Strategies of Chinese Companies when Entering Global Market

Zakić, Katarina and Radišić, Bojan (2017) Strategies of Chinese Companies when Entering Global Market. In: Economic and Social Development, 21st International Scientific Conference on Economic and Social Development. Varazdin Development and Entrepreneurship Agency; John Naisbitt University; University North; Faculty of Management University of Warsaw, Varazdin; Belgrade; Koprivnica; Warsaw, pp. 169-180. ISBN ISSN 1849-7535

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Abstract

Almost forty years ago, the Chinese economy slowly but steadily started to open itself to investments of foreign companies. It was a long process, in which both foreign managers and Chinese businessmen learned a lot. Since the establishment of the People’s Republic of China in 1949 until 1978, there was no presence of foreign companies and investments at the Chinese market. During this period, China was focused on domestic development with domestic resources along with the state planned economy. So it was difficult to completely change the way of functioning of the Chinese economy and to have a successful cooperation with foreign companies and investors, when China opened its market to foreign investments. Since the opening of Chinese market, foreign companies used the only possible way to enter this market and that was joint venture. After Chinese Government pulled out this restriction for operating on its market, international companies used many different strategies to operate in China. Then, ten years ago, a reverse process began, in which now strong Chinese companies started to enter different international markets. Chinese companies are increasingly becoming important international business competitors, having enterprises or subsidiaries in countries such as the United States of America, United Kingdom, Germany, France, Sweden etc. In their process of growing and going abroad, the Chinese companies are using different strategies for doing their business - such as mergers, acquisitions, joint ventures or, if possible, direct investments. The aim of this paper is to show how Chinese companies from different business fields first succeeded in China and after that to reveal what type of strategies they were using when entering global markets. It will be shown that, besides direct export, which was the most important strategy of Chinese companies in former times, they are changing their approach and nowadays they are becoming more versatile in doing their business abroad.

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