Embedding Relationship:the Government And The Market Of China’s Investment Promotion

The biggest difference between Chinese economic markets and the western economic markets is the formation of paths, in a sense, Chinese market economy is constructed by the government’s policy. Therefore, there exists a distinct particularity between the relation of Chinese government and the market, which can’t be explained by the Keynesian, neither can it be totally explained by the theory of East Asian developmental state. The understanding of the relationship between Chinese government and market can only be constructed on the base of Chinese practice.Investment promotion is the important connection between the government and the market. In practice, the investment promotion is not only a market action, but also a market action. The thinking about the relationships between Chinese government and market and the function orientation of the government are inevitable to involve the comments about the government’s investment promotion. If the investment promotion is the government’s intervention of market economy, then the understandings about this intervention has a significant meaning for the transition of government’s function and the formulating of government’s policy making.Scholars have two main investigating paths for the thinking about the Chinese government’s investment promotion, one is the path of economics, which pays attention to the investment promotion efficiency, it adopts the quantitive method to realize the measurement and evaluation of the investment atmosphere, it has provided suggestions on the improvement of government’s investment promotion efficiency; the other one is the political path, which mainly stress on the responsibility system and the role definition of the government during the investment promotion process. It uses the qualitative research method to discuss the responsibility boundary of the government in the investment promotion to push the function transformation of the government.The main problem discussed in this paper is the Chinese government’s role in the investment promotion. Specifically speaking, this paper pays attention to the following aspects:the existing form of the government’s investment promotion behavior, which indicates the government’s way of conducting investment promotion activities and the responsibility system the government has formed during the investment promotion process; the theoretical thinking of the government during the investment promotion process, which indicated the overall characteristic of the relationship between the government and the market during the investment promotion process; the dynamic mechanism of the government’s investment promotion behavior; the basic function of the government’s investment promotion behavior; the side effects of the government’s investment promotion behavior; the transformation and development of the investment promotion work of the government, which indicates how the government choose to transform the working train of the investment promotion under the pressure of economic upgrading and how the government improve the efficiency and quality of the investment promotion work.The basic hypothesis of this paper:the investment promotion is a market behavior, while the Chinese government is getting involved in this for the purpose of efficiency improvement. Under the driving of multiple forces, the government gets involved in the investment promotion action in different forms from the macro, meso and micro three levels, the government has given play to the political support, organization and coordination, overall planning functions, which has laid a solid foundation for the decisive role of the market during the investment promotion process, it also improves the efficiency and quality of the investment promotion work. On the other hand, the "embedding relationship" formed between the government and the market formed during the investment promotion process has their limitations, which has generated some negative effects; under the pressure of economic transformation, the government should convert the investment promotion function and push the transformation and development of the investment promotion work.This paper proposes the "embedding relationship" formed between the Chinese government and the market during the investment promotion process and conducts operational research on the "embedding relationship" conception. It first systemizes the historical chain for the development of investment promotion from the international and domestic level and summarized the development rules of investment promotions works of the world and China, in which way a better understandings about the revolution and development of the investment promotion activities are formed.Later, this paper uses the analysis method to investigate the existing form of the "embedding relationship". It analysis the behavior characteristics of the investment promotion of the government from the macro, medium and micro levels, in the macro level, it analysis the central government’s top level designing from the development strategy, institutional framework and capital guidance; in the medium level, it conducts independent investigation of the local government from the project planning, benefit policies and political environment perspective; in the micro level, it analysis the investment promotion sectors’ specific implementations from the information platform, business operation and investment services perspectives. Then the theoretical analysis is conducted about the "embedding relationship", whose basic characteristics are summarized from the concept expression, time-and-space background, structure analysis and the operating logic; the driving force system of the "embedding relationship" is analyzed from the international driving force, financial driving force, technology driving force and performance driving force perspective, the four basic characters of the "embedding relationship" are further proposed: political support, organization, planning and construction of vector; on this basis, the five negative effects of the "embedding relationship" are also summarized:the worship of number, the lack of benefit, the waste of land, the dependence on policy and the lacking of management.On the base of theoretical analysis, this paper has conducted experience analysis and comparative analysis on the government’s investment promotion so that this behavior’s local experience and international experience can be summarized. The experience analysis can be divided into three levels, the first one is the organization system of the local’s investment promotion, the second is the practice of the local’s investment promotion, the third is the park experience of the investment promotion. In the district level, this paper has chosen the Yangtze River district, Pearl River district, the Bohai Sea district and the Shangdong Peninsula district. In the park level, this paper selects the Shanghai Zhangjiang Hi-Tech Park, Qingdao economic development zone and the Hefei economic development zone. From the concrete analysis of different areas and parks, it is clear that different local governments have their differences when it comes to the investment promotion activities and strategies, the complexity of the "embedding relationship" is deeper understood in this paper."Embedding relationship" has its university and particularity, different countries and local governments around the world are conducting their own investment promotion activities, while their focuses are placed upon different things. Generally speaking, in the countries and districts where the market developing level are higher, the governments tend to narrow down their scope of "embedding" investment promotion, the ways of the "embedding" are relatively indirect, the government relies on different kinds of professional organizations and intermediary organs to finish their market behaviors of micro-level. While in those countries and districts whose markets developing levels are lower, the governments tend to enlarge their scope of "embedding" investment promotion, the ways of the "embedding" are relatively direct, the government do not use the different kinds of professional organizations and intermediary organs often, the governments invest their administrative resources directly into the micro economic areas.On the base of empirical research and comparative research, this paper has proposed the transformation of investment promotion work and overall thoughts and suggestions for the investment promotion work during the economic development stage of China, it suggests that the investment promotion work’s transformation and development should be pushed through the transformation of government functions, the overall thoughts of the investment promotion work should be adjusted, the "overall embedding" should be transformed to "local embedding", the "direct embedding" should be transformed to "indirect embedding". On this base, the local governments should transform their investment promotion thoughts, enhance their investment promotion supervision, optimize their investment environment, enhance project guidance, promote intermediary organs, reform assessment mechanism and push the corporation of policies.