The Reciprocal Methods Of Foeign Capital Purchasing Our State-Owed Enterprises

Since 1990's, Cross-border merger & acquisitions become the main trend of FDI. Foreign capital purchasing our state-owed enterprises provides the new support to our state-owed enterprises' reform. Cross-border merger & acquisitions will be unfavorable to host countries' national industry while promote host countries' economics. So the most important thing is to seek the reciprocal mechanism of foreign capital purchasing our state-owed enterprises. At present the discussions about this problem are most focused on the merger & acquisitions' patterns,motives or the reform of state-owed enterprises. Foreign capital purchasing our state-owed enterprises is a new economic phenomenon, and many auxiliary mechanisms are not perfect. So there is little achievement about this problem. This paper is just an attempt after the author reading plenty of writings about this problem. First, this paper sets forth the international back-ground of Cross-border merger & acquisitions,the domestic back-ground of state-owed enterprises' reform and the trend of foreign capital purchasing state-owed enterprises. The second chapter analyzes the two parties' motives. We attract foreign capital to promote the development of national economics, while the goal of foreign capital is to obtain profits. So there is a conflict all along between the two parties. The conflict leads to potential risks. The third chapter discusses the macro and micro risks existing in the process of mergers. Then the paper analyzes the barriers to mergers from three aspects that is idea,system and trade. An example about the question is given in the fifth chapter. The sixth chapter attempts to explain how to establish reciprocal mechanism. Conclusion and defects of this paper that should be improved are listed in the last part.