Analysis Of Factors For "Joint Venture" Finalized By "Wholly-owned" In China

This paper uses abundant facts and figures to analyze the current situation of foreign direct investment (FDI) in China and conies to the conclusion that joint ventures are finalizing by wholly owned companies in China. This article tries to find out the reasons from both macro and micro perspectives. The major part of this paper uses classical theories to illustrate the inevitability of these trends form some points of views like internationalization phase, global strategy arrangement, monopoly advantage, dealing cost, increased resource possession and effective management. The following part utilizes game theory to make it clear that domestic authorities and enterprises have no better choices but following foreign company's decision when the latter has a leading position. Finally, this paper suggests that domestic companies should carefully consider the different motivations of these foreign owned companies in order to make fully use of FDI and undermine the monopolism.