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On the development of multinational companies in China

Author: ChangYiWen From: www.yourpaper.net Posted: 2009-07-30 10:42:22 Read:
Abstract: With the development of economic globalization, China's economy will fully integrate into the world economy, enterprises have a competitive advantage in China, facing identity repositioning and market the complete transformation of the role of focus from the past single domestic resources, a market into international operations, and actively participate in international competition, the international division of labor and cooperation, the path of international development, positive response to the national "going out" strategy called on to continue to expand its own survival and development space rapidly grown into a world-class multinational corporations. This is not only conform to the strategic choice of the development trend of the world economy today, but also continue to grow, to become the only way of powerful multinational.
Keywords: multinational corporations, development, globalization, countermeasures

0 Introduction

Global companies as a future world economic development trends, is attracting the attention of the international community. Because, first of all, because the multinational operation is conducive to mutual cooperation, the introduction of new technologies; Second, help break through trade restrictions, to enter the market; once again for each to enter the local market, thereby saving the market investigation and the establishment of market cost of the network. Most economists generally believe that the rise of the global company, is a healthy phenomenon in international economic activities, and predicted that this would be an important characteristic of the development of the world economy in the 21st century. With the development of economic globalization, China's economy is bound to fully integrate into the world economy, have a competitive advantage in China's enterprises should actively respond to national "going out" strategy called for a powerful multinational . This paper analyzes the current situation and the main problems of multinational companies in China, the development of the main strategies of multinational corporations in China from the point of view of the enterprise and government.

A century, the development of global multinationals

Needless to say, 130 years before the end of this century, multinational companies successful and rapid development, and played a great role in promoting the development of the world economy and changes in human lifestyle. The development of multinational companies in the 21st century will be the following trend:
First, corporate mergers, the combination will continue to become an important form of multinational companies to expand the scale and improve competitiveness;
Second, multinationals research and development cooperation more international;
Third, the direct investment of multinational companies in developing countries will be further strengthened;
Fourth, transnational alliances will become the new trend of multinationals;
Fifth, global companies are emerging. With the rapid development of economy and science and technology, the number of cross-border, unlike global multinational corporations in the 1960s, has been quietly rising.

2 of multinational

In China, for quite a long time, multinational companies seen as exploitation of the Third World and the countries of the working people, "vampire", thus the study of multinational corporations is almost blank. With the in-depth development of reform and opening up, the use of foreign capital is increasing year by year, the tentacles of the International Institute of Multinational Corporations increasingly extends into China, Chinese enterprises have gradually towards the world, the gradual internationalization. The increasing interdependence of the Chinese economy and the world economy, Chinese enterprises transnational business from scratch, growing day by day, play an increasingly important role in the national economy.

2.1 of the status and problems of multinational companies
At present, China has a considerable number of enterprises have the strength and condition of the "going out", but only a few multinational companies with global multinational corporations, the gap is still very wide gap. Status and problems of multinational companies in China mainly for the following aspects.
(1) transnational business enterprise is a substantial increase, but the overall investment is smaller.
2003, China's total investment in more than 160 countries and regions, the establishment of the 7178 non-financial enterprises, a total contractual investment of 14.79 billion U.S. dollars, the amount of Chinese investment of nearly $ 10 billion; accumulated amount in more than 180 countries and regions of contracted projects about $ 123.2 billion, a complete turnover of $ 87.92 billion. At present, Chinese enterprises engaged in transnational business has grown to more than 30,000. Although China's foreign investment enterprises, small-scale investments. According to statistics, the average amount of 1999, China's overseas processing trade projects only $ 2.2 million, while the developing countries average of $ 4.5 million, the average level of developed countries is 600 million U.S. dollars. Second, multinational business enterprise, but the formation of multinational enterprise. Multinational enterprises in China reached 30,000, equivalent to the total number of multinationals in the world, nearly 1/2, but not influential multinational companies in the world. This reflects the overall level of transnational business. Again, less labor-intensive enterprises and trade processing enterprises, high-tech industries. At present, foreign investment in China's industry is mainly trade enterprises, accounting for 61%; followed by resource development-oriented enterprises, accounting for 19%; production and processing enterprises, accounting for 12%; transport industry accounts for 2%; Other 6%.
(2) the total momentum of our multinational development in the increasing number of firms to enter the world's top 500, but the overall level of the developed countries are still far apart.
In recent years, a large number of enterprises in China is increasing by the three companies in 1996, increased to 11 in 2001. From the operating income rate from 2000 to 2001 has more than 500 of the world average yield of 0.25 and 2.5 percentage points. 2001 over the level in the United States, Japan and South Korea. But on the other hand, the total number of Chinese enterprises to enter the world's top 500 is still very small; 11 into 500 enterprises still do not have a world Youqiang multinationals strength; Chinese enterprises to enter the 500 basic is a state monopoly and market competitiveness TNCs from developed countries are essentially different.

2.2 Development of multinationals necessity
The 1990s, multinational corporations has become an important force to promote economic globalization, a profound impact on the development and changes of the world economy, political and social life. Currently, more than 60,000 multinational companies in the world with 850,000 subsidiaries, toured around the world, among them not only have a long history, and the strength of the developed-country TNCs emerging newcomer, vibrant country TNCs. These foreign subsidiaries employ 54 million workers, and controls more than 65% of world trade, technology transfer and the world more than 80% of the foreign direct investment more than 90%. The world's most important industries, services have access to the multinationals integrated international production, distribution and service network. At the same time, China, as the largest developing country in the world, but also the wave of economic globalization, the forces should not be underestimated in the world economic arena. In 2003, China's actual use of foreign investment reached $ 53.5 billion, to engage in transnational enterprises amounted to more than 30,000. At present, there are already 15 enterprises to enter the ranks of the Fortune 500. These huge changes to multinational companies has become a widespread concern of the highlights of our government and theorists. Strengthen research in the field, for the promotion of the development of multinational companies in China, as well as the effective use of foreign capital, China's rapid economic growth, has important theoretical and practical significance.

2.3 Development of multinational countermeasures
With the development of economic globalization and China's entry into the WTO, China has become an organic part of the world economy. In order to fully participate in the international division of labor to be more pro-active stance to improve China's international competitiveness, the Chinese government is promoting the implementation of the "going out" strategy. This is a major economic strategy related to the overall development of the national economy as a whole, will directly affect the future of a period in our country's international status in the pattern of economic globalization. The enterprise is the main body of the market economy. Implementation of the strategy of China's export-oriented economy, in the final analysis, to be reflected in the implementation of the strategy of China's multinational enterprises. Therefore, the strategy and control of transnational operations of Chinese enterprises should adapt to the new requirements of the international and domestic situation, learn effective practices of multinational companies, establish and improve the transnational business strategy and control system in line with the characteristics of Chinese enterprises.
(1) go out of business expansion needs. The expansion of low-cost, overseas acquisitions, joint ventures, wholly-owned factories overseas processing trade is the the multinationals prevailing investment and transnational business world today, is the fastest-growing, most promising way. The advantages of this approach is that the variable origin sales to break through a variety of tariff and non-tariff barriers, and the rapid formation of scale, reduce costs, and expand the brand influence, directly explore the target market.
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