The Analysis Of Political Risk In Foreign Direct Investment Of China Enterprises

As economic globalization goes on, along with the implementation of our policyof reform and opening up and the ‘going out’ strategy, our country’s economydevelops greatly and goes up with the other countries in the world. Many enterprisesin our country go out to foreign countries for further development. We can know thatour country’s FDI develops greatly from the data of flow and stock in FDI. However,many enterprises get into trouble in foreign countries. They meet many risks, such aspolitical risk and cultural risk.Political risk can cause great loss to our FDI enterprises. So we must study itdeeply, including causes, forms, estimating methods and solving means. Now expertsall over the world study political risk. They have different perspectives and they havenot got the final conclusion. Therefore, it needs more experts to study political risk toget the final conclusion.After studying the definitions of political risk from many experts, I think itsdefinition should cover two aspects. One is the causes of political risk. They arepolitical instability, economic environment and social environment. The other is theresults of political risk. They are the loss of enterprise’s property, the failure ofenterprise’s strategy and worker’s injuries and deaths.I try to classify political risk from the causes. I think political risk should beclassified in three aspects including politics, economy and society. For further study,the politics includes political instability and government behaviors. I also expand theforms of political risk with diplomatic risk.After studying the causes of political risk, I think it should include three aspects. They are international aspect, host country aspect and FDI enterprise aspect. I studythe host country aspect from politics, economy and society.To get solving means of political risk, I make a summary of many experts’ ideas.I come up with another two means. One is doing self propaganda. The other iskeeping good relationship with foreign countries.I divide the thesis into five chapters. The first chapter is introduction andliterature review. The second chapter is the current situation and features of ourcountry’s FDI. The third chapter is the forms of political risk met by our FDIenterprises. The fourth chapter is the causes of political risk. The fifth chapter is thesolving means of political risk.