Abstract
This exploratory study examines perspectives of multinational corporations (MNCs) from South Africa (SA) in respect of the variables considered important in product and labour markets in China. These include how MNCs first interpret and understand cultural, human capital, regulatory factors and employment practices, before considering how they might adapt to or seek to influence them. A survey of thirteen SA firms operating or trading in these markets and interviews with South Africans who had undertaken exploratory assignments in China, were done. Key factors were identified and evaluated based on relevant literature and research. The following six focus areas were found to be important for business effectiveness in this market: understanding its market complexity, importance of joint venture partners, guanxi relationship networks, human capital, language and culture, and regulatory environment.
Highlights
China is a sleeping giant...and when she awakes, she shall astonish the world.Napoleon Bonaparte, 1803.Current trade between China and Africa is $12 billion per annum
The World Bank reports that the total value of goods and services has been growing at a double-digit rate for over 20 years and that, by the year 2025, China's economy will account for 25% of the total world economy
This exploratory research proposes that the perspectives presented in literature, regarding focus areas for foreign companies in China, are consistent with those of South Africa (SA) firms operating in these markets
Summary
China is a sleeping giant...and when she awakes, she shall astonish the world. Napoleon Bonaparte, 1803. China is clearly an attractive target for foreign investment due to sustained economic growth over the past five years, its market size, and because it “profoundly affects the competitive capabilities of all multinational corporations and direct trade given its low-cost, low-price manufacturing capability’ (Lieberthal & Lieberthal, 2003:1-2). It is posited that the most successful foreign investor enterprises in China are those who adapt to the unique conditions of the Chinese market They have an intimate understanding of its political economy, regulatory environment and culture, and adapt their brands and business practices . Some 18 SA MNCs are amongst the top 200 emergent market companies (Morgan Stanley Capital International Inc., 2003) Several of these such as SAB Miller have joint venture operations, investments and growing market share in China. This exploratory study provides a basis for further survey and qualitative research in this area
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