**5. Conclusion**

Quo vadis? When it comes to doing business in emerging markets, in particular China, MNCs find themselves at the crossroads. Emerging economies have emancipated, and China has become a vigilant system competitor. For MNCs, it cannot be business as usual. However, the current headwinds do not *per se* necessitate firms to go backwards. The new realities may create complications for their China engagement, but it does not mean MNCs have to pack their bags and *stay foot* (i.e. stay away). MNCs need to engage in a robust reflection on the new normal in emerging markets in general, and in China in particular, and their strategic options going forward. There are very good reasons to engage and *stay put* (i.e. stay there). The discussion in this chapter shows that their primary motives and mandates (i.e. efficiency-, resource-, market- and strategic assets-seeking) appear to have shifted but in general remain valid. The pendulum has not swung from an open-door policy to a closed-door situation. However, independent of the actual status of the door, the 'house rules' may have become more strict and less welcoming. Overall, while China has become more assertive and self-sufficient, the country is not expected to enter a new phase of 'isolation and locking the country (bì guān suŏ guó). After all, the promise of economic growth and prosperity is central to the regime's on-going legitimacy. There have been discontinuities sparked by exogenous shocks and decoupling efforts between major economic blocks. However, IB does not have to mirror global political frictions. In fact, from

the perspective of MNCs, the notion of decoupling from China is thorny as it entails uprooting global supply chains and rejecting the purchasing power of 1.4 billion consumers. For MNCs, the benefits continue to outweigh the hazards. While the riskreward equation has changed, an exodus of foreign firms is not immanent. With China having become a firebrand for Western MNCs, there is a clear imperative to de-risk, that is, disentangle complex operations and balance the exposure in order to reduce the vulnerability to external shocks and systemic rivalry. A carefully crafted strategic re-orientation will allow MNCs to effectively insulate themselves from potential risks while 'keeping the lighs on' in a market that will continue to act as a powerhouse in the global economy. To do so coherently, strategic typologies, namely Miles and Snow [73], can serve as useful instruments to identify viable strategic configurations as well as modes of interactions between organisations and the environment. The exploration of strategic types showed that Prospectors and Analysers perform best, with Analysers being the most successful type in ever changing contexts including emerging economies [58]. Defenders perform moderately [86] while Reactors achieve underwhelming results. Drawing on these and other findings, one can conclude that proactive engagement and deliberate strategic choice [114] are major hallmarks of sustained performance in emerging markets. MNCs that adopt new ways of collaborating with institutions and other economic actors are best positioned to succeed. MNCs needs to prepare themselves for disclosing more details of their China business, as stakeholder including home-country policy makers may obligate them to stress-test their exposure. Embracing a proactive stance seeking strategic interaction and discourse, including corporate political activities [118] pays dividends and allows for effective risk-management. By reducing the dependency on China, MNCs can better mitigate events out of their control as well as make use of investments outside of their previous must-win market. In sum, MNCs in China face a highly volatile institutional environment and a high risk of regulation, thus it is prudent to basically expect disruption and deleveraging (i.e. a period of slower economic growth). For MNCs, this may feel like the rally is over. However, it is just the beginning of the end of naivety and the start of a more sustainable cycle. There is a fairly robust basis for continued collaboration and integration, and there is a certain level of consensus among foreign businesses to remain invested. While MNCs need to realise that the heyday of China's abnormally high growth rates has past, a diligent recalibration of their strategy and portfolio will make them continue to thrive in one of the world's preeminent economies.
