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Multinational investment in China started in the late 70s of the 20th century 
than the newly industrialized countries 10 years later to 20 years, but 
developing rapidly. As of 2004, accumulated foreign direct investment 44.9 
billion U.S. dollars, net foreign direct investment enterprises to domestic 
investors reverse investment, total net foreign investment (the stock) has 
reached 44.8 billion U.S. dollars, the highest in the forefront of developing 
countries ; by the Ministry of Commerce approved or filed more than 6,000 
foreign enterprises in China, these foreign companies located in more than 160 
countries, production in many industries engaged in transnational business 
activities. But with other countries, especially developing countries than 
multinational corporations, multinational companies present in China is still 
in the preliminary stages, so there are many less obvious. 

1. Size of the business strength of the weak, the low degree of international 
>From the scale of strength, recent data show that in 2005, 500 of the total 
>revenue, total profit and total assets were only about 500 of the world in 
>2005 the same index of 8.4%, 7.0%, 6.0%, in 2005 the United States 500 
>companies of similar indicators for 17.2%, 12.5%, 18.2%. Degree from an 
>international point of view, according to statistics, the world's largest 100 
>multinationals in overseas assets, sales, employees have been accounted for 
>these national assets, sales, and 41% of the total number of employees, 48% 
>and 48%. Foreign Direct Investment in China is relatively developed countries, 
>the average investment level is low, most of the mainly small and medium 
>projects, the development of staying power; and the relative concentration of 
>investment in the region, less able to resist risks. According to Lu Tung 
>(2000) empirical research, Chinese enterprises in overseas operations of the 
>following eight areas of weakness: Sales Network, expenses, cultural 
>differences, management personnel, lack of market information, product and 
>service quality, local knowledge and management level . The competitiveness of 
>Chinese enterprises is relatively low. 

2. Multinational innovation in China is weak, the overall level of equipment 
behind 
>From the cross-products of production and management point of view, a 
>world-leading high-tech products less, more general products. China's overall 
>technological level of major sectors of industry than in developed countries 
>15 years to 20 years behind, focus on large enterprises and enterprise groups 
>with international advanced level, the ratio is not high. According to 
>statistics, China's industrial enterprises existing technical equipment, the 
>performance of only 13% of the more advanced enterprise product development 
>capabilities low. Fortune 500 companies R & D expenses as a percentage of 
>sales ratio generally 5% to 10%, while medium and large enterprises in China 
>accounted for only about 1%, resulting in enterprise product development 
>capacity, and lack of ability to continue to develop unique products, the lack 
>of independent intellectual property rights products and technologies. 

3. Property rights are not clear, defect management system 
Property rights are not clear due to internal, the lack of incentives; most 
enterprises still have not completed according to international practice, the 
establishment of modern enterprise system, management system and management 
model, and not well adapted to the needs of corporate international operations, 
resulted in mortality or Kuisun overseas investment . According to incomplete 
statistics, in 1997 China has set up overseas corporate earnings and only 50%, 
30% fair profit and loss, a loss of 20%. 

4. Transnational investment and lack of coordination between government 
departments 
Main features: (1) government departments on overseas investment enterprises 
lack effective coordination and management of regional funds to invest in the 
business and industry to invest, the Government lacks an overall strategy, but 
also a lack of policy guidance, arbitrary large enterprises in overseas 
investment; the same time , long overseas investment management, lack of 
effective coordination between departments, their own way, resulting in 
duplication and omission of certain regulatory operations coexist. (2) approval 
of a rigid system, in the fleeting opportunities of international economic 
activities, to some extent restricts the transnational corporate investment and 
business activities. (3) Foreign investment in inefficient and ineffective 
supervision of the late. (4) to encourage foreign investment enterprises with 
preferential policies to support the lack of maneuverability, some preferential 
policies for reporting procedures are complicated and involve a number of 
departments implementing some preferential policies, the implementation is 
difficult. 
5. To encourage enterprises to multinational investment in building the legal 
system lags behind 
There are two main aspects: (1) there is provision to the competent 
departments, administrative regulations, the tendency to replace national laws, 
lack of standard companies overseas investment and business law. (2) bilateral 
and multilateral international investment agreements, lag, increased 
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