Asia’s International Trading and Finance Centres
Edited by François Gipouloux
Chapter 4: Regional Headquarters for Multinational Enterprises in Chinese Cities: Strategies for Location
4. Regional Headquarters for Multinational Enterprises in Chinese cities: strategies for location Christine Hung INTRODUCTION In an attempt to attract the Regional Headquarters (RHQs) of Multinational Enterprises (MNEs) to Mainland China, the Central Government (Beijing) is not only faced with competition from regional hubs, such as Singapore and Hong Kong, but also from well-established internal rivals, such as the Shanghai and Guangzhou municipal governments.1 More and more MNEs have been heading towards Chinese cities such as Shanghai, Guangzhou, Shenzhen and Beijing. The ‘Headquarters Economy’ of these cities ‘extensively attracts the MNEs, international financial centers, enterprises, and groups to set up the head offices and the R&D, operational and procurement centers in order to develop the Headquarters Economy’.2 Understanding the location strategies and decision-making of MNEs is a key task for developing their global markets. The main questions revolve around localisation and local competitiveness of enterprises, the impact of regionalism, conglomeration and industrial clustering, mode of entry, strategic location choice, 3 relocation and public functions in China. The RHQs that have been set up are between the global headquarters of MNEs and national markets; they enable overseas MNEs to better understand, for example, local consumers or business practices. American, Japanese and European MNEs, such as GE, Siemens, Hitachi and Rhodia have located their RHQs in a number of different Chinese cities. In this chapter, the location strategies of RHQs of MNEs in different Chinese cities will be examined. It consists of three main sections. The first Kroymann (2005), pp. 67...
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