Research Overseas Investment Of Chinese Enterprises

During globalization of international economics,transnational corporations arebecoming important international actors. The number of famous transnationalcorporation has becoming an important symbol of comprehensive national power.When it comes to the new century, Chinese government not only continues to absorbmore foreign investments, but also attach importance to improve Chinese corporationsto invest worldwide.Since China becomes an official member of WTO on December11th,2001,Chinese foreign trade increased rapidly, Chinese corporations started joining the waveof globalization of world economy. In2003, Decision of the third session of the16thNational Congress of CPC said the strategy of “going out” is part of building socialistmarket economy system and building a more activate and opened economic system.In2007, Report of the17th National Congress of CPC said it’s necessary toadhere to “going out” and “bringing in” policy for it’s involved in the formation ofnew advantages in international economic cooperation and competition duringeconomic globalization. In2012, Report of the18th National Congress of CPC saidwe had to accelerate the pace of “going out”, enhance the ability of internationaloperations and foster a number of world-class transnational corporations.Since China has long history of socialist planned economy, State OwnedEnterprises(SOE) is stronger than private enterprises. Compared with westerntransnational corporations which have more than one hundred years of history,Chinese enterprises were established very late. The history of overseas investment iseven shorter. So, at the beginning stage, most of enterprises going out are SOEs. Aswe all know, the Chinese government supports the foreign investment by SOE. TheSOEs foreign investments are executing the Chinese government strategy.Since China has long history of socialist planned economy, SOE is stronger thanprivate enterprises. Compared with western transnational corporations which havemore than one hundred years of history, Chinese enterprises were established very late.The history of overseas investment is even shorter. So, at the beginning stage, most of enterprises going out are SOEs. As we all know, the Chinese government supports theforeign investment by SOE. The SOEs foreign investments are executing the Chinesegovernment strategy.Private enterprises foreign investment is much slower compared with SOEs. Thenature of socialist market economy requires balanced development of SOEs andprivate enterprises. It’s not reasonable if the SOEs accounted for too much of the totalforeign direct investment, or the private enterprises accounted for too little of the totalforeign direct investment. In the long term, small scale private enterprises in China’sforeign investment are not conducive to the healthy development of China’s foreigndirect investment.Surviving in the competition and developing in the competition is the only wayfor development of every enterprise. According to the author’s personal experience ofmore than six years, vicious competitions among Chinese enterprises appear fluently.Vicious competition has become a “cancer”for overseas development of Chineseenterprises. It not only harms their own economic interests, but also harms the overallimage of Chinese enterprises.The experience of Japan and Korean enterprises worthy of China Enterprisesattention. They believe that even their competitors failed to compete overseas is alsotheir failures. Because it means a failure of their country’s national industry. This is amature competitive market environment reflecting good business mind and worthy ofChinese enterprises following. The overall strength and brand influence of Chineseenterprises is far behind the Western companies under the status quo. Any Chinesebrand is a representative of the overall brand of all the Chinese enterprises and shouldbe safeguard jointly. Meanwhile, the concerning government departments andindustry associations should take appropriate measures on the basis of fullinvestigation as soon as possible to avoid overseas vicious competition of Chineseenterprises.With the rapid economic development of emerging market economies and thefinancial crisis in Europe and the United States, the eastward trend of the worldeconomy is obvious. The position of emerging market economies, especially China, inthe international political and economic structure continues to increase. After morethan30years of rapid development, Chinese enterprises have been established modern enterprises system, have the capital and technological strength for overseasinvestment. Favorable domestic and international environment is the main reason forthe rapid growth of China’s overseas direct investment.Opportunities and challenges of Chinese enterprises in the process of foreigndirect investment are relative. If Chinese enterprises can learn lessons from theenterprises of Western countries, other developing countries, Chinese enterprises willbe able to transform challenges into opportunities, vice vers.As more and more Chinese enterprises will join the wave of overseas investment,China will eventually realize the transform from the “world factory”model of theproduction power to “world market”.