China: Past and Present Parameters Pre-Reforms(before 1979) Post Reforms(1979-2007) 5. FDIs At a very low level as there were restrictions, quotas in place, the only foreign investment that came in was because of imports of those materials which couldn’t be produced domestically Cumulative level stood at $760 billion in 2007 6. Productivity in Industrial Sector Very inefficient as most of the industrial output was under the control of the government Economic Reforms led to increase in Productivity
China’s Industrial Parks & Provinces Province Industries Anhui Producer of white goods, motor vehicles Beijing Mobile phone Technology Research, real estate, financial service sector Chongquing Largest industrial, commercial in interior China, large companies are relocating their business here Fujian Agriculture, light industry, important hub for international trade Guangdong Textiles, garments, electrical appliances, this province account for a third of China’s trade Jiangsu Near to Shanghai, 3 rd largest province, plastic , semi conductors, automobiles Shanghai Manufacturing giant for cars, computers, chemicals
China’s Industrial Parks & Provinces Province Industries Tianjin Automobiles, Electronics, Petrochemicals Zhejiang Attracted a lot of foreign investors in sectors like garments, plastics, fibers. Has become a Shipping hub Shandong Cars, shipping
2005- announcement of SAIC of building own branded cars by early 2007
Why no branded cars up till now?
Initially company wanted to learn foreign tips and tricks
Didn’t have enough capacity to create a world class brand
Government policies stringent which had a clause of JV so may be SAIC didn’t want to upset its foreign partner by creating its own brand from whom it was transferring technology taking money for projects
Why a want to create a Brand of its own?
Accession to WTO could make foreign companies start their own wholly owned companies in China
To be on a global stage having a brand for itself is very important
After the JV exposure company had enough expertise to go for such thing