Chapter 9: Entry and Marketing Strategies of FDI Firms in China
9. Entry and marketing strategies of FDI ﬁrms in China Tung-lung Steven Chang The recent inﬂux of foreign direct investment (FDI) ﬁrms into China is a development of the growing concern of multinationals for competitiveness in the global market. Such FDI inﬂows have led to China’s recent dramatic growth in exports. According to the UNCTAD, China received US$53.5 billion of inward FDI (that is 9.6 per cent of the world’s total inward FDI and 12.4 per cent of China’s gross ﬁxed capital formation) in 2003. In the same year, with a trade surplus of US$25.53 billion, China’s total foreign trade (imports/exports) reached US$851.21 billion, an increase of US$230.4 billion (or 37.1 per cent) from 2002. Its total exports reached US$438.37 billion, with an increase of 34.6 per cent from the previous year. More than two-thirds of its exports were generated by foreign-funded collective and private sectors in which foreign multinationals have participated signiﬁcantly. China provides foreign multinationals with opportunities to exploit their core competencies. As its economy continues to grow, China has become not only an oﬀshore low-cost manufacturing site, but also a promising market for both consumer and industrial goods. Recent studies reveal that multinationals view China as a core component in their approach to globalization (BCG, 2003; BCG and KW, 2004). However, owing to its unique business and legal environment, oppressive political system and underdeveloped infrastructure, it is necessary to overcome some diﬃculties in order to capitalize fully...
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