German FDI Analysis
Abstract
The purpose of this study is to identify motives and prospects of German FDI in China.
Introduction
This essay considers to analysis motives and prospects of German FDI in China by the OLI framework which is an eclectic approach to analysis FDI. According to Dunning (2008)? the OLI Paradigm connects three theories of FDI about advantages. Thus, Ownership advantage, Location advantage and Internalisation advantage which I am going to use to define why a lot of German’s investors invest?? in China and what they can expect in the future.
Literature review
FDI
OLI framework
OLI framework blablabla...
The first advantage, Ownership is one or more distinct tangible or intangible assets which are characterized by possibility to be hidden
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Low cost of resources and cheap labour causes increasing of attractiveness of China for German FDI. Germany disposes technology know-how and managerial skills which leads them to good partnership with emerging markets like China.
To the Location advantages may include market potential which is huge as the Chinese consumers have significantly purchasing power. Disposable incomes can equal or exceed those of European and American consumers. Now, the number of potential customers is more than 1,4 billion (worldometers.info). Moreover, more than 80% of German investments is located in three central regions. The Shanghai region gives opportunities to be in vicinity with potential customer and also is attractive due to high-level of infrastructure. The North East region is rich in natural resources such as coal, ore and oil. Furthermore, there is a good location, close border with South Korea and Japan which gives possibilities to be local supplier to manufactures. The third region is the Pearl River Delta where is a lot of small and medium
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