The New Trends Of Multinational Corporations' Location Choices Of FDI In China

From late 1990s, there are three new trends in Multinational Corporations(MNCs)' location choices for Foreign Direct Investment (FDI) in China. First, compared with the southeast China, the middle-east and northeast China are becoming, more and more favored by MNCs. Second, more and more MNCs start to set up Research and Development (R&D) institutes or Regional Headquarters (RHQ) in China. Third, FDI tend to locate in the regions where many foreign enterprises cluster. This essay tries to analyze the reasons for such phenomena with subjective factors and objective factors. This essay argues that due to the change of FDI investors in China and the rising of the status of China in the world, MNCs' motives of FDI in China are changing. It leads to the change of FDI location selection strategy. Meanwhile, only by good combination of location factors and motivations, can the FDI objectives be carried out. The changes of FDI motives cause the change of more favored location factors by MNCs. The aforementioned new trends are the reflection of the change of location selection strategy. Based on these ideas, this thesis makes some empirical studies on the nationwide FDI, FDI in Guangdong and FDI in Shanghai, from different aspects, in order to further test the developing trend of FDI strategy in China and the change of more favored location factors nowadays. Meanwhile, Dongguan IT cluster is analyzed to test the change.