Foreign Multinationals In China M & A To Explore

Transnational Corporation (TNC) is a main force of world economic globalization by its foreign direct investment (FDI). In recent years, transnational merger and acquisition (TNM&A) of TNCs has become the main trend of FDI. This character of TNCs is very significant to those developing countries who want to develop their own economy by using foreign capitals. Nevertheless, we can't induct that once there are TNM&As, there will be equivalent influx of foreign capitals. This essay focuses on how to use foreign capitals effectively by TNM&As and consists of four parts.In chapter 1, the author reviewes the development of TNCs and the characters of FDI, showing that TNCs have taken bigger and bigger part of world economy. The scales of them are so immense that they are no weaker than those of some countries. The development of TNCs is also the development of FDI. As an adjustment to a new world economic circumstances, which is known by the increase of uncertainty, more violent competition, wider open to the outside and mass use of modern information technologies, TNM&A has become the main way of FDI by TNCs. After the review, the author summarizes briefly the use of foreign capitals of China in recent 20 years since it opened to the outside world, pointing out that there are two stages in using foreign capitals in China. In the first stage, foreign capitals came mainly from foreign debt, while in the second stage, FDI has been prevailing foreign debt. The summary also shows that foreign capitals has made great contributions to Chinese economy. The author analyses why China still need much foreign capitals and points out that there are shortcomings in using foreign capitals--there are few cases of TNM&As by foreign TNCs in China, which means there llies a possibility of further using foreign capitals. The conclusion is that TNM&As by foreign TNCs will be the necessary trend to China in using foreign capitals in coming years.Chapter 2, the theory of TNM&As. As the history of the practice of TNM&As is not long, The theory of it is far from mature. Though as a combination of M&A and FDI, TNM&As can be partially explained by theories of M&A and FDI, the combination of practice does not definitely lead to the synthesis of theories of these two fields. There needs a new framework to explain TNM&As theoretically. In this course, Doc. Si Jiansan made a useful temptation. He explained TNM&As in a totally new way of factors combined analysis. Since TNM&As are in fact no more than export where goods are firms, and export appears when some special conditions are accomplished, TNM&As come nowhere but the accomplishment of this conditions. Edified by the fact that TNM&As are but actions of export and helped by Si Jiansan's factors combined analysis, the author temptes to explain TNM&As by the theory of outside incentives and the theory of demand preference.Chapter 3, practices of TNM&As in China by foreign TNCs. In the first place, the author analyses three typical cases of TNM&As emerged in China, including foreign TNCs merge or acquire of joint ventures, foreign TNCs merge or acquire of publicly listed companies and foreign TNCs merge or acquire of non-publicly listed companies. In the second place, from the angle of using foreign capitals effectively, the author analyses the impact of TNM&As by foreign TNCs on the use of foreign capitals, Showing that the scale of TNM&As doesn't mean the equal scale of influx of foreign capitals. Generally speaking, payments in cash and in asset can both use foreign capitals effectively. But as the main purpose of absorbing foreign capitals of China is not to invest abroad, payment in securities can't lead to an effectively use of foreign capitals. When the payments purely in cash, in asset or in securities are not accepted, the payment in mixed ways becomes the second most acceptable dealings. The above analysis also shows that the efficiency in using foreign capitals is influenced by the practices of M&As, especially by ways of payment. Lastly, the author analyses several proble...