Financing and Guarantees from Parent Companies to Overseas Subsidiaries

Xiao Huang: DOORM, Japanese companies do not provide financing guarantees to overseas subsidiaries after the initial investment. How should Chinese companies learn from this practice?

DOORM: Japanese companies typically do not provide financing guarantees to overseas subsidiaries after the initial investment, which helps the subsidiaries operate independently and develop on their own. Chinese companies can learn from this practice by gradually reducing financing guarantees to overseas subsidiaries after the initial investment, encouraging them to operate independently and develop self-sufficiency. At the same time, Chinese companies can establish comprehensive risk management mechanisms to ensure the financial health and operational stability of overseas subsidiaries, thereby achieving sustainable development in the global market.