The Strategic Adjustment Of Transnational Corporations In China And Its Revelations

Reform and opening up more than thirty years, China's economic development has experienced the process from childhood. Transnational corporations①played an important role: TNCs and China's economy have already combined; TNCs have penetrated into all aspects of the industrial chain. Now, Review the history of TNCs'investment in China, The study of their investment and the strategic adjustment process in China is greatly significant for China's economic development.TNCs in China from the start to grow through three stages: 1979-1991 test stage, from 1992 to 2001 mass entering stage, since 2002, we have adjustment stage.In the 1970s, TNCs got a big development. In the 1980s, financial liberalization happened in developed countries. In the end of 1978, China government decided to reform and open up. In such a domestic and international backdrop, TNCs'investment in China came into the test stage. Its features as listed below: First of all, only a few TNCs invested in China. In the midst of them, American companies are in the majority; Secondly, the investment is small, and not systematic; finally, investment locations were on the eastern coastal area mostly, especially some famous cities.In the 1990s, peace and development became the themes of The Times. TNCs as the main character on the stage of world economy, they had great effect. Since 1992, China's reform and opening up carried forward in an all-round way. TNCs'investment in China came into a full-scale entry stage. The main characteristics of this phase are: first, most TNCs started to invest in China; Second, the quantity of investment projects and investment amount increased dramatically; Third, since the mid 1990s TNCs began setting up independent research and development institutions; Fourth, New businesses were mostly of individual proprietorship, and investment locations were concentrated; Finally, TNCs'systemic investment in China strengthened.Entering the 21st century, TNCs adjusted the strategies in the world in response to the challenges of globalization. After China's entry into the WTO, China has also entered a new stage of opening and attracting foreign investment. These changes to TNCs had far-reaching influence; TNCs began to readjust their strategies in China. Mainly displays in: first, increased investment in both ends of the value chain; Second, increased the service investment, industrial structure was more reasonable; Third, adjusted investment mode, actively developed the Mergers and Acquisitions; Fourth, accelerated investment on the research and development; Fifth, implemented comprehensive localization strategy in China. In short, with China's position in the TNCs'global strategy continuing to improve, the competitive abilities and advantages of the TNCs'enterprises in china accumulating constantly, the increasing changes of China's economic environment, TNCs in china carried out more localization strategies, and bore more and more of the value chain activities.The 2008 global financial crisis erupted; TNCs were inevitably under negative effects. Facing the crisis hit, the new adjustment of TNCs included: strategic withdrawal, adjustment of the global layout, restructuring and exploring new market. Our country also was deeply affected by the financial crisis, business environment and investment environment the enterprises facing became harder, all kinds of potential problem also exposed. But TNCs still preferred China as foreign investment host. In strategic layout in China, on one hand TNCs continued the strategic adjustment since China's entry into the WTO, on the other hand had intensified social and environmental responsibility in China, and strengthened the"compliance management". In addition to companies also increased investment to the west and the consumer sectors. 2010 as we enter into"Post Financial Crisis Era", TNCs need to find the cost control mechanism, meanwhile, a low carbon economy and other emerging strategic industries will become the future development direction.In China since 2002 TNCs have adjusted investment strategy, whether they have integrated value chain or increased the merger and acquisition and research and development, these measures are undoubtedly a far-reaching influence for our country economy. And these affects not only have positive aspects, there are also negative aspects. We should see that TNCs in China have put forward the industrial safety threat to a certain extent.The economic development of a country would eventually put up at microcosmic level, one country enterprise development direct determines its economic strength. Reform and opening up is not only to let TNCs come in, more is that our local enterprises should go out, expanding gradually in overseas to growth for our own TNCs. As local enterprises'the best example, their strategic adjustment in our country provides a good revelation: first, Chinese enterprises can accelerate"going out"by overseas acquisitions; Second, break the monopoly of foreign investment, to reshape supply chain; Third, Standardize the protecting commercial secrets related laws, prevent the international commercial spy; Fourth, give financial support to China enterprises going out comprehensively; Fifth, the subject of overseas expansion should be diversified; Sixth, clarify government accountability, perfect laws and regulations, establish protection system of overseas investment; Seventh, quicken the domestic industry integration.This paper mainly research TNCs'investment strategy adjustment and evolution in China since the reform and opening up, and Focuses on the analysis of the characteristics of new investment adjustment after china entering the WTO, especially it analyzes the new trend since the financial crisis. And on this basis, analyzes the positive and negative influences of industries and enterprises in china; put forward the corresponding proposals for Chinese enterprises to go out. The paper based on empirical research and normative research, comparative analysis and reference, in order to realize the combination of systematic and holistic research. The theory and method include: international investment theories, TNCs theory etc.The innovation points include: first, research the new strategic adjustment since the financial crisis and especially the new trend after we enter into"Post Financial Crisis Era". Second, use the U.S.-Japan investment courses to verify TNCs'Investment strategy evolution process in China, and comparatively analysis of the difference between the U.S.-Japan investment patterns. Third, according to the strategic adjustment process of TNCs in China, puts forward the enlightenments for Chinese enterprises to go out.