Globalization and Chinese Enterprises

Globalization and Chinese Enterprises

Globalization is a phenomenon of human social development process. There are many definitions of globalization, in the usual sense globalization refers to growing global linkages, human life, based on a global scale development and the rise of global consciousness. Politics, economic, trade between countries are interdependence. After 1990s, with the forces of globalization affect the level of the expansion of human society, which has gradually caught people’ attention about the politics, education, social and cultural disciplines, which has caused a boom of studies.

The opportunities of globalization for China

The first, China has abundant natural resources, cheap labor and other advantages. Which determine the long-term exports of primary products and labor-intensive products for China. But from a dynamic point of view, over time China will change the factor endowments, labor factors of production are fully utilized in this, and gradually becomes short.

Accordingly, it becomes abundant because of the accumulation of capital and technology. Economic globalization makes worldwide industrial restructuring and further deepening of the pace of increase. China should continue to introducing technology, the introduction of

more advanced labor-intensive industries from developed countries , developing a number of high-tech industries to fully exploit the comparative advantages, increasing domestic employment, increasing exports, completing the process of industrialization, speeding up the process of national modernization, seizing the strategic future competition high ground.

The second, economic globalization has promoted the development of multinational companies in China and made it more competitive in world markets gradually.

The third, economic globalization has promoted financial integration. Economic globalization has attracted more foreign investment conditions and opportunities for developing countries.

The challenges of globalization for Chinese enterprises

The first, what the market competition changes in the environment impact on our business and challenges. Economic globalization has become an irreversible historical trend. Countries and regions of the economy are intertwined and affecting each other, merging into a unified whole, the environment of enterprises in which fundamental changes in the market, domestic enterprises will be more truly experiencing the fast-changing and unpredictable of the business environment. If there is not the world economy, globalization of business operations, global technology, capital, labor and raw materials market system, different

countries, national policies, legal system, economic development, social and cultural differences in customs, instant messaging andcommunication tools and agile competitor strategies and so on. Which encourage enterprises to face the competitive market environment ,to become more complex, to increase competition , business risk increases with the depth of modern information revolution and economic globalization. The acceleration of these features will become increasingly real. The fatal weakness of Chinese enterprises is reflected in the lack of an accurate analysis of the new market environment and the ability to judge the results to the sea has a vast number of Chinese enterprises is only a brilliant flash in the pan, then disappeared without a trace.

The second, the impact and challenges from the market changes about business competitors for Chinese enterprises.

China is a huge potential market for any country because of Chinese rapid economic development of enterprises. China attracts a huge influx of foreign companies. Mostly foreign companies investing in China have a strong, valuable talent, advanced technology, management experience and excellent corporate culture. Multinational corporations can be not profitable for five years or even decades in order to dominate the market. While most Chinese enterprises generally don’t have such heavy strength as the Multinational corporations. It becomes a prime target of employment for the students because of better wages and benefits,

excellent growth opportunities and advanced corporate culture in the multinational corporations, which provides the opportunity to have talents for multinational corporations. And because multinational corporations have the strength to invest in research and development, its technical level is a world leader in the technical reserves, technology transactions took initiative, and Chinese enterprises are in weak position in these areas The third, the impact and challenges from the changes of the contents of the market competition for Chinese enterprises

With economic development, accelerating the process of globalization and intensifying the market competition. The substantive differences between enterprises which provide the provision of products and services have tended to disappear, the spending trends of consumers have shift from physical consumption to psychological consumption. Which means consumers pay more attention to the psychological feelings from the products and services. And brands meet the consumers’ need, so the battle of the brands among enterprises is inevitable. Because of shorting product life cycles, new product after another, if companies want to maintain market competitiveness, they must continue to launching new products, which in turn requires constant technical innovation, and technological innovation requires a lot of money and good talent, which requires companies to have solid strength. So the contents of market not only include products and services but also the brand competition,

technological competition, talent competition, the strength of competition, marketing mode competition and corporate culture of competition. It is the so-called One hour round loser. It is not infrequent that many Chinese companies are falling by the wayside. We can reach the following conclusions from the influence of globalization for Chinese enterprises: The market environment has become increasingly complex, the viability of increasingly high demand for more and more competitors, competitive pressures are growing, product life cycle getting shorter, the new product development has become increasingly difficult; competition become more and more complex content, and the association among enterprises become increasingly strong. In this context, the Chinese enterprises want to survive and develop, and compete with multinational corporations in the international market place, we must develop own core competencies.

Chinese enterprises should actively respond to globalization from the following aspects:

The first, active participation in the globalization process. Economic globalization is an irreversible trend, we must actively participate in the rules, actively cooperate with developing countries, individual developing country’s force is weak, the strength is not enough to push the rules of globalization which is not conducive to the development of developing countries. In order to effectively protect their own interests, developing countries should have the courage to change the existing irrational

international economic order. The developing countries should have the courage to force developed countries to give more consideration to the interests of developing countries when they make the rules of globalization, to reduce debt of developing countries, to open the markets and technologies for developing countries.

The second, participation in economic regionalization and grouping. For China, before participating in economic globalization, they should focus on the participation in regional economic integration of organizations. Which is a more realistic, more appropriate approach. So far as the nation state is the core of regional economic integration, which has included the distribution of benefits, included clear rules of the game. There is better monitoring and coordination mechanisms, and thus the interests of developing countries, the guarantee can be relatively good. Meanwhile, regional economic integration has brought favorable conditions and accumulated experience for Chinese participation in economic globalization. It provides a solid rear.

The third, we should guide industries and sectors to participate in international competition. With the development of productive forces, we should guide the conditional industries and sectors directly participate in international economic competition, in order to make appropriate business have a greater incentive to pursue new technology. Increasing efficiency and improving the management, which can make us obtain

more benefits from the world market. That is to take different protection measures for the national economy and the industrial sector at different times and in different levels. The domestic industry and the need to explore the potential importance of economic development industries are under the appropriate protection, while encouraging them to actively participate in international competition, basing on the domestic market, then going out to have foreign development.

The fourth, we must develop the market economy and make Chinese enterprises become an integral part in the world economic system.

The fifth, we must open up the market. Only opening up the market ,it can become an integral part of the world economy, but China is a developing country, markets can not fully open immediately and unconditionally, we should conditionally, step by step, and adapt to their own level of development in the case of opening, so as to produce the benefits of trade ,to better promote the development of Chinese enterprises.

The sixth, we must abide by international trade rules, to some extent the market economy is the legal economy, so China must abide by the rules and participate rules.

The seventh, we should enhance independent innovation capability. Technological innovation and progress are the basis and conditions of economic globalization. China will adhere to the strategic principles of

science and technology, using modern technology, science and technology trade, and constantly improving the technology of China's foreign economic and trade content and international competitiveness, and participation in economic globalization. China has only accelerated technological innovation, developed high-tech industries, using advanced technology and high technology to transform and improve the technological content of traditional industries in order to continuously promote the development of productive forces and achieve a leap in technology development in China.