AM Lecture 2

Economic strength of SOEs

China is a State controlled country, in which an experiment has been taking place to see if it can be driven towards marketisation from being a socialist country, where State leaders are replaced by market managers.

State Owned Enterprises (SOEs) are prevalent in China, with 11,000 in 1992. They accounted for a tiny 2.9% of all industrial enterprises, but accounted for 50% of China's industrial total value and 67% of China's tax revenue.

By 2002, FDI inflows to China had overtaken inflows into the US, indicating that China has become an investment centre. This suggests that local companies have now been opened up to pressure, as foreign companies are bringing their own technologies and with them, great competition.

Reform pressure

Structure and power of SOEs

Distortions and outcomes of central planning

Two stage reform period

The Sichuan experiment

Western governance reforms

Effects of "Corporatization"

The Learning Organisation

Change motivation

Chinese culture

Chinese management and tradition

Sinoelectronics - Case study

Other studies and remarks on Chinese management

Conclusions