Determinants of local responsiveness of FMNCS in mainland China

Abstract

Recent regulations, associated with China’s accession to the World Trade Organisation (WTO), specifically Decree 113 and Decree 114, have largely changed the situation for foreign multinational construction companies (FMNCs) operating in mainland China. A field investigation has identified that local responsiveness is critical for FMNCs to survive and develop in the complicated and uncertain Chinese construction industry. Government policy, China-specific construction industrial factors and increasing competition intensity imposed by local competitors are recognized as the major determinants driving local responsiveness of FMNCs. This study has also examined that localisation of internal resources, establishment of local networks and cooperation or strategic alliances with local contractors and design institutes are the key local adaptation strategies for FMNCs operating in mainland China