The Strategic Adjustment Of Transnational Corporations In China And The Transformation Of China's Policy On Absorbing Foreign Capital

Confronted with the transnational corporations' investment strategy transformation in China since the 1990's, how to change China's policy on absorbing foreign capital and improve the ability in this field has become an unavoidable and urgent research subject. Based on transnational corporations' tracks and facts as to their investment strategy transformation in China in the 1990s, the article analyzes systematically various forms of expression and motivation on transnational corporations' investment strategy transformation in China, clarifying the positive and negative economic effects caused by this transformation. By reviewing and assessing systematically the traditional occidental policy theory on absorbing capital, the author thinks that contemporary transnational corporations' investment strategy transformation in China has greatly deviated from the frame of the traditional theoretical explanation and therefore comes up with a new hypothesis-a periodic model on foreign capital absorption policy. In accordance with host country's growing capacity to absorb foreign capital, this model expounds its internal mechanism on the transformation of foreign capital absorption policy and draws a relevant conclusion on improving the efficiency of absorbing foreign capital from this .