Research On The Problems And The Countermeasure In Attracting Investments By China Local Authority

Attracting investments is the important economic policy which is being widespread carried out by current Chinese local governments, already and is affecting the local economic and social life profoundly. This phenomenon has given rise to a high degree of academic attention. While bringing new vitality, attracting investments also produced a number of problems, some problems are common and serious. Therefore, not only giving full play to the positive role of attracting investments and avoiding its negative effect is of great practical significance.But current research on attracting investments is often from an angle, to analyze from one side or merely from the practical level, which is elusive, lacking systemic and macroscopic. This article unified its author's own work and public management, economics of public sector, which makes an in-depth study on the problems in attracting investments by Chinese local governments, and propose the countermeasure and the conception, as is for reference for the government and the parties concerned.This article first comprehensively reviewed the current research on attracting investments by domestic academic, and combed the main point of view of the academic and research achievements. It sums up ten aspects of common problems in attracting investments by local governments. Production factors price distortions, unequal treatment of foreign-funded enterprises and domestic-funded enterprises, serious formalism of attracting investments, input-output ratio imbalance, the poor quality of the project, welfare decline, government credit loss, local cut-throat competition, low performance of government services, lacking a mechanism to assess the effectiveness of attracting investments and long-term industrial planning. In response to these issues, it makes an in-depth analysis from the financial system and economic policy, foreign investment laws and regulations, evaluation of the performance of leading cadres, and an analysis of Zaozhuang. On this basis, it proposed nine specific countermeasures. Three countermeasures on the central government response: introducing policies to avoid cut-throat competition on local preferential policies, clearing the country's geographical distribution of industry, establishing investment risk control mechanism. Six countermeasures on the local government response: objective understanding of the status and role of attracting investments, local enterprises to enhance the strength and core competitiveness, improving public services and public infrastructure , resolutely put an end to short-sighted investment behavior with a waste of resources and at the expense of the environment, to foster high-quality talent in the first place, to enhance the study on the experience of attracting investments in developed countries. This article also placed particular emphasis on: attracting investments is the external reason for economic development, is an important means of needs in Economic development, but not internal reason to the economic development. Attracting investments should be regarded as local economic development aid, not the main means. Attracting investments alone will not solve the fundamental problem of economic development.