A case study of German investment in China and the CEECs

Abstract

The issue of EU FDI to China in the early 2000s is intractably associated with the changing composition of the EU and its possible impact on EU FDI flows across regions. A comparison between China and the new EU member countries, in terms of competitiveness in attracting EU FDI after the Fifth Enlargement, emerges therefore as a new possible research avenue. This paper is based on a case study approach. It explores the locational determinants of EU Multinational Cooperations (MNCs) in China, and the interdependence of the EU and Asian markets through the global operations of EU multinational firms. It focuses on the investigation of internationalisation strategies and location choices of German manufacturing MNCs within the background of growing regional economic integration (e.g., the Fifth Enlargement). Two German MNCs in the mechanical engineering industry as well as one German MNC in the Pharmaceutical and Chemical manufacturing industry are the focus of this study.