The Research On The Equity Strategy Of Foreign Direct Investment Of Transnational Corporations In China

For transnational corporations(TNC)' foreign direct investment (FDI), China is becoming one of the most attractive countries for its fast GDP growth and potential consumer market. More than 480 of world top 500 TNC have already entered China and set up subsidiary companies. Especially after China became a member of WTO, TNC investes much more capital in Chinese market and adjust their strategies, among which the wholly foreign-owened equity strategy is being paid more and more attention to.Beginning with analysing the concept and related theory of equity strategy, this paper analyse how equity strategy of TNC in China evolve based on the daily-use chemical products manufacturing industry's data and cases. Besides, this paper discusses the factors determining equity strategy through integrating six authoritative theories and proposes some suggestions for our enterprises and government.To achieve the above purpose, this paper is divided into six parts as following:The first part is preface about the background of this paper, the meaning of the study, the ways it will be written and the frame arrangement.The second part will introduce the theories of TNC equity strategy. After defining TNC and equity strategy, this part will review foreign theory and describe the related research in China to make the foundation for this paper.The third part will analyse the process of TNC's equity strategy evolvement in China based on industry's data and discover wholly foreign-owned trend through three ways, namely setting up new wholly foreign-owned firms, increaseing capital to gain more equity and cross-border M & A.The forth one mainly discuss the determinants impacting the equity strategy of wholly foreign-owned trend.The fifth part gives some suggestions to the Chinese investors of the joint venture, the chinese enterprises who is investing overseas and our government.The last part is conclusion to summarize the research.