China Versus the World - Hbr Review

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This is a reflection of the Harvard Business Review of Thomas M. Hout and Pankaj Ghemawat “China vs. the world”, HBR December 2010, page 94-103. Thomas M. Hout is a professor at the University of Hong Kong's School of Business since 2002. He teaches Strategy, Operations and Information, Business Strategies for China and India and fast companies (IMBA program in Shanghai)[1][2]. Pankaj Ghemawat is the Anselmo Rubiralta Professor of Global Strategy at IESE (spanish: Instituto de Estudios Superiores de la Empresa)[3] Business School. In 1991, he became the youngest person in the Harvard Business school's history to be appointed a full professor. Ghemawat was also the youngest "guru" included in the guide to the greatest management thinkers of all time published in 2008 by The Economist.[4]

China is one of the worlds fastest growing countries, around 9% per year, since 2008. To be part of this fast growing market multinationals settle down in China. Disenchantment came through China, because U.S. and Western Europe took the greatest profits.

To prevent this in the future, the Chinese government came with several policies. Firstly, the state will be buyer and seller in certain key industries. Secondly, they want to consolidate several manufactures into a few national champions or behemoths. And then they are going to force the MNE's to form joint ventures with national behemoths to transfer the latest technologies to the Chinese government. Lastly, the government gives hefty tax discounts to domestic companies and state-owned banks give loans below the market rates and sometimes the government reimburses interest payments. In addition, the Chinese entrepreneurs get land below market price or even for free. Main goal of China is to catch up with the U.S. by 2020.


The Chinese government has been implanting policies to give China the chance to overtake the west on the technology market. The authors suggest that they might be...
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