With the globalization and China’ s further participation in the international division of labor, it is inevitable that more and more principal transnational corporations choose the way of transnational merger to enter into China. Some national enterprises, meanwhile, are beginning, owing to the strongest pressure ever from competition, to be inclined to cooperate with foreign-funded companies by means of transfer of ownership. This conception of selling capital stock to transnational companies, so to say, "agree without consultation" with the thought bestowed several years ago by some local gove rnments on how to reform national enterprises: "to sell the national enterprises, that’s all". As a result, in the mid 1990s the merger of China’s national enterprises by foreign - funded companies reached its first climax. We consider that, although without touching the subject of the protection for national industries in this article,it is of particular significance to look back several years later to the problems that cropped out in the process of merger, to explore the actual effect of the enterprises’ operation after the merger, and furthermore, to make a case study of the overall achievements made by merger.In this article, we take the merger of the Yangzi Refrigerator Factory situated in Anhui Province by Bosch und Siemens Haüsherate, Germany, as a case for study. Most of the data used here comes from the reports made by the above-mentioned companies. In the preparation for this paper, we visited many people concerned and collected much valuable information. As all of the information has been, in themain, brought into or half-into the open locally, involving no business secret, if something to be mentioned in the analysis made in this paper is identical with some complicated strategic thoughts of both parties, it happens totally by chance.
