commercial service and construction are the main sectors that directly benefit from Coca-Cola operations. In order to sell Coca-Cola’s products, the sells department in the downstream network offered other 50,000 work positions opportunities. The total number of providing job opportunities by Coca-Cola bottling system is nearly 400,000, which is the 32 times of its direct employees. On the other way, these information means every 100 thousand RMB be injected in Chinese market, it may create almost 6 job position opportunities.
From 1992 to 1996, over 95% foreign taxation that came from foreign investment firms accumulated to 211998 million RMB, (without customs and land tax) the annual rate of growth achieved to 58%, and the foreign taxation occupied the national industrial and commercial taxation from 4.25% in 1992 to 11.88% in 1996. About 99.3 billion RMB of foreign taxation in 1997 had increased by 29.97% at the same period in 1996, which occupied the 13.16% of national industrial and commercial taxation. In 1998, the foreign taxation had raised to 123 billion RMB, which had a increasing of 25.94% at the same period of last year. It occupied 14.38% of national industrial and commercial taxation. The similar phenomenon happened in 1999, there was a growth in foreign taxation. The net growth of taxation had enhanced to 41633 million RMB, which occupied 23.66% of national net growth quantum. The Coca-Cola bottling system had improved the economic expansion, also increased the government income simultaneously. The Coca-Cola system would generate about 1.6 billion RMB in tax revenue annually for Chinese government. Observe also that the final tax revenue share of national income (1.2 billion RMB) is more than 3 times that of initial tax payment of the bottling system.
2.3.4 Other impacts in China by multinationals
Technology transfer
Multinationals may actuate technology (knowledge and technical ability) transfer to
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other nations, which called technology transfer. Technology just like a kind of infection, the more people contact it, the farther and faster it could transmit. People in China could understand the products from others countries through global business. The FDI have offered a more effective channel to transfer technology. When the multinationals which have technology advantages establish subsidiaries in China, the personnel relationships between subsidiaries and local firms would be more frequent than parent companies, and also more close. When a foreign firm has manufactured an outstanding product that is very popular in customers groups, other enterprises are under threat. In order to survive, the local firms have to innovate their products and improve the quality.
Coca-Cola Company’s soft drink products need good glass bottles which could sustain 32 atmospheric pressure, but the bottles produced from China could only sustain 16 atmospheric pressure in 1980s. Then Coca-Cola requests the exports from abroad offered the request glass bottle technology to Chinese glass bottle manufacturers.
Some other cases show the technology transfer is the airplane manufacturing business in China. Due to the Chinese appropriate and vast economic market, the famous airplane manufacturers from developed countries have settled on the Chinese market to be the sales source. But Chinese government insists if the foreign firms want sells their planes to China, they must separate several plane components contracts to Chinese manufacturers. This technology transfer would help China study the airplane manufacture skills, and producing Chinese own planes itself ultimately. At last, the three largest airplane manufacturers Boeing, Airbus and McDonnellDouglas established their own factories in China and produce the cabin door, empennage and a great deal of other components. (Robert J. Carbaugh, 2002: 290)
2.4 The transformations in China after attracting foreign investment.
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2.4.1 Transformation of GDP in China
The increased GDP year by year was the best evidences that prove the Chinese economic excellent development. The national statistics office issued the changes of GDP in nearly past years. Since 2003, Chinese economic growth rate kept a relative stable level which is almost 10%. The rate in 2003 was 10.0%, 10.1% in 2004 and 10.4% in 2006. The GDP in 2006 was 20940700 million RMB, which reached the 10.7% growth rate. From this good impetus, lots of industries had been influenced since those years the FDI entered into Chinese markets; the first industry had an increase value of 2095600 million RMB in 2004, which occupied 13.1% of GDP. The growth rate in second industry was 7390400 million RMB, which increased 151700 million RMB to last year and occupied 46.2%. At last, the rising value in third industry was 6501800 million RMB, and occupied nearly 40.7%. (see Appendix 5 )
4.5.2 The transformation of employment in China
On the basis of research of global trade and economy research laboratory, there are over 20 million direct employees in almost 150 thousand of foreign investment firms in China, which occupied 11% of national non-agricultural employment population. It is becoming one of the most significant channels to solve the employment problem. If we consider the employment opportunities that foreign investment in processing and trade business, the direct and indirect employment opportunities created by foreign investment may reach 30 million.
Employment in China was the largest and most distinct part that impacted by multinationals in Chinese economic market. First, multinationals came into China, they must have powerful economic strength to exploit Chinese market, so a large number of operating post would be provide to Chinese society by the company itself. However, the physical truth of employment is not this situation. A company’s
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business running actually may drive a lot of other industries’ operating. Sometimes it also could motivate many competitors expand operating and employ more people. For example, Coca-Cola spend $100 to purchase sugar as the raw material expenses, then the sugar manufacturer could use the $100 to purchase automobile as the
transportation, furthermore, the automobile manufacturer purchase other supply with this $100. And every stage this $100 passed by, it will create some employment position in each relative industries. Go round and round, we could not say one company only has contribution to employment to itself, the employment contribution content of the company and the every links of society producing that the company has effected.
4.5.3 The transformation of living standards in China
According to the respondents of questionnaire survey, the general trend of people’s living standards is good, and most of people’s reflections in income, expanses, savings and ability to pay indicate the good tendency in living standards. As indicated in Figure 1, of a total of 100 respondents, there were 71 people had felt the Chinese economy is getting better, and only a small group people felt worse of it, equaling to the percentage of 71%, 16% and 13% respectively. The people who satisfy the current Chinese economic situation are over 2 times than the summation of other two groups.
Figure 1: The level of current economic situation in China of the respondents
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71 16 13 Satisfactory Indifferent Non-satisfactory
Source: Survey Data (Q1 in Appendix 2) n=100
With this flourishing trend of Chinese economic development, Chinese people now have more income and expenses than before, and the situation is getting better day after day. Figure 2 and 3 show the people’s cases whether they have a increase in income and expenses.
Figure 2: People’s income situation
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