Foreign Investment Analysis: China
Abstract: The objective of this research was to analyze the acquisition case of Volvo Car by Geely including the environment scanning, strategic management and acquisition implementation.The theoretical overview to strategic management explained the acquisition decision making process with various management tools. Furthermore, the benefits and principles of foreign direct investment which were presented in this part are sound base for the detailed discussion about foreign direct investment in China.The study was accomplished mainly on qualitative research method due to the research limitation. Secondary sources are largely collected from a variety of publications, websites, journals, magazines etc. Meanwhile, the intensive case study provided a comprehensive picture of the acquisition case in a decision making process.
Introduction: According to the statistics released by Chinese National Development and Reform Commission, from 2002 to 2008, China’s annual business volume of foreign investment increased from 2.7 billion USD to $56 billion USD and the average annual growth rate was 66%. To the end of 2008, the foreign investment stock of Chinese enterprises reached 184 billion USD and the total overseas assets was over 1 trillion USD. (SDPC statistic 2010)The amount of foreign investment by merger and acquisition achieved 30.2 billion USD with an increase of approximately 380% over the previous year which account for 540% of the total foreign investment in that year. From 2003 to 2009, Chinese enterprises closed 437 overseas acquisition deals amount to 116.8 billion USD in total. (SDPC statistic 2010)..
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