On Improving Local Government Function In Investment Promotion

Investment promotion has long been an important economic function of the local government in China. So far, the local government acts not only as the constructor of investment environment but also as the promoter to attract foreign investment, and takes too much work in investment promotion, such as making preferential policies, conducting business talks, approving projects, holding investment fairs, etc. The government becomes the main participator in investment promotion has its historical and social reasons, which, for a certain historical period, makes great contributions to china's economic development. However, investment promotion is a kind of market activity and should be operated according to market principles. Along with the mature of market system in china, and with china entering WTO, it is improper that the government still plays a major role in investment promotion, which caused serious problems and has bottlenecked the regional sustainable development and effective use of investment. So, how to play a proper role in investment promotion becomes an urgent problem for the local government to solve in current situation. The paper, against the background of international and domestic atmosphere for attracting investment and on the basis of case analysis, takes government function in investment promotion as the research object, discusses the development of local government function in investment promotion, points out the disadvantages of such traditional methods and gives a theoretical investigation about its internal causes. The paper then puts forward the necessities to improve the local government function, and gives advices on how to make improvement. Hope it will bring certain enlightenmentsto the local government.The paper consists of four major parts as follows:Partâ… introduces the history of local government function in investment promotion, including its formation and development, its contributions to regional economy, and the traditional methods in investment promotion;Partâ…¡points out the major problems caused by the local government function in investment promotion on the basis of case analysis ,and gives a theoretical investigation about its internal reasons, that is, improper viewpoints in post achievement, unsatisfied system of evaluation and discipline in investment promotion, shortage of matured intermediaries, etc.Partâ…¢states that, along with China's entry to WTO, the situation for investment promotion has got profound changes and the traditional methods the local government adopted in investment promotion can no longer meet the requirements of the new era. It is necessary for the local government to improve its function in investment promotion.Partâ…£gives some detailed and practicable proposals on how to improve local government function in investment promotion. The most important thing is to properly position the local government function in economic field, and raises an idea that detailed things regarding investment can be delivered to relative intermediaries to carry out.