About China
...Three strategies for "going global"
Under the general trend of economic globalization, resources, commodities, capital and talents all flow around the world. China must also take the world market as its center stage and create a batch of its own large transnational companies, only in this way can it have its foothold and development in global competition.
To further expand overseas investment by Chinese enterprises, it is essential to study and promote the following three major strategies:
First, besides resources exploitation, manufacturers are encouraged to invest in developed countries.
Generally speaking, the manufacturing industry should be set up in countries where labor cost is relatively low. But this is only one aspect of the matter. What developed nations transfer out is mainly their low-end manufacturing sector, they keep the high-end manufacturing industry and core products in their homelands. They remain the chief commodity markets and major sources of technologies. If we do not rest content with working permanently for others, we must have go to compete in developed countries.
The labor cost in developed countries is indeed much higher. But their productivity is much higher, too. The labor productivity of the US manufacturing industry is 23 times than that of China and the average annual wages for its workers are about US$30, 000.
Considering that the gap between China and Europe is not big in terms of labor productivity and workers' wages, Europe's investments mainly flow to the United States, rather than to Latin America where labor cost is even lower; foreign investments in China's manufacturing industry are concentrated mainly in the Yangtze and Pearl River Delta, not in China's western region where labor cost is even lower.
As a result of investing in production in the United States, Haier has developed the most high-end wine cabinet in the US market and rapidly improved its own brand. It would not have reaped such a quick return if it had invested in the establishment of plants only in developing countries. In fact, the United States, especially its local governments,
encourages investments from outside. Some of their free services and favorable policies are even better than those offered by the development zones in China and can be fully utilized.
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