Research On The Risk Of China’s Foreign Direct Investment Based On The Perspective Of Legitimacy

With the continuous enhancement of China’s economic growth,in recent years,Chinese enterprises have taken advantage of the “Belt and Road” initiative and other policies to expand the scope of their investment overseas.However,the complex changes in the investment environment of the host country have also caused Chinese enterprises to frequently encounter risks and challenges in their foreign direct investments,and there have been many cases where projects have suffered losses.From a deep perspective,these foreign investment projects facing risks all have the problem of inadequate response to the demands of project stakeholders.Therefore,using the theory of legitimacy to assess whether a company is legitimate,appropriate,and desirable in the corresponding social structure through three dimensions: regulation,standardization,and cognition;and adopting relevant strategies to improve the legitimacy of the company in the host country will help it obtain the recognition of stakeholders,thus avoiding the risks.This study clarifies the relationship between the legitimacy and foreign direct investment risk theory,and takes the Malaysian East Coast Rail Link Project contracted by China Communications Construction Co.,Ltd.as an example to analyze its legitimacy in three dimensions in different periods,which demonstrates the important role of legitimacy construction in preventing foreign investment risks,so as to make recommendations of risk aversion for Chinese companies.