Ebook Economic Globalization and Foreign Direct Investment in Shanghai
Economic globalization has become an inexorable and irreversible trend since the end of last century. It is an iterative process that results in increasingly closer economic linkages and interconnections among most of the states and regions of the world, and towards the widening scale and cooperation in the world economy.
The major economic characteristics of globalization are: trade liberalization, production integration and financial securitization, among which production integration is fundamental (ZHANG, 1999). By means of FDI, MNCs have merged national economies into the world market, thus becoming the main carriers and organizers of international production integration.
With the strategy of integrating global production, MNCs have played an increasingly important role in China’s economy. After China’s accession to WTO, even more MNCs will enter the Chinese market.(Wang, 1996) This economic watershed is resulting in fierce competition among and between both domestic and international enterprises.
As Shanghai is a popular city to begin FDI in China, this paper first makes a general survey of MNCs’ penetration into Shanghai since China adopted its reform and opening-up policy more than 20 years ago. Second, the trend is revealed that under the strategy of MNC localization, Shanghai will develop into a global manufacturing base. Third, the paper analyzes the reasons why the export competitiveness of foreign enterprises in Shanghai is increasing. Finally, the conclusion is reached that within the framework of the MNCs’ global network, the economic efficiency of foreign enterprises in China will be significantly enhanced.
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