By Long Guoqiang　

Date: 2004/12/02

Abstract:

To attract multi-national companies to set up research and development agencies in China is a new measure with the purpose of better using foreign capital. This paper analyzes the motivation of the multi-national companies to set up R&D institutions in China, the spill-over effect to the host country, and the possible crowding-out effect in the meantime. It is pointed out that at present, because of the restrictions set by current policies, the spill-over effect is far from being fully displayed. The point is to maximize the spill-over effect of the R&D agencies under foreign capital, and adjust regulation policies accordingly.