R&D Activities By Multinational Corporations In China

R&D plays a central role in the new theory of economic growth. It is the driving force underneath the technological advancement. As the core of strategic implementation for enterprises, R&D was once a close-location activity. However, the growing trend of globalization challenges multinational corporations to face the increasingly diffuse and diverse networks of R&D laboratories in host countries. China, being one of the world's largest recipients of foreign direct investment from the world, is evidently a major destination for R&D investment from foreign enterprises. This paper examines the driving factors for internationalization for R&D activities and the evolutionary processes of MNC's R&D settlements in China. Characteristics of the foreign R&D activities in China include geographic, functional, typological and financial statistics are overviewed. Along with the risks and rewards of running R&D operations in China, barriers from policy environment, local market and human resource management are identified and discussed. This paper concludes with in-depth analysis designated to managerial and strategic implication for conducting and/or starting up R&D activities in China.