Main Challenges of Chinese Outward Foreign Direct Investment - Dissertation Example

The research findings show that the host country’s government policies (HSGP) and the high taxes and duties in the host country (HSTD) are among the main challenges that most marble companies in Portugal. Aside from the host country’s government policies (HSGP) and the high taxes and duties in the host country (HSTD), other challenges that most marble companies in Portugal are currently facing include the social conflicts caused by cultural differences.
This study recommends that the marble companies in Portugal should comply with the regulations and policies set by the government of their host country. Since high taxes are being imposed on Chinese marble companies in Portugal, this study highly recommends that the Chinese marble companies in Portugal should consider investing in other countries with good sources of natural stones such as marble that can provide a tax haven to foreign investors. With regards to organizational conflict caused by the differences in cultural practices and beliefs, this study recommends that the managers of the Chinese marble companies in the host country should use effective leadership, practice two-way communication between the top management and employees, and create a favorable working environment through organizational vision and goals.
Trade liberalization triggers the free movement of “goods, services, capital, and technology” all over the world (Ferrantino et al., 1997, p. xix). It also promotes the development of tight competition within the global markets (Suavant, 2008). In general, foreign direct investment (FDI) is an example of trade liberalization. In the process of removing barriers to export, the outward FDI in China may increase accordingly (United Nations, 2008, p. 6).
In 2010, China’s outward FDI has reached almost US$68 billion (Downs, 2011). In line with this, the bulk of China’s outward FDI goes to the Asian market (US$49.9 billion) followed by North America (US$39 billion), South America (US$36.5 billion), Europe (US$35 billion), Africa (US$32.4 billion), and Australia (US$32.2 billion) (Tan, 2011).