This report analyzes technology transfers and education for local engineers within overseas subsidiaries of Japanese and European companies that have advanced into China, and examines differences among them. The local engineers nurtured in overseas subsidiaries of Japanese companies have mid-level skills similar to those of Japanese engineers at a holding company. When Japanese holding companies succeed in fostering local engineers, of course, there is a beneficial effect both for the overseas subsidiary and for the technical enlightenment of local engineers. However, these benefits may also help rivals. In comparison, overseas subsidiaries of European companies foster low-level engineers, and the division of labor with engineers at a holding company is a complementary relation, without duplication.