Assessment On The Risk Of “Joint Venture-losses-Merger&Acquisition ” In The Alliance Between Chinese And Foreign Enterprises

In the backdrop of the global integration and China’s reform and opening up,the amount of foreign direct investment in China also showed a trend of growth.Early days, the Chinese enterprise absorbed certain foreign knowledge and technology in the process of cooperation with the foreign company. But in recent years, the absorption has been compromised, and the tendency of the foreign direct investment in China has made China obtained the disadvantages far outweigh the advantages. The trend is that a large number of foreign enterprises expanding equity on the basis of the original joint venture, and hold or even owned the joint venture gradually.In fact, the foreign company into China in the form of founding a joint venture with Chinese company, always with a hidden purpose- to achieve the sole proprietorship by plot means. This greatly increased the learning cost of Chinese enterprises, and more seriously endanger our country’s industry security, harm the interests of producers and consumers in China.In reaction to the phenomenon, this paper in combination with the status quo of sino-foreign joint venture and the related research both at home and abroad, then summarizes the plot means of the foreign companies “joint venture-losses-M&A”Chinese companies. Using these factors as the key points of “joint venture-losses-M&A” risk identification. On this basis, according to the unascertained characteristic of “joint venture-losses-M&A” risk, We choose to adopt the unascertained risk measure model to evaluate it, these two parts formed a“joint venture-losses-M&A” risk assessment model. To test and verify the validity and rationality of the risk assessment model, this article use the data of 98 listed Chinese and foreign joint venture and assess the “joint venture-losses-M&A” risk in key point of “conspiracy losses”, the assessment results show that the joint venture which was merged later have a higher risk level. At the same time, in this paper, the sino-foreign joint venture process is divided into early, middle and late stages. We use data of 64 sino-foreign joint venture that has been merged and assess the risk stage by stage. We get the following conclusion :1, “joint venture-losses-M&A” risk level increases with time. 2, compared with the sino-foreign joint venture which has long joint venture period, the enterprises with short joint venture period have higher risk level at the beginning of cooperation. 3, risk is divided into high-risk andlow-risk by C3 risk level, when the level of risk of sino-foreign joint venture reach to C3, Chinese company has an urgent need to produce more attention to “joint venture-losses-M&A” risk.Build a “joint venture-losses-M&A” risk assessment model,We can draw the following recommendations : 1.Chinese enterprises should have a comprehensive understanding of the joint venture partners, then grasp the joint venture negotiations.Do not make their own in the dangerous position. 2. Real time monitoring of risk should be strengthened. When the risk is increasing, China needs to remain vigilant.3. The government should adjust the policy of introducing foreign capital, establish a standardized monitoring system and standardize the approval system of foreign capital merger and acquisition to guard against the risk.