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The McKinsey Quarterly recently conducted an interesting survey on “Competition from China.”
With 41% of the answers, China is widely seen as the country where major competition comes from and is likely to continue to come from in the future. China tops by far India 22%, South East Asia 11%, and Eastern Europe 6%.
What are the reasons that make China such a strong contender?
According to the survey, while higher wages are driving up production costs in China, executives around the world see low-cost production as the primary competitive advantage of Chinese companies and expect little change in the next three years.
The two other key advantages of Chinese companies are support from the Chinese government, and the fact that they are “not being subject to stringent enforcement of patent and copyright regulations”.
That said, a surprising and somewhat conflicting 41% of executives around the world consider Chinese companies as weaker competitors than companies from other countries. They say that, besides lower prices, Chinese companies have little to offer global markets, and particularly dismiss their product quality, marketing skills, and brand strength.
A perception that seems to be changing rapidly, for four out of five of the executives also say that they expect to see rising competition from Chinese companies in the next three years, as superior quality of services and brand attractiveness are expected to become part of China’s competitive advantage.
And what do Chinese managers think of that?
Almost three out of five respondents say their long-term goal is to become a global competitor in their industries.
44% of Chinese leaders recognize that their major impediment is by far the lack of managerial talents, a finding that those of us who do business with China would certainly support.
Think of these last 2 factors. Aren’t they the evidence that the rise of China opens a lot of great job / business opportunities for Westerners?
The whole study is available at http://www.mckinseyquarterly.com/home.aspx.
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Then I would say it’s time that we Americans get our butts in gear, get out of debt to China, and start creating opportunity over here again.
It just my opinion and I am no economic strategist at all.
But, I do believe that we can establish a better trade agreement and diplomacy with China when they no longer own this country.
Left by Shinade on June 8th, 2008