Research On Current Situation And Problems Of Foreign M&A In The Mechanical Manufacturing Industry Of China

With the development of economic globalization, a kind of new trendy of international capital flow emerges — foreign M&A. Nowadays foreign M&A has become the main way of FDI. In the recent years, foreign capital has entered many important economic fields of China, such as retail trade, automobile industry, banking, logistics industry, etc. From the year of 2004, mechanical manufacturing industry began to involved in the M&A, and become more and more intense in the year 2006.The absorption of foreign capital in mechanical manufacturing industry has two sides influence. On one hand, it can help improve the development of this industry; on the other hand, it brings some negative impacts. On the base of general theory of foreign M&A, the author firstly analyzed the motives, ways and conditions of the foreign capital's entering, then combining with many classical cases of foreign M&A in the mechanical industry of China, gave the analysis of the current situation of the foreign M&A in the industry and found out many problems, such as the loss of the controlling right of enterprise, the loss of own brand and the self-ability of researching and development, etc. All the problems show the mechanical manufacturing industry safety should be drawn increasing concern of China. Thereafter author analyzed the international conventions for legal and institution arrangement related foreign capital M&A, taking USA as an example, followed the shortage of the current law and institution of foreign M&A of China. Based on all the analysis and facing the situation that is not optimistic, the author finally gave the suggestion on related policy arrangement and strategies coping with.