As Tesla's first overseas factory and China's first wholly owned foreign automotive factory, Gigafactory Shanghai has developed rapidly, thanks to the series of industrial reforms in China and strong support from the Shanghai local government. Gigafactory Shanghai has bolstered Tesla's manufacturing capacity rapidly and significantly, enabling the company to tap into the growing global demand for electric vehicles, especially after the COVID-19 pandemic. Tesla's investment has also contributed to the advancement of China's electric vehicle industry and aligned with the broader goal of technological development and carbon neutrality. Nevertheless, Tesla's investment has risks, such as the deterioration of US-China relations, changes in government regulations and policies, competition from other automakers, and the threat of technological obsolescence. The student question revolves around Tesla's ability to defend its leading position in both the Chinese and global electric vehicle markets, with a view to creating a mutually beneficial partnership with the Chinese government. This case allows students to explore how host country industrial policies affect corporate investment decisions and how to deal with the uncertainties of foreign direct investment. After studying this case, students will be able to discuss the intricate relationship between industrial policies and foreign direct investment.

With a fine division of labor across different countries, the global value chains use global sourcing and combines developed countries' know-how with developing countries' low-cost labor to produce lower-priced and higher-quality products, bringing benefits to all parties joining the global value chains. This case, which is based on Foxconn, a major supplier to Apple and other global technology giants, enables students to understand that several forces are challenging and reshaping these global value chains. Foxconn, officially known as Hon Hai Precision Industry, plays an important role as an electronics manufacturer in the global supply chains. The company manufactures different parts in multiple locations to lower costs and offers good quality and competitive prices. Foxconn's main manufacturing plants are all located in China, but Foxconn is under pressure from major US customers such as Apple to move production facilities to other countries. Many factors that are reshaping the global value chains, such as the US-China trade war and COVID-19 pandemic, all have affected Foxconn's operations and forced Foxconn to adjust its strategies. This case sheds light on the risks of global value chains. It provides an opportunity for students to discuss how a company can be affected by global value chain restructuring, especially the US-China trade war and the COVID-19 pandemic, and what strategies a company might adopt to cope with global value chain restructuring.