The Rise of Third World Multinationals: Hong Kong’s Foreign Direct Investment in Manufacturing

In the past chapters, we have focused our attention on multinational corporations which have their bases in developed countries. Specifically, we have attempted to analyse the economic impact of developed-country MNCs on developing countries. For a long time, developing countries acted only as host countries for multinational activities and never as home countries. But now multinational activities are no longer monopolised by developed countries. Since the late 1960s, we have witnessed the rise of multinationals from developing countries or the third world. Many MNCs today are established by the oil producing countries, the Latin American countries such as Argentina, Brazil, Columbia, and Mexico, and the Asian countries such as Hong Kong, South Korea, Singapore, and Taiwan. It is indeed of interest to observe that ‘third world multinationalism, only yesterday an apparent contradiction in terms, is now a serious force in the development process’.1 The rise of third world multinationals has also raised a number of interesting issues such as the validity of the existing general theories of foreign direct investment and the role of multinationals — those from developed countries vis-à-vis those from developing countries — in the development process of the host countries. The present chapter attempts to study some of those issues associated with the rise of third world multinationals in the light of the experience of multinationals from Hong Kong.