China’s Multinational Corporations: Then and Now

Abstract

Discussions of policy evolution and debates in the last chapter show how China has wrestled with its changing attitude towards multinational corporations in the global economy, from looking at them as part of the problem for world economic development to embracing them as part of the solution for its economic modernisation. It is at best, however, only half of the story of the political economy of China’s emerging global businesses. This chapter examines transnational operations conducted by the Chinese government and enterprises before 1978, and discusses specific policy innovations significant in the early transnationalisation of Chinese businesses. In this chapter, we also tell the story of the steady growth of China’s outward investment and rapid emergence of transnational businesses headquartered in China. Accordingly, this chapter seeks to address a number of questions that are of great interest. Were there any transnational operations and investment activities by the Chinese government and enterprises before 1978? When and how did the Chinese multinational corporations first emerge? And to borrow from Raymond Vernon, ‘Where are they coming from? Where are they headed for?’ (Vernon 1992). How does China’s outward investment promote the transnationalisation of Chinese firms?