The Impact Of MNCs Direct Investment On China Automotive Industry

MNCs have been investing in China on a large scale and in a systematic way since 1990s. And therefore, influences of Foreign Direct Investment on China Automotive Industry are becoming more evident day after day. In order to achieve effective research results on the influences of Foreign Direct Investment on Automotive Industry?in China, this dissertation, on the basis of absorbing in the world –wide scope the latest research results and methods on the subject of the Foreign Direct Investment and Organization Theory, sets up a research outline suitable to China in this field, makes positive researches on such aspects as MNCs direct investment on Automotive Industry in China, and summarizes the influences of MNCs direct investment on Automotive Industry in China at last. The prupose of the dissertation is to achieve objective and accurate understanding of the status quo of the influences of MNCs direct investment on the Automotive Industry in China, based on the systematic analyses and studies of the investing motivations, modes, market structure, market conducts as well as market performance, so as to provide beneficial and revelatory function for the governments' decision-making and the enterprises to face the challenges of MNCs in the new situation.This dissertation summarizes the theory of FDI, especially the influence theory to the market of the host countries so as to offer the theory guidance for the analysis frame. The discussion of the status quo of the FDI shows that FDI is the result of the global stream of economic integrating. By statistical analysis on the total amount of the FDI, structure, and as well as entering modes in China, the joint venture is the main form when MNCs enter China market and distributed on the developed area and traditional automotive producing bases. Three modes of joint venture are summed up as follows: the overall merging, the partial merging and the mix.The third chapter analyzes the influences of MNCs direct investment on automotive industry in China. It is divided into three sections developed under the frame of SCP. The first section focuses on the Market Concentration Ratio, Entering blocking, Scale and Organization Structure. MNCs can raise the concentration ratio and entering blocking when they enter the markets abroad. The second section, based on the studies of technology transfer and pricing of MNCs, a model has been set up to explore the relationship among the pressure, driving and resistance of technology transfer. It explains the conducts of the MNCs in the technology transfer and pricing. The third section is a positive study about the market performance. Firstly, using the Main Dominant Firm Model in Microeconomics to analyze the MNCs, we can get the result that MNCs occupies the large part of share in the competition with the monopolistic position in the market and finally drive our local firms out of the market if we don't foster our own domain firm. Secondly, referring to the Findlay and Wang Jianye's Model to show the mutual effect between FDI and technology transferring and overflowing. Technology transfer can narrow the gap between developing and developed countries, but can't eliminate the gap. The developing countries can only overtake the developed countries when technology innovation is adopted. This result can be supported by the regression made by Liu xiaohui and Wang chenggang studying the data of the ten industries in China. The test verifies that the FDI is positive correlation with the technology transfer.Merger and Acquisition are adopted more and more by the MNCs in 90's. The forms, modes and problems have been examined, especially in the case study of M&A between the Dong Feng Automotive Company and Nissan. Finally the venture discernment system for Merger & Acquisition of Enterprise has been summarized. Finally, the conclusion and enlightenment of this dissertation are given. Further research are brought forward.