The “Outgoing Strategy” of Chinese Companies

The “Outgoing Strategy” of Chinese Companies

Ping Zhou (City University of Macau, China) and Tim Wong (City University of Macau, China)
DOI: 10.4018/978-1-5225-8440-7.ch003

Abstract

The globalization of economics and China's accession to the World Trade Organization (WTO) have brought new opportunities and challenges to Chinese enterprises. Taking the sense of globalization, China is participating in global resource allocation, expanding and utilizing the market on the global scale, actively participating in international division and cooperation, and implementing international operation are important steps for Chinese enterprises to go abroad and seize the initiative in the global economic competition. In China, the strategy of “going out” is still at the initial stage. Compared with the developed countries, there is still a large gap between China and other developed countries in terms of investment amount, enterprise scale, and internationalization. China enterprises can adapt to the changing environment of international market; the key is to improve the competitiveness of enterprises in the international market, which is a crucial step in expanding Chinese enterprises' international market.
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The Challenge To The Competitiveness Of Chinese Enterprises By The Deepening Development Trend Of International Labor Division Of Labor

In the 21th century, economic globalization, distribution of information and economic networking has become an irreversible trend in the multi-national company’s development (Duanmu, 2012). The international division of labor has broken the individual country as the main body of the division of labor and turned the national characteristics of the traditional division of the relationship to globalization as the characteristics of multinational enterprises and enterprises between the division of labor, among which has changed in the past the kind of single product manufacturing as the boundary division of labor. Countries and multi-national enterprises paid more attention to the product design, development, research management service and a series of related value-added activities in the value chain thus multinational companies as the main body of the company represented the division of labor. The division of labor of the value chain is more inclined to the outsourcing division of business between the co-ops of the global multinational corporation (Wang et al., 2018). Multinational corporations have become the leading factor in deepening the international division of labor. Multinational corporations have established global production networks through direct investment, so that industries, especially modern manufacturing, have globalized characteristics. Facing the international market competition, Chinese enterprises corresponding to the world economy should face more competition in the international market, and strive for more effective resources. They must go to the most effective area of resource allocation to achieve cross border flow of products, technology, finance and human resources (Liu et al., 2018). Though the output of many manufacturing products has become the number one in the world, the credibility and influence of Chinese enterprises and their brands in the international market are still very small. Chinese enterprises are still passively accepting the industrial transfer of MNCs, and there are no products, technologies and brands that have been developed independently. The international competitiveness of China enterprises is still too disadvantage to dominate the extension of the production of processors the global rules of transnational corporation, which demonstrated that Chinese enterprises are only a world processing plant in the international division of labor system (Lall & Albaladejo, 2004).

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