A Research On Localization Strategy Of Foreign Chemical Enterprises In China From The Perspective Of GVC

Since the late 20th century to the beginning 21st century,the international division of labor model of significant changes have taken place to reflect a global scope and use of resources to effectively integrate.With the aggravating competition,multinationals increasingly felt that it was difficult to deal with fierce competition effectively on their own strength,and is adjusting their development strategies,such as low-end processing and assembly areas will be outsourced to retain the most competitive process,which are core resources including the most lucrative research and development,brand,service,marketing channels.The global value chain integration is the best theory to explain the current pattern of this division.The chemical industry as a major part in the manufacturing industry,also presents the obvious international division of labor,production manufacturing and other low value-added industries are migrated to the representative of the developing countries,such as China.In the initial stage of development,due to the low cost of production factors and preferential policies to attract foreign investment,foreign chemical enterprises have developed rapidly.But as the rapid development of Chinese economy,the labor cost has increased greatly,meanwhile,product demand structure has also changed,in competition with local enterprises,a part of foreign chemical enterprises gradually lost their competitive advantage,limited to our policies on foreign enterprises are strict,the foreign funded enterprises in China's development are facing great challenges.Based on the theory of global value chain and the national value chain theory,and GVC curve as the model tool,the paper analyzed the localization of the foreign chemical enterprises in China,the theory origin and the national value chain,propose that the foreign enterprises take the domestic market as the guide and form the national value chain oriented labor division mechanism.In the empirical part,taking BASF,the largest foreign chemical enterprise in China,as an example,to seek the evolution trend of exploration of the value chain through the research on the localization strategy of the three links in the BASF GVC curve,and combined with the formation mechanism of the national value chain,and deduced the conclusion that foreign chemical enterprises should form a localization strategy model which is NVC oriented and under the framework of GVC background.In the end,the author offer some proposals for further development.