Research On The Obstacles And Countermeasures Of Outward Direct Investment Of Chinese Enterprises

Since1979, the development of outward direct investment of Chinese enterpriseshas experienced three main stages which is spontaneous exploration stage, graduallyformed stage and the rapid development stage. From1979to2000, during this period,the main objective of China’s so-called "international investment" is to attract foreigninvestment. After our country joins the WTO, along with the economic developmentand integration with the world economy, outward direct investment in China hasentered a period of rapid development, at the same time, China’s outward directinvestment plays a more important role in the international market. Because of therapid development of China’s outward direct investment and the growing scale,obstacle factors that China’s enterprises are facing in the process of outward directinvestment has increased significantly. Therefore, comprehensive understandingobstacles that China’s outward direct investment faced, it has the vital significancethat according to the different obstacles to adopt different strategies to prevent. Thispaper mainly introduces the obstacle factors that Chinese enterprises meet in theprocess of outward direct investment and coping strategies for these obstacles.In addition to the introduction, the full text is divided into five parts.The second part analysis the influencing factors of foreign investment enterpriseswhich mainly from the motivation, the mode of foreign direct investment, locationchoice three aspects and its determinants. The determines of motives of outwarddirect investment is policy, laws and regulations, their own ability, the externalenvironment. Enterprises adopt newly built or merge depend on the experience ofoutward direct investment and other factors at the same time adopt soleproprietorship or joint venture depend on the advantages and business factors ofoutward direct investment and other factors. The choice of industry, ownershipadvantage and other internal factors and infrastructure, policy and other externalfactors determines the location choice of outward direct investment. The third part analyzes the current situation and motivation of China’s outwardinvestment. Think that outward direct investment in China has experienced a slowdevelopment, gradually formed and the rapid development three stages, according tothe analysis of the flows, industry, region, subject, entry mode and the multinationaldegree, give a comprehensive introduction to the development status andcharacteristics of China’s outward direct investment.The fourth part give detailed analysis for encountered obstacles that enterprisesmeet from international, domestic, and enterprises three aspects. Think that politicalnationalism, terrorism, international law, policy, culture, business, internationalinvestment rules are some barriers that encountered by our enterprises in internationalaspect. Approval procedures of outward direct investment project is miscellaneous,lack of capital supply of outward direct investment, lack of policy guidance andsupport, laws and regulations, intermediary service institutions are some barriers thatencountered by our enterprises in domestic aspect. This paper introduces its ownobstacles from the state-owned enterprise and private enterprise.The fifth part proposed that should take specific strategies from the perspectiveof the government and enterprises. When facing international barriers: ourgovernment should be actively involved in the formulation and negotiation of bilateralor multilateral agreement on investment, establishment and improvement laws andregulations related to foreign investment; enterprises should make full use of foreignresources, make full use of the international guarantee institutions and insuranceinstitutions. When facing domestic barriers: our government should simplify theapproval system, perfecting the financial system and establish more intermediarybusiness service for outward direct investment. When facing enterprises barriers: thepaper also put forward coping strategies from the state-owned enterprises and privateenterprises respectively.At the end make a summary. Put forward that prevent for more barriers thatencountered in the future development, at the same time, seizing the opportunity toparticipate in the negotiation of international investment agreements and win morefavourable terms for China, promote the development of China’s outward direct investment.The innovation of this paper is combined with the cases to give a comprehensiveanalysis and summary to obstacles that China’s state-owned enterprises and privateenterprises encountered during outward direct investment, then propose a new opinionon the growth of the scale and the coping strategies of China’s outward directinvestment. But the paper also has shortcomings, because the data is not complete, thecontents of the paper may different from the actual situation, at the same time becauseof my limited ability, some coping strategies that proposed maybe defectiveincomplete.