Why The Chinese Multinational Enterprises Have Difficulties Establishing Themselves Globally

Why The Chinese Multinational Enterprises Have Difficulties Establishing Themselves Globally

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Discuss why the Chinese multinational enterprises have difficulties establishing themselves globally.

“Multinational corporations (MNC) or multinational enterprises (MNE) are the organizations which own or control their products or services and facilities in one or more countries other than the home country.” (Pitelis & Sugden, 2000) Since the implementation of the policy of reforming and opening to the outside world initiated by Deng Xiaoping who was the Chinese revolutionary and statesman in 1978, Chinese national economy and international trade have made great achievements in a tenfold improvement of Gross Domestic Product (GDP), it has also influenced on the integration of foreign companies. (Idrissov, 2014 ) In addition, China was approved for entering the World Trade Organization (WTO) in 2001, made it open wider through the whole world. (World Trade Organization, 2001)Foreign multinationals are in the favor of investing Chinese market based on the preferential policies like lower cost and fewer risks in a rapid upward trend, many international brands have succeeded in the mainland China like BMW, McDonald 's and IBM. On the other hand, numbers of Chinese cooperation actively involve themselves in the process of globalization as well, following as the instructions of “go out” and “go global” by the Chinese National Development and Reform Commission, for instance, Huawei Technologies, Tsingtao Beer and Bank of China. (Browning, 2014)

It is undoubted that Chinese multinationals have taken up a large share of the world market, whereas, it is not easy for them to have predominance on international businesses. There is a common phenomenon that many Chinese multinational enterprises prefer to export products by processing at hom...


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...of business strategies. After that, the government should encourage the transnational operations consulting industries to better service for the related aspects of the Chinese multinational cooperation. Last but not least, the company management should specify the structure. According to the needs of international operations following the guidance of market strategy, adjust the organization structure and guide the companies to perfect the governance and international brands. “The world’s largest companies are globalizing, localizing and reorganizing.” (Kramer, 1995) The Chinese multinationals will adapt to the new stage and lead in the world by the enhanced social responsibility, good image and deep understanding about international rules, aiming to the specific goals, clear path, cost-effective investment and convenient operation standard and harmonious management.

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