The Study Of Chinese Construction Machinery Enterprises’ FDI

Recently, the rapid developing of emerging economies like "The Golden Brick" has changed world economic pattern. One of the significant change is the increase in the number of foreign direct investment (FDI) from the emerging economies, thus the multinational companies from the emerging economies have important effect on global economy. With the stable growth of Chinese economy, our country has become the important driving power of the growth of FDI from the emerging economies. Since1978, Chinese construction machinery industry has made great development. The construction machinery industry provides a strong support for the national construction, and has set up a batch of competitive national construction machinery enterprises, such as Sany, Xugong and Zoomlion which shows a strong vitality in the international competition. Since2006, Chinese construction machinery industry expedited the speed of FDI, accelerated the pace of overseas expansion. Up to now, the number of Chinese construction machinery enterprises’FDI projects has increased, the investment scale has expanded, nevertheless most of the FDI projects are greenfield investment. Chinese construction machinery enterprises are changing from the factory to the manufacturer. In2012,Chinese construction machinery enterprises have made many big acquisitions, but overall, the "going out" is not going well. The main reason is that local businesses and governments usually suspect our technology of manufacturing, the ability of continuous operation and brand management, the ability of dealing with local labor relationship. In2013, the world economy is becoming more and more unstable. Since June, Europe has imposed anti-dumping and antitrust taxes on Chinese photovoltaic industry, and thereupon China has imposed duties on import wine and milk powder. These sanctions make overseas operation full of risks. In this political and economic environment, the study of how to make the FDI from Chinese construction machinery enterprises operating well overseas seems very useful.This article combines the theory with reality. It uses related theory and economic data to analyze the motivation of Chinese construction machinery enterprises’ FDI. Specifically, based on the analysis of Chinese construction machinery enterprises’ FDI, I sums up the advantages and disadvantages of FDI from Chinese construction machinery enterprises. By analyzing the experience of developed countries, I put forward the suggestions to promote Chinese construction machinery FDI. Compared with the previous views that Chinese construction machinery enterprises only have disadvantages, this essay concludes our advantages and existing achievements through comparative analysis. Paper structure arrangement is below:The first part is introduction. It begin with stating the background and significance by making a thorough review of research on the theory at both home and abroad, summarizes the deficiencies in order to promote this study, point out the method, innovations and disadvantages.The second part is the theoretical analysis of the motivation of Chinese construction machinery enterprises’ FDI. Introduce the two theories, comparative advantage theory and the internalization theory. By the support of the above theory, the essay analyzed the history of Chinese construction machinery enterprises’FDI and summed up the inner impetus of these FDI.The third part introduces the practical circumstance of Chinese construction machinery enterprises’ FDI. This part combined a large amount of data, charts and other related information to analysis the investment scale, investment trends, investment mode, regional distribution and the source of funds of the current Chinese construction machinery industry FDI.The fourth part is the advantages and the problems of Chinese construction machinery enterprises’FDI. In the methods of comparative analysis, I summed up Chinese construction machinery enterprises have advantages in the sales increasing, prices, labor costs and other aspect, have disadvantages in the external risk control, the functions of the government and enterprise itself.The fifth part is the reference of successful experience of construction machinery’ FDI in developed countries. Considering the problems of FDI in our country, I analyzed the successful experience of developed countries, reckoned that our country should improve in fiscal taxation, R&D policy, finance, insurance and other government level as well as sales, innovation, remanufacturing, environmental protection and other enterprise’ level.The sixth part is based on the above analysis, putting forward the suggestions on Chinese construction machinery enterprises’ FDI. The government should improve in the fiscal taxation, finance and insurance, science and technology policy, laws and regulations. Enterprises should attach important to capital sales, innovative and technology, environmental protection, etc.