R & D Investment Of Multinational Companies In China And China's Technology Progress

With the rapid development of economic globalization, research and development is regarded as one of the core function of the multinational corporations (MNCs) and plays more and more important roles in the management strategy. The MNCs change their traditional R&D modes, found R&D centers in host countries and expedite localization strategy in order to enhance their competition advantages, In recent years, along with the speedy promotion of our comprehensive national power and the growing depth of opening to the outside world, the number of R&D centers which are set up by multinational corporations from North America, Europe, Asia in the fields of electronics, information, software, and chemistry has been growing at a fast speed, which is mainly because of China's large market space, booming economy, rich R&D resources and a series of favorable and encouraging investment policies.Under the influence of R&D globalization of MNCs, china has made huge progress in technology and science. However, the final target of MNCs is to obtain the superior profits, rather than promote the technology. For our country, the MNCs' R&D is just like a sword with two blades, including gains and losses. The globalization of multinational research and development, on the one hand, has provided an opportunity for the developing countries and regions to improve their capabilities of technology, but on the other hand, it shows the flinty challenge for china's technology progress. So how to deal with the challenge of the R&D globalization and how to go after the advantage and avoid the disadvantage in the MNCs' R&D localization stratagem are the problems we must face now. The whole paper is divided into four parts and the main contents are as follows:Firstly, the paper discusses the MNCs' R&D localization stratagem with theory and demonstration and studies the cause of MNCs R&D stratagem on the basis of concluding correlated theories written by scholars from the internal and the external. Secondly, it analyzes the motivation, current situation and possible trend. Thirdly, I examine the channels through which technology spillovers occur, including the demonstration-imitation effect, the spillover of human resources, the competition effect, the linkage effect and the cooperation with domestic universities and science institution. Then I discuss the plus and minus effects of technology spillovers on technology progress and economics growth in terms of the flowing of the human resource, the technology advantage and so on. At last, I analyze the obstacles that MNCs might meet in the process of investing and the factors which may influence the technology progress of China from both china and the multinational companies' perspective. Then the paper gives some feasible and innovative advices to the Chinese government on how to use the R&D activities in china to enhance the country's technological development, including the reform of the political environment, the education system, the foundation facilities as well as the favorable policies, and how to distribute the resources effectively and help our own enterprises.The main and valuable point of this text is that the purpose is not attracting MNCs' R&D centers itself but exerting MNCs' R&D centers' technology spillover, driving and radicalization function on china's technology progress. Recently, most of the papers focus on how to attract the investment of foreign R&D, while this paper puts emphasis on how to benefit from the foreign R&D in the technology via the reform of the existing policies in terms of the holding share, the category of the R&D and the industry.