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Effective Executive Magazine:
Chinese Companies Going Global : The Hidden Dragons
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Chinese companies are going global through strategic partnerships, joint ventures, and mergers and acquisitions to fuel Chinese domestic growth.

 
 
 

China's remarkable recent economic growth (an average of 9.4% per annum) is attributed to its trade and export dominance. China has become the world economy's lowcost supplier with its low wages, specialized regional networks and product exporters. However, China has now recognized that achieving sustainable growth needs the evolution of its relationship with the global economy beyond an exportdriven model. China's economic growth has given rise to a new breed of Chinese companies with the motivation and scale to expand into global markets. Chinese companies are building on their export origins to become global players in industries ranging from electronics to automobiles. "But success is far from certain. Chinese companies must overcome significant challenges to compete against established foreign companies in global markets, including within China."

After the founding of the People's Republic of China in 1949 under Mao's leadership, a strong central government was formed. But a succession of political campaigns brought famine and upheaval. Agriculture was collectivized and industry was nationalized. However, the economic growth suffered. China largely cut itself off from the world.

For a faster industrialization, the central government invested heavily in the 1960s and 1970s. A large share of the country's economic output was controlled by the government, which set production goals, controlled prices, and allocated resources throughout the economy. As a result, by 1978 nearly threefourths of industrial production was manufactured by stateowned enterprises. There were no private enterprises and foreigninvested firms. Until the mid1980s, the government did not allow any foreign investments. The government's major goal was to make China's economy selfsufficient. Foreign trade was limited to obtaining only those goods that could not be made in China. Countries that had good relationship with China only could participate in China's foreign trade.

 
 
 

Effective Executive Magazine, Chinese Companies, Hidden Dragons, Mergers and Acquisitions, Globalization Strategies, Global Markets, Political Campaigns, Chinese Government, Marketoriented Economy, Foreignowned Enterprises, FOEs, Special Economic Zones, SEZs, World Trade Organization, WTO, Commodity Markets, Mergers and Acquisitions, M&A.