Tnc-owned Operations In China Are Analyzed

Since the great improvement of China's investment environment during thetwenty years of reform and opening, transnational corporations has made China theirfirst choice to invest. Along with the increase of transnational corporations investingin China, they prefer to choose directly build exclusively foreign invested branches ormerger originally state owned enterprises in order to maximize their benefits. Thistrend of exclusive investment choices has both good and bad effect on China'seconomy. Although the research on foreign investment in China mainly focuses on thewhole quantity of investment, some economists begin to pay attention on this trend.But there are still no relevant books on the issue.This thesis first present three periods of foreign investment development inChina and introduces the conditions of China's foreign investment. On this basis, thisthesis uses the theory of market entry mode and discusses the definition ofinternational market entry and the factors which can determine it. Then the thesispresents that the trend of exclusive investment in China is in fact a change of marketentry mode. And the thesis also discusses the reasons and expressions of the trend.Second, the thesis analyses the good and bad effects of exclusive investmenttrend to China's economy. The good effects of exclusive investment trend in Chinalies in the good experiences and technologies transnational corporations havebrought to us;And this trend also push the state enterprises to involve in reforms andthus the whole industrial field will make progress. And as to the bad effect, the trendof exclusive investment may lead to monopoly. Transnational corporations are proneto control the resources of the industrial field and it is a threat to national economicsafety.Finally this thesis presents the solutions for Chinese government and Chineseenterprises. As to the government, it should complete the law system of foreigninvestment and build up the effective anti-monopoly system;Regarding to theenterprises, when choosing transnational corporations for co-operation, they shouldadopt flexible policies to protect their own benefits.