Will multinational corporations survive China’s Dual Circulation Strategy?

Multinational corporations (MNCs) have long played a major role in formulating foreign policy towards China. More recently, American MNCs played a significant part in promoting trade relations with China and paving the way for the country’s accession to the World Trade Organization (WTO) in 2001.

It is therefore no surprise that as Beijing’s assertiveness prompts a global debate about how to handle President Xi Jinping’s proposal for ‘national rejuvenation’, MNCs operating in China find themselves at the center of this discourse. The future of multinational corporations operating in China, particularly as it embarks on the new Dual Circulation Strategy (DCS), is the subject of this three-part paper by Hinrich Foundation Research Fellow Stewart Paterson.

Section I assesses the importance of MNCs to China, and China’s importance to MNCs. We examine the evolution of MNC activity in China – its scale, scope, and profitability. In Section II, by using publicly available company data, the paper scrutinizes varying types of MNC activity in China. Finally, Section III positions MNC engagement with China in the context of DCS and examines the changing attitudes and the political role the firms play in influencing policy formulation.