Research On Sole Proprietorship Tendency Of Multinational Corporation's Direct Investment In China

Since China launched the reform and opening-up policy in 1979, multinational corporation (MNC) has expanded rapidly, which played a great role in promoting chinese marketization and economic growth. Meanwhile, MNC's direct investment also presented some new features and trends. Especially since accession to WTO, chinese sole proprietorship tendency has been getting more remarkable. Regarding its causes and possible effects to chinese economy, scholars have given analyses from different angles, but there are still some disputes about that.Therefore, this paper first analyzed the development and characteristics of sole proprietorship tendency of MNC's direct investment in China. Next, combined with the related theory and present status, it analyzed chinese external causes and MNC's internal causes which led the MNC to build solely invested enterprise or to merge with domestic enterprise, and finally to get sole proprietorship. On the analysis of the external aspect, this paper used the method of co-integration test and found that the continuous expansion of chinese market, the rapid growth of the economy, the greater level of opening policy and the unceasing enhancement of marketization are important reasons of MNC's sole proprietorship tendency. While on the internal aspect, it chose Li Weian and Li Baoquan's two-stage model and cost benefit analysis method, and then found that sole proprietorship was not only a strategy to maximize the benefit but also necessary to realize globalization management and maintain the monopoly advantage.Finally, this paper analyzed the effects of MNC's sole proprietorship tendency to chinese economy , and gave some corresponding measures from the government and corporate level based on that.