Market Liberalization In China

consulting services. The lack of these services has inhibited the ability of Chinese firms to internationalize and to close the gap with multi-national enterprises (Nolan 1999).

Although market liberalization has brought about benefits to Chinese consumers by providing more choice, for Chinese firms it has meant that they have had to find ways to Compete with foreign competitors in their own backyards. Perhaps there is no Greater evidence of this than in the food retail sector. The likes of retail giants Walmart and Carrefour have made significant inroads into the Chinese market. Their strength to compete on price through economies of scale means that Chinese Supermarkets have found themselves losing market share in some urban centers. It

This seriously resulted in a massive public backlash in

China. Stone’s films were stopped in many cinemas, along with her Christian Dior fashion range being removed from many stores. Although Christian Dior is a popular designer brand among many of China’s growing middle class, this nationalist undertone illustrates the mess that can be done to foreign brands if they step out of line. To be particular Chinese nationalism can be a positive factor for Chinese firms when targeting consumers in their domestic market, however, the association with

China, or in short ‘Made in China’ label has brought about negative reactions for some consumers in international markets. This is just one of the many issues Chinese firms need to tackle in regards to their internationalization process. Still, as far as its domestic market is concerned, Chinese firms can definitely do more to attract Chinese consumers by focusing more on national values. A good example of this is the Chinese sportswear company – Li Ning. Founded by China’s former leading gymnast in 1988, the company is now the top sports brand in China, which sells 50 per cent more in revenue terms than Nike, which is the number two, with Adidas, a close third (www.peopledaily.com). The company’s founder – Li Ning, and his reputation as China’s ‘Prince of Gymnastics’, certainly plays an important role on the national loyalty

Foreign firms have had a serious effect on the competitiveness of Chinese firms. Figures published by MOFCOM highlight the increasing number of acquisitions and mergers involving foreign firms in China. So much so, that the Chinese government has introduced measures to protect industries deemed to be of national security. For example, in August 2007 the Standing Committee of the National People’s Congress (NPC) Declared an Anti-Monopoly Law. This was a result of foreign company’s acquisitions of major SOEs and/or Chinese brands. Foreign firms now need approval from the Chinese Ministry of Commerce if their purchase is perceived as affecting China’s national economic