A Research On The Risk Management Of Chinese Central Enterprises’FDI

Recently, the Foreign Direct Investment(FDI) of Chinese corporations is increasing rapidly. According to the United Nations Conference on Trade and Development (UNCTAD), the amount of Chinese FDI reached68.81billion dollars in2010, and increased by21.7%than2009, ranked fifth in the world and second in the developing countries. Central enterprises plays the main role in the total of Chinese FDI, for example, the number reached46.34billion dollars and accounted for70.5percentage of the Chinese FDI in2010.But the FDI of central enterprises faces huge risk, according to the statistic data from McKinney Company,67%of the Merges&Acquisition of Chinese company is not succeed in the last20years, as the former Chinese diplomatic Office, Hua Liming said,14Central enterprises suffered the deficit from2004overseas, and accumulated loss reached95.05billion Yuan; the statistic data of the Department of Commerce showed, only33.3%of the overseas Chinese companies profit.While "Going out", the Chinese companies face the uncertainty of the economic environment; the uncertainty of the business environment; the uncertainty of the company environment. To be more specific, it concludes the risk of politics; the risk of government policy; the risk of competition; the risk of technique; the risk of operating; the risk of investment and so on. From the present situation of the FDI, the Central enterprises’ investment center on the energy and mine and centralize in Asian and Latin America. This raise the difficulty of the risk management.This paper adopts Analytic hierarchy process and intends to provide a method that can be used to estimate the risk level in the practice and help to take Preparatory measures to reduce the extent of loss. Meanwhile, this paper bring up the idea of subsuming the risk management into the performance appraisal system and strengthening risk management from the angle of internal control.