Chineseenteripiseseyeworldmarket

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Chinese Enterprises Eye World Market

Chinese President Jiang Zemin urged Chinese enterprises to go out and temper themselves in the winds and storms of economic globalization and build up their own competitiveness in his address to the '99 Fortune Global Forum held at the Shanghai International Convention Center Monday evening.

A great number of successful Chinese enterprises are working toward this goal, as they try their best to become ranked among the top 500 multinational corporations in the world.

Zhang Ruimin, president of the Qingdao-based Haier Group, said his group is endeavoring to be one of the world's top 500 corporations by introducing an advanced management mechanism, improving product quality, and developing its brand name, at a seminar hosted Tuesday by the Fortune Global Forum.

This embodies the aspiration of numerous Chinese enterprises who wish to expand their scale by entering the world market. Haier, one of China's leading consumer electronics producers, put forward a global business strategy in 1995 when its annual output equaled only one-nineteenth of the smallest corporation on the top 500 list. By the end of 1998, Haier's annual output accounted for a quarter of the smallest firm of the leading 500 multinationals.
In recent years, Haier has maintained an annual growth of 80 percent.

However, Zhang stated, "Haier still lags far behind prestigious multinationals such as GE and Siemens. The road to catch up with the world's top 500 is also a process of absorbing advanced technology and expertise of the multinationals."

The Chinese government has decided to give energetic support to the development of six companies including Haier, Baoshan Iron and Steel Complex, Beijing University Founder Group Corp., Huabei Pharmaceutical, Sichuan Changhong and Jiangnan Shipyard by allocating at least 20 million yuan to each enterprise annually in an effort to make them part of the top 500 by the year 2010.

Five Chinese enterprises, SINOPEC, China Grain Conglomerate, China National Chemical Import and Export Corporation, Bank of China and Industrial and Commercial Bank of China, have now been listed among the top 500 multinational corporations. SINOPEC ranks seventh among the world's petrochemical companies.

Li Yizhong, general manager of SINOPEC, said he felt great pressure to maintain this position. The group must enhance its competitiveness on the world market through readjusting industrial structure, promoting sales, improving efficiency, restructuring assets and carrying out technical innovation.

The Bank of China, which has been on the top 500 list for 10 years running, underwent a substantial reform in its management and operating mechanism last year. It has set up a market-oriented system centering on services and risk prevention, and cultivated a strong sense of management, investment and service in the course of cooperation with overseas companies.

Both China Grain Conglomerate and SINOPEC have turned fromimport-export companies to international groups which combine trade with manufacturing, technological development and financial and information service.

Fan Gang, a noted economist, said at the Fortune Global seminar that Chinese enterprises are experiencing a change from the planned economy to a market economy, and their business operations abroad are confronted with many difficulties. They must guard against the tendency of aiming too high and seeking too large a scale, he warned.

In his view, a criterion for the world's most competitive company should be evaluated in terms of assets, market share, creative ability, management skills, business turnover and development potential.

Representatives of the 200 Chinese enterprises participating in the current Fortune Forum regard the occasion as a good chance for them to enter the world market.

Zhao Xinxian, president of Shenzhen-based Sanjiu Group, pledged that he will turn his group into the world's largest and most advanced herbal pharmaceutical plant in five years.

And Huayuan Group said it will take the advantage of the government's new policies on trade expansion for enterprises to build 10 production bases and 20 trade companies overseas in the next five years.

According to official statistics, China has established 5,666 overseas enterprises with a combined investment of 6.32 billion U. S. dollars from the Chinese side. These cover a wide range including trade, manufacturing, resources development, processing, transport, medicine and tourism. Non-trade firms constitute 40 percent of the total. The most active sectors include household electric appliances, tourism, telecommunications, and textiles.

At present, 30 of the 225 largest global contractors in the world are Chinese, with a total workforce of 300,000.

Chinese entrepreneurs all hold the view that more Chinese firms will be added to the list of the top 500 when the country's overall economic strength is improved, though many enterprises still lack experience and brand-name recognition at the present stage. (Xinhua)

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