On entering the New Year some multinationals sent congratulations by expressing intentions to invest in the construction of R&D centers in China.
Meanwhile the Chinese Commerce Ministry disclosed a statistic saying that by the end of last year foreign investors have, in various ways, set up close to 700 R&D centers in China.
Foreign investments in China in actual use topped $60 billion last year, which were the largest worldwide. What is worth noting is their gold content. Foreign investments are tending more and more to be injected into high-tech areas with high added value.
China is becoming the target of technology-intensive investments for multinationals. In the process R&D centers are the bright spots. Compared with the labor-intensive investment-dominated projects in the 1980s and capital-intensive investment-dominated projects in the 1990s this investment-attracting structure, which is dominated by technology-intensive investments, has greater potentials and is more competitive.
One of the newest tendencies in international investment is the growing globalization of R&D and technological innovation. The most obvious is the increasing number in recent years of overseas R&D centers set up by multinationals. For example, more than 10 percent of the Japanese manufacturing companies with over 1 billion yen registered capitals have overseas R&D centers while the US, with its natural advantage in high technology, has become a "magnet" where foreign companies set up most R&D centers. In view of current utilization of foreign investments, if it is to take an advantageous position in the international economic and trade pattern China must strengthen cooperation with multinationals, shift from emphasizing on quantity to quality and put importance on the selection of investments instead of the attraction of investments. It can no longer afford to blindly absorb itself in making foreign investors select some more land, start up a few more factories and buy some more equipment. Instead it should make breakthrough in the key link of research and development, so that it can establish new partnership with multinationals.
China's current foreign-invested R&D centers are concentrated in industries such as computer, communications, electronics, chemical industry, automobile and medicine etc. Its huge market capacities, high-quality human resources and relatively complete R&D infrastructure make more and more multinationals hand out "olive branches" to China's R&D fields. Companies such as Motorola, Microsoft, GM, Lucent, Samsung, IBM, Dupont, P&G, Ericsson, Nokia, Siemens and so on, they all target China in starting R&D projects. China's long-term investment prospects are better than most other regions in the world. R&D centers spearheaded by technology, to a certain extent, narrow the gap between the Chinese side and the foreign side and are hopeful to become the engine of China's sustained growth of foreign economics and trade. Most of the hi-tech export in China came from foreign-invested companies last year. It can be foreseen that the development of R&D centers will bring even more considerable benefits of investment attraction.
Of course, compared with other countries R&D centers set up by foreign investors in China are, in general, still at the starting phase. They are still far inadequate both in terms of profundity and extent and need to further adjust their way of thinking, perfect policy and improve environment. Faced with the uncertainty of investment by global multinationals China, which for many years tops the world in attracting investment, needs to pay attention not only to attracting more foreign investment but also to ways of raising the ability to capture "win-win" as much as possible from foreign investments. Projects similar to R&D centers are, without doubt, the wise choice of adjusting to the new situation.
Moreover, the multinationals' setting-up of R&D centers is systems engineering. When these giants select sites in China the things they value are no longer limited within "hard" and "soft" environments. Instead they expand their vision to things like whether the location has certain manufacturing and R&D potential, the industrial chain there is complete, corporation groups are concentrated there, the trans-regional economic zone is large enough, opportunities for the existence and development of investors are many and local corporate culture in general is affinitive to commerce etc. "The waterside flower pining for love sheds petals, while the heartless brook babbles on - unrequited love", as the saying goes. International capitals have always been going after profits. To attract more R&D centers we must first come up with more active "nesting" attitude.
