A Study On The Performance Of Overseas Direct Investment Of Chinese Enterprises

Global economic integration promotes various countries and regions actively or passively to join the international division of labor and exchange of goods, and the speeded-up of goods, capital, technology, information, and human resources between the various countries and regions promote the efficient allocation of resources on a global scale. FDI is an important factor to promote world economic growth, and any country rely solely on its own resources, market, capital, technology will be unable to achieve sustained and good development. It’s inevitable to use two markets, two resources home and abroad, as well as taking the road of international operation. Since the 1980 s, with the international economic structure adjustment, states encourage foreign capital inflows, gradually reduce their control over foreign direct investment, and take measures to encourage enterprises to foreign direct investment. This presents new challenges to cross-border investment theory on one side, and proposes requirements to an empirical study of FDI on the other. In the 21 st century, with the mature adjustment of China’s economic development and the adjustment of foreign economic policy, Chinese FDI has entered an accelerated growth path. Between the decade of 2004-2014, the flows of Chinese FDI increase from $ 5.5 billion to $ 123.12 billion, with an average annual growth rate of 41.7%, has been ranked third in the world. The pattern of Chinese utilization of foreign capital has gradually transformed from the "bringing in” to "bringing in" and "going out" two-direction paralleling development. FDI has become the inevitable choice of Chinese enterprises to actively take advantage of domestic and foreign resources, and to participate in global competition. The scale of Chinese enterprises FDI increases rapidly, whether the "going out" capital achieve preserving or increasing the value and whether achieve their intention to invest overseas become very important issues. Although the FDI theory of traditional and developing countries has some explanatory power, because of China’s special conditions and stage of economic development, FDI has its relative independence, urgently needs new theories and methods to explain. This paper attempts to do an in-depth and systematic discussion about Chinese FDI, and focuses on investment performance evaluation putting performance expectations as a starting point. The study of Chinese enterprises FDI performance enriches and promotes the development of china’s FDI theory; provide a theoretical reference for scholars, policy recommendations for the government, provide practical guidance for enterprises. Firstly, this paper is based on the relevant concepts defined and the existing research reviewed, sorts out the development of china’s FDI, summarizes the feature at this stage, and defines the developing stage of china’s FDI according to theory of IDP; Secondly, on the basis of careful analysis about macro and micro performance expectations of Chinese enterprises’ FDI, it establishes the criteria and evaluation system of Chinese enterprises’ FDI, conducts empirical analysis combined with relevant information and data, gets conclusion that the Chinese enterprises’ FDI performance of three decades is not satisfactory, and analyzes the reasons; Finally, it proposes to enhance Chinese enterprises’ FDI performance strategies combined with the experience of some developed countries. The basic conclusions of the paper are as follows: 1. The Historical Stage and Current Situation of Chinese Enterprises’ FDI. After the opening-up policy, FDI aroused in china in a real sense, then has undergone the development of four stages: the initial and exploration stage, the learning and adjustment stage, the homeopathic forward stage, the steady growth stage, and also been through the process of a continuous growing of total investment, during which the state sector gradually reduced and local investment gradually increased, M&A gradually increased with a lower proportion, and the investment in developed economies gradually increasing, with the proportion of tertiary industry promoted. The development path of china FDI was drawn by empirical analysis, the development stage which is third stage as defined, and China is at the end of the third stage according to the general trend, lagging behind the development of the general country. This is due to lack of ownership advantages of Chinese enterprises as well as insufficient government support and guidance. Taking into account the important role of capital for one country’s economic development, the quality of the utilization of foreign investment must be optimized in the development process of FDI. 2. Performance Expectations of Chinese Enterprises’ FDI. There are microscopic expectations of Chinese enterprises’ FDI to expand the market, make up for the shortage of elements, enhance brand value and seek efficiency, also there are macroscopic expectations to improve the development level of economic, deepen economic reform, improve the income of foreign exchange reserves, promote the internationalization of RMB, encourage industrial upgrading, to deal with trade protection, and intensify interaction between politics and economy. 3. Performance Evaluation System and Revaluation Outcome of Chinese Enterprises’ FDI. Based on principles of seeking common ground, fully integrating, combining with short and long term interests, combining macro and micro analysis, macro and micro performance evaluation system of Chinese enterprises’ FDI is designed; empirical analysis is conducted with the relevant information and data. From the analysis results, in the macro aspects, Chinese enterprises’ FDI has a certain role in promoting the assessment indicators,but the long-term performance result is 0.0464, the short-term performance result is 0.0081, which means no significant role in promoting and the macro performance results unsatisfied; In the micro aspects, according to the relevant investigation material and empirical analysis, the microscopic performance results of Chinese enterprises’ FDI are unsatisfied. The reasons for this result include macro aspect that a modern enterprise system is not perfect, the government guidance is not in place, lack of political and diplomatic auxiliary, foreign negative factors influence, and micro aspect that the scale of investment of Chinese enterprises is smaller, inadequate financing, the risk control ability is weak, the lack of investment experience and core technology. 4. Policy Responses. Learning from the West to enhance ourselves, by reference to the history, characteristics and experiences of enhancing FDI performance of the developed countries such as the United States, Germany, Japan, Korea, This paper considers that there are three aspects to enhance Chinese enterprises’ FDI performance: Firstly, the strategic layout of Chinese enterprises’ FDI is optimized by promoting development of the One Belt One Road strategies, strengthening the synergies with the foreign assistance programs, and improving the enterprises’ social responsibility; secondly, the advantages of China’s FDI are improved by enhancing the core competitiveness of Chinese enterprises, accelerating the development of intermediate organizations and using the approach of cluster development; Finally, China’s FDI promotion policies are optimized from promoting reform, further reforming the management and approval system, and improving the investment protection system, tax incentives, encourage policies, social service system and so on.