Analysis Of Political Risk Of Chinese Enterprises’ Transnational Mergers And Acquisitions

Although the global financial crisis in2008,led to the economic downturn, andtransnational M&A activities turned down in both quantity and amount.TransnationalM&A has become the main way of foreign investment, Chinese enterprises showunprecedented enthusiasm and motivation. However, the high failure rate is hiddenunder the high M&A rate. In many cases, a series of risks faced by Chineseenterprises’ transnational M&A, the most critical risk is political risk, political risk isincreasingly becoming an important factor to Chinese enterprises’ transnationalM&A, sometimes even decisive factor. Therefore, this paper aims to research andanalyses the political risks of Chinese enterprises’ transnational M&A, and on thisbasis, put forward the corresponding measures.Firstly,this paper introduces the present situation of the transnational M&A,from the perspective of global and China. This paper introduces the developmentand characteristics of global transnational M&A and the history,characteristics,motivations, risks, and the success rate of Chinese enterprises’ transnational M&A.Secondly, from the macroscopic and microscopic aspects elaborates the politicalrisks. The political risks are subdivided into domestic or abroad risks and social orgovernmental risks, the most important one is the governmental risks.Thirdly, thepresent situation of political risks of the Chinese enterprises’ transnational M&A isinvestigated. From Asia, Europe, The United States, Latin America, Africa and otherregions to introduce the different political risks. The empirical research includes thefail cases of Chinese enterprises’ transnational M&A and the rating to political risks. Through researching the26countries which contact with China closely, rating theirpolitical risks.It is very important to the location choice of Chinese enterprises’transnational M&A. Fourthly, analyzing and explaining the causes and problems ofthe political risks. The causes of the political risks include the international reasons,the host country’ reasons and Chinese enterprise own reasons. The problems of thepolitical risks include the macroscopic and microscopic problems. Though a series ofresearch and analysis, have a deep understanding to the political risks. Finally, thispaper puts forward the countermeasures of Chinese enterprises dealing with politicalrisks from the macroscopic and microscopic aspects.This paper is committed to understand and analyses the political risks ofChinese enterprises’ transnational M&A, and put forward the countermeasuresagainst the risks. Hoping to guide and help Chinese enterprises’ transnational M&A,implementing Chinese enterprises’ strategies of "going out" and “becoming biggerand stronger”.