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the World?
With their ability to produce more cheaply, China might catch up if
America stops investing in federal science research or short-term
investments driven by stock market profits override building up longterm investment but at the current time, despite impressive GDP
numbers, China does not yet have the freedom of information sharing, a
large base of technology innovators, experienced supply line managers
or competitive freedom to challenge existing dominate world market
powers.
Chinas large corporations are continuing their multi-year ascent in the
global economy.
According to 2014, list of Fortune Global 500 Companies, 95 Chinese
corporations made the list, up from 89 last years, 73 two years ago, and
34 in 2008. Three companies made it to the top ten, beating the US and
JapanSinopec Group (NYSE:SHI), China National Petroleum, and State
Grid.
Getting bigger doesnt necessarily mean getting betteror
more competitive. Chinese companies have yet to develop matching
clout in the world economy, by gaining a competitive edge against their
American, European, and Japanese counterparts.
It was a period when Chinas internet related industry was yet to see
explosive growth. But it was a boom time for US internet firms. Unlike
investors in China their overseas counter parts understood the value
and potential in technology firms.
So, forward looking but cash strapped Chinese startups tapped the
friendlier US bourses.
Foreign markets were more attractive because dollar-denominator
venture capital funds and private equity players were willing to back
promising Chinese technology startups without fuss. After a few years,
China with its newfound emphasis on entrepreneurship and innovation,
realized it needs those companies back. The govt. began easing
regulations to lure them back. For instance, profitability stipulation may
no longer apply to internet related companies. The Chinese govt. is
encouraging entrepreneurship. China stock markets now offer more
opportunities making them more attractive than US bourses, especially
in terms of valuation. Obviously, Chinese corporations are lagging
behind their American and European counterparts in all of these
attributes i.e. strong management, sound business strategy, ethical
business practices, competitive edge, and revenue and profit growth.
BOTTOM LINE: Chinese companies have a long way to go before they
can compete effectively in world markets, gain the respect of investors,
and conquer the world.
References
https://www.foreignaffairs.com/articles/united-states/can-chinascompanies-conquer-world
www.pressreader.com/china/chinadaily/20160427/282265254618459
http://www.forbes.com/sites/panosmourdoukoutas/2014/07/10/can
-chinas-large-corporations-take-the-world/#2363de6e34ba