The Analysis Of The Motivations For Multinationals’ Divestment In China And Its Enlightenment To China

Since the reform and opening, the scale of investment in our country continue togrow. Since1991China has been the first in the developing world because of thebiggest scale of attracting foreign investment. At the same time, the phenomenon ofdivestment of multinational companies in China become more frequent by reason ofthe domestic labour costs, increased competition, international economic situationand other factors, and has become the problems what cannot be neglected in theprocess of the foreign investment. For a long time, our country constantly stressed theimportance of investment promotion and capital introduction, vigorously implementthe investment promotion and capital introduction policy, but ignored the study ofproblems of withdrawals. Divestment of multinational companies will lead to somany problems such as unemployment, affect the balance of payments and hinder thedevelopment of relevant industries. In order to carry out foreign investmentmanagement, the study of divestment is indispensable. Divestment is the opposite ofinvestment, divestment is not able to completely eliminate, but can take activemeasures to guide to investment, reduce the divestment phenomena.First, from the perspective of the domestic and foreign scholars, this article beginthe of study withdrawal, clarify the research status and main research results ofdivestment, and from the two dimensions of the number of divestment and theamount of divestment, study the status of the divestment of multinational companiesin China, and points out that the divestment of multinational companies in China havethe five characteristics including industry distribution, regional distribution, countrydistribution and so on. and analyzes the effect of divestment, the adverse impact onemployment, import and export, international balance of payments, and relatedsupporting industries. Second, divestment of multinational companies in China is theresult of comprehensive shaping of many factors, including labor costs, policy system, market competition and other factors at home and abroad, and including management,operational mistakes, decision-making failure. Therefore, this article from two aspectsof divestment of internal cause and external cause, systematically analyzes the factorsinfluencing the divestment of multinational companies in China. In addition, fordivestment motivation analysis, this article also through the typical case analysis,respectively adopted the cases of United Energy companies in the United Statesselling power plants, and Japan Toshiba company withdraw from the mobile phonemarket of China, The paper describes in detail the process of divestment and thecause of divestment, more intuitive, concretely analyzes the common factorsinfluencing the divestment.Finally, according to the factors influencing the divestment of multinationalcompanies in China, the correct views of divestment should be adopted. On the onehand, divestment of multinational companies is an inevitable phenomenon, althoughmany adverse consequences, but also had a positive effect. Divestment can beeliminated the companies which are labor-intensive, low value-added, seriousenvironmental pollution, relying on China’s cheap labor resources and cheap land, toa certain extent, divestment can promote industrial upgrading and adjustment ofindustrial structure. On the other hand, with the development of our country’seconomy, the rise of labor costs and the market competition is the inevitable trend,but China has a lot of advantages in attracting foreign investment. China has hugeconsumption market and good investment environment, china not only have a strongappeal to foreign enterprises which didn’t invest in China, but also attract the flowingof capital of foreign enterprises again. To reduce the phenomenon of divestment offoreign investment enterprises in China, this article provides many practical measuresinclude setting up early warning mechanism, improving the quality of foreigninvestment, optimizing the investment environment, perfecting the legal system,guiding the investment again.