Summary
The single greatest challenge facing Western corporations is the competitiveness of Chinese corporations on their own turf and their global ambitions in the multinationals' own backyards. Research over the past five years reveals that local champions frequently beat out international rivals in the Chinese markets over the past five years, although this phenomenon is far from universal. Chinese competitors enjoy advantages in three areas. First, they have a better understanding of what will work in the local environment. A second key advantage of Chinese competitors is that they are often leaner, more flexible and have lower costs. A third advantage comes from the existence of open global markets - the same opportunity that multinationals hope to benefit from in China. Open markets allow Chinese companies in many industries to simply buy much of the technology and expertise they need to catch up.
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How to Succeed in the New China
Chinese companies are hitting the headlines. In December 2004, computer-maker Lenovo announced that it was shelling out $1.7 billion to take over IBM's global PC business. Last year, Chinese consumer-electronics company TCL took a 60 per cent interest in a joint venture that acquired the TV business of Thomson of France; through this deal, TCL gained control of the brand icon of America's TV business, RCA.
That Chinese corporations are making their presence felt on the international scene should not come as a surprise to those who have seen them battle their multinational rivals inside China-in many cases, coming out on top. The single greatest challenge facing Western corporations is the competitiveness of Chinese corporations on their own turf and their global ambitions in the multinationals' own backyards.A decade ago, it seemed unlikely...See the full content of this document
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