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I. Abstract摘要
1978年以来，我国吸收外资稳定、积极，投资者信心不断增强。
与其他国家相比，中国已成为改革开放以来最大的招商引资国。据商务部统计，2018年5月，外商在华投资588.1亿元人民币，同比增长7.6%。早在十年前，中国公司就开始收购海外公司。2006年，中国海外并购总额达163亿美元。从那时起，营业额一直在稳步增长，并且在过去的两年里从2014年的692亿美元大幅增长。
中国政府和企业本身都看到了投资带来的好处和收益。因此，作为一个好的投资者或投资并购国家已经成为中国的首要问题。在本文中，我们利用全文中的比较来告诉读者投资对一个国家的重要性。同时，我们列举了许多例子来说明一个吸引或贡献大量投资的国家实现最有利目标的必要和重要的环节或方法。
如果通过阅读本报告，您可以了解当今投资趋势的理论和使用方法，我们将实现我们的目标和目标。
China's foreign investment absorption has been stable and positive since 1978, and investors' confidence has been improving.
Comparing to other countries, China has become the largest investment attracting country since the open and reform. According to the ministry of commerce, in May 2018, the amount of foreign investment in China reached 58.81 billion yuan (RMB), seeing an increase of 7.6% year-on-year. As early as a decade ago, Chinese companies began acquiring overseas companies. In 2006, China's overseas acquisitions totaled $16.3 billion. Since then, the turnover has been steadily increasing, and a huge increase of in the past two years, from $69.2 billion in 2014
Both the Chinese government and the enterprises themselves see benefits and gainnings from the investment. Thus, being a good investor or invest acquisition country has become the top essential issue of China. In this article, we utilize comparison throughout the whole text and intend to tell the readers the importance of the investment to a country. Meanwhile, we list a lot of examples to illustrate the necessary and important links or methodologies for a large investment attracting or contributing country to achieve the most favorable goals.
If by reading this report, you can understand both the theory and usage method in nowadays investment trends, we then will fulfill our aims and objectives.
II. Introduction介绍
A. Hook
随着改革开放的发展，我国对外投资和对外投资已成为一种综合性的积极趋势。中国已经经历了对捐助国最大的投资吸引国。
早在改革开放之初，这项政策最显著的目标之一就是吸引来自国外和海外的投资。对于每一个高兴的中国人来说，从那时起，有一股热钱流入中国的趋势。然后，中国政府计划好好利用这一大笔钱。他们开始进行基础设施建设，建立实体，投入学校或房地产资本。此外，投资可以解决很多人的就业问题。
随着改革开放的不断深入，90年代以来，不仅有国外投资，而且有中国资本进入国外。随着招商引资步伐的加快，中国向其他发展中国家甚至发达国家分享资金。与此同时，中国开始收购其他国家的公司。
为什么中国经历了从吸引到贡献的这一趋势？在这两种情况下，资本在赚钱方面是如何运作的？未来的热钱会导致通货膨胀吗？如何有效利用资金？本文将最终揭示所有这些问题，并解释这些现象下的原理。
With the development of open and reform, the overseas investment to China and from China have become a comprehensively active trend. China has experienced the largest investment attracting country to contributing country.
As early as the opening and reform, one of the most noticeable aim of this policy is attracting investment from abroad and overseas. To every Chinese delighted, since then, there was a trend of hot money flowing into China. Then the Chinese government planed to make good use of this big sum of money. They begin to start the infrastructure construction, establish entities and input the capital of school or real estate. Furthermore, the investment can solve a lot of peoples’ employment.
With the development of opening and reform, since 1990s, there were not only investment from abroad, but also Chinese capital going into overseas’ countries. Following the step of investment attracting country, China share its funds to other developing or even developed countries. At the same time, China began its acquisitionto other countries’ companies.
Why has China experienced this trend—from attracting to contributing? Under the two ways, how does the capital conduct in earning money? Could the coming hot money cause inflation? How can the money be utilized efficient? This article will ultimatelydisclose all these questions and explain the principles under these phenomena.
B. Background Information (Connecting Info)
During the beginning of opening and reform, investment has given Chinese the power to absorb wisdom and move on. Since the reform and opening up, China has grown from a relatively closed and backward country to one of the most open and dynamic country. It has made great achievements in economic and social development.
Since 1978, China has embarked on a historic journey of reform and opening up. From rural to urban, from the pilot to the promotion, from the economic system reform to comprehensively deepen reform, the Chinese civilian hands to write an epic in the development of the country and nation. In order to gain more profits and seek an easy way to draw more attentions on investing, China began to become the largest investment attracting country.
Over the past 40 years, the Chinese people have worked hard and perseveringly, greatly liberating and developing the productive forces of Chinese society. As the ancients said, heaven rewards diligence, spring flowers autumn fruits. The Chinese people have continued to concentrate on construction the reform and opening up. Today, China has become the world's second largest economy, the largest industrial country, the largest trader of goods and the largest foreign exchange reserve country. Over the past 40 years, China's GDP has grown at an average annual rate of about 9.5%. China's foreign trade has grown by 14.5% annually.
Chinese people insist based on national conditions, look around the world, emphasize independence, self-reliance and opening to the outside world, win-win cooperation, adhere to the socialist system and adhere to the reform direction of socialist market economy. The Chinese people have kept pace with The Times and kept moving forward, fully demonstrating China's strength. Chinese people stick to emancipate the mind, seeking truth from facts.
Over the past 40 years, the Chinese people have always been open to the world and made positive contributions to China. Reform and opening up is a great course of development and progress for China and the world. For many years China has contributed more than 30% for the world economy, become the main stabilizer of world economic growth and the source of power, to promote the lofty cause of human peace and development.
As a big investment attracting country, China must continue to optimize the industrial structure. Only attracting more foreign capital can Chinese people see better industry arrangement and layout. Foreign investment accelerated at the high-end of the industrial chain, accounting for 20.5% of the foreign investment in high-tech industries from January to May. High-tech manufacturing accounts for about a third of foreign investment in manufacturing.
Second, China will optimize policies to attract foreign investment. Changing the investment from liberalization, investment facilitation, investment promotion, investment protection, optimization of regional opening-up layout, strengthening the state-level development zone in six aspects such as the use of foreign capital important platform to launch further positive and effective utilization of foreign capital.
The Chinese government will further open the financial sector steadily, encourage the investment of foreign capital's m&a(mergers and acquisitions), and allow qualified foreign natural person investors in accordance with the measures such as investment in listed companies, will attract more overseas long-term funds invest in China's capital market.
Third, optimize the business environment. China will complete the revision of the negative list of foreign investment in the near future and substantially ease market access so that to strengthen both the investment attracting and contribution.
C. Thesis
The subjects and ways of investment
Diversity of subjects and ways
Since the 1990s, the proportion of private capital overseas investment in total investment has been increasing year by year, reaching 60% in 2004, which is characterized by small scale but generally good benefits.
Meanwhile, the subjects of investment have changed in many aspects: 1. It can be divided into many categories: Both the intended aspects and undesired aspects are require improvement. 2. The investment can be sorted into enterprise’s investment and infrastructure investment and so on.
In addition to the traditional new investment, most enterprises choose the way of joint venture and equity participation in overseas investment (Markowitz, H. M. ,1992). Not only can give full play to all the investors in capital, technology, raw materials, sales and other advantages, formed complementary advantages, and less susceptible to the host country national consciousness of resistance, easy to get preferential treatment, reduce the investment risk. #p#分页标题#e#
The above trend of diversification of China's overseas investment is caused by the dual factors of the international situation and China's domestic economic development level. To construct the macro-management framework of China's overseas investment, we must start from the economic law, so as to meet the needs of overseas investment and even the development of the entire national economy.
To the contrary, China currently has not become the investment attracting country but also become investment contributing country.
As an investment attracting country, China should do the following to make the entering hot money to be regulated in the standard form.
In the process of foreign hot money entering China, a lot of it is through some seemingly legal means. There are four ways to be compliant under current and capital projects:
One is the way to increase trade. At present, China's enterprises implement the compulsory foreign exchange settlement and sale system for import and export.
Trade enterprises inflate the way of trade export, raise the price of export goods, and issue export invoice. This allows some foreign currency to flow into the country through export trade.
Second, export advance payment. The gaining merits ways for enterprises abroad invest to Chinese enterprises:
The ways for foreign enterprises invest capital into Chinese enterprises:
Payment for goods to enter the Chinese enterprise. Enterprise through the settlement of exchange into RMB after receiving the deposit. After the appreciation of the RMB, domestic enterprises return the payment for goods to overseas enterprises on the grounds of non-performance, and remit the money after purchasing foreign exchange to complete a foreign exchange arbitrage.
Third, besides direct investment, there is another way to obtain investment from abroad: To start a business in China.
C.1 Investment trends and its benefits
Factors include the formation of an international production network for manufacturing and modern services should be taken into account. The removal of restrictions on capital flows and the privatization of developing countries. The average annual inflow of FDI into developing countries increased tenfold. However, most foreign direct investment (more than two-thirds) is still concentrated in developed countries. Moreover, foreign direct investment in developing countries is also very concentrated, more than 80% of the investment flows to developing countries into the only a dozen (mainly the middle-income countries), including China and India.
Foreign direct investment brings money and technology and is therefore greatly conducive to the long-term economic growth of developing countries. However, it is clear that countries with higher incomes and more developed markets, infrastructure and human capital attract most foreign direct investment. In this sense, FDI seems to have contributed to the growth differential. Moreover, not all countries where FDI has increased substantially have increased their economic growth.
C.2 The domestic companies and foreign companies benefiting from FDI
Domestic companies and institutions must have the necessary absorptive capacity and technical capacity to benefit countries from foreign direct investment. That a large number ofinvestment in its infrastructure, human capital and entrepreneurial ability to countries play in the inflow of foreign direct investment has also the most successful leverage. On the other hand, if in a major tax incentives or distorted trade policies (such as textile and clothing quotas) to attract foreign direct investment, rather than building local capacity.
C.3 Policy issues
Trade liberalization has been a major policy trend in recent decades. In much of the world, this has boosted exports, but not necessarily economic growth. The growth rate of the national economy, which has the capacity to diversify and change production structures, including those engaged in productive activities, has increased significantly. Greater diversification of the economy and exports is a major challenge. Developing countries need both positive domestic policies and a more favorable trading environment.
Governments of developing countries have reason to develop positive production sector development strategies. Most developing and developed countries that have successfully maintained sustained economic growth have adopted positive industrial policies to support economic diversification and promote economic and technological upgrading. In developing countries, the success of the state shall adopt the export-led growth strategy is adopted the following measures: formulating supportive macroeconomic policies and protect the infant industry selectively, to provide export subsidies, directional credit plan, formulate local content rules and a large number of human capital investment and form strategic alliances with multinational company.
III. Literature review
State encouraged foreign invested enterprises refer to the foreign investment industrial guidance catalogue of encouraged projects and the catalog of foreign-funded dominant industries in industrial projects as the main business, its main business income accounted for more than 70% of the total enterprise.
1. Between 2001 and 2010, corporate income tax was levied at a reduced rate of 15%.
2. The import of equipment for self-use within the total amount of project investment shall be exempted from customs duties and import environment tax except for the goods listed in the catalogue of import commodities not exempt from duty for foreign investment projects.
4. In order to improve the economic benefit of enterprises to improve product quality, increase the designs and varieties, to promote product upgrading, expand exports, reduce costs, save energy consumption, strengthen the comprehensive utilization of resources and waste management, labor safety purposes, such as the use of advanced and applicable new technologies, new processes, new equipment, new materials and the modification of existing facilities, the production technological conditions for outside investment to purchase domestic equipment, 40% of the purchase of domestic equipment investment can also purchase from equipment that year than the year before the new enterprise income tax in the credit.
Support measures are often explicitly linked to specific export performance standards(s). Within the framework of the multilateral trade agreements, the space for such a policy of active development in the productive sector has been reduced, but it has not completely disappeared (Beatty, R. P., & Ritter, J. R. ,1986). The general agreement on tariffs and trade give special and differential treatment to developing countries, particularly the least developed countries(Borensztein, E. ,1995). In practice, however, developing countries, with the exception of the poorest countries, must apply the same rules as developed countries, only to extend the period of implementation and the extent of protection.
3.1 Economic regulation and its effect
First, there are two kinds of economic regulation: monetary policy (adjusting reserves, interest rate, etc.) and fiscal policy (investment). For countries in the economic downturn, the investment can create demand, thus promote other industries (Caves, R. E. ,1971), and through the money multiplier effect to drive GDP growth(Christensen, C. M., & Bower, J. L. ,1996), create more employment opportunities, tax increases, and so on.
3.2The examples of Chinese investment contributing to overseas
By 2016, Chinese companies spent $247.1 billion buying overseas firms.
From the perspective of major players in overseas acquisitions, China's outbound investment can be roughly divided into two stages (Raymond Vernon.,1966).
The first stage was from 2006 to 2013, when China's overseas m&a was mainly driven by the deep-pocketed state-owned enterprises, and most of them were in the traditional energy industry, such as steel and coal. More than half of the deals are attributed to the traditional energy industry(Rose, J. R. ,101959).
Since 2013, it has entered the second stage, and the proportion of non-state-owned enterprises in foreign investment has been increasing.
IV. Counterargument to the thesis and rebuttal
Looking from the flow, flow rate of $196.15 billion, 2016, Chinese foreign investment in the global foreign investment is more than double the third place, is equivalent to ‘champion’ almost two-thirds of the United States.
In terms of stock, China's foreign investment stock stood at 1357.39 billion US dollars in 2016, matching that of the UK, Japan and Germany, and further narrowing the gap with the US. Over the same period, China's foreign investment stock accounted for more than 5 per cent of the world's total for the first time, rising from eighth to sixth place.
In terms of geography, several ‘China projects’ also look at large markets in Asia and Africa. All the way in the ‘area’ initiative leads, the rapid growth of Asian countries, infrastructure construction, the turnover in foreign contracted projects completed the top 20 countries, with 11 Asian countries. Chinese enterprises have signed us $113.52 billion of new contracts for foreign contracted projects in 61 countries along the One Belt And One Road line, accounting for more than half of the total contracted projects over the same period.
V. Counterargument to the thesis and rebuttal
With the continuous development of economic globalization, international cooperation, technology transfer, production and capital flows more frequently, contact more closely, also makes the Chinese enterprises' overseas investment trends continued ascension. Over the past 13 years, China's ofdi (Overseas Foreign Direct Investment) has grown at an average annual rate of 33.6 percent, and has been the world's largest trading block with its strength since 2014. For a long time, the enterprise foreign investment industry has been supported and encouraged at the national macro-policy level. Enterprise mergers and acquisitions investment areas, from the initial search for raw materials, energy, infrastructure, and gradually to the value chain of high-end development (Richardson, S. ,2006), at present, the majority of overseas investment has involves brand mergers and acquisitions, research and development of mergers and acquisitions, and other fields. But as the overseas investment boom has grown, the problems in some investment projects have become more acute.#p#分页标题#e#
5.1 The main industries contributing foreign market
The rise of private companies in outbound investment has contributed to a dramatic change in China's appetite for overseas m&a (Merger&Acquisitions) in recent years. The decline of traditional energy industry investment overseas, Internet and real estate for investment, these two industries overseas acquisitions also rose sharply, nearly two years the growth rate of 304% and 186% respectively.
5.2The relationship between inflation and investment.
Inflation is essentially a monetary phenomenon. But if you consider the conduction effect, increased on a large scale of local government investment, to form reversed transmission power. The key is to see whether the central bank can maintain a stable and neutral monetary policy(Fazzari, S. M., Hubbard, R. G., & Petersen, B. C.,1996).
From the perspective of a local government investment funding channels, in addition to the fiscal budget allocations, through the national policy bank, local financing platform, bank, trust, and other financial institutions, the PPP methods such as access to funding, are all more or less will be formed in the money market transmission mechanism. If local government investment grows too fast and a large amount of financing demand causes a shortage of liquidity in these institutions, it may force the central bank to release water.
5.3 The investment effect and other results
In the past years, the high investment of excess capacity, debt repayment pressure, the problem such as asset price bubbles that social common to continue to intellectual, high investment and downward pressure in the current economy does not lose, steady growth, employment and inseparable from the investment.
Therefore, the improvement in investment efficiency is particularly important. In the past, we will adopt a through fiscal policy and monetary policy to boost economic growth. The massive factor inputs such as land, labor, capital growth are of great important in the entire investment. Now, these measures have failed. The next boost to economic growth depends on the increase in total factor productivity.
VI. Quantitative analysis
Overseas investment
China has set up 6,610 foreign enterprises of various types and agreed to invest US $8.4 billion. More importantly, overseas investment has broken through the previous single model, which reflects the trend of diversification while developing rapidly, mainly in the following aspects:
From January to May 2018, 24,026 new foreign-invested enterprises were set up in China, an increase of 97.6% year-on-year. The amount of foreign capital actually used was 52.66 billion USdollars, an increase of 3.6% over the same period last year (345.59 billion RMB, an increase of 1.3% over the same period last year).
In may, 5,024 new foreign-invested enterprises were set up across the country, an increase of 106.5% year on year. The amount of foreign capital actually used was us $9.06 billion, up 11.7% year on year (58.81 billion yuan, up 7.6% year on year).
From January to may, Asia invested 558 new enterprises in China, an increase of 11.4 percent over the previous year. The 28 EU countries invested 856 new enterprises in China, an increase of 10.2% over the previous year. The number of newly established enterprises invested in China by countries along the "One Belt And One Road" line dropped by 9.1% year on year. There were 5,060 new foreign-invested enterprises in the Yangtze river economic belt, down 0.04% year on year.
Most of the overseas investment of Chinese traditional target is set up a trading company and import and export trade link internalization, or development companies and the supply of raw materials (including resource) links the internalization. At present, there is a clear trend of diversification in overseas investment objectives. First, market service investment is established through investment International marketing and services.
VII. Conclusion
The goal of this kind of overseas investment is to internalize the product service link, which can be regarded as the continuation and deepening of the internalization goal of the import and export trade link. Second is export-oriented investment, that is, in the export market or export market of surrounding countries and regions to establish production bases, main equipment and raw materials from domestic supplies, products in overseas sales. This kind of overseas investment is mostly the transfer of China's marginal industry (also the advantageous industry) to other countries, which conforms to the product life cycle. Also, technology acquisition investment, through investment to strengthen technical cooperation with foreign countries, access to upstream technology.
From investment attracting country to investment contributing country, China has experienced the big capital input country to capital output country. Nevertheless, the tremendous change has bring big opportunities in Chinese economy. To other words, this large difference can give China the big challenge to balance the investment and gaining.
China can utilize both investment from China and to China so best. Thus, it can become the most efficiencycapital leveragecountry.
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Reference
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