In the economy-globalization age, multinational corporations are the important interface to thrive the economic growth. To multinational corporations, for the purpose of achieving resources allocation adequately, it’s the best solution to select the optimized location to generate maximum benefit as well as functionality. It’s what we called it as location choice.
To achieve the result of most benefit coming from the foreign investment to Chinese enterprises, China government is doing it’s best to develop more multinational corporations to enlarge the scale as well as effectiveness regarding foreign direct investment. Till the end of June in 2006, the net foreign direct investment was accumulated around $63.6B. Those private owned companies, join-venture and OEM businesses out of China but encouraged by China government are over 9900 in total. They are located all over the world and across 170 countries. The foreign direct investment regarding China is ranking as 17th, the growth rate from 2001 to 2005 are 26%, 25%, 110%, 78% and 80% separately. It also means the foreign direct investment regarding China is growing quickly and stably.
Deploying strategy to develop resources, increase the export weight, get more advanced technologies as well as management skills, utilize foreign investment and deliver enough information as the 1st priority, those Chinese enterprises had been stepped out to become the real multinational corporations as well.
The characteristic for those Chinese funded multinational corporations in terms of foreign direct investment, they are mainly focusing on acquisition and most are concentrated in Asia Pacific. The private enterprises had become the key to be the new power to implement the overseas acquisition.
Electronic fields are one of the most customized markets in China, competition between one another is aggressively, could be thought as the benchmark for the remaining fields for the future development in China. Based on this, the paper will take Haier and TCL to have further investigation as well.
The principle of foreign direct investment which Haier took is going to the difficult part first then to easy part later on. Moving into developed countries first then following under-developed countries. TCL took the opposite strategy compared with Haier. Haier set up global design center, manufacturing bases, financial center, IT, sales branches all over the world, most importantly is they are located at what they are especially strong on the selected field. TCL divided the globalization strategy into two parts-acquired other companies in European and North American markets and built up the new brand for their own in under-develop regions.
According to the research, most types of resources development enterprises are better to have it done in Latin American or Africa. Labor-intensive could be further driven in South East Asia, Latin American and some of East Europe countries which are under developing. Capital intensive businesses are suitable to be deployed in East Europe, Latin American and Asia Pacific for those developed regions. Hi-tech and knowledgeable businesses are adequate to have the investment in Japan, North American and West Europe which has developed quite well.