Turkey has a unique geographic location. It is strategically located having the Commonwealth of Independent States bordering to her north and the northeast, Iran to the east, and Iraq and Syria to the south. Its land on the European continent borders with Bulgaria and Greece. Her proximity to these countries provides her with excellent access to world markets.

In Turkey developments in foreign capital investment occurred in the early fifties. During this period, with the formation of rapid development strategies and international economic cooperation, the Foreign Investment Law No. 6224 was enacted. Due to the structure of the economy at that time, foreign investment entries were limited.

Since the 1980′s the Turkish government has followed liberalized, outward oriented, economic policies. There were rapid changes in the economic and social structure of Turkey. Deregulation of interest rates, establishment of organized markets for money, foreign exchange, stocks and securities, liberalization of capital movements, reforms in the banking sector etc., were just some of the changes.

Following these measures, protectionist economic policies were abandoned and a comprehensive economic stabilization and liberalization programme was implemented. The three major objectives of this new programme were:

i- minimizing state intervention,
ii- establishment of a free market economy;
iii- integration of the Turkish economy with the world economic system.

One of the major policy decisions was the adoption of a liberal and flexible foreign investment policy. As a result of the changes in the Foreign Investment Law, the investment climate was made more efficient and suitable for potential investors. The Turkish Lira became almost fully convertible and the implementation of Foreign Investment Law No. 6224 guaranteed the transfer of capital gains, fees, royalties and dividends (and in the case of liquidation), the transfer of paid up capital, freely. In addition, Turkey provides a well-secured environment for foreign capital by being a party to several bilateral and multilateral agreements. In this context, investment protection and double taxation agreements have been signed between Turkey and with 16 and 20 countries, respectively.

Since the mid-1980′s international investors have been playing an increasingly prominent part in the Turkish economy. As a result, Turkey has become a more attractive country for foreign investors.

The infrastructure for industrial operations has considerably improved, especially in the western part of the country. Presently, seven Free Trade Zones are operational and another five are under construction. There are also about 20 Organized Industrial Zones throughout the country which offer attractive conditions for establishing industrial operations. Turkey is conveniently connected to Europe by excellent air, sea and land links.

http://www.turizm.net/economy/laws_a~1.htm

China has an economy which grow faster.They grow &8.6 in 2003,&9.5 in 2004,&10.4 in 2005,&10.7 in 2006 and %11.9 in 2007.There are lots of reasons why China grew economically,the most important ones are investments and increase of exports.

The foreign capitals which are in China economy are about 60 billion dollar in a year.These foreign capitals are used mostly in production sector.The reason why foreign capitals are in China is decrease of costs.56 percent of total china exports are made by companies which are not from China.Also China is a big market.Assortments of investments affects foreign investors.

Developing countries are the ones that can’t compete with china and developed countries are the ones that can take advantage of China market.There are different countries that can affect badly or good by China’s wto(world trade organization) membership.at this point,developed countries can take advantage on China’s growth but the others cannot.

How can we protect our economy aganist the China ?Decrease of costs at production ,energy,raw material and capital could be useful for competing with China economy If governments supports  the local investors and real sector,that could prevent the effect of China market and also governments have to protect their local investors for bureaucratic problems.