Research On The Mode Selection Of Hunan Construction Machinery Enterprises Entering The Countries Around The Belt And Road

Since the reforming and opening up,the economy of China has grown continuously and rapidly,it became the second largest economy among the world suddenly in 2010.However,by the influence of the world-wide economic crisis,economic growth of China was getting lower than before,but still in a high speed.As a result of this,problems like overcapacity occurred,especially the engineering machinery industry in Hunan province.The strategic visions of“The new silk road economic belt" and "Maritime silk road in the 21st century" put forward by Jinping Xi,the current general secretary of the Communist Party of China,in 2013 had made the conditions for engineering machinery enterprises in Hunan to "go out".The population of the countries around B&R(shorted for“The Belt And The Road ")is about 4.4 billion,the economic output of that is about 21 trillion dollar,which provides a broad market for the Hunan engineering machinery enterprises to solve the problem of excess capacity.But,which model the engineering machinery enterprises in Hunan should get into the countries around B&R is the most urgent problem to be solved currently.In this article,through the analysis of the influence factors of enterprises getting into the key nations around B&R,based on the theorem of enterprise internationalization motivation,progressive market entry model theory,transaction cost theory and industrial organization theory,I provide a feasible solution to the mode selection of engineering machinery walking out in Hunan,which has a practical significance to some degree.Firstly,this article introduced the four main modes of enterprises "walking out",which are direct exports,foreign direct investment,mergers and acquisitions and contract transactions,then explained the theoretical basis in this paper,which provided theoretical supports for engineering machinery“walking out" in Hunan;Secondly,it stated the current modes of the engineering machinery "walking out" in Hunan and problems this may face systematically;Thirdly,the key countries were selected by analyzing the demand and supply along the countries around B&R and analyzed the factors of enterprises walking into key countries along B&R and got the conclusion.The demand of EU market was growing relatively rapidly,but EU had more successful engineering machinery enterprises with a large pressure of competition,central Asia-Russia-eastern European had a large market demand and it was much easier to finance,south Asia,southeast Asia,west Asia-north Africa certainly had large potential market but also with more political turbulence,Oceania-south America's market demand was restrictive and with less well-known engineering machinery enterprises;Finally,based on the above analysis,this paper put forward that the engineering machinery enterprises in Hunan could enter the EU market by taking mergers and acquisitions mode,could enter the central Asia-Russia-eastern Europe market by taking the foreign direct investment mode,could enter the South Asia,southeast Asia,west Asia-north Africa market by taking the direct exports mode,could enter the Oceania-South America market by taking contract transactions mode.