Chinese enterprises are facing challenges in utilizing foreign capital effectively after joining the WTO. There are limited areas where foreign capital is being used, with varying levels of utilization across regions and industries. The current methods of using foreign capital are too simplistic. To improve competitiveness, Chinese enterprises need to reform, innovate technologically, and change how they use foreign capital. The government should establish a transparent system for foreign investment, remove restrictions, and revamp the approval process for foreign investments.