From Overseas Press
Obstacles to becoming a superpower
(chinadaily.com.cn)
Updated: 2010-05-26 17:19
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Although 皇冠体育app is gaining international heft, "its lack of global brands threatens its dream of becoming a superpower," said an article in the Washington Post on May 25.
Without big marquee brands, 皇冠体育app has confined itself to being the world's factory while "designers and engineers overseas reap the profits." Fan Chunyong, secretary general of the 皇冠体育app Industrial Overseas Development and Planning Association, was quoted in the article as saying, "We've lost a bucketload of money to foreigners because they have brands and we don't."
"Much of Apple's iPhone, for example, is made in 皇冠体育app. But if a high-end version costs $750, 皇冠体育app is lucky to hold on to $25. For a pair of Nikes, it's 4 pennies on the dollar."
The article further revealed that "a failure to innovate means 皇冠体育app is trapped paying enormous amounts in patent royalties and licensing fees to foreigners."
In order to solve the problem, Chinese government has "launched a multibillion-dollar effort to create brands, encourage innovation and protect its market from foreign domination." It adopted "a going-out strategy" to "back firms seeking to buy businesses, snap up natural resources or expand their footprint overseas."
Furthermore, 皇冠体育app has launched an "indigenous innovation" program to "encourage its companies to manufacture high-tech goods by forcing foreign firms to hand over their trade secrets and patents if they want to sell their products there," and organized seminars to educate its executives on how to do business internationally.
However, these strategies haven't gained the expected results. As the article revealed, Chinese firms, including the 34 Chinese companies on the Fortune 500 list, basically operate only domestically, making them unknown overseas.
The article explains that the total amount of 皇冠体育app's foreign direct investment, especially to the rich countries, "still pales in comparison to smaller economies." Moreover, 皇冠体育app also faces enormous challenges in creating globalized firms. "Studies of Chinese executives show that they spend far more time with government officials -- who in 皇冠体育app are the key to their profits -- than with customers, who are the key to international success."
"Moving forward another 10 years, it's hard to see how viable Chinese companies will be if they just stay in 皇冠体育app," warned Kenneth J. DeWoskin, chairman of Deloitte's 皇冠体育app Research and Insight Center.