FDI-based Chinese Enterprises "going Out" Strategy

Since the reform and opening policy was adopted by the Chinese government 20 years ago, Chinese economy has developed quickly and attracted the whole world's attention. Our country has already become the most important capital inflow country in the world, and the foreign direct investment has promoted Chinese economy greatly. Therefore in very long period of time, in our country, the research of capital flow between countries mainly focus on the ways to attract and use overseas fund and the technology, the influence of foreign capital on our economy, and the "coming-in" strategy. Relatively, there are few researches and discussions about the foreign investment of Chinese corporation.With the advancement of economical globalization, it's difficult for our country to take good advantage of the economical globalization and the global division of labor pattern only depends on the introduction of foreign capital and the passive acceptance of the developed country and its multinational corporation's global strategy. This is because the economical globalization is not only a tendency of the development of the world economy, but also a new kind of international economy system. The main character of the economical globalization is the production globalization. Therefore, as the driving force of economical growth and the production development, corporations are playing the key role in creating employment opportunity, developing emerging science and technology and accumulating material wealth, and becoming the leading strength for the economical globalization. Therefore, it's necessary for our country to establish bidirectional thought of "coming-in" and "going-out". Only in this way can we make our economy connected with the whole world economy, can we closely hold the opportunity to develop our domestic and foreign investments environment. Only then, can we develop and use the market from the global scope, can we hold the historical opportunity which the economical globalization provides to promote our economic development, can we make the foreign direct investment of our country to step into the higher level, thus can we truly realize the magnification of investment scale, the globalization of investment region, and the organization of investment main body.Considering the current situation, the leaders in our country have promptly realized the strategic sense of the "going-out" strategy to Chinese enterprises. Former president Jiang Zemin has pointed out that we should implement the "going-out" strategy at every possible opportunity in the future opening. We should integrate the "coming-in" and the "going-out" strategies, and use the two kinds of resources of domestic and overseas and two markets well. We must encourage and support the superior enterprises to expand foreign investment gradually, to conduct multi-national businesses, and to carry out transnational management in wider range through establishing the overseas sale network, the production system and the financing channels. In this way we can speed up to cultivate our own multinational corporations. The Central Party Committee has poured into the new content for our basic national policy.Looking from the current condition, the Chinese enterprises have already got the basic abilities for "going-out". However, when we analysis the present situation of our corporations' "going-out", we can see that our enterprises' transnational investment is still at the initial period, and that the foreign investment scale and our country's economic status are extremely not symmetric. Our country's foreign total investment only accounts for the world foreign investment storage quantity 0.15070. The ratio of foreign capital to the foreign investment is 1: 0.09. Not only is greatly lower than that of developed country (1: 1.1), but is far lower than that of developing nation (1: 0.13). The proportion of foreign investment in domestic fixed asset investment is also very low. This kind of condition is disadvantageous for our enterprises to use two kinds of resources and two markets and to enhance the efficiency and ability to dispose resources. The success of "coming-in" and the slow step of "going-out" have formed a strong contrast. Therefore, how to speed up the implementation of the "going-out" strategy is becoming a problem needed to solve urgently in the opening of our country.Based on the principle of integrating the theory and reality, this paper has conducted a systematic research on the foreign investment of Chinese enterprises, and believes that it's necessary and feasible for Chinese enterprises to carry out foreign direct investment. And according to the above analysis, this paper proposes some countermeasures for Chinese enterprises from both macroscopic and the microscopic stratifications.This paper includes the theory analysis, the comparison research, the real diagnosis analysis, the strategy suggestion and the practice utilization. It starts with the connotations of foreign direct investment and "going-out" strategy of Chinese enterprises, and attempts to establish the solid theory foundation for the implementation of "going-out" strategy of Chinese enterprises. Then the paper reviews the course of Chinese enterprises' foreign direct investment, analyses the present situation of Chinese enterprises' foreign direct investment especially after the implementation of "going-out" strategy, compares the foreign direct investment of both domestic and abroad corporations, and proposes the strategic plan for the "going-out" of Chinese enterprises.The paper is composed of three parts. The first part introduces the rationale and the practice basis of "going-out" strategy of Chinese enterprises, including the second and third chapter of the paper. The second part introduces the history and the overall appraisal of the development of FDI in Chinese enterprises, including the fourth and fifth chapter of the paper. The third part introduces the strategic choice of implementing "going-out" strategy in Chinese enterprises, including the sixth, seventh, eighth, ninth and tenth chapter of the paper.The paper is divided into ten chapters:The first chapter is the introduction. It mainly defines the basic concept mentioned in the paper-foreign direct investment and the "going-out" strategy of Chinese enterprises; Simultaneously, it also proposes the research background, the significance of the selected topic, the research technique, innovative points and the contents needed to be studied further.The second chapter is the evaluation on FDI theory. Firstly, it introduces the most influential macroscopic and the microscopic school. At present, the main macroscopic foreign direct investment theory has Macdougall 's international investment benefit assignment model, K. Kojima's comparison superiority investment theory, and John Dunning 's international investment development phase theory; the foreign direct investment microscopic theory mainly has S.Hymer 's monopoly superiority theory, Peter. J. Buckley, Mark. Casson and John Dunning 's internalization theory, Vernon's product cycle theory, John Dunning's Eclectic Theory of International Production; in the developing countries, foreign direct investment theory has the small scale technology theory, the technical localization theory, the technology accumulates—the technical change evolution theory and the dynamic comparison superiority investment theory. This chapter also points out the theory of various schools which explain the phenomenon of foreign direct investment is insufficient. This chapter carries on the narration to these foreign direct investment theory in order to provide the theory support for the behind strategic analysis.The third chapter introduces the practice of foreign direct investment in the developing countries. Based on the FDI theory of the developing nations, this chapter especially analyzes the reasons of swift development of FDI in the developing nations in recent years, summarizes the basic characteristics of FDI in the developing countries, and provides the model for "going-out" strategy of Chinese enterprises.The fourth chapter introduces the proposal, the formation and the perfection of the "going-out" strategy of Chinese enterprises. This chapter mainly focuses on the proposal, the formation and perfection of the "going-out" strategy, begins with the connotation of "going-out" strategy, analyses the necessity and the urgency of "going-out" for Chinese corporations, discusses the dialectical relations of "coming-in" and "going-out", and elaborates the strategic sense of Chinese enterprises' "going-out".The fifth chapter introduces the development of Chinese enterprises' foreign direct investment. This chapter firstly reviews the course of the foreign direct investment of Chinese corporations, then analyzes their characters as well as the basic characters of the "going-out" strategy, proposes the problems existing in the progress of Chinese enterprises' "going-out", and at last compares the international competition of transnational enterprises both domestic and abroad.The sixth chapter introduces the choice of the main body of Chinese enterprises' "going-out" strategy. The multinational corporation is the main carrier of foreign direct investment; therefore, the number of multinational corporations in one country can indicate its economic potentiality. This chapter firstly analyzes the general concept of the main body of investment, then introduces the concept of multinational corporations which is the main body of foreign direct investment, and proposes the strategic conception of raising our own multinational corporations.The seventh chapter introduces the industrial choice of Chinese enterprises' "going-out" strategy. This chapter analyzes the factors that influence the industries of foreign direct investment under the economical globalization background, proposes the principles for the industrial choice of Chinese enterprises' foreign direct investment, and finally gives some suggestions on ways to choose the industries for Chinese enterprises to implement "going-out" strategy.The eighth chapter introduces the location choice strategy of Chinese enterprises' "going-out" strategy. At present, location is the key question in implementing "going-out" strategy of Chinese enterprises. The reasonable location choice can guarantee the anticipated benefit obtained by the project. This chapter first proposes the realistic meaning of location choice, then analyzes all kind of factors which influences location choice, and the status of location choice at present; at last, it proposes correct ways of location choice.The ninth chapter introduces market entry strategy of "going-out" strategy of Chinese enterprises. This chapter first systematically analyzes the advantages and disadvantages of each way of entering the market, and then thoroughly analyzes the influencing factors of transnational management of the small and medium-sized enterprise. Finally, through the quota model analysis, the paper has discussed the entry mode of foreign direct investment from the multiple perspectives.The tenth chapter introduces the government's support strategy of the "going-out" of Chinese enterprises. Regardless of the developed country or the developing country, in the entire process of foreign direct investment, government's support is essential. This chapter first introduces the government's role which should play in the market economy, then has carried on international contrast on FDI strategy between the developed country and the developing country, has analyzed the present situation and the existent question in FDI strategy, points out that the government should improve its function in the process of "going-out" strategy of Chinese enterprises, in this foundation, proposes the government's support strategy.