個案總覽

An interesting dialectic is currently being played out in China: The state is continuing its age-old tradition of preserving order while a much newer force, free-market capitalism, and a previously unheard of phenomenon, a middle class, are slowly creating a new order. It is within such an economic environment that very large bets are being placed on the future of China, both by those already inside and by those rushing to go in. This article examines the crucial role of the state in China's great economic push forward and in its emergence as an economic colossus. It questions the relative safety of placing such bets by examining obstacles faced when investing in China. These include the political dilemma of sharing power with a rising bourgeoisie of prosperous business owners, the managerial challenge of coordinating large, complex organizations at world standards of efficiency, and the fact that global competition has intensified to a level which is virtually impossible for any new entrant to match. Other, more specific features are also considered, such as the fragmentation of the China market, productive inefficiency, allocative inefficiency, the weakness of information, the lack of intellectual property protection, the irrational passion for building capacity, the tendency to diversify rather than focus, and the sheer size of the state. The article also highlights potential opportunities for MNEs investing in China. For instance, declining SOEs may be used as launching pads for entry into the market. Furthermore, there are significant cost advantages to be realized from manufacturing in China, particularly in industries that Chinese companies cannot handle efficiently.