An analysis on financing activities of foreign funded enterprises in China

Foreign direct investment is one of the most important driving forces in China's economic growth. Financing activities are important financial decision-makings after the set-up of a foreign funded enterprise. Based on the Pecking Order theory under the multinational environment, this paper concludes that the financing activities of the foreign funded enterprises in China are their rational behaviors under the specific financing environment with special regulations and policies on taxes, loans and monetary and capital markets. Since China's financial system and the financing environment are in the process of transformation, there, of course, are rooms for improvement in respect to satisfying foreign funded enterprises' financing needs, which constitutes one of important parts of China's financing system transformation. This paper has this topic discussed.