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China Daily Website

Corporate competitiveness

Updated: 2012-08-22 07:20
(China Daily)

The increasing popularity of big State-owned enterprises among Chinese employees is becoming only more evident as the economic recession in Western countries forces some foreign businesses to cut staff even in China, which remains a promising market for many industries.

A recent survey of Chinese college graduates by ChinaHR.com suggests that seven of the top 10 best employers to work for in China are all domestic companies.

Meanwhile, reports have come out saying that the cell phone manufacturer Motorola Mobility Holdings Inc, once a top foreign employer in China, was laying off hundreds of employees in Beijing and Nanjing as part of a plan to cut about 4,000 jobs globally.

So quick a reversal in the relative prestige of SOEs and foreign companies speaks volumes about the Chinese economy's development.

Long after the country adopted its reform and opening-up policy more than three decades ago, foreign companies were seen as being nearly synonymous with sophisticated technology, advanced management and generous worker benefits.

Given that reputation, it was natural that many Chinese graduates would prefer to work for foreign employers, especially in the late 1990s, when a large number of State-owned enterprises were on the brink of bankruptcy.

The situation changed in the early 2000s, when China decided to reduce the number of SOEs to foster a few corporate champions. As many as 70 Chinese companies, mostly State-owned, appeared on the latest Fortune Global 500 list, which ranks the world's biggest companies measured by revenue. That made China the second most-represented country in the rankings.

By profiting hugely from the expansion of the Chinese market, more and more State-owned firms have managed to outshine their foreign counterparts, not only by their remarkable performances but also through offering attractive salaries.

And since 2008, global financial troubles have put many Western companies' balance sheets under greater stress. Large SOEs, meanwhile, continue to expand on the back of China's massive stimulus.

The greater esteem accorded to big Chinese enterprises, particularly by employees, is indeed worth noting. But it is not a guarantee that they will prevail in future global competition.

Will they be ready for the new industrial revolution? That most of these top Chinese businesses still operate as monopolies, to different extent, suggests that their strengths have yet to be fully tested. Innovation and consumer experience have yet to become part of their DNA.

(China Daily 08/22/2012 page8)

 
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