China's economic reform program had many important impacts on business competition in the country. In many industries, foreign competitors entered, making "strategic investments" that they thought would lose money over a considerable period of time and then turn profitable. At the same time, many Chinese companies have adapted to the new environment more quickly than many observers expected. At the same time, however, regulatory and administrative systems that have created considerable uncertainty, the relationship between government and companies, bank lending, which kept unprofitable firms in business and the rapidly changing and reforming the economy has made business competition in China is different from the business competition in many other places. This case gives a vignette four industries in China, where competition has been fierce on the eve of China's accession to the WTO, including beer, computers, steel and televisions. Class discussion focuses on the nature of competition in the industry and the possible consequences of the full entry into the WTO on competition. Allows you to discuss the nature of uncertainty in the business and the development of tools to create scenarios of future competition in uncertain situations. "Hide
by Michael Enright, Vincent Mak Source: University of Hong Kong, 21 pages. Publication Date: July 26, 2002. Prod. #: HKU207-PDF-ENG
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