Hbr - China vs. the World

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Introduction to International Business
Review on

Harvard Business Review
Whose Technology Is It?
by Thomas M. Hout and Pankaj Ghemawat, December 2010

In this review on the article “CHINA VS THE WORLD – Whose Technology Is It?” by Thomas M. Hout and Pankaj Ghemawat (Harvard Business Review, December 2010, Pages 95-103), the main purpose is to critical evaluate the authors’ opinions and statements. The above-mentioned article deals with the subject of China being one of the biggest and also fastest growing economies in the world and the way China tries to acquire western technologies. Emerging markets are a great chance for national-, but also for multinational enterprises (MNE’s) to increase their sales, so many MNE’s are interested to open up a business in the Chinese market. The Chinese government came up with many rules and regulations for foreign companies during the last years, for instance to cooperate with a domestic Chinese company (e.g. in a joint venture) and also share the company’s technology with their partner. Those Chinese companies are often state-owned or at least work closely together with the Chinese state, so the Chinese government achieves those western technologies. Most companies have to get along with those rules and regulations, otherwise they weren’t be able to open up a business in this huge market. We claim that the purpose of the text is to convince the reader that China has a major influence on domestic companies, including native enterprises as well as foreign businesses which operate in China. Thomas M. Hout and Pankaj Ghemawat state that the Chinese government tries to improve Chinese technology. The two authors emphasize on the misuse of the governmental power by interfering in the economy and giving Chinese companies a competitive edge towards foreign organizations. This is achieved by mandatory cooperation between foreign- and native companies, in which the Chinese companies always have the...
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