Transnational Corporations' Changes In Investment Strategies And China' Adjustment In Foreign Capital Policies

One long-term of China' policies is to make use of foreign capital in economic construction and China has made great achievement in utilization of foreign capital, especially foreign direct investment which has been playing great role in China economy. With China' entry into WTO and furthermore development of economic globalization, transnational corporations have changed greatly their investment strategies in China. In order to adapt with new situations, China' foreign investment policies should change from privileges-affording which is out of date into competence-enhancing. For study of that purpose, the main contents of this thesis are composed of five facets:Chapter one: Preface. One prominent feature in China' foreign capital utilization after China' entry into WTO is the changes in investment strategies of transnational corporations in China market. In this first chapter, the background and evaluation of this research are introduced. Also previous researches on this thesis have listed and the research object is definitely outlined for aiming targets.Chapter two: Theories of transnational corporations. This chapter introduces the overall development of transnational corporations both in international and China market. Also the models and motivations for transnational corporations' entry into China market are analyzed.Chapter three: The changes and relevant reasons of investmentstrategies of transnational corporations. With development of economic globalization and knowledge economy, transnational corporations have adjusted their investment strategies to keep accordance with new conditions. As is the fact that China market belongs to the global market, rapidly increasing development and improvement of investment environment stimulate transnational corporations to make adjustment.Chapter four: Analysis on theories and practice of China' foreign investment policies. This chapter analyzes the internal and external factors for China' utilization of foreign capital on condition that a big surplus of capital exists and theories on foreign direct investment are no longer applied into China. The utilization of FDI is to improve efficiency of Chinese investment and economic structure.Chapter five: Countermeasures for China to deal with changes in investment strategies. As transnational corporations' investment with their own purposes which usually unfamiliar with China' targets, China has confronted greatly challenges brought by transnational corporations. The previous privilege-affording policies can't be adapt with new conditions and need to be adjusted into competence-enhancing model which is consist of absorption, guidance and supervision. Thus China can make good use of foreign capital in improving economic organization, enhancing competence ability of domestic companies and efficiency of China investment.Methodologies of theory-practice, feature-amount has applied into research. New findings and innovations has also made in this paper: the foundation of models of absorption foreign capital especially FDI from transnational corporations.Finally, some constructive suggestions have been put forward in this thesis which include: China should transforms previous " privilege-affording" policies into "competence-enhancing" model to deal with new conditions resulted from transnational corporations' changes in investment strategies. Also, China should draws up new regulations to supervise foreign investment on behalf of China' economic safety.