How Packaging Enterprises Cope with the Influence of Foreign M&A

At present, the trend of economic globalization is increasingly evident and the process is getting faster and faster. As China's accession to the WTO and the opening to the outside world continue to expand, multinational companies have entered China's packaging market with capital and technology. On the one hand, they have brought much-needed funds and technology for the development of China's packaging industry, and on the other hand, they have also established a strong economy. The strength and strong competitiveness have brought tremendous impact to the packaging enterprises in China.

Multinational corporations have established a large number of foreign-funded enterprises in China mainly through sole proprietorships, joint ventures, cooperation, and mergers and acquisitions by foreign capital, and domestic competition has gradually entered a period of enthusiasm. In the process of competition with multinational corporations, some state-owned enterprises have continued to grow and have achieved a transformation from learners, followers, and challengers. However, there are also many state-owned enterprises that have gradually been transnational corporations in the process of dancing with wolves. Control, even "eaten".

I. Adverse effects of foreign mergers and acquisitions on China's packaging industry

After China's accession to the WTO, foreign mergers and acquisitions will form a monopoly and control over the packaging industry in China. Since multinational corporations aim at maximizing global profits, many decisions such as investment, sales, employment, and trade may be made by the parent company. They rarely or completely ignore certain economic and social interests of China, and they can often make use of their strengths. The advantages of manpower, material resources, and financial resources in our country have formed a certain range of pros and cons. Since multinational corporations are a networked organization all over the world, its influence on monetary policy, financial policy, and sales arrangements is often difficult for our country to control.

Foreign M&A operations have occupied the domestic market. Foreign investment focuses on China's huge market. In order to maximize its occupation of the domestic market, foreign exchange purchases have become an important means of exporting products and occupying markets. Its mergers and acquisitions are mainly determined by its global business strategy. The arrangement of production and business locations and the direction of input into products all depend on the requirements of internal planning and resource development. Therefore, whether our country can gain profits from the M&A of MNCs and whether the industrial structure is reasonable does not entirely depend on China's subjective assumptions and policy orientation. To a certain extent, it will also be influenced by the development strategy of multinational companies. This will bring negative effects to our country in two aspects.

The first is the "crowd-out effect", that is, multinational corporations invest in large-scale mergers and acquisitions, use mergers and acquisitions to control the production of operating rights, and make China's industrial capital expelled.

The second is the "considerable effect", that is, the absolute control of transnational corporations on the use of foreign capital mergers and acquisitions, and the transfer of advanced technology and other resources that have been invested or developed in our country, resulting in the loss of China's technology and resources.

Foreign M&A operations have weakened the company’s scientific research and product development capabilities, and are also likely to cause tax avoidance.

Foreign capital mergers and acquisitions can easily lead to the loss of talent in our country. After China's accession to the WTO, the R&D institutions set up by multinational corporations in China have sole proprietorship, commissioned scientific research institutions, joint research and development of scientific research institutions, and foreign capital mergers and acquisitions. In foreign M&A research institutions, except for a small number of senior researchers from abroad, most of them are investing in local recruitment and are recruiting the best local talents to complete their talent localization strategy. Therefore, if multinational corporations invest in M&A companies in China are still subdivided into "market sales and sales of cakes," the greater threat posed by the arrival of foreign M&A research institutions is that domestic "innovative talents" are divided up.

It can thus be seen that the negative impact of foreign mergers and acquisitions on China's packaging industry is not only a threat to China's packaging industry, but also to a certain extent constitutes a threat to the entire national economy.

Opening up to the outside world and developing international economic and technological exchanges are the trend of the times and the needs of the times. The attitude of unfavorable acceptance of foreign capital mergers and acquisitions and the unconditional welcome attitude are one-sided and inadequate. China and transnational corporations have the same interests. Therefore, when formulating policies for the management of foreign mergers and acquisitions, we must use its active role. At the same time, we must also be vigilant against its negative effects.

International economic cooperation is two-way. With foreign investors, especially multinational companies investing in M&A in China, large-scale development, international competition has begun to domesticize, and Chinese packaging companies have in fact directly faced the challenges of world-class companies. Under such circumstances, China's packaging companies must constantly adjust and reform their own institutions, enhance their competitiveness, and continue to develop themselves and expand themselves in international competition under the conditions of opening up to the outside world.

Second, foreign mergers and acquisitions of China's packaging industry <br> <br> beneficial effects of multinational companies through mergers and acquisitions, corporate structure so that our packaging has changed dramatically. The management model of multinational corporations is having an increasingly profound impact on the production and operation of China's packaging industry.

(1) Foreign capital mergers and acquisitions will become the main form of state-owned capital exit in the future, which will help promote the reform of state-owned enterprises in China.

At present, international mergers and acquisitions have become the main method of international capital investment. 80% of the capital's cross-border flows are realized through equity mergers and acquisitions. However, in China, cross-border mergers and acquisitions only account for about 10% of foreign capital absorbed by China due to policy and market maturity. Industry insiders pointed out that because the existing state-owned assets are only worth more than 10 trillion yuan, which is equivalent to only one year's GNP, the historical debts of state-owned enterprises that need to be paid will have trillions of yuan. If foreign investment is to be achieved, It will not only solve the problem of the burden on state-owned enterprises, but also help improve the quality of listed companies and realize the realisation and appreciation of state-owned assets.

(2) Bring in urgently needed funds for enterprise development and quickly form economies of scale production capacity.

In recent years, many countries have set up packaging production plants in China. For example, German packaging DTNOVA has signed joint ventures in southern Hubei and Minjiang, and has a large scale with a total investment of 1 billion yuan. According to relevant information, at present there are more than 100 foreign-owned and joint-venture packaging companies, and there are more than 10 medium-sized packaging companies.

(3) Introduced advanced management techniques.

In recent years, many packaging companies in China, through joint ventures or foreign capital mergers and acquisitions, have introduced foreign advanced computer management information systems in the production, finance, and logistics management of enterprises, and realized the full-scale networking of production, supply, and sales. Especially the introduction of advanced packaging machinery and computer management, operations, etc., so that packaging production and application of high efficiency. '

(4) Developed some products international market and gradually incorporated into the international market division of labor system.

In order to obtain the greatest return on investment in the global market, multinational corporations will continue to provide capital, management, and technology to member companies, and help member companies actively explore the international market, and contact and undertake international business. This mode of operation is conducive to multinational companies in foreign mergers and acquisitions of China's packaging companies to open up the international market and participate in international competition.

(5) Foreign mergers and acquisitions can accommodate a portion of the labor force.

One of the purposes of MNCs in mergers and acquisitions is to use our cheap labor. In general, foreign M & A companies, except for a few senior management personnel from multinational companies in the company, other personnel are basically employed.