Chapter 21 The allure of the Chinese market

China has a special attraction for the world's best companies.The entry of these enterprises into China did not affect China's economic sovereignty, nor did it cause economic chaos in China.Other countries are making concessions to multinational corporations, and multinational corporations will make concessions to China.In order to be able to enter China, they will accept some restrictive terms, which is simply impossible when negotiating investment conditions with other countries.China can not only attract foreign companies to invest, but also control the time course of opening up to the outside world.

China has no foreign debt, which is also an advantage.Historically, China's debts to Western countries have caused the Chinese people to suffer greatly psychologically, and have also provided excuses for Western powers to further control China's internal affairs.In a sense, the Washington Consensus is all about using debt as leverage.Many countries urgently need loans to develop their domestic economies, and the governments of western countries and international financial institutions are the providers of loans.Therefore, in order to obtain loans, these countries have to comply with the conditions put forward by Western countries.However, this is not necessary for China, because China does not need to lend money to Western countries.

Foreign companies' direct investment in China not only realizes their development vision, but also indirectly provides capital conditions for China's development.Therefore, China's modernization did not come at the cost of sacrificing its own national sovereignty. On the contrary, some foreign companies paid a considerable price.Foreign companies investing in China in the early days not only invested billions of dollars (it accounted for a considerable proportion of China's total economic output in the 1990s), but also sent excellent management talents to China, hired Chinese local labor, and sent Chinese Partners transfer advanced knowledge and experience.China has access to capital and knowledge brought by Western companies, which together benefit the expansion of multinational corporations and the formation of a "Central America."This has gradually brought the two largest economies of China and the United States closer together.

The relationship between China and the world's economic center and world financial center is unique. Of course, this uniqueness cannot be infinitely exaggerated.In the past 60 years, China is the only country in the world that has achieved modernization and industrialization according to its own time and principles.Deng Xiaoping's original decision was to integrate China into the modern international society, but he may not have thought that the world today is catering to and adapting to China's development.Yes, Western companies have been putting pressure on the Chinese government to speed up reforms and effectively protect contracts and intellectual property rights.The U.S. government also often voices opposition to China on human rights issues and exchange rate regimes.However, China is neither humble nor overbearing to the pressure from the West.Of course, Western companies will not withdraw their capital because of China's attitude. Instead, they will seize the Chinese market through larger investments.

In the 1990s, China was the fastest growing country in the world.At the same time, the express delivery business is also growing at an average annual rate of 30%. At the end of the 1990s, FedEx had opened businesses in nearly 100 cities in China, and started direct cargo plane operations in and out of China.At that time, China lacked vehicles, trains and other means of transportation, and the infrastructure was not perfect, so "overnight delivery" was rarely achieved, but FedEx would try its best to deliver the goods to the recipient within two days. FedEx can help other American companies and multinational companies investing in China to improve their work efficiency.Headquarters in Hong Kong, Guangzhou or Shanghai can send goods via FedEx to factories in Fujian or Wuhan, as well as documents to law firms and government agencies in Beijing.With FedEx, other foreign companies in China can quickly gain a foothold, and can easily plan for the future development of the company.In China, foreign companies that have gone through the entrepreneurial stage in the 1990s will not describe this process as easy, but even so, in the eyes of entrepreneurs, investing in China is far more important than opening mines in Central Africa and extracting oil in the Middle East much easier.On the other hand, the entry of FedEx and its rivals UPS and DHL into the Chinese market has been a factor in China's rapid development.

The business expansion of foreign companies in mainland China has had a profound impact.They provide Chinese enterprises with a development model of modern industrial economy that can be emulated, and they have played a certain role in promoting China's construction and improvement of infrastructure.Since Deng Xiaoping proposed reform and opening up, China has invested a lot of money in highways, ports, power plants, and municipal construction, but until the early 1990s, those major projects were only regional, and their radiating scope included only important around the economic region.Regional development is critical to promoting China's overall progress.Of course, this is not enough.In the next development, China's cities and regions need to be connected to each other, and this can only be done through the central government.

In the 1990s and the first decade of the 21st century, China underwent earth-shaking changes.In the late 1980s, China was still a bicycle kingdom. 10 years later, cars entered people's lives.The development of the automobile industry has created a demand for expressways. Therefore, China's road transportation network has expanded rapidly, but first of all it is to meet the needs of cargo transportation.The development of China's inland cities has accelerated the formation of railway networks, because containers from coastal ports need to be transported to inland areas by rail.At the same time, the goods loaded in the container also need to be delivered to enterprises and consumers by trucks and roads.Rapid economic development has put a certain amount of pressure on China's power system. In major urban centers and manufacturing centers, local power cuts and outages often occur. Upgrading the national grid has become a problem that must be solved.

It was not until the late 1980s that China had its first expressway.Just 10 years later, the total mileage of expressways in China has reached 15,000 miles.After another 10 years of construction, China's expressways will double, or even more.In addition, China builds nearly 25,000 miles of single-lane and two-lane roads every year, and thousands of miles of new railway lines every year.Tianjin and Dalian in the north of China, and Hong Kong and Shenzhen in the south are rapidly expanding ports.As the infrastructure was built, new factories, office buildings, and apartments were built, and millions of people found jobs in the new factories and office buildings.The development of the economy has led to more consumption behavior and demand for more goods, which are transported between places by road, water and rail every day.

The changes in China were not brought about by FedEx, but FedEx is also one of the factors driving the changes in China.It provides a visible business operation model for China's state-owned enterprises.Its partner, Sinotrans, is also a partner of United Parcel Service. Sinotrans has learned a lot from these multinational companies, which is better than hiring managers and consultants from some Western companies.Sinotrans employees and corporate managers can closely learn how FedEx conducts business operations, how to formulate corporate plans, and how to adopt effective development strategies for the Chinese market.They may have a real understanding of it, they may only have a glimpse of it, but either way, working with FedEx will give them a clear sense of reality.

For most of the 1990s, the hope that China brought to foreign companies remained at the level of "hope".Enterprises from all over the world, including those from the United States, Europe, Hong Kong, Taiwan, and other countries or regions in Asia, investing in China is very important for China's development. For enterprises, investing is placing hope in the future, and Not just now.That's why Fred Smith and other business leaders go to Capitol Hill every year.They have tried to persuade members of Congress to maintain China's most-favored-nation status and deepen ties with China.If the relationship between the US government and China deteriorates due to human rights issues and Taiwan issues, these companies will face great risks in investing in China.

The trend of U.S. companies moving into China to gain access to emerging markets and take advantage of low-cost production began in the 1990s, when the U.S. domestic economy was in good shape.Although there are also voices warning that China is a competitor of the United States, China will snatch American job opportunities, and China will become a potential opponent of the United States in the world.However, compared with the United States at that time, there was a huge gap in economic strength between China and the United States, and the Americans were very confident in the face of huge business opportunities.Business leaders like Fred Smith became heroes of the era, as did Jack Welch of General Electric, Jeff Bezos of Amazon, and Steve Bezos of AOL. Case et al.China's development in recent decades has brought hopes and dreams to foreign-funded enterprises, and China has become an important member of the ever-expanding global market. China has brought hope to the world. In the late 1990s, the investment of foreign companies in China paid off.China's economy is accelerating, and the Chinese government is looking for ways to modernize the economy, investing more in infrastructure and rural reforms.When great achievements have been made in the development of special economic zones, the reform of the banking system and the reform of the financial system have also been put on the agenda. Foreign companies and investors want to see reforms in China's banking system and financial system.If reforms are sustained, China will soon be integrated into the global economic system.In order to achieve this goal, China needs to face the world with a more open attitude.At the beginning of Deng Xiaoping's reform and opening up, China did not think of joining any international economic organization. In the 1990s, China began to work hard to join the World Trade Organization.China's accession to the WTO will change the world trade pattern, and the development of the world economy will also change accordingly.Now that China has joined the World Trade Organization, what people need to discuss now is how to lay the foundation for the development of Sino-US relations under the framework of the World Trade Organization.