Foreign Direct Investment And Risk Prevention Of Chinese Central Enterprises

With development of economic globalization and large-scale transnational production&operation proceeding in developed countries, developing countries begin to go abroad to invest in the developed and developing areas as well. As the biggest developing country, Chinese government encourages enterprises to invest direct in foreign countries, which aims to comply with international situation, improve enterprise competitiveness and solve problems in foreign trade and development of domestic enterprises. Those investment activities achieved a great accomplishment, amount of investment flow rise from1,000million USD in1991to68.81billion USD in2010. However, compared to developed countries, there are still some problems in the "going out" process of domestic enterprises, such as unclearness of investment target, investment structure need to be optimized, low profits of investment, uncontrollable investment risk, etc.Method of combining theoretical analysis and empirical analysis, quantitative analysis and qualitative analysis is applied in this paper. This paper takes State Grid Corp as the entry point, which analyzes investment abroad situation of central enterprises, takes a deep research on what risk evaluating and risk solving methods has State Grid Corp taken confronted of different type of risk. It’s hoped that research on successful cases of State Grid Corp in investment abroad and risk preventio&control can provide reference to other central enterprises for the development of foreign direct investment. Research findings show that thanks to evaluating and excavating in enterprise itself, State Grid Corp is possible to have accomplished the goal of "going out". First is to break traditional view to try to invest abroad like overseas acquisition and participation in share. Second is to promote the inner soft power of enterprise, focus on developing advanced techniques like UHV and intelligent power grid. Third is to reinforce the ability of risk management&control. In the process of invest in foreign countries, it’s suggested that Chinese central enterprise can dilute the political complexion first. And secondly, monopoly advantage of enterprise should be developed. Third is to make efforts on cultivating talents of transnational management&control. Last but not least, risk prevention system should be optimized.