Multinational Corporations In China M & A Behavioral Study

The opening of China's economy to foreign investors and the reforms that have swept the nation have added tremendous impetus to the optimization of its investment environment. Now more than ever, large-scale transnational corporations regard China as one of the most important destinations for competitive corporate development. Expectedly, the increase in transnational corporations' direct investment in China is closely tied to China's economic reforms. By allowing mergers and acquisitions of transnational corporations in China and encouraging the participation of foreign businesses in the reform of China's ailing state-owned enterprises, China has adopted policies to boost the inflow of foreign capital. This increase in cross-border mergers and acquisitions will exert a profound influence on China's macro economy, including its market structure, the reform of its state-owned enterprises, and its long-term economic stability.This paper examines and analyzes the motives behind cross-border mergers and acquisitions, the aspects of international and domestic environment that have thus attracted foreign investment, and the characteristics of mergers and acquisitions carried out by transnational corporations in China. In accordance with the analysis herein, the author puts forth certain guidance for economic policies as well as reform measures aimed to exploit the benefits of increased M& A activities in China's new economic environment.