The mainland companies' ambition to go globetrotting has raised a few hackles. Does it enhance the manufacturing prowess?
The
world's workshop and sixth largest economy exports billions
of dollars worth refrigerators, computers, DVD players
and other consumer goods every year. Going by the huge
foreign direct investments in manufacturing over the
decade, in the year 2002 China became the largest electronics
exporter to the US. It is now marketing its own brands
globally. While the domestic market has fostered the
initial growth of many Chinese companies, the fast growth
companies are looking into overseas market for opportunities
of expansion and sustainable growth. Besides, Chinese
companies have sharpened their skills in the highly
competitive domestic market by competing with foreign
multinationals, particularly in electronic manufacturing.
According
to Boston Consulting Group (BCG), Chinese companies
are now a force to be reckoned in almost every industry.
Their success formula combines extremely low-cost structures,
aggressive adoption and adaptation of technology and
management practices, advanced wholesale distribution
channels, and increasingly sophisticated branding and
marketing.
With
China's entry into the WTO, the government induced relaxation
of the export rules and regulations that gave Chinese
manufacturers greater room in exporting and marketing
their own products in global markets. Spurred by this,
a few of the manufacturing powerhouses are developing
global ambitions and these are aiming high by making
their names and brands instantly recognizable around
the world in the lines of successful Japanese and South
Korean big brands of Sony, Samsung and Sanyo. According
to statistics from the Ministry of Commerce, China had
set up 7,178 non-finance related enterprises overseas
in over 160 countries and regions by the end of June
2003, involving a total investment of some $15 bn. However,
says Khalil Hamdani, an investment official with the
United Nations Conference on Trade and Development,
"China's outgoing investment is still small."
To take more share of the international market, he says,
"Chinese enterprises still need to focus more on
outbound investment and go out." |
