New face of globalisation, Foreign Direct Investment and technology capacity building in China

Abstract

The paper reveals that contrary to its significant contribution to China's economic development, FDI has in the past played a limited role in transferring technology and contributing to local technology capacity building. It analyses the problems and challenges for China to benefit from FDI for its technology capacity building and the possible policy strategies that China could apply. It points out new opportunities to change this situation given the soaring interest from Multi-National Corporations (MNCs) in relocating R&D centres to China and the country's new strategy as IT outsourcing destination under the changing international trade patterns. In conclusion, it provides three alternative S&T strategies related to the use of FDI and the policy implications of the proposed strategy.