A Study On Divestment Of Japanese Multinational Corporations In China

Since the opening up of China, lots of foreign direct investment(FDI) comes into China because of a series of preferential policies adopted, inexpensive labour and the large-scale market of China. But at the same time, more and more divestment phenomenon derived from multinational corporations in China becomes frequent day by day with the rapid growing of foreign direct investment. The paper analyzes the motivations and characteristics of divestment of Japanese multinational corporations in China and the changes of market environment, this will be helpful for better use of foreign investment in the future.This paper begins with the reviews of different theories of divestment, and uses many analysis methods such as Comparative Analysis, Case Analysis and so on to study the motivations of divestment next. Firstly, the domestic factors, including the increasing of labor and land costs, the oversupply in many products, the cancellation of some preferential policies for foreign direct investment and so on. Secondly, international factors, including economics crisis and competition for FDI from other countries. Then compares the structure of Japanese corporate governance with American', and finds that market expansion strategies caused by Japanese corporate governance structure is one of the motivations of divestment. Afterwards analyzes the characteristics of divestment of Japanese multinational corporations in China. It's easier for labor-intensive manufacturing than any other industries, joint venture than wholly foreign-owned enterprises to withdraw. Divestment is more frequent in the east of China. At last analyzes the influences of divestment, and gives some suggestions and countermeasures. The last part is the conclution of this arcticle.