Research On The Political Risks In The Process Of Resources Merger Between China And Australia

Mergers and acquisitions of resource projects(energy,mining,etc.)are an important part of developing economic cooperation between China and Australia.In the resource field,the overall level of M&As between China and Australia is not satisfactory at all.Until 2016,direct investment in resources field accounted for less than 20%of the total,which is apparently needed to be improved.According to empirical evidence,Chinese companies are faced with lots of political risks in the process of acquiring projects when it comes with Australia.Accessing this kind of risks is the main point of the paper,by doing so,it puts forward reasonable suggestions for the Chinese companies,which could boost the FDI to Australia.This paper adopts case analysis method and comparative study method to systematically and comprehensively explore the political risks encountered by Chinese M&A in the Australian resource field.On the basis of reviewing and summarizing relevant research literature and research theories,this paper has explored the motivations of Chinese companies to do FDI,analyzed the whole environment of investment and given an introduction of relevant policies in Australia.Then,this paper uses case analysis method to review the failure cases of Chinalco's acquisition of Rio Tinto and China Nonferrous Metals' acquisition of Lynas,and summarizes relevant experiences and lessons learned by political risks.In addition,this paper reviews two successful cases of Luoyang Molybdenum's acquisition of Northparkes Mine and Yanzhou Coal's acquisition of Felix.Through the comparison of successful and failed cases,this paper identifies and analyzes how to avoid similar political risks in the process of M&A.At the end of this paper,it shows two suggestions based on the case analysis.