Study On TNCs' Technology Transfer And Chinese Technology Advancement

New-classic growth theory suggests technology advancement is the most important source of national growth. There are two ways for a country to acquire advanced technology: 1) research and development at home, 2) import from overseas. However, as far as the majority of developing countries are concerned, R&D at home means large capital investment. As the developing countries are not able to afford the R&D expenses, they choose the later way of importing technology from overseas. At present, under the background of economic globalization and integration, transnational corporations (TNCs) promote the flow of such traditional production factors as capital and labor. Moreover, TNCs play increasingly important role in global technology transfer and diffusion. Foreign researchers have taken up the study of technology diffusion since 1970s. The impact that TNCs' technology diffusion made on host countries technology improvement becomes a hot research topic. Since the beginning of 1990s, foreign direct investment has emerged at a high speed. As the TNCs' technology investment increases, Chinese researchers began to study and discuss TNCs' technology diffusion effect on china. Since 2002 China has annually absorbed more FDI than any other countries in the world. Meanwhile, the technical activities TNCs have taken increases a lot and have some new characteristics.In this paper, the author sums up the technology diffusion theories created by both foreign and domestic researchers. On the basis of these theories and combining the FDI's technical activities, the author studies and analyzes the effect of TNCs' technology diffusion from the aspects of micro-economy, industries and enterprises. The author uses different methods like ecomatrics analysis, statistics index, and questionnaires. In the end, the author shows some countermeasures and suggestions in terms of the current problems and limiting factors.