The role of local Multinational Companies in enhancing the competitiveness of the Chinese Industry: Case Study of Huawei Technologies and the Information and Communications Technology Industry

Abstract

Over the past two decades, the Chinese economic development has received a lot of attention. From a planned and relatively poor economy, it has become the worlds second largest and the worlds first exporter. In the beginning, western Multinational Companies (MNC) have invested massively in China and was in integrant part of its development. Nevertheless, over the past few years, Chinese Multinational Companies started to emerge on the global stage and, more importantly, started to invest massively in developed markets such as Europe and North America. Previous research have already investigated this trend notably how it compares to traditional theories developed on Foreign Direct Investment. Based on Moons imbalance theory, the thesis seeks to understand how these investments affect Chinas industrial competitiveness. The hypothesis therefore states: Chinese MNCs through their internationalization process contribute to the development of the Chinese Information and communications technology (ICT) industry. In order to investigate, the case of Huawei Technologies and its impact on the Chinese ICT is studied thoroughly. Huawei was chosen due to its prominence on the global stage and the position it has as a pioneer in outward FDI. This case can help to demonstrate how Chinese MNCs global operations can upgrade the competitiveness of the Chinese industry and how investing in more developed market can be positive for both the company and the home country. It appears that it is the case through its activities within the Chinese ICT clusters and through the global sourcing of assets upgrading the firms activities.