Impacts of Multinational__ Enterprises Transnation

JiangsuCollegeofInformationandTechnologyInternationalAcademyforBusinessandAdministrationImpactsofMultinationalEnterprises’TransnationalInvestmentinChinaonChineseDomesticIndustryDiplomaThesisPaperSupervisedby:Prof.Dr.WolfgangWagnerStudent’sName:HuangXinrui(Jason)Student’sNumber:0614233143TurningDate:March15,2009MultinationalCorporationImpactsofMNE’sInvestment1Abstract:Dependingonpeople’sdifferentpointofview,multinationalenterprises(MNE)areeitherheroesorvillainsofglobalizedeconomy.Multinationalcompany(MNC)wasusedbylocalgovernmenttocompeteforforeigndirectinvestment.Justinlastyear,onSeptember3rd,2008,inconformityofbeoptimisticaboutthedevelopmentpotentialofChinesebeverageindustry,Coca-Cola,oneofthebiggestMNEintheworld,announcedthattheymadeacquisitioninHuiYuangroup—Chineselargestjuicebeveragecompanyatpriceof17.92billionHongKongdollarsintotal.Oncetheinformationwaspublished,afiercedebatewasestablishedaboutwhetherweshouldsellsomanytribalindustriesandcompaniestoforeigninvestorsornot.Besides,alotofpeopleexpressedtheiranxiousconcerningthepossibleimpactthatdomesticindustrymaysufferfromaswell.SoitisnecessarytodoadetailanalysisaimedatMNEs’transnationalinvestmentinthefollowingcontents.MultinationalCorporationImpactsofMNE’sInvestment2ListofTables:Table2-1:Theproportionofdevelopedanddevelopingcountries’FDIinworldtotalFDIflowsfrom1988to2005(parts)……………………………………………………15Table2-2:TopfivetransnationalcompaniesinChina………………………………..21Table2-2-1Topfiveintermsofoverallassessment…………………………………….21Table2-2-2Topfiveintermsofbestoperation………………………………………….21Table2-2-3Topfiveintermsofpublicimage…………………………………………..22Table2-2-4Topfiveintermsofregionalcontribution…………………………………..22Table3-1:ThestockvarietyofoutflowFDIondevelopingcountries………………..25Table3-2:Annualoutflowvolume,annualgrowthvolumeandannualabsolutegrowthrateofChina’snon-financialFDIin2007……………………………………..26MultinationalCorporationImpactsofMNE’sInvestment3ListofFiguresFigure2-1:The3mainfeatureclassificationsofmultinationalcorporations…….122-1-1Geographicdistribution………………………………………………………….122-1-2thesourceofinvestment…………………………………………………………122-1-3thestructureofindustry………………………………………………………….12Figure2-2:Theproportionofindustrialpatternfordevelopedcountries’FDIinglobalforeigndirectinvestment………………………………………………………16Figure3-1:Proportionofdevelopedcountryanddevelopingcountry’sFDIinthetotalworldvolume……………………………………………………………………..26Figure3-2:ThevarietyofChina'sNon-financialFDIflowfrom2002to2007……32Figure4-1:ThebasicmarketshareofChina’swholecarmarketin2008…………37Figure4-2:Theproportionofeachdifferentcountry’scarin2008………………..37MultinationalCorporationImpactsofMNE’sInvestment4TableofContents:ListofTables……………………………………………………………………………..2ListofFigures……………………………………………………………………………3Contents.............................................................................................................................4ListofAbbreviation……………………………………………………………………..51.Introduction…………………………………………………………………………….61.1CurrentstatusofMultinationalCorporation...........................................................61.2Objectofwriting………………………………………………………………….72.Overviewofmultinationalenterprises…………………………………………………82.1DescriptionofMNE………………………………………………………………82.1.1ConceptionandbasicstandardsofMNE……………………………………82.1.2DevelopmentprocessofMNEandcauseofformation……………………..92.1.3ThefunctionandfeaturesofMNE…………………………………………132.2Foreigndirectinvestment…………………………………………………………142.2.1IntroductionofFDI………………………………………………………….142.2.2ParticipatoryapproachesofinvolvingFDIformultinationalEnterprisesinChina………………………………………………………...162.3IntroductionofGlobalTopFiveMNEinChina…………………………………203.TransnationalinvestmentandChina’slocalindustry…………………………………233.1Influencesofinvestmentforadevelopingcountry……………….........................233.1.1Investingadvantageofadevelopingcountry………………………………233.1.2PositiveinfluenceofinvestmentinChina………………………………….263.1.3NegativeinfluenceofinvestmentinChina…………………………………313.2Chinesedomesticforeigndirectinvestment………………………………………323.2.1Opportunities………………………………………………………………..323.2.2Challenges……………………………………………………………….......354.Practicalargument:theimpactofforeignautomobileCompany’sinvestmentonChinesecarmarketandindustry…………………………365.Suggestionsandsolutions……………………………………………………………426.Conclusion…………………………………………………………………………….457.References…………………………………………………………………………….46MultinationalCorporationImpactsofMNE’sInvestment5ListofAbbreviation3NNoacceptingNomanufacturingNotransferring4MMenMachineMaterialMethodsAMCAmericanMotorCorporationBEICBritishEastIndiaCompanyBOTBuild-Operate-TransferCNPCChinaNationalPetroleumCorporationFDIForeignDirectInvestmentGDPGrossDomesticProductM&AMergersandAcquisitionsMNEMultinationalEnterpriseR&DResearchandDevelopmentTNCTransnationalCorporation(Company)UNCTADUnitedNationConferenceonTradeandDevelopmentWIRWorldInvestmentReportWTOWorldTradeOrganizationMultinationalCorporationImpactsofMNE’sInvestment61.IntroductionThischapteristheintroductionofwholearticle;thegoalofthisshortdescriptionistoshowthecurrentsituat