Risk Research On Direct Investment Of Chinese State-owned Enterprises

Foreign direct investment is an important way for enterprises to participate ininternational trade, foreign direct investment in China started late, but developmentrapidly, especially state-owned enterprises. The main differences betweenState-owned enterprises and other enterprises is that the greater support from thegovernment, for this, foreign direct investment behavior often points to the will ofgovernment, state-owned enterprises encounter risks from the host countrygovernment in foreign direct investment, thereby resulting in loss of business. Inaddition, although the state-owned enterprises have been taken the reform of modernenterprises system several years, but still, there exist a series of questions, such asdecision-making hasty and so on. The above issues will be the risks whenstate-owned enterprises in the process of foreign direct investment, so that sufferedlosses.The first chapter begins with the background and the meaning of this thesiswriting, and foreign direct investment and risk management theory, literature review.In addition, also statement the new ideas and inadequate. The second chapter on thepresent situation and characteristics of foreign direct investment in state-ownedenterprises. The state-owned enterprises has been playing an important role in theprocess of foreign direct investment, although the decline in recent years, but itsinvestment accounts for66.2%of the total stock. Thus, the state-owned enterprisesare still the main part of foreign direct investment in China. In addition, with thechange of the international situation, protection awareness which refer to minerals,energy and other strategic resources of host country is growing, and increasinglysensitive for Chinese enterprises, especially large-scale foreign direct investment of state-owned enterprises, therefore, state-owned enterprises faced the risks in theprocess of foreign direct investment is also growing. The third Chapter is an analysisof the main risks which state-owned enterprises encountered in foreign directinvestment. The government risk is one of the biggest risk, so the loss more seriousonce happen. In recent years, Loss cases of state-owned enterprises in foreign directinvestment most involved to the government risk. And, market risk and managementrisk will product negative impacts on foreign direct investment of state-ownedenterprises. Based on the analysis of second and third chapter, in the fourth chapterexpress risk management and preventive measures. State-owned enterprises should beestablished risk management system, pay close attention to the host country, such aspolicy changes, host country's market, society, culture and others before the foreigndirect investment, in order to avoid or diminish the impact of the risk. The fifthchapter summarize former chapters and draw conclusions.The state-owned enterprises in the coming period is still the main role in foreigndirect investment, therefore improve risk management and prevention is a requiredcourse for "going out". With the improvement of the international environment,improving the quality of their own, state-owned enterprises will be better in foreigndirect investment.