Chapter 12: Globalization Challenges Facing China Inc.{0}
China has been the world’s largest exporter, now it changing its attention to globalization. According to the article, Beijing Automotive Industry has made a bid to buy Opel from bankrupt GM. This means that china companies are eyeing on other companies to expand themselves. The Chinese companies have had great success with two types of globalization. The first is conquering global markets via exports from China. The second is acquisition of natural resource assets in Africa, Australia, and Latin America.
The next wave of globalization by Chinese companies will be requiring smart acquisition of established companies in some of the world’s major economies. For example, USA and Europe countries. However, this will require skillful management of geographically dispersed marketing, manufacturing, and R&D operations.
Globalization will be a great challenge to China companies because of a few issues. First is the language and communication problem, most of the Chinese are not fluent in English, which is the world business language. Second is a majority of Chinese companies usually competes cost efficiency rather than differentiation, competing through differentiation remains a distant concept for them. Another major challenge is to pertained political sensitivity and barriers to potential acquisitions by Chinese companies in other developed economies. Most large corporations in china are state-owned and governments are reluctant to cede control over “strategic” assets to a foreign government.
I picked this article because I chapter 12 talks about globalization and this article talks about challenges China is facing when they try to globalize their companies. I am sure those corporations will find a way to solve their globalization problems and move forward into other countries.
Reference:
Anil K. Gupta and Haiyan Wang.July 10, 2009. Globalization Challenges Facing China Inc. BusinessWeek.
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http://www.businessweek.com/globalbiz/content/jul2009/gb20090710_479130.htm