Problems and Countermeasures in China's Conference Industry The Impact of Foreign Capital Mergers and Acquisitions on China's Industrial Security and Countermeasures

Foreign mergers and acquisitions and industrial security Since the reform and opening up, foreign direct investment has played a positive role in realizing rapid economic growth in China. Foreign direct investment has not only provided China with huge capital, but also brought advanced business ideas, production technology, global marketing network and enterprise management experience. In particular, foreign mergers and acquisitions have played an important role in changing the operation and management system of state-owned enterprises, recreating micro-market entities, and forming a standardized corporate governance structure, which has promoted the improvement of the competitiveness of China's national industries. However, foreign capital mergers and acquisitions may form a dominant monopoly position, the formation of strong barriers to entry of national enterprises, squeezing the survival space of national enterprises, inhibit the incentive of industrial technological innovation, will have a non-negligible impact on China's industrial security. In recent years, foreign capital mergers and acquisitions of Chinese enterprises directly refers to the control of industry, and presents a new trend: one must be controlling, the second is the merger and acquisition of the object is the industry's leading enterprises, the third is the future revenue must be more than 15%. These three are multinational corporations in our country mergers and acquisitions of the general requirements. Foreign mergers and acquisitions in China also appeared between multinational corporations, multinational corporations and investment companies or funds between the joint action. First, the new trend of foreign capital mergers and acquisitions 1. foreign-invested enterprises tend to significantly increase the tendency of sole proprietorship, cross-border mergers and acquisitions have gradually become an important way for foreign investors to enter. With the gradual improvement of China's investment environment, the market outlook is increasingly favorable, the proportion of wholly foreign-owned continues to rise. Since 1997, the proportion of wholly foreign-owned projects has exceeded that of joint ventures, ranking first among the major ways of utilizing foreign capital in China. Even if foreign investors initially take the joint venture mode, when the joint venture enters the maturity period, performance stabilization, foreign convenience began to seek control of the enterprise through the way of capital increase and expansion of shares. At present, more than 80% of foreign investment projects in China to take the sole proprietorship mode. The main purpose of foreign investors adopting the wholly-owned or holding mode is to better implement the investment strategy of their parent companies, to integrate their investment projects in China into the global layout, and to meet the needs of technology and market internalization. This trend of equity changes in foreign-invested enterprises is also in line with the general pattern of global transnational corporations' investment. 2. The number of channels for foreign capital to enter China has increased significantly. On the one hand, since the 11th Five-Year Plan, China has steadily implemented the Qualified Foreign Institutional Investor (QFII) system, allowing qualified foreign institutional investors to enter the domestic securities market. As of April 2012, China ****approved 163 QFII institutions. According to the data of the Bureau of Foreign Exchange, as of April 16, *** there are 133 QFIIs with a total approved investment quota of US$25.193 billion. On the other hand, despite the fact that China still implements capital project control, various types of international investment entities are generally optimistic about China's economy and have utilized various channels (both legal and illegal) to inject large amounts of capital into China's market. The Institute of International Finance (IIF) predicts that global capital will flow to emerging economies in 2011 with US$1,041 billion, and in 2012 it will reach US$10,560 billion; China is the largest destination of net international capital inflow, accounting for about one-fourth of the total amount of capital attracted by emerging economies. In addition to FDI in the traditional sense, foreign capital inflows into China also include funds invested in the stock market and interbank capital flows. Since 2008, China has been the largest destination for international private capital, and it is expected that the net inflow of private capital from 2010 to 2012 will be about 250 billion U.S. dollars, which will be nearly twice as much as that of Brazil and nearly three times as much as that of India. 3. The main body of investment shows a diversified trend. From the composition of the main body of investment, for a long time, transnational corporations as the main carrier of FDI, is the main source of foreign capital absorption in China. In recent years, private equity funds and other financial capital began to accelerate the penetration of China's real sector, attempting to domestic enterprises with potential for capital injection or direct acquisition, and gradually become one of the important main body of cross-border mergers and acquisitions. Currently, China has become one of the most active private equity markets in Asia. in 2010, the amount of investments and acquisitions made by private equity funds in China amounted to US$18 billion, a 57% increase from 2009, of which RMB funds accounted for 46%. Some foreign private equity funds regard state-owned enterprises as their main targets, such as Carlyle's acquisition of XCMG, Blackstone's acquisition of Bluestar Group, and Newbridge's acquisition of Shenzhen Development. Meanwhile, small and medium-sized high-tech enterprises have also become the focus of private equity funds. In particular, the opening of China's Growth Enterprise Market in 2009 provided the best exit channel for private equity funds. In addition to private equity funds, venture capital funds, foreign sovereign funds have also become the new source of FDI in China. For example, Singapore Government Direct Investment Ltd. and KKR fund, CICC invested 160 million dollars to acquire 20% of the equity of Far East Leasing, and so on. From the sovereign fund investment trends in China, the rapid expansion of the scale of China's commercial banks have a strong attraction to foreign investment institutions, many commercial banks began to introduce foreign investment banks, sovereign funds and other strategic investors. At present, sovereign funds including Temasek, Qatar Investment Authority and Kuwait Investment Authority hold shares in China's commercial banks and have become their important foreign shareholders. Diversification of foreign investment is conducive to optimizing the governance structure of China's enterprises, driving institutional reform and mechanism innovation, and improving the supply of talents in high-end service industries, but at the same time, the diversification of foreign investment subjects and investment modes also puts forward new regulatory requirements for China's foreign investment policy. 4. The trend of mergers and acquisitions of large-scale leading and backbone enterprises is obvious. These leading backbone enterprises tend to have strong competitiveness, its brand advantage, perfect marketing network and large market share, favored by foreign enterprises. Through mergers and acquisitions and then control these leading backbone enterprises, foreign-funded enterprises can make full use of their advantages, save the necessary costs to develop a certain industry, and successfully occupy or even monopolize the market of the industry. In recent years, foreign mergers and acquisitions are mostly in the domestic industry-leading leading enterprises, through the strong combination, control of the domestic industry. Food, catering, home appliances and other industries, the backbone of domestic enterprises have been "captured". Relating to industrial security and national economic security of the backbone of the dominant enterprises were a large number of mergers and acquisitions, will directly result in a decline in industrial control, China's industrial security and the implementation of national industrial policy has caused a certain impact, thereby increasing the security risk of China's economy. 5. Foreign mergers and acquisitions by the manufacturing industry to the financial, retail, high-tech services transfer. After joining the WTO, China's service industry open to the outside world in the field of expanding, so far, has covered the "General Agreement on Trade in Services" 12 major categories of services in the 10, involving a total of **** 160 subclasses in 100. Among them, service sectors such as banking, insurance, securities, telecommunications and distribution have been opened to foreign investment. According to the foreign direct investment (FDI) data released by the Ministry of Commerce on January 18, 2012, for the whole year of 2011, the actual use of foreign capital in the service sector amounted to 55.243 billion U.S. dollars, a year-on-year increase of 20.54%, accounting for 47.62% of the country's total for the same period; the actual use of foreign capital in the manufacturing sector amounted to 52.101 billion U.S. dollars, a year-on-year increase of 5.06%, accounting for 44.91% of the country's total for the same period. For the first time, the amount of utilized foreign investment in China's service industry accounted for more than the overall proportion of manufacturing industry, indicating that foreign investment is shifting to China's service industry. Foreign investors to increase investment in the service industry, China's economic development and national economic security, is a double-edged sword. Second, foreign capital mergers and acquisitions of industrial risk At present, China has been part of the strategic industry control by foreign capital mergers and acquisitions of obvious damage. China's soybean industry due to foreign control of processing, sales and import channels, has basically lost industrial control; China's equipment manufacturing industry, many of the backbone of the enterprise has been foreign mergers and acquisitions, due to the equipment manufacturing industry, the division of labor is more detailed, once the backbone of the enterprise by foreign capital overall mergers and acquisitions or holdings of mergers and acquisitions, which means that the industry basically by foreign control; foreign control of the main channels of circulation in our country will be directly jeopardize the national financial The control of foreign capital on the main channel of distribution in China will directly jeopardize the country's financial and economic security; have a significant impact on the economic security of the leading industries or pillar industries, such as equipment manufacturing, microelectronics, automobiles, petrochemicals, finance, information services, etc. to the national economy with a high degree of relevance, driven by the control of the industry, it will be the whole industrial system of China's security poses a major threat. 1. Controlling the market and forming industry monopoly. Through mergers and acquisitions of domestic enterprises to obtain monopoly status, is the multinational corporations choose mergers and acquisitions to enter China's market for important reasons. Multinational corporations with its strong capital, technology, management, brand, reputation and other advantages, can quickly enter the higher profits of the product field, and rapidly expand its market share and market share in China, and then monopolize or intend to monopolize some domestic industries. A research report by the Development Research Center of the State Council shows that foreign investors have majority control of assets in 21 of China's 28 industries. For example, the five largest enterprises in the glass industry have all been joint ventures, the five largest elevator manufacturers accounting for more than 80% of the national output are held by foreign investors, 11 of the 18 national designated home appliance enterprises have been joint ventures with foreign investors, the cosmetic industry is controlled by 150 foreign-funded enterprises, 20% of the pharmaceutical industry is in the hands of foreign investors, and 90% of the sales of the automobile industry come from foreign brands. These data show that foreign capital through mergers and acquisitions has essentially controlled a number of important industries in China, which will weaken the regulatory power of our government on the industry, affecting the independent development of China's industries and the formation of a complete industrial chain, which in turn threatens China's industrial security. 2. Control of core technology, triggering path dependence. Maintain the monopoly of technology, especially the monopoly of core technology is the key to monopoly profits of multinational corporations, they will generally take all means to prevent technology, especially the core technology spillover. It is very difficult for China's enterprises to obtain advanced foreign technology through demonstration and imitation. Facts have proved that China's introduction of foreign investment in the early stage of the "market for technology" policy, is a heavy price in exchange for a number of low-end technology, while the cutting-edge technology and high-tech are very few, resulting in China's enterprises are solidified in the international industrial division of labor at the low end. In addition, many foreign investors, when merging and acquiring domestic enterprises, require domestic enterprises to give up the control of R&D, making them dependent on the technologies provided by the R&D organizations of their foreign parent companies, thus forming a path of dependence on foreign technologies, which weakened and wore down the independent innovation capability of Chinese enterprises. At present, the products of many industries in China are subject to the new economic and technological standards and key components of developed countries, such as television sets, washing machines, air conditioners, automobiles and other industries. High-tech, core technology, key technologies in the hands of foreign parties, innovation capacity is still controlled by foreign parent companies, this pattern of long-term development, is bound to affect and weaken China's technological research and development, innovation capacity, threatening the independence of China's industrial development. 3. National brand loss, foreign brands flooding our market. Since the 1990s, some multinational groups take advantage of the Chinese enterprises in urgent need of capital, technology, psychology and brand awareness of the weakness of the shortcomings, began a frequent mergers and acquisitions of China's national brand road. 1994 Unilever to obtain a controlling stake in Shanghai toothpaste factory; 1996 vitality of the 28 and Germany's Meijer joint venture; 1998 Nestle to buy the first brand of the domestic chicken industry, Shanghai Mrs. Le 80% shareholding; In 2000, 92% of the shares of Lobelco were acquired by Danone; in 2003, 72% of the shares of Nanfu Battery fell into the hands of Gillette; in 2003, France's L'Oreal acquired Little Nurse; in 2006, France's SEB acquired 52.74% of the controlling stake in Nepal; in 2006, the U.S. Goldman Sachs acquired the No. 1 brand of meat in China, Shuanghui; in 2008, Johnson & Johnson announced that it had completed the acquisition of Dabao; in 2010, France's Coty Group acquired Tingyi. France's Coty Group acquired Dingjiayi; in December 2011, Nestle acquired 60% stake in each of Xufu and Yinlu Foods; in 2012, the U.S. Yum Brands acquired a 93.22% stake in Little Sheep and so on. After the foreign capital mergers and acquisitions of our enterprises, control the sales of our brands, reduce or terminate the investment in technological development, reduce production capacity, resulting in a significant decline in the market share of state-owned brands; at the same time, foreign-funded enterprises to replace our brands with their own brands, quickly occupied the original market space of our brands, resulting in the continuous shrinkage of national brands; there are also foreign-funded enterprises will be the original local trademarks are located in the low-grade products, resulting in the China's trademark value has declined. The end result is that a large number of foreign-funded brands are flooding the market in China, many people once familiar with the well-known national brands not only did not grow their own in foreign mergers and acquisitions, but was weakened, or even eliminated. According to statistics, 90% of China's Sino-foreign joint ventures use the trademarks of foreign investors. China's national brand a large number of extinction, resulting in domestic enterprises reduced to foreign brands of processing plants, to a certain extent, affecting the brand control of China's industry. 4. Institutional mechanism is not perfect, serious loss of state-owned assets. In recent years, some multinational corporations have to asset mergers and acquisitions and equity mergers and acquisitions of some of China's large state-owned enterprises for mergers and acquisitions. Due to China's current property rights transactions are still very unstandardized, state-owned enterprises governance mechanism is not perfect, the local government's impulse to attract capital, making foreign capital in the process of mergers and acquisitions of Chinese enterprises there is a serious loss of state-owned assets. First, the loss of state-owned assets in asset evaluation. As China's asset evaluation system is still imperfect, asset evaluation institutions are not standardized, the evaluation method is not scientific, the evaluation technology is not standardized, easy to ignore or underestimate the value of intangible assets, or low price or gratuitous transfer of brand, business reputation, raw material supply channels, product sales network and other intangible assets, resulting in China's enterprise assets cheap transfer of the phenomenon is very common in the country. Second, the state-owned enterprise agent problem. China's state-owned enterprise governance is a multi-level hierarchical "principal - agent" model. This longer "entrustment - agency" model, gave birth to foreign mergers and acquisitions of Chinese state-owned enterprise agents of adverse selection, rent-seeking, moral hazard, insider control and other behaviors and problems, these unlawful behavior and problems is precisely the mergers and acquisitions of China's state-owned assets a large number of loss of important reasons. The third is the factor of local government. Thirdly, it is the factor of local governments. Local governments are eager to attract capital, depending on the foreign capital injection and market protection is more important than the preservation and appreciation of state-owned assets and the independent development of China's enterprises, in the negotiation process to reduce the conditions of mergers and acquisitions, the result is to let the foreign capital invincible, so that the loss of state-owned assets from the outset is unavoidable. 5. Speculative arbitrage, malicious mergers and acquisitions. With investment in the real economy of the traditional FDI is different, QFII, private equity funds and a variety of hot money is interested in short-term investment and arbitrage, the domestic industrial upgrading, technological progress, employment and tax revenues contribute very little, and even produce some negative impact. From the perspective of the industry structure of private equity funds' investment in China, at the initial stage of entering China's market, private equity funds mainly invested in domestic Internet and other high-tech industries, but in recent years, more and more private equity funds have shifted the target of acquisition to traditional industries. As China is in the middle and late stage of industrialization, heavy industries such as iron and steel, equipment manufacturing, machinery and electronics, chemical industry and other heavy industries maintain a strong expansion momentum, these traditional industries will remain the most interesting investment areas for private equity funds, while the traditional industries have the strength of the state-owned enterprises to become a popular target for private equity funds to acquire, which has caused a certain impact on the traditional areas of industrial security as well as the implementation of the national industrial policy. For the acquired enterprises, private equity funds themselves do not master advanced production technology, and their ownership advantage is only reflected in the short-term performance of enterprises. Due to the nature of the private equity fund's pursuit of arbitrage, it is destined that it will not pay attention to the long-term development of the acquired enterprise. After the private equity fund's merger and acquisition, it tends to improve the financial statement index of the acquired enterprise through large-scale reduction of non-core business and other means in the short term to improve the enterprise's market value, and then take the opportunity to sell it to other enterprises at a high price or cash out through IPO, which is difficult to guarantee the long-term development of the enterprise in the short-term behavior. The integration of private equity funds after taking over a company, such as layoffs, may also damage the social benefits of the enterprise. For some innovative SMEs in China, although the injection of capital by private equity funds provides financial support for their scale expansion, the arbitrage tendency of private equity funds may induce these enterprises to deviate from the direction of entrepreneurship. Once the founders of the enterprises are also involved in cashing out, the accumulation of innovative resources of the enterprises will be jeopardized, which may even lead to the "premature death" of the enterprises. In addition, as the enterprises acquired by private equity funds will often be listed in foreign IPOs after their performance improves, the ultimate beneficiaries of the listed mergers and acquisitions are mainly foreign investors, and domestic investors do not enjoy the benefits of the development of the enterprise, which in turn causes certain losses to the domestic financial market. Since 2011, with the continuous fermentation of the European debt crisis, the world economic recovery process has slowed down, and the uncertainty of the international capital market has increased. Influenced by the global economic situation, coupled with the domestic real estate and other macro-control policies to tighten, the domestic entity enterprise general profit decline, and many hot cities real estate investment restrictions, housing prices downward trend. Under such circumstances, the nature of private equity funds' merger and acquisition investment activities chasing short-term profits has further emerged. In the recent period, this kind of investor withdraws from our market frequently. Ministry of Commerce data released on May 15, 2012, China's FDI has been six consecutive months of negative growth; January to April 2012, China's actual use of foreign capital 37.881 billion U.S. dollars, down 2.38%. To this end, we should strengthen the analysis and prediction of the domestic hot money flow and the trend of change, make relevant plans and countermeasures, and strengthen the supervision to prevent the drastic changes in capital flow from negatively affecting the macroeconomic stability. Countermeasures to build a national industrial security prevention system Developed countries have developed foreign capital mergers and acquisitions earlier, and have rich experience in industrial security prevention, and have formed a complete set of perfect industrial security prevention system. U.S., Germany, Japan, South Korea and other developed countries of industrial security prevention system, are law-led industrial security prevention system. Its core content is to regulate the legal system of foreign capital mergers and acquisitions. On the basis of perfecting the legal system, specialized agencies have been set up to review foreign capital mergers and acquisitions, relying on the legal basis to be directly responsible for the approval of foreign capital mergers and acquisitions and to strengthen the ability to deal with key cases. At the same time, developed countries have clear and specific provisions in their legal systems on the industrial restrictions on foreign-funded mergers and acquisitions, the degree of foreign-funded controlling interests, the determination of monopolistic mergers and acquisitions, and the approval procedures for foreign-funded mergers and acquisitions. In this way, the review of foreign capital mergers and acquisitions has a clearer goal and is more operable. China should learn from the successful experience of developed countries in dealing with foreign-funded mergers and acquisitions and maintaining industrial security, and build an industrial security prevention system under the premise of opening up to the outside world, so as to improve the international competitiveness of enterprises and safeguard China's industrial security. 1. Formulate the Anti-Monopoly Law on Foreign Capital Mergers and Acquisitions, and improve the system of laws and regulations. First, the Anti-Monopoly Law provides a clear legal basis for China's anti-monopoly in the process of foreign mergers and acquisitions and the maintenance of national security, but there is only one legal provision in the whole law regulating foreign mergers and acquisitions, and many important contents have not been reflected. Implementing rules for the Anti-Monopoly Law should be issued, supporting measures should be improved, and an anti-monopoly enforcement agency with a high degree of independence and authority for foreign-funded M&A should be set up; and an anti-monopoly litigation mechanism should be established, such as a public interest litigation mechanism that can be modeled on the U.S. anti-monopoly law. Secondly, in view of the special characteristics of foreign-funded M&A, and in accordance with the actual market situation in China and the current situation of foreign-funded M&A of domestic enterprises, a unified "Foreign-funded M&A Anti-Monopoly Law" covering all aspects of foreign-funded M&A anti-monopoly and with a higher degree of validity and maintenance of rights can be formulated on the basis of the Provisions on the Merger and Acquisition of Domestic Enterprises by Foreign Investors and the Anti-Monopoly Law. In terms of content, the Act should comprehensively regulate the monopoly problem and all its aspects resulting from M&A activities. Thirdly, the Anti-Unfair Competition Law and the Mergers and Acquisitions Law, Securities Law and Company Law should be further improved, and the enforcement of the Trademark Law, Patent Law and Intellectual Property Protection Law should be strengthened so as to safeguard the lawful rights and interests of foreign investors, effectively curb the illegal and illicit behaviors of multinational corporations and their unfair competition activities in China, and urge multinational corporations to practice the social responsibilities they should fulfill. In February 2011, the General Office of the State Council issued the Circular on the Establishment of a Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors, proposing the establishment of an inter-ministerial joint conference system for security review of the merger and acquisition of domestic enterprises by foreign investors. This is China's first regulatory system specifically for security review of M&A. On March 4, 2011, the Ministry of Commerce promulgated the Interim Provisions on Matters Relating to the Implementation of the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors by the Ministry of Commerce, which further clarifies the application procedures for security review, the review and processing of security review, and other provisions, marking the formal establishment of the security review system for M&A. In the future, the security review system for foreign-funded mergers and acquisitions should be further improved, the legal norms for foreign-funded mergers and acquisitions should be sound, the specific contents thereof should be refined, the implementation capacity should be strengthened, and the principle of appropriateness and moderation should be grasped so that it can neither be abused nor not be used, and we should strive to improve it day by day in practice. The establishment and improvement of foreign capital mergers and acquisitions security review system is only to do the work beforehand, and for foreign capital mergers and acquisitions after the enterprise behavior, should also maintain sufficient vigilance, the use of its dominant position in the market should be monitored in real time. From the viewpoint of foreign legislation and practice, most of them provide for a system of continuous review of the effects of competition restriction on enterprises after the completion of mergers and acquisitions. In order to be able to avoid or reduce to the maximum extent possible the consequences of foreign-funded mergers and acquisitions on China's market in terms of restricting market competition, with reference to foreign legislation, China should also set up an after-the-fact monitoring system for foreign-funded mergers and acquisitions. The merging and acquiring enterprises should regularly report to the national antimonopoly enforcement agency on the holdings of the merged and acquired enterprises at the time of the completion of the merger and within a certain number of years after the completion of the merger. Once the proportion of equity held by a foreign investor exceeds the state's prescribed share, the antimonopoly enforcement agency has the right to determine that it has violated the law, and may either rescind the acquisition or force the foreign investor to sell its shares to the relevant domestic enterprise in order to weaken its control position. 3. Strengthening the guidance and regulation of foreign-funded mergers and acquisitions. Foreign mergers and acquisitions of Chinese enterprises must be in line with China's national economic development strategy and national industrial policies and regulations. For our country, not all industries encourage overseas enterprises to enter, otherwise it will form an impact on the national industrial policy. Firstly, China should adjust its foreign investment industrial policy in due course according to the changes in the industrial situation. The 5th revised Catalogue of Industrial Guidance for Foreign Investment (2011 Revision) has come into effect since January 30, 2012, which is conducive to actively guiding the direction of foreign investment. Secondly, in order to further strengthen the supervision of foreign-invested mergers and acquisitions (M&A) and to guide and regulate foreign-invested M&A activities, it is proposed to introduce the Law on Industrial Policy. In the program of industrial policy, the holding of state-owned enterprises in China by foreign-funded enterprises, especially foreign financial capital, should be categorized and managed according to the characteristics of industries and products, and the areas to be prohibited, restricted and encouraged should be clearly defined. At the same time, it should be strictly prohibited to grant industry concessions to foreign investors in those areas determined to be the pillar industries of the national economy, and the expansion of foreign ownership should be restricted in those parts of the industry that have already been granted. Where conditions permit, the state can use the reverse "stock to debt", so that it becomes debt, and gradually be paid off. Thirdly, we should understand the new trend of private equity funds' mergers and acquisitions or capital injections into domestic enterprises, as well as the diversification of the main body of the utilization of foreign capital, and sort out the cases of such mergers and acquisitions, grasp their motives for mergers and acquisitions and their modes of operation, and actively guide them in conjunction with effective supervision, so as to avoid the harms and advantages. 4. Establish an industrial security monitoring system and strengthen industrial security early warning. The measurement of industrial risk caused by foreign mergers and acquisitions is a very complex issue, according to its formation mechanism and the consequences, while taking into account the availability and accuracy of relevant data, the establishment of industrial security monitoring index system. It should mainly include the following dynamic indicators: foreign-funded market share, foreign-funded brand ownership, foreign-funded holding rate, foreign-funded technology control rate, and technology source exogenous rate. According to this indicator system, the national industrial security situation will be forecasted regularly, abnormal signs of national economic security will be reflected in a timely manner, and specific measures will be put forward to prevent behaviors that harm China's economic security. 5. Strengthen the construction of innovation environment and enhance the independent innovation ability of enterprises. Independent innovation ability is the core embodiment of enterprise competitiveness and even national strength. To build an innovative country in China, we need to vigorously promote the national intellectual property strategy, create a policy environment and cultural atmosphere of independent innovation, effectively stimulate the enthusiasm of the whole society for innovation, completely change the basic environment of "innovation is better than imitation", and allow enterprises to form a clear expectation of strengthening the construction and protection of patents. China to really embark on the road of independent innovation, cultivate and enhance the independent innovation ability of enterprises, must make the enterprise has the inherent motivation to innovate and independent innovation of the sense of mission, the technological innovation to produce the inherent demand for technological innovation into a real productive forces, and completely get rid of the technological dependence on the developed countries. 6. Improve the institutional mechanism to prevent the loss of state-owned assets. Firstly, we should improve the laws and regulations on asset evaluation, standardize the procedures and system of asset evaluation, strictly enforce the law, strengthen the supervision of asset evaluation, achieve the fairness and scientificity of asset evaluation, and ensure that the evaluation value of state-owned assets is reasonable and accurate. Secondly, the state-owned assets management department should strengthen the management of asset appraisal organizations, strictly examine the qualifications of appraisal organizations, verify the appraisal results, ensure the quality of appraisal, and avoid "backdoor operation". For cases of state-owned asset loss in mergers and acquisitions, the relevant departments should work together to carry out serious investigations and deal with them, and resolutely put an end to the loss of state-owned assets caused by human factors. Third, to further improve the corporate governance structure of state-owned enterprises, the establishment of a set of effective incentives and constraints mechanism. Establish a long-term incentive mechanism to perpetuate the economic interests of state-owned enterprise agents. Improve the internal and external constraint mechanism, strictly stipulate the duties and obligations of agents at all levels, and strengthen the agent's sense of responsibility; improve the market mechanism, and give full play to the market's external constraints on state-owned enterprise agents. 7. Improve the awareness of national brand protection. National brand is after years of painstaking management, carefully built, successful in the domestic market and even in the international market also has the fame of the excellent brand, is a valuable treasure, we must not easily give up the national brand, some malicious acquisition of damage to the well-known national brand of the application is resolutely not approved. In addition, we should give national enterprises in leading positions in various industries the same treatment and status in taxation, capital, mergers and acquisitions, and support the country's strong national enterprises to develop and grow, and to become a century-old stores, Chinese brands. It is also necessary to encourage the same industry to speed up the pace of reorganization and union, accelerate the development and formation of large companies and enterprise groups in China, and improve the international competitiveness of China's enterprises. Through the cooperation between large enterprises, the formation of strategic alliances *** together to resist foreign annexation or hostile takeovers, to promote China from a large trading country to a trading power, from a manufacturing power to a brand power. (The author is a doctoral candidate at the School of Finance of the University of International Business and Economics, and general manager of the Asset Management Department of China Export and Credit Insurance Corporation)