Risk Analysis Of Chinese Enterprises’ Foreign Direct Investment To Asean

With the continuous development of economic globalization and regional economic integration, the Chinese government takes an active part in global economic cooperation and competition, and encourages Chinese enterprises to invest to the Association of Southeast Asian Nations (ASEAN). ASEAN is China’s most potential trade partner. But due to the disparity of economic development level among the ten countries is very big, and their political environment, social customs, religious beliefs, etc, are not the same, there is still a great risk of investment. In addition, although there is a big breakthrough concerning the investment risk of ASEAN in the academic circles of research, there are still some deficiencies. The research,especially in the aspect of risk research with Chinese characteristics is limited. The recently research about the risk faced by Chinese enterprises to invest in ASEAN is lack of systematically study, and can not judge the risk level. This article’s study of the risk of Chinese enterprises’s foreign direct investment to ASEAN has certain theoretical and practical significance.Firstly, this paper introduces the background of risk research and theory, and illustrates the significance and necessity of studying the the risk of Chinese enterprises’s foreign direct investment to ASEAN. Then using the combination of qualitative and quantitative method to analyze the current situation of Chinese companies’investing in ASEAN, mainly including the scale of investment, country distribution and industry distribution.Secondly, this paper determines the risk source of Chinese enterprises’s foreign direct investment to ASEAN, including political risk, economic risk, cultural risk, legal risk, and financial risk. Then this paper takes the case of China Aviation Oil (Singapore) as example, and summarizes its failure, and the reason for the success.Thirdly, this paper constructs the risk evaluation index system of Chinese enterprises’s foreign direct investment to ASEAN. First of all, we choose the political risk, economic risk, investment risk, competition risk and other risks for primary evaluation index. Then by using expert scoring method and analytic hierarchy process (AHP) to determine index weight at all levels. And assign in indexes at all levels. Finally, the article uses the method of linear algebra to calculate the primary index score.Fourth, this paper uses empirical analysis method to establish the matter-element extension model according to the risk evaluation index system, and uses the correlation functions to assess risk level.In the end, according to different countries, this paper put forward the corresponding countermeasures and suggestions to achieve the purpose of risk prevention.Through the research of this paper,we have some results as follow. First, the absolute scale of Chinese enterprises’foreign direct investment to ASEAN is stablely increasing, but relatively smaller scale as a whole. And it is extreme imbalance in national distribution, which mainly inflows into Singapore. The investment mainly distributes in the industry of electric power, heat, gas and water production and supply industry, and the mining industry. Second, risk of China’s foreign direct investment to ASEAN includes political risk, economic risk, cultural risk, legal risk and financial risk. China aviation oil (Singapore)’s failure is mainly due to business risk, financial risk and legal risk. Third, Brunei, Singapore and Laos belong to low risk level, which have good investment environment; Cambodia, Malaysia, Thailand and Vietnam belong to medium risk countries; Myanmar, Indonesia and the Philippines belong to high risk countries.The innovation of this article lies in determining the risk rating of Chinese enterprises’s foreign direct investment to ASEAN, and enrich the existing research on the risk. But it unavoidably has many deficiencies, which needs further improvement.