China's Political Risk Research On Direct Investment In The United States

With China's rising national strength and the accelerating of "Going Out" Strategy, this decade has witnessed a boom in China's Foreign Direct Investment in United States. However, in the process of entering U.S. market, Chinese enterprises also confront serious political risks.Based on study of previous theories of political risks, a new evaluation framework is given in Chapter One which combines the characteristics of 21 century and the developing trend of political risk theory. Based on the framework, the paper discusses four types of political risks Chinese enterprises come across including pressure of U.S. national security concern from the Committee of Foreign Investment of United States, Limits on technology transfer, Investment Protectionism, Economic Nationalism and Social Unrest. Further analysis of the reasons which lead to the risks can be categorized into three levels:From the international system level, China and America face severe competence in global production structure, especially energy consumption. From the state level, America's domestic national security system has become stricter, the U.S. economic system has been unstable and U.S. political decision making process is prone to be influenced by congress, interest groups and election; from the interaction level, factors include the different cognition on state and market and the expanding of Sino-US trade frictions.At last, this paper draws some reflections about the origin of the political risks Chinese investment has in U.S. The difference between China's nation-dominated economic development model and the U.S. market-dominated economic development model is the key concentration. The fundamental root of the political risks Chinese firms confronts in U.S. comes from the strategic containment motivation of U.S. in order to maintain the dominance of the international economic system.Worth noting that study on political risk of Chinese enterprises has in U.S. also provide a chance to make some reflections on our development model, in order to nurture true and competitive multinational companies, Chinese government should change their role from direct support to supervision and guidance. Only by promoting our enterprises become more independent and market-oriented entities can they contribute the comprehensive national strength of China.