| Through more than twenty years'implementation of Reform and Opening to the Outside World policy, Export-oriented Economy in China has made substantial progresses. However, there exists disproportionate imbalance between foreign capital absorption and direct investment in foreign countries. The tardy growth of the latter influences two sorts of domestic market and resources. Analysis shows that the era in which China's direct investment countries is going to take off has set in. For full theoretical research and strategic preparation, we should make correct decisions with regard to industrial strategy through sufficient research and absorption of developed countries'successful experiences.This article is divided into three sections. The detailed structure and contents are as following:The first section makes a general theoretical description of direct investment in foreign countries, reviews the theory of international direct investment in foreign countries and has settled a theoretical groundwork for the analysis and comparison of major developed countries'direct investment in foreign countries as well as the deep-going discussion of industrial strategies for Chinese investment in foreign countries.Firstly it introduces the theory of western direct investment in foreign countries. After the Second World War Two, with the rapid development of multinational enterprises and investment in foreign countries, western economic circle did a great number of researches in the international direct investment area, forming multi theoretical genres. This section focuses on Theory of Incomplete Market (Theory of Monopolistic Advantage), Theory of Internalization, International Production Compromise Theory, Theory of Product Life Circle and Theory of Comparative Advantage (Theory of Marginal Industry Dilation). Secondly it explains the new theoretical evolution of direct investment in foreign countries. The traditional theory of direct investment in foreign countries was very weak in persuasion when it comes to direct investment in foreign countries by enterprises in developing countries which have no evident proprietary advantages compared with competitors. Moreover, the purpose of their investment was to gain resources, rather than better use employment of resources. New theory of direct investment in foreign countries designed especially for developing countries have been constantly brought forward by scholars. We place emphasis on the small-scaled technology theory, theory for technically innovative upgrade industry and theory for technical localization.The second section of the article makes an analysis on the direct investment in foreign countries by USA and Japan. After the World War Two, among the capitalistic developed countries, America ranked itself in the first place as to the increase of direct investment in foreign countries, also with the largest scale. Prior to the middle of 1980s, USA held the largest balance of direct investment in foreign countries; however, since 1970s its status and share in international direct investment in foreign countries began to descend. Finally in 1985, America was surpassed by Japan in the direct investment in foreign countries. When time came to 1990s, the statuses of America and Japan in international investment were radically changed again. American re-occupied the lead position in direct investment in foreign countries. It is obviously that the developing history of international direct investment is actually an evolvement of alternate statuses between America and Japan.First of all, it makes an analysis on America's direct investment in foreign countries after World War Two.1,The evolution of direct investment in foreign countries in America. Since more than fifty years after the war, America's direct investment in foreign countries gained a sustainable growth. New characteristics and trends emerged. The growth was slow during the 1960s to 1970s and began to increase in 1980s with large fluctuation. Then in 1990s the scale of direct investment in foreign countries entered unprecedented expansion. The development stays stable and rapid. From the investment increase pace we can conclude that the increase pace of America's direct investment in foreign countries war enormously faster than that of prewar.2,The industrial structure and its changes of America's direct investment in foreign countries after World War Two. The evolution of industrial structure clearly shows that the investment in foreign countries tend to be injected into light and high-grade industries. The original America's investment mainly lied in agricultural and mineral industries. Since World War Two, the proportion of investment in agricultural and mineral industries has continued to reduce, while that of manufacturing and service industry has kept rising. From investment industry, manufacturing industry, finance / insurance/real estate industry and petroleum industry are the three key industry of American investment; while from the industrial investment increase, American direct investment to foreign service industries increases at a fastest speed. America's direct investment in foreign countries is turning from manufacturing and traditional industries toward service industries, especially to finance, insurance and real estate industries.Wholly speaking, America's direct investment in foreign countries tended to focus on manufacturing sectors which centralized in higher technical intensive industries like machine, chemicals, food and beverage industries after the World War Two. The internal manufacturing structure showed that industrial machine, metal products, chemical products and medicine manufacturing industries were the major four industries of America's direct investment in foreign countries. The investment increase in food processing industry centralized in beverage, meat processing, and fruits and vegetables storing sub-industries; while investment increase in chemical industry focused on medicine manufacturing, lavation and cosmetics industries, especially on medicine manufacturing. From the internal investment structure in manufacturing industry, the increase in electrical appliances and electronic industries occupied the first position. The change of internal investment structure in manufacturing industry indicates that the investment in high-tech industries and industries with high additional values increases the most like electronic industry, precision apparatus and communications devices industries, and that in traditional industries increases comparatively slow with a diminishing proportion in the total investment.Secondly, we make analysis on the direct investment in foreign markets made by Japan after the Second World War. (1) The development course of direct investment in foreign markets by Japan after the War. It relates closely with economic development in home. Japan's economy has passed through the recovery, rapid growth, low-rate growth, foam and depression (Heisei depression) phases, the development of its direct investment in foreign markets can be accordingly divided into five steps, namely startup, growth, acceleration growth, stagnancy and adjustment phases. (2) The industrial structure and change in direct investment in foreign markets since the War. Affected by the domestic resources, economic development, industrial structure transformation and the weakly geographical location of the country, Japan has focused on different industries and formed different industrial structures in foreign investment along with its economic development phases, when it made its strategy for choice of sectors in foreign investment. In the startup phase, it emphasized the petroleum exploitation and light labor-intensive industries. The growth period put weight on heavy chemical industry. The assembly and processing industries became dominated in the acceleration growth phase. In the stagnancy and adjustment phases, all-around and multi-level layout was seen. Recently, the depression and recovery period gave the further change in the investment scope, which features 1) the investment of non-manufacturing industry, 2) the investment put into manufacturing industry dominated by the automobile and electrical appliances fields, and 3) the finance, insurance and commerce as the centers in the non-manufacturing investment with obvious increase in commercial investment.Thirdly, by analyzing the direct investments in foreign markets by USA and Japan in comparative manner, we found the two modes from the both countries are respectively typical of an"old brand"developed country and a"catch-up and surpassing"developed country, which went on their respective paths. The two modes show their own characteristic. (1)The theoretical foundations in direct investment in foreign markets are not the same one between USA and Japan, the former of which adopted"monopoly advantage theory"and the latter accepted the"comparative advantage theory". (2)Different degrees of influence on their respective international trades. The major US player in direct investment in foreign markets are those giant businesses who hold the monopoly and advanced technologies and the pioneers into foreign markets are the top ones in growth with most advanced comparative-advantage structure. Such investments are made at the cost of scale loss in the same sector in home. They belong to trade substitute investment. In another side, Japan's small- and medium businesses are the main in the direct investment in foreign markets. The industries that made investment overseas are those in disadvantages already in home but in emerging or potentially advantaged position in other counties. The increased investments directly put in foreign markets will expand the volume of international trade. Those investments can be classified as trade creation classification. (3)Different goals of direct investment in foreign markets made by USA and Japan. The first goal of direct investment in foreign markets made by USA is to capture high profits and higher market share, which, in essential, is for the pursuit of profit and occupation of market. While, the direct investments in foreign markets made by Japan have no fixed goal and they are the results of change in order to adapt the home economic development. The goal of Japanese investments in overseas has shifted from resource control, to cost efficiency, and then to global market. (4) Different paths for direct investments in foreign markets between USA and Japan. Since the end of the War, US made its investments into developed countries. Viewing from hr industrial distribution, US highlighted the increase in investments in the manufacturing industry that features uniform but requires higher technologies, and reinforced the investment in financing, insurance and others in service sector. The investments made by Japan were in dynamic distribution. The comparative costs in investments determined the decision of investments for any industry. Investment distribution showed different characteristics as they were put into different regions or in different times. The industrial structure is thus with investment ranging from low level to high level and distinctive by region.In third section, the strategy of industrial selection is discussed for the direct investment in foreign markets made by our country.Firstly, the section analyses the current situation of the country's direct investment in foreign markets. These investments appeared as of 1979 and climbed up a small upsurge in 1987. From 1992, the direct investment in foreign markets stepped into a comparatively rapidly-growing period. At present, the country enters into the acceleration development phase. The direct investments in foreign markets stress, overly, on the primang products and primary industries while the investments in high or new industries are badly minor. The dominance is the industries involving resources exploitation and primary manufacturing and process. The lack is the investment into the technology-intensive industry and service sector, which are increasingly become the mainstream of economy in the world. The investment favors the industries that have weak chain effect in home but ignores the ones with strong chain effect in home. The trading businesses engaging in commodities'circulation are in a certain number but enterprises specializing in production and financial services are few.Secondly, the strategy of industrial selection in direct investment in foreign markets made by our country. (1) The theoretical foundation for the choice of strategy in direct investment in foreign markets by our country. The theory of marginal industry expansion, integrated with the conditions of underdeveloped countries for their direct investment in foreign markets, has demonstrated the possibility of direct investment in foreign markets by an underdeveloped country and paved the theoretical way for underdeveloped countries to make direct investment in foreign markets and participate in the system of international division of labor. The theory has been regarded as one of the best for the direct investment in foreign markets by any underdeveloped county. Having directed Japan to succeed to be a power in the direct investment in foreign markets as a model of"catch-up and surpassing", it now becomes the cornerstone for many underdeveloped counties in such investments. Being one of the underdeveloped countries, our country needs to select this theory as instruction. (2) The principles and goal in choice of industries in direct investment in foreign markets. Viewing from the domestic development, China is now in the transforming period for its industrial structure. The direct investment in foreign markets does not have the favorable conditions (or advantage) of highly structured industries. In c0ontrast, the stake in the international production will push the improvement of industrial structure in home. If we view with a global prospect, the level of industrial structure in China stands in the middle in the international division system. Such special position, under some but higher than some, determines that the investments in foreign markets are into two investment distributions, different in nature. They are advantage mode and learning mode. The former is to carry out the comparative advantage in some aspects, to shift the marginal industries, and to facilitate the adjustment of industrial structure in home, through direct investment in foreign countries that have lower level of industries. The latter is to draw the advanced technology in industries and experiences in management, to leverage the upgrade of domestic industries, and to create new comparative advantages through investments in countries that have higher level of industries. (3) The strategy of industrial selection. At a strategic highland, the direct investment in foreign markets for resource control should be stressed. The comparatively advantaged industries in our country should be taken as key to make investments and investments in the marginal industries should be pushed. The industrial selection should attach positive influence on the adjustment of industrial structure in home. The trend that investment in foreign countries come into similar with those in home should be followed and in proper times, the investment in the third sector should be enlarged. |
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