Research On The Political Risk And Circumvention For The Investment Of Chinese Enterprises

Since our country put forward the “walking outside" in the “fifteen" plan,China’senterprises "walk outside" is faster and faster. But at the same time,the probability ofsuffering from the political risk is rising rapidly for China’s multinational enterprises in theinvestment abroad. Especially in2011, the war in Libya and Syria pushed the managementof political risk to the cusp of the storm. Since the1990s, China’s foreign investment hasbeen the rapidly increased. The Commerce Department data shows that there are13,000enterprises investing directly abroad, distributed in177countries and regions and theinvestment coverage has reached72.8%. This shows that the number of enterprises inChina has constantly shift from the domestic business type for the type of internationalbusiness. But the content and form of cross-border investment business are much morevariable and complex than domestic investment, which bring more opportunities for thedevelopment of enterprises, but also more political risk at the same time.This paper, based on theoretical analysis,starts from the current situation of Chinesemultinational enterprises’ investment,combines the methods from defense economics,political economics and regional economics, refers to the related experiences of domesticand international enterprises in the process of dealing with the political risk. Perfect lawsand regulations, perfect investment insurance system, reasonable evaluation of riskprediction and information platform, good diplomatic relations from the perspective ofgovernment for Chinese enterprises to avoid political risks of providing effective legalguarantee and the government support. Scientific investment mode, the effective riskmanagement mechanism, the "localization" strategy," win-win"," win-win" concept, fromthe enterprise point of view for Chinese enterprises to avoid political risks providesinternal methods and measures. Government and enterprise two angle, multiple aspects ofevading measures for transnational Chinese enterprises to guard against political riskprovided advantageous safeguard.This comes to a comprehensive analysis of Chinese enterprises’ political risk ininternational investment, and then at last gives some propositions from both the aspects ofgovernment and enterprise. Here we present the concept of war risk, follows the main line of political risk, focuses also on the war risk, combine the knowledge of economics andnational defense economics, and comes to a new theory and research methods. Ourresearch object is the Chinese foreign enterprises, for whose investment war risk in thenon-developed countries. According to status of the war risk and reality problems, wepropose the corresponding risk management measures to help the enterprises to preventand avoid political risks effectively.