The Research Of Relation Between The Trend Of Multinational Corporation's Investment Towards Wholly-Foreign-Owned Enterprises And Chinese Market Competition

From the beginning of our country's reform and opening to now, multinational corporations (MNC) direct investment in our country have experienced about three stages and the investment modes are undergoing successively change. Especially after 1997, the number of wholly-foreign-owned enterprises(WFOE) has exceeded the number of joint-ventures. From 1998,the total foreign capital of contract in WFOE is more than that of joint-ventures. From 2000, in the aspect of foreign capital that has been really used WFOE have exceeded the joint -ventures. From 2001 when China joint WTO to now, the trend of establishment of WFOE in China has become more remarkable. According to the statistical data in the "China foreign trade and yearbook" the WFOE take 65.56% in that of all new foreign investment project. Therefore from the macroscopical view we can conclude that WFOE have become the main MNCs' investment mode in China. On the other hand, after operation in China several years later more and more foreign investors convert the established joint-ventures into WFOE by purchasing Chinese partners' shares. What do this kind of trend influence on our country's market structure? Does it intensify or weaken our country's market competition? After analyzing the inside and outside motives and doing the research through combination "Guluo" mode and the demonstration research of manufacturing, I draw the conclusion that this kind of trend will intensify our country's market competition.