The battle for MNC investment heats up

Multinational corporations (MNCs) have become more willing to establish their regional headquarters in China. First tier cities are likely locations as companies compete for a place in the market. Factors often taken into consideration are based on whether a location is investment-friendly in terms of incentive policies, information accessibility, consumption levels, financing resources and government cooperativeness.

Since the 1990s, the PRC government at both the central and provincial levels has successively promulgated legislation with preferential treatment for MNCs. Beijing, Shanghai and Shenzhen, as the widely recognised first tier cities, have issued their own rules for headquarters. But Shenzhen seems far behind compared to the other two cities when it comes to attracting MNCs. This is backed up by the fact that Shenzhen has the least number of existing regional headquarters. According to unofficial and incomplete statistics, 393 regional headquarters of MNCs are located in Shanghai as of September 2012, 121 in Beijing as of August 2012 and only 2 in Shenzhen as of July 2011. This situation may change because of recent legislation issued in Shanghai and Shenzhen.