China's WTO Entry
Chinese Businesses Urged to Study WTO Rules

Chinese enterprises should gain a deeper understanding of WTO rules to turn challenges into opportunities, Chinese entrepreneurs and economists urged.

"The biggest challenge facing Chinese businesses is not the entry into the WTO itself but the problem that many companies still do not know what the challenges are and where they are from," said Zhang Ruimin, CEO of the Chinese home appliance giant Haier Group Co.

According to a survey conducted by the Information Center of the Development Research Centre under the State Council (DRC) among more than 5,000 business executives, only 3.2 percent of the surveyed executives said they thoroughly understood WTO rules, and more than 20 percent of the executives admitted they know little or nothing about the WTO.

With intense competition coming from their international counterparts, domestic enterprises should take the opportunity to adopt modern enterprise management systems.

"WTO membership means that domestic enterprises will stand before the same starting line with their international counterparts, and they must improve their quality in the competition to survive," said Wu Jinglian, a senior economist with the DRC.

Guo Wei, president of the largest IT distributor Digital China Holdings Ltd, said Chinese enterprises should use information technologies like Enterprise Resource Planning software to run businesses scientifically and efficiently to avoid misjudgments.

Besides benefiting from competition with foreign rivals, domestic companies can also grow through co-operation.

Zhang with the Haier Group Co said that although many foreign companies would enter the Chinese market soon, it would be more efficient for them to find a foothold through co-operation with local partners, which translates into opportunities for local businesses.

"Although foreign businesses may have advantages in manufacturing or sales, it is very expensive to build their own distribution networks, and Haier will be able to gain from that," Zhang said.

Digital China is also optimistic about the prospect for co-operation between international and domestic companies.

"Many local businesses have not realized the importance of managing their companies with IT technologies, but through competition and co-operation with international software makers like SAP and Oracle, we will enhance the awareness of those businesses and create a bigger market," said Guo.

WTO entry will also lead to the reallocation of economic resources and restructuring of Chinese industries.

"We will see mergers and acquisitions heat up after China joins the WTO, and it will help Chinese enterprises form big companies to fend off the threats from international giants," said Wang Wei, CEO of China M&1 Management Co Ltd.

He suggested that the government devise a set of preferential policies that will facilitate State-owned and private companies to buy low-efficiency firms to enter the financial and telecom sectors.

Meanwhile, domestic companies should also be encouraged to go overseas and take advantage of their resources, markets, or labor and enjoy the benefits of the globalization.

(China Daily November 13, 2001)


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