Interactive Development Between Transnational Corporations And Chinese Domestic Manufacturing Industry

Abstract: In the 21st century, as a major power to accelerate the pace of economic globalization, transnational corporations have tremendous impact on the development of the world. China, as the largest developing country in the world, and with its obvious location advantages, has become an important link in the strategic layout of the global manufacturing industry. Transnational corporations' swarming into China directly influences the development and prosperity of the domestic manufacturing industry. Researches in this field certainly have essential theoretical and practical significance in promoting the position of domestic manufacturing industry in the value chain of the international industry and in realizing a win-win development pattern between Chinese domestic enterprises and transnational corporations.This thesis, with the value chain as a thread running through, presents a careful and in-depth discussion analyzing the issue of the interactive development between transnational corporations and Chinese domestic manufacturing industry. The thesis begins with elaborating the strategy of the value chain in transnational corporations and summarizing the history of transnational corporations stepping into Chinese domestic manufacturing industry (focusing on the changes of the value chain when transnational corporations invest in China).It then analyses the mechanism and effects of the interactive development between transnational corporations and Chinese domestic manufacturing industry. Some suggestions are put forward at the end for the development of domestic manufacturing industry.The thesis consists of five parts.Part One discusses the strategic adjustment of the value chain of transnational corporations. Careful analysis is made of the theories of the value chain, the marketing strategies of transnational corporations, the decomposition and reconstruction of the value chain in the manufacturing industry, the extension of the connotation of the value chain of transnational corporations, and the chief manifestations of strategic adjustmentin the value chain of transnational corporations.Part Two describes Chinese domestic manufacturing industry of the strategy of the value chain in transnational corporations, chiefly about the new features of value chain-based strategies of transnational corporations, transnational corporations' entry into China and the value chain of their investment in Chinese manufacturing industry, as well as the characteristics of the process of transnational corporations' stepping into Chinese manufacturing industry.Part Three involves the interactive mechanism between transnational corporations and Chinese domestic manufacturing industry. The relationship between transnational corporations and Chinese domestic manufacturing industry is no longer of an affecting-and-affected kind, but a mutually affecting, mutually relying on and interactive relationship. This relationship, if properly applied, will bring about win-win effects. The analysis is firstly made from the perspective of the value chain, i.e., by analysing the different positions transnational corporations and Chinese domestic manufacturing enterprises occupy respectively. The analysis is also made in light of the location advantage theories, particularly by applying the F.Southard theory to the analysis of the location advantages of China and the development of transnational corporations in China. This part finally analyses the interactive factors, including the political environment, the economic system, the legal institutions, the adjustment of industrial economic infrastructure, as well as other factors.Part Four focuses on the interactions between transnational corporations and Chinese domestic manufacturing enterprises. First, transnational corporations help the development of Chinese domestic manufacturing enterprises, as can be seen from the mechanism, the speed, the quality and the beneficial result of the output increase of the manufacturing industry. The chief means of enhancing is via the technology-outflow effect. Seco...