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Handbook of Research on Asian Business

Edited by Henry Wai-chung Yeung

The rise of Asia as an important region for global business has been widely recognized as one of the most significant economic phenomena in the new millennium. This accessible and comprehensive Handbook brings together state-of-the-art reviews of Asian business in an expansive range of areas including: business organizations; strategic management; marketing; state–business relations; business and development; and business policy issues.
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Chapter 9: Entry and Marketing Strategies of FDI Firms in China

Tung-lung Steven Chang


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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