The New Tendency Of TNCs'R&D Investment And Effect On China

Transnational corporations (TNCs) always are the main sources of technology innovation, and their strong R&D ability guarantees their survival and development, so TNCs pay more attention to R&D investment. At the beginning, in order to prevent the technical overflow and maintain their leading position, TNCs generally concentrated their R&D activities in their motherland. From 1960s, many TNCs started to undertake R&D activity in their overseas subsidiary companies, since then the overseas R&D activity proportion has increased unceasingly. After 1980s, TNCs gradually moved their R&D activity centers abroad. TNCs'R&D investment globalization tendency is more and more obvious. The last century TNCs'R&D investment mainly centralized in the developed countries who invested mutually. Enterring the 21st century, TNCs'R&D investment has some new trend, that is TNCs expand their R&D investment to the developing countries, China and India will become the world's R&D centers. After the first R&D organization which was set up at 1994, TNCs have already built 980 R&D organizations in China until 2006. This article analyzed the new tendency of TNCs'R&D investment expecially their R&D investment in China, and also discussed its effect on China, finally proposed suggestions on policy of attracting TNCs'R&D investment and measure of avoiding the negative effects.The article is divided into five chapters. The first chapter is TNCs'R&D literature summary, it mainly introduces the domestic and foreign research results which are the rationale of this article.The second chapter is new tendency of TNCs'R&D investment; this chapter discusses the reasons of TNCs R&D investment abroad.The third chapter studies present situation of TNCs'R&D investment in China. The main motive for TNCs to invest R&D center in China is abundant R&D resources and big market. Economy, science, technology and environment influence transnational corporations'R&D position choice. The fourth chapter discusses effect on China. Transnational corporations'R&D brings the huge opportunity for our country, at the same time they also bring the impact and the challenge to us. Generally speaking, positive influence is bigger than the negative.The fifth chapter is the countermeasure and the suggestion; it is the most important chapter in this article. India will become the strong competitor of China in attracting TNCs'R&D investment. After comparing India with China from aspects of resource, culture, industry enviorment and government policy, this article points out that the advantanges of China are big market and good foundation facilities, the advantages of India are excellect R&D resource and good intellectual property protection, and also discusses how to attract TNCs'R&D investment and how to suppress their negative effect in this chapter.