Posted on 01/05/2005 6:57:05 AM PST by maui_hawaii
The rising economic powerhouse hasn't produced consumer-electronics outfits that can truly compete with multinational giants
Everybody knows that China is the world's next economic superpower. Each year, it gets billions and billions of dollars in foreign investment, powering its booming economy. The Middle Kingdom has more cell-phone users than anywhere else on the planet, and soon it will be tops among Net surfers, too. American consumers can't get enough of the low-cost TVs, DVD players, mobile phones, computers, and other gizmos that come out of China's factories.
For believers in the China-rising story, the latest sign of ascendance was the December announcement that IBM (IBM ), one of the most venerable names in U.S. industry, was selling its PC division to Lenovo (LNVGY ), the No. 1 PC maker in China. Lenovo is owned in part by the Chinese government.
A HAS-BEEN? All the hype about the Lenovo-IBM deal and China's might obscures one problem: For a country that's about to become such a powerful threat to the U.S., China has a tough time producing world-class companies that can compete with the likes of America's Dell (DELL ) and Hewlett-Packard (HPQ ), or Japan's Sony (SNE ) or Asia's Samsung. Sure, China has Huawei Technologies and ZTE, both of them growing providers of low-cost, high-quality networking equipment. But when it comes to consumer electronics, Chinese outfits just aren't in the same ballpark.
(Excerpt) Read more at businessweek.com ...
He who owns the brand, owns the dollars.
Ignore China at your own peril.
I second that....
BTW Who is advocating ignoring anyone?
I just think we will ultimately beat the pants off of them in large part.
Elaborate.
They are a bright people, and have made great technological strides, but they still have a relatively resource-poor country, and too many people.
Then comes the test of how well they know the rest of the planet.
Au contaire, he that fulfills the consumer's need -- either real or perceived -- owns the dollars. The Craftsman 1/4" drill bit doesn't sell b/c it is made by Craftsman. It sells because it's bit reliably delivers, at a good price, what the consumer wants: a 1/4" hole
However, the infrastructure of how to manage a big multinational on a global scale is yet to be seen. The US, Japan, Korea, and Taiwan even are much farther ahead of the game.
You very well could see a couple of "Chinese" corporations that make a name for themselves globally, but odds are the ones that do will be Taiwan led, and they won't be entirely Chinese either.
Branding and product development geared towards a global market is a whole different ball game than anything almost any of them have ever seen.
I agree. A big portion of the products produced by China were built from stolen US technology. If we can remain the leader in new products/ideas they will remain dependent on us.
This is a good set of examples of the fundamental rotten to the core operation that China continues to be.
China will not create world class companies until the Chinese government gets its hands out of the pockets of every company that aspires to be something in the global marketplace.
These companies do well internally because the corruption (contracts, purchases, markets)is easy to contain and manage. But when forced into the harsh reality of the international marketplace they don't do well at all.
No company can be world class while dragging along the weight of its corrupt government and as a result being forced to look inward all the time.
If the Chinese government ever lets its entreprenures loose then it will become an economic powerhouse. But I would not worry about that anytime soon. That is not to say the sheer size of their emerging consumer market will not have a significant impact on the world market, it is just to say that innovation and leading edge companies will probably never come from China in large numbers.
IE "Craftsman is a brand known for its reliability..."
China may make inroads into the Asian market, but in doing so, they are going to have to open wide themselves. Many are reluctant to do that.
They have the manpower to rule the world.
Only problem: Boots on the ground won't be meaningful in 20-30 years. Robotics and autonomous devices will make this manpower advantage moot.
I'm not too enlightened regarding their business savvy, but I did just return from a 2-week business trip to evaluate their quality practices in two separate high-tech firms. Anecdotal for sure, but what I saw reminded me of late '80's to early 90's domestic practices... which means antiquated, in my industry. They're a player, but not quite ready for the big leagues. It may take a few years to catch up to Korean level, more to match Taiwan, and likely never Japanese. (I put domestic practices somewhere in the Taiwan-to-Japan level)
China will not create world class companies until the Chinese government gets its hands out of the pockets of every company that aspires to be something in the global marketplace.
BUMP
These companies do well internally because the corruption (contracts, purchases, markets)is easy to contain and manage. But when forced into the harsh reality of the international marketplace they don't do well at all.
Oh so true. Just stack the deck and you got yourself a winner.
No such stacking happens in their favor elsewhere.
You may be right but some of the not so advanced nations with more people than technology could use EMP devices to level the playing field, so to speak. Then we are back to human wave attacks.
Correction: A big portion of the product produced by China are built from the the plans and technology that foreign corporations gave them and essentially signed a labor agreement with...
Kind of like contract labor.
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