A Study Of Strategies To Prevent Risks Of Medium And Small Sized Companies’ FDI To Vietnam

The increase of FDI from developing countries is becoming a new trend of overseas investment. As the largest developing country in the world, China has witnessed its FDI growth accelerating year by year. Especially after the establishment of CAFTA, the investment from China to ASEAN countries raised sharply. From the view of flow, the amount of investment goes up from 110 million dollars in 2007 to 480 million dollars in 2013. And from the view of stock, Vietnam has received 2.1 billion dollars investment from Chinese enterprises. As for what mentioned above, this paper on one hand discusses the main FDI risks that Chinese medium and small sized companies face in Vietnam, while on the other hand the paper also analyzes different kinds of risks, reasons of risks and solutions to avoid different risks. To begin with, the paper introduces related studies from scholars around the world and states the basic theories related to FDI. Then, the paper gives a general current situation of China’s FDI to Vietnam from the perspectives of investment scale, industrial structure, investment ways, investors and investment motives. Moreover, the paper concluded the features of Chinese companies’FDI to Vietnam and points out the reasons for the problems of those FDI to Vietnam by analyzing related data and cases. Finally, based on the analysis of current situation, features, problems and causes of the investment, the paper proposes strategies for Chinese medium and small sized companies to avoid FDI risks in Vietnam.