A Study On The Effects Produced By Full Ownership Roreign Direct Investment On Beijing Economy Development

Great changes have been taken in the scale and manner of foreign direct investment in Beijing since 1980s.More and more foreign direct investors would rather chose full ownership than form contractual joint ventures or equity joint ventures. The wholly owned enterprise has been the main manner of FDI in Beijing since 2000. This paper focuses on these problems: the development of foreign direct investment manner in Beijing; the features and reasons of transition of FDI manner in Beijing from joint venture to full ownership; the positive and negative effects placed by the transition on Beijing economic development; suggestions on countermeasure. This paper analyses deeply the reasons of the transition by comparing cost and income of foreign funded enterprises. The result shows that the transition of FDI manner from joint venture to foreign wholly owned enterprise is not only the result of improvement of investment environment in Beijing, but also the result of foreign investors weighing the advantages and disadvantages. This paper analyses in detail the effects of the transition on Beijing economic development empirically and theoretically using a great deal of data. The result shows that more and more foreign wholly owned enterprises will contribute to the advance of science & technology and industrial structure in Beijing. On the other hand, they will not help to improve the investment quality and employment. At the same time, there are some potential risks brought by the transition, for example, benefit running off, lessening domestic taxation, brain drain, industry safety risk, technique monopoly, lessening other positive effects of FDI in Beijing, etc. According the reasons and effects of the transition, this paper makes some suggestions on countermeasures. This paper has a wide theoretical and practical significance to the research of utilization of FDI and adjustment of opening strategy in Beijing.