Since the 1980s, with an appealing market of 1.4 billion population, China has welcomed multinational companies (MNCs) to operate on its soil and believed inflow of investment and technology would boost the long-term economic development and competitiveness of the country. However, things changed in the 2000s. Lots of technology MNCs were restricted by the Chinese government, some of them compromised, some of them refused to give way and left the market. This paper investigates what has caused the change in Beijing’s treatment of technology MNCs and under what conditions would technology MNCs make successful compromises to enter the market.