On the calendar recording China’s economic rise, the year 2006 may be a highlighted coordinate. During this year, the Carlyle-Xugong takeover, the foreign investment’s corporate M&A of China’s strategic industry, has sparked a heated discussion across the country. A wide range of topics concerning the defects of China’s economy were severely explored, leading to the public’s continual condemns of foreign M&As. As a result, all the foreign acquisitions of control of China’s machinery companies were halted. These facts, seemingly accidental, imply a latent trend as well as complicated causes: in 2006, China’s foreign ex- change reserve exceeded US$1 trillion; having gone through the full circulation reform, China’s stock market value topped RMB7 trillion (US$894 billion); the country’s saving deposit reached RMB1.6 billion (US$204 million); foreign trade surplus recorded a historic height; and China was flooded by huge amount of global capital. Such macroeconomic changes demonstrate a fact that China is not short of fund or foreign exchange. Nor is China deprived of a capital market that is able to ensure the country’s sustained economic growth. Thus, the government has begun to revise the national strategy for economic development and the judging criteria for macro economy. On the calendar recording China’s economic rise, the year 2006 may be a highlighted coordinate. During this year, the Carlyle-Xugong takeover, the foreign investment’s corporate M & A of China’s strategic industry, has sparked a heated discussion across the country. topics concerning the defects of China’s economy were severely explored, leading to the public’s continual condemns of foreign M & As. all a foreign acquisitions of control of China’s machinery companies were halted. These facts, seemingly accidental, imply a latent trend as well as complicated causes: in 2006, China’s foreign ex- change reserve exceeded US $ 1 trillion; having gone through the full circulation reform, China’s stock market value topped RMB7 trillion (US $ 894 billion); the country’s saving existent reached RMB1.6 billion $ 204 million); foreign trade surplus recorded a historic height; and China was flooded by huge amount of global capital. Such macroeconomic changes demonstrate a fa ct that China is not short of fund or foreign exchange. Nor is China deprived of a capital market that able to ensure the country’s sustained economic growth. Thus, the government has begun to revise the national strategy for economic development and the judging criteria for macro economy.