Globalization Strategies of Chinese Companies: Current Developments and Future Prospects

Abstract

The object of this study is to examine the globalization strategies of Chinese companies which, it is contended, have been influenced by China's current stage of economic development. Since the initiation of its open-door policy in 1978, China has, in this respect, followed to a considerable extent the path of other Asian countries. Currently, China's foreign direct investment (FDI) is present in 139 states and territories but heavily concentrated in Australia, the United States, Hong Kong, Thailand, Russia, New Zealand, South Africa and Macao. Such ventures overseas are, however, small scale, with an average capitalization of US$ 3 million. This figure may nevertheless be set to rise, as Chinese companies move into more high-tech ventures; to date, China's firms have been more heavily involved in the service and processing sectors. In addition, China's FDI has been constrained both by government regulation of the economy and lack of experience on the part of China's companies in international competition. Accordingly, the role of both business and government in the promotion of managerial, financial and linguistic competence is assessed. In conclusion, the study summarizes the salient features of Chinese FDI to date and the future prospects for the globalization of China's companies.