. Here, I think they can be divided to three parts: technology development’s revolution and investments’ innovation, development project of central and western region, and future service industry’s improvement.

First, the encouragement of technology development and innovation of foreign-invested enterprises are very vital for China. China lost lots of opportunities to develop the national science and industry from 1960s~ 1978. Therefore, China has to develop national business in order to compete with the other countries. Also, China can not always depends on foreign investment, and some forms need to be transferred that means it is better for Chinese people to learn the technology from the foreign companies and develop international trade at the same time.

Next, China should pay attention to develop the industry and business of the central and western area of China step by step. As we know, Chinese businesses are concentrated along the sea shore. The situation for China’s security is not very good. The Taiwan problem is definitely dangerous to China. If the war happened, Chinese important city along the sea shore might be under attack; meanwhile, Taiwan might be completely destroyed. As a result, the economic of the Chinese nation including Taiwan will be probably difficult to recover. Consequently, China should also develop the central and western area in order to keep stable economic situation even during the emergency.

Finally, China should improve the future service industry efficiently. As China is an old country which has about 5,000 year’s history and has lots of famous cultural interests, China can take the advantages of these points to attract the foreign tourists. At the mean time, China can also have a chance the show the foreigners its big change in order to get more investment to develop economic. 2008 Olympic Game which will be held in China might be a good chance, let’s wait and see.

The new policies and strategies are being made in order to make Chinese economic goes along an accurate and fast way. I believe China will become better and better in the future.

April 2003