Since the mid-1990s, the global top 500 have gradually made their way into China. The phenomenon of so many world-class transnational companies investing in one country has rarely occurred in world economic history. Insiders have made the following analysis of these companies' investment strategy in China:
   
       Industrial distribution: Projects funded by the global top 500 in China involve oil, chemical, electronic, machinery, meters and instruments, computer, telecommunication equipment, household electrical appliances, transport facilities, medicine, food, beverage and light industries, as well as real estate, information and consulting service, logistics management, banking and insurance, import and export trade, catering, recreation and other service sectors.
     
       Location: More than 90 percent of the projects funded by the global top 500 are located in coastal provinces and cities such as Shanghai, Guangdong, Beijing, Jiangsu, Tianjin, Liaoning and Shandong, and more than 80 percent of the knowledge-intensive projects funded by the global top 500 involved in banking, insurance, management consulting and accounting sectors are situated in Beijing, Shanghai, Guangdong and Tianjin.

       Ranking: Electronic and electrical industries come first in terms of the number of projects funded by the global top 500, followed by auto, motorcycle and auto parts industries, chemical industry, food, edible oil and beverage processing, metallurgical and hardware industries, banking, insurance and leasing companies, textile and clothing industries, oil, petrochemical and light industries, import and export trade and warehousing in bonded zones, and machine-building and telecommunication equipment manufacturing. Enterprises funded by companies in the list of the global top 500 play a significant role in sectors featuring an economy of scale and a distinct trend of economic globalization, such as the auto industry.
   
       Categories of investment strategy:

       --Low-cost strategy. Companies of this category strive to lower their production costs by taking advantage of a scale economy, accumulated experiences, optimized design, ideal location and the timing of market access. P&G of the United States, for instance, has developed localized products catering to the tastes of Chinese consumers, which helps the company meet its low-cost expansion strategy in China.
   
       --Variation strategy. Enterprises adopting this strategy attract consumers to their high-priced products by offering unique and name-brand products accompanied with special services. The Shandong Matsushita TV Co. funded by the Japanese Matsushita Electric Industries has developed high-definition digital television suited to the Chinese market. Despite its high price, the product has snatched an increasing market share in China.

       --Systemization strategy. Companies pursuing this strategy have expanded their investment from a single project to a product series or an industrial system. Siemens, of Germany, for instance, has established jointly and exclusively funded enterprises, an R&D center, trading companies, and management and training centers in China. In addition, it has set up a holding company and regional headquarters to assist, serve, coordinate and manage its enterprises in the country. This has further systemized its investment procedures.

       --Merging strategy. Foreign investors seek to enter China's market by purchasing or merging with Chinese enterprises. This practice, requiring Iow costs and limited time, helps the merged businesses to expand quickly and enables the investors to swiftly occupy a potential market, share the partners' resources, develop an economy of scale, lower operational costs and enhance their capacity to guard against risks. An example is the Kodak Co. of the United States, which has succeeded in purchasing China's sensitive materials enterprises.
   
       --Localization strategy. Given the growing market force and regional and comparative advantages of China, the global top 500 have endeavored to localize the production of components and parts, as well as design, R&D and the use of human resources.