Abstract: From economic analysis, the idea of China absorbing foreign investment is based on the consideration of demand side, which is mainly for enhancing the ability of capital formation, expanding investment demand and accelerating economic growth. In the phase of “Structural Growth” of China’s economy, attracting investment policy and the practice of making use of foreign investment which are in the guidance of this idea are really successful. But seen from the periodical characteristics of China’s economic development in recent years, China has entered or will enter the phase of “Structural Slowdown”, and the policy of just emphasizing expanding demand is faced with the challenge of the decrease of economic benefits, so we need to reassess the function of the policy of making use of foreign investment. This paper refers the theory and policy of “Supply Economics” in western economics to analyze the internal and external factors of supply management while making use of foreign policy, and argues the target and direction of absorbing foreign investment and its policy adjustment meanings from the perspective of supply management.
Keywords: Supply Side, Foreign Investment, the Third Industrial Revolution
source:Finance & Trade Economics ,No.4,2013