Utilize foreign capital and technology transfer

Author: Chen Feixiang, Hu Jing
Publisher:
Publish Date: 2006-06-01
Features: China's economic development has entered a new historical stage. It is necessary to shift the strategic focus of actively utilizing foreign direct investment (FDI) from increasing capital supply to enhancing the technological transfer effect at an early stage. The technological transfer effect of FDI includes both technology inflow and technology spillover. From aspects such as labor productivity and export competitiveness, China has already formed a relatively broad technological transfer effect in the process of introducing FDI, but there are significant differences between different regions and industries. The domestic market environment is a major factor influencing the strength of FDI's technological transfer effect, and there is a significant correlation between real factors such as human capital and the technological transfer effect of FDI. China's current foreign investment policies have a gap in encouraging the technological transfer effect of FDI, and it is necessary to work towards establishing a new FDI encouragement policy system oriented toward technological transfer effects to better coordinate the relationship between opening up and domestic economic development.