5: Technology Spillover of Foreign Direct Investment and Chinese Technological Progress

The manner in which the mutual benefit and win-win opening-up strategy is reflected in China’s foreign investment policy is becoming the main problem of the utilization of foreign capital in the new phase. We must, on the basis of strengthening and expanding the existing open results, further perfect the foreign capital policy, further enhance the quality and the level of the open economy and make use of foreign capital. The technology spillover effect of foreign direct investment and its positive role and impact on economic growth exists and cannot be denied. In fact, technology spillover is the main channel for foreign direct investment to drive forward Chinese industrial technological progress. However, “nationalism in technology” is an indisputable fact at any time, and will not change for quite a long period in the future. In the 21st century, the contention of world political and economic interests has gradually transformed from the perspective of capital to technology, and international competition, to a great extent, deals with the competition at the level of science and technology and depends on the ability of research and development. As it turns out at home and abroad, it is impossible to try to improve the level of a country’s technology and to occupy a favorable position in international competition only through the introduction of foreign capital. For developing countries, it is important to take advantage of capital, but the key factors in determining the long-term sustainable and stable economic growth are technology, management, market and so on. In the new environment of expanding opening-up to the outside world, the following factors are of great significance both at the theoretical level and at the practical level of decision-making: How to understand the mechanism, the facilitation and the constraints of technology spillover of foreign direct investment in China, and what strategies can we adopt to bring the positive effects of technology spillover into full play? How to set up the pattern of technological progress that adapts to China’s enterprises, to enhance the capacity of domestic enterprises, technology absorption and re-innovation, thereby raising the level of China’s technology…