The Empirical Study Of The Transformation Of US Investment Strategies In China Under The Context Of Global-rebalancing

The outbreak of global financial crisis in 2008 made the issue of unemployment and international trade imbalance in US prominent due to the hollowing-out of the US manufacturing sector. Since then, the traditional economic development mode of US has been challenged, US has made great efforts to implement its “Global Rebalancing” policy around the world, and began to withdraw its manufacturing plants from the developing countries, especially from China. Thus, last several years have already witnessed an “inverse transfer” of the real economy from the developing countries towards the developed countries.China and the United States are the largest developing and developed country in the world respectively, the game and cooperation between which should play a very significant role in shaping the world’s whole economic structure. Although there have been extensive researches on the investment strategy of the US in China, the study on the recent transformation of US investment strategy in China under the context of global rebalancing is very rare. In order to fill the gap, this paper re-examines US new investment strategy and its spillover effects in China from macro, middle, and micro levels respectively.The whole logic of the paper is designed as followed. First, by reviewing and analyzing historical data in a macro-level, this paper reveals the logical fallacy ofthe withdrawalstrategyof US manufacturingsector. Second, by examining China’s institution-building process and outcome, which could be considered as a topic in a middle-level, this paper discusses whether there would be an arbitrage intention to seek institutional benefits among US transnational enterprises in China, and proposes several suggestions on how could China attract high-quality foreign investments. Third, by inspecting the influence of US transnational enterprises’ strategic priorities on their Chinese head offices’ rank-setting strategy in a micro-level, this paperfinds that the establishment of regional head offices in China are generally driven by the traditional factors and endowments rather than the creative factors and endowments in China, and advocates that China should develop its “Head Office Economy” in a green, high-tech, and efficient manner. Finally, by exploring the effects of external experience accumulated in a host country on later arrival’s imitating propensity and outcome in a micro-level, this paper proves the existence of the US transnational enterprises’ cognitive dissonance in China, and verifies the U-shape effects of host country related external experience with a very different cultural background on a later foreign entrant’s imitating propensity and outcome.This paper has several theoretical, practical, and contemporary contributions.In the perspective of theoretical contributions, first, this paper supplements the theory of “Head Office Economy”, and creatively discusses the quality of the head office economy from the angle of the ranks of head offices. Second, this paper extends the inter-organizational learning and imitation theory by verifying the opposite U-shape effects of host country related experience on later foreign entrants’ imitating propensity and outcome.In the perspective of practical contributions, firstly, this paper finds that anti-corruption and fraud can strengthen China’s achievements in establishing a fair and legal investment environment. Secondly, by illustrating the impact of a transnational company’s strategic priority on ranks and authorities of its head offices, this paper comes up with some advices for a host country to develop a high-quality “Head Office Economy”. Thirdly, this paper reveals the arbitrage intention of the US transnational enterprises to seek institutional benefits, and gives advices for China to keep some bad-quality foreign investments out.Last but not the least, the logical fallacy of America’s manufacturing withdrawing strategy,which is revealed by this paper reveals,has a significant contribution in this contemporary world.