Fdi And Chinese Industrial Security Studies,

In the context of accelerating economic globalization, international trade and investment are scaling up and conducted in diversified ways, creating double effects on the global economy. For one thing, opportunities are created through cooperation; for another, competitions give rise to risks and challenges. In particular, developing countries involved in the process of globalization are able to avail themselves of their advantages to achieve rapid economic growth. This, however, may increase the risks they face and result in excessive dependence on foreign countries to develop their economy and even cause economic insecurity.Economic security refers to the capacities of a country to maintain effective supplies to ensure its economic existence and development, to safeguard independent and steady operations of an economy, and to protect its overall economic welfare from malicious attacks or the harms of force majeure in the era of economic globalization. The issue of economic security has always been a core strategic issue of a country, and industry security is the basis for economic security.Where the economy is open, industry security under external influences can be categorized as being induced by international trade or by international investment. Judging from the experiences of developing countries including China, the issue of international investment-induced industry insecurity is more prominent and more likely to become a problem. This dissertation attempts to discuss international investment-induced industry security from the perspective of foreign direct investment (FDI). FDI has changed the traditional international labor divisions, causing great changes to a sovereign country's domestic labor division as well as industrial ecology and structures. This causes under-developed countries to loose control over their industries and technology which underline the livelihoods of their people. This also undermines the foundation for the healthy development of their economy. Practices indicate that economic security is to a large extent embodied in industry security, which is to a large extent resulted from FDI and shows itself as international investment-induced industry security.This dissertation studies China's industry security in the context of economic globalization. Through literature review of domestic and foreign theories on industry security, research is conducted by using related theories and methods of evolutional economics. Based on rational understanding of how economic globalization creates opportunities and challenges for China, this dissertation undertakes to analyze how international trade and investment impact China's industry security with a focus on how and why FDI affects China's industry security. Strategies are proposed on how to ensure China's industry security against increasing FDI.As of 2010, China's annual use of FDI had amounted to 105.7 billion dollars, much of which showing the tendency of becoming "sole investment." Foreign funds have been forming a monopoly over China's food processing and manufacturing industries as well as some service sectors. Foreign funds are gradually affecting and changing China's industry ecology and structure through share rights, technologies, and branding control, seriously affecting China's industry security. Undoubtedly, indiscriminative use of foreign funds will impact the sustainable development of China's economy in the future and ultimately impact the security of China's economic system. It is theoretically and practically meaningful to conduct research on the issue of international investment-induced industry security based on China's industrial development and practical use of FDI.Major contributions of this dissertation include:1) the distinction made between international trade-induced industry security and international investment-induced industry security with efforts made to use theories and methods of evolutionary economics to develop a theoretical framework to analyze industry security; 2) development of an industry security evaluation system based on analyses of how and why FDI affects industry security, and evaluation and analyses of China's industry security based on China's practical situations; and 3) propositions on how to adjust and innovate China's policies regarding foreign funds management based on the practical situations where industry security is closely related to the making and implementation of industry-related policies in order to improve the policy and legal framework appropriate to safe industrial development, to eliminate the factors endangering China's industry security, and to ensure China's industry security in the context of open economy.