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Multinationals
Increasing Investment in China In recent years there has been more systematic investment by multinationals in China that has had an important bearing on China's economic development. By the end of 1998, many of the world's best known business giants, especially in the manufacturing field, had invested in China, and up to now more than 300 of the Fortune 500 have invested here. Advanced technology and management techniques plus more competitive products are the key factors in the success of multinationals in China. Many had been in the Chinese market before the founding of the People's Republic of China in 1949. After China adopted its reforms and opening-up policy in the late 1970s, multinationals gradually began returning to China. In the 1980s though, there were still not very many. Only Germany's Volkswagen, Japan's Sanyo, and a few other giants began large-scale investment, while others made trial investments on a trial basis, according to China's Institute of International Economic Cooperation and Trade. As the reforms and opening-up increased, China began shifting from a big potential markets to a more realistic one and international corporations began to regard China as a more attractive investment site, according to the Institute's Wang Zhile. Their experiences in investment in the 1980s helped them to introduce more systematic investment in the 1990s. Since 1993, the multinationals have continued to make investment on a large scale. The multinationals have used trade and technology cooperation to gradually put China in their global business network, Wang says. The big companies have invested in China for long-term strategic interests and have made long-term development strategies and detailed plans in China for choice of projects, partners, and location. How to consolidate their hold in China has become a major problem of multinationals, Wang says, and to ensure success in China, they have implemented a localization strategy in recent years. So many multinationals entering into a country in such a short time was unprecedented, Wang points out, and their presence has led to intense competition in China, something that will push the globalization of China's economy further faster. With the improvements in the investment environment here and more favorable policies, more multinationals are expected to come to China. (Xinhua) |
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