Culture in the PRC: The Role in FDI and Its Evolution

As the second largest economy in the world and one of the BRIC countries, China has been a major inward FDI receiver and competing ground for MNEs. Entry mode strategy has become a critical factor to the success of MNEs in China. Common among different approaches is sensitivity to the cultural nuances of Chinese society and, in particular, to the norms of government actors at the Central, Provincial and Local government levels. The role of culture in inward FDI presents unique challenges and opportunities to MNC's in establishing a presence in one of the world's largest market. Entry strategies are discussed as well as the role that culture played in specific MNC's entries. The recent anti-corruption campaign in China has brought much attention from the outside world. Its impact on MNEs business model in China was discussed in this study. Implications for HR practitioners and managers are reviewed as well.