Research On The Location Choice Of TNC's Regional Headquarters And China's Economic Development

After World War II, the world economy experienced an unprecedented wave of development in various countries and regions, which has a great relationship with transnational corporations'expansion. Transnational corporations has brought the flow of merchandise, capital, human resources, information technology and other factors of production in the world, the foreign direct investments for the developed countries, especially for developing countries, are resources of finance and technology. With China's rapid economic development, China's status of global strategy for transnational corporations is rising. More and more multinational corporations are investing to China, especially in the production, marketing and other aspects of the industry chain, more and more multinational corporations demand to set up regional headquarters in China, in order to achieve systematic management of investment in China, to coordinate research and development activities in China, and to strengthen its surrounding areas management.To better understand the reality of the situation of location of regional headquarters of transnational corporations, but also to explore the factors that could promote and restrict the choice of transnational corporations'regional headquarters, and verify the effects that the location of transnational corporations'regional headquarters could bring to the corporations, the host country and the region, as well as the relationship between the choice of location of transnational corporations'regional headquarters and China's economic development, this article bases on the existing literature and analysis results, grooming and developing the theoretical research related to regional headquarters, and from a global and localization point of view to analyze this topic, specifically including: (1) start with the related concept definition of this topic, research on the transnational corporations and its regional headquarters definition, type, motives and functions; (2) start with the theory of space economics and international economics, study the theories basis that can explain the location selection of regional headquarters of transnational corporations; (3) research on the effects of location selection of transnational corporations'regional headquarters to the companies, the host country and the regional development; (4)study the typical cases in a global and in-depth way; (5) combined with the actual situation of China's economic development, research on the strategy of China.From a theoretical level, the regional headquarters of multinational companies are the region's policy makers, the coordinator between various subsidiaries and also the coordinator between the company headquarter and the host countries. From a practical level, different governments have different definitions about regional headquarters of transnational corporations, especially for the developing countries. The emergence and development of regional headquarters of transnational corporations are the results of both internal and external factors. The so-called internal factors refer to its own business strategy, organizational structure, competitive advantage and so on. While the external factors mean that regional headquarters of transnational corporation are found because of the integration of the world economy, international cooperation, industry clusters and so on.The impacts of the selection of multinational regional headquarters location come from two aspects, the endogenous demands and the exogenous demands. The endogenous demands include financial management need, marketing need, research and development need and strategic development need. The exogenous demands include resources need, human resources need, and city upgrade need and so on. The effects of the selection of multinational regional headquarters location are clear, which could be summed up into three levels. First of all, the selection of multinational regional headquarters location could expand market, control costs, get innovation and enhance the strategy and brand to the companies themselves. Secondly, it can gather industries, increase taxes, increase employment and improve social capital and so on for the host countries. Thirdly, it has some effects on the economic, political and cultural aspects to regional area.With China's rapid economic development, China's status of global strategy for transnational corporations is rising. More and more multinational corporations are investing to China, especially in the production, marketing and other aspects of the industry chain, more and more multinational corporations demand to set up regional headquarters in China, in order to achieve systematic management of investment in China, to coordinate research and development activities in China, and to strengthen its surrounding areas management. Besides, the rising status of China's economy in FDI, the expansion of China's market and the rapid development of some big cities are also the reasons.Regional headquarters of transnational corporations in China has some special characteristics: from the geographical distribution point of view, the regional headquarters of multinational corporations is concentrated geographical selection, mainly in Beijing, Shanghai and Guangdong, particularly in the first two cities; from the function point of view, the establishment of investment companies and regional headquarters that built by transnational corporations are late in time, most of their functions are about distribution, R&D, clearing and management, but mainly concentrated in the general services fields, such as investment, coordination and management, and market research; from the Government's supervision point of view, China's laws and regulations are lagging behind; from the investment point of view, transnational corporations would rather like to set up wholly owned enterprises or joint venture in order to controlling stake; from the economic effect point of view, regional headquarters of multinational companies will bring a more advanced science and technology and business management to enhance the internationalization and competitiveness of the region.Based on the sentences above, it is necessary for China to take measures to attract more multinational companies, but also should be avoided the hidden contradictions in this process. China should environment platform for the regional headquarters, such as a stable social environment, good environment and the legal system, business environment and strengthens the building of human resources. While, in this process China has not only to respect the laws of the market and play a guiding role of government's macro-conflicts, but also to resolve the contradictions between arresting foreign corporations and cultivating own companies. It is necessary to improve the city environment and different part of the city. At the same time, in this process, we should also avoid disorderly competition and duplicate construction, try to avoid the negative effect of the establishment of multinational corporation headquarters but also can not ignore the development of small and medium sized companies.