ABSTRACT
The rapid growth of China&s outward FDI in recent years has implied a shift from pure resource- and market-seeking investment to a more comprehensive government strategy to seek advanced technology and knowledge by acquiring leading TNCs, particularly in the consumer-based industries where the value of a prestigious brand is an essential part of the acquisition. This objective, expressed by the national government, should be viewed as not contradictory to the ambition to create and to promote “national champions” in the home-base, but rather to use the competition between the acquired foreign brands and the own state-owned firms to prepare the latter group for the next step towards internationalization. The most spectacular case so far is Zhejiang Geely&s acquisition of Volvo Car Corporation where Geely is promoted to become one of the national champions and to grow outside China, while Volvo builds up a large production capacity in China, but still remains as a global player. We propose in the chapter that this recent phenomenon has given rise to a new “hybrid” category of foreign corporations.
