The Research On The Development Of China's Outward Direct Investment

After the 1980's,two elements have greatly lowered the threshold for foreign direct investment. Firstly, the commercial use of information technology has reduced the cost for enterprises to operate in different sites; secondly, the globalization of economy has greatly speeded up the international trade and international investment. As a result, more and more developing countries have begun to invest abroad .After 20 years' rapid development, China has become a country with abilities to launch FDI-o campaigns and take a more active part in the international competition and co-operation, and has become one of the biggest developing FDI parent countries, making traditional FDI theories unsuitable for the developing countries. Therefore, to establish a new FDI theory for developing countries, carefully study the feasibility and necessity of China's FDI-o, and provide strategy and advice on this issue, is the major purpose of this essay.First of all, the thesis has developed a new theory which is entitled "The diversity of FDI theory". The theory holds the idea that monopoly is not the necessary element in FDI-o, and FDI-o is determined by both the capability of enterprises and the threshold of the FDI projects themselves.The new theory emphasizes that, in terms of different strategic aims, an enterprise will encounter different difficulties in FDI-o. This new viewpoint has provided the developing countries with theoretical base for their investment outward.The thesis has made efforts to justify China's FDI, as there are a lot of discrepancies on the issue. First, it analyzes in detail the feasibility and necessity for China to invest directly in foreign countries. The article has discussed the positive effects of China's FDI-o in the balance of macro economy, technology progress, resource supply, and economic structure adjustment. In the feasibility discussion, the article has viewed the subject in some special angle, pointing out that, as a rapidly growing developing country, China has provided itself with some special conditions for FDI-o.In the discussion of a blueprint of China's FDI-o, the thesis has presented a differential development strategy. As the strategy to develop China's FDI-o entities, the article advises that China should build its own "comprehensive trading companies" and big TNC's. As the strategy to manage China's overseas business, thearticle advocates that China should make full use of transnational mergers and international strategic alliances. The article has also advised that in order to facilitate the enterprises in FDI-o, China should improve its service system and promotion policy, and speed up the unification of China's economy and the world economy.