The Negative Effects of Using Foreign Capital and the Strategic Adjustment in China

Since putting the policy of reform and opening up into effect, the amount of foreign capital in China is growing, and the foreign capital has played an important role in promoting the economic development of China. However, with the economic environmental transformation of China, the inflow of a large number of foreign capitals has also brought many negative effects. Based on the analysis of adverse effects of foreign capital inflow on the private investment, the international balance of payments, trade monopoly and the national industrial development, resources and environment, and many other aspects, we proposed a new re-positioning problem of making use of foreign capital in order to bring the foreign capital into full play in the economic development.