A Study On The Problems And Countermeasures Of Chinese Petroleum Enterprises' FDI In Africa

With the rising consumption demand of Chinese petroleum which was caused by the accelerated industrialization and urbanization, the imbalance between supply and demand of Chinese petroleum has been conspicuous day by day as the bottleneck to restrain the socioeconomic development in recent years. The import volume has been growing since China became net import country in crude oil of the 1990s. According to " China Statistical Yearbook 2010 ", the consumption quantity of crude oil has grown to 442 million tons from 223 million tons, annual growth rate is amounted to 8.6%. But in the meantime, the quantity of crude oil output just has grown to 203 million tons from 160 million tons with the 2.44% annual growth rate. The import quantity of crude oil has grown to 239 million tons from 63 million tons with the 25.39% annual growth rate. As the data above, we could educe the conclusion that the imbalance between supply and demand of crude oil is very serious.The oilfield of Africa is playing a more and more important role in the scramble for the crude oil have far-reaching strategic sense with the discovery of oilfield in Gulf of Guinea, Africa and the application of exploration technology. By the way, the import quantity of crude oil in this area for China has grown to 16.95 million tons (2000) from 70.74 million tons (2010). It can be seen that the strategic position of Africa as an oil supply country is becoming more and more important. Therefore, there are lots of advantages for Chinese petrol companies to invest capitals directly to african countries. That could not only input great amount of petrol resources, which would balance the domestic demand-supply of oil, but also could help Africa to transfer its petrol advantage to economic and social develop advantages. Besides, during that investment process, Chinese companies could learn how to cooperate with international petrol organizations and take up their developed management experiences. In this way, Chinese petrol companies will gradually increase their own competitive ability. This paper analysis about the cause of FDI for Chinese petroleum enterprises by the way of the basic theory combined with the cases. data declaration and chart analysis. Specifically. using correlative theories and foreign successful experiences for reference to analysis about the problem of FDI in Africa for Chinese petroleum enterprises with five sections.Section one " The introduction " is the leading part for understanding the theme of the paper. It begin with stating the background, significance and aim of it by making a thorough review of research on the theory at both home and abroad, summarizes the deficiencies in order to promote this study in China and provide useful and worthy reference.Section two is the study of the FDI Motives of the Enterprises of Our Country to Africa with theoretical analysis. Beginning with reviewing the Monopolistic Advantage Theory and the Eclectic Theory of International Production, the FDI Motives of the Chinese Enterprises to Africa were pointed out by analyzing the necessity and feasibility with a large number of economics data and charts.Section three is for present situation and problem of the Chinese Enterprises FDI Motives to Africa analysis. In this section. the main problems of Chinese Enterprises FDI to Africa which include the enlarged external risk, the obvious disadvantage of Chinese petroleum enterprises and the imperfection of present policies and management system were point out for laying the groundwork which will be talked in Section five by making a thorough review of the current Chinese enterprises FDI to Africa status.Section four is" Developed countries' experience of foreign direct investment". In this section, as a guide to what the problems of Chinese Petroleum Enterprises' FDI in Africa, from the government and corporate level, introduce developed countries' experience of foreign direct investment, as the fifth part of the thesis the analysis countermeasures to provide reference.Section five is to explain the strategies of how to solve the problems in Chinese petroleum enterprises FDI to Africa from two points of view of government and corporation on the basis of the analysis talked before. The view of government include below:One. In oversea investment insurance, improving oversea investment insurance system. concluding bilateral agreements on investment and protection and applying to multilateral investment guarantee agencies for guarantee service. Two In the petroleum of international diplomacy. benefiting from the experience of Sino-African Cooperation Forum and developing vigorously Sino-African Petroleum Cooperation Forum. Three. In IT service, instituting Information Consultation Center which is under the direct control of government. Four. In supervision. filling up the vacancy of oversea investment in law study, defining the Ministry of Commerce running as the only one oversea investment management institution. Five. Affording preferential treatments in respect of taxation. credit and loan in finance. The view of enterprise include below:Paying more attention on the control of investment risk and cooperating with other petroleum enterprises as improving the capacity of capital, technology and talents.