Research On Foreign Direct Investment Risks Of China Enterprises And Risk Early Warning Mechanism

“The strategy of going global” and growing steadily domestic economy propelChinese Enterprises to invest overseas in recent years, the scale becomes larger and hasbrought some economic benefits. The complexity of international business environmentdetermines that Chinese enterprises must face various risks, such as political risk andmarket risk. During the business process, there are some risks resisting in the internal ofthe enterprises, as operational risk, management risk and technical risk. So it is urgent totake measures to avoid and control the risks.This paper is divided into six chapters. From the whole framework perspective, it canbe divided into four major sections. The first part mainly introduces the thesis researchbackground and significance of the research and gives a brief description for theframework of the paper, to clarify the relationship between the various chapters.The second part do a detailed analysis on general meaning of the foreign directinvestment risks, characteristics and classification to make the necessary foundation forChina’s foreign direct investment in risk identification. Then do a detailed analysis on thestatus quo, patterns and problems of China’s foreign direct investment, followed by furtheranalysis of foreign direct investment risk. Then do the classification identification of themajor risks of the foreign direct investment combined with the status quo of China’sforeign direct investment, and the typical case of Geely acquisition of Volvo Car in2010.Then do an analysis on the causes of the various types of risk according to theclassification of the above enterprises of foreign direct investment risk.The third part establishes initial early risk warning mechanisms, and builds enterpriserisk early warning organization and operation mechanism, then fuzzy mathematics is usedto analyze the risk impact, finally, the author does an empirical study on the case of Geelyacquisition Volvo Car. At the last part, the author gives some risk avoiding measures according to the aboveanalysis.The text gives a new risk management model based on the international experienceand domestic company’s actuality and problems. In practice, we should use the risk modelaccording to the fact as it is only a mathematics method which has some limiting factors.