Chapter 47 harmonious society

China is committed to building a harmonious society, and they also regard Western companies as partners in building a harmonious society.This can resonate with many people, and it is also a political declaration for the Chinese government to seek economic growth and social stability.As President Hu Jintao said in his speech at Yale University when he visited the United States in April 2006, to build a harmonious society is to build a democracy ruled by law, fairness and justice, integrity and friendship, full of vitality, stability and order, and harmony between man and nature To achieve the organic unity of material and spiritual, democracy and the rule of law, fairness and efficiency, vitality and order.This is a speech with a strong appeal. Westerners never use such words as "material and spiritual". American politicians often mention God in their speeches.However, spirit cannot completely replace matter.When talking about China's great achievements in economic development, Hu Jintao said that China's development should benefit both rich and poor, urban and rural areas equally, so that the country's economic development and modernization progress are not limited to coastal provinces.In order to maintain the momentum of development, the efforts of Western capital and personnel are very important, which is the same as the situation in the 1990s.

More than one Western business group believes that China's building a "harmonious society" is beneficial to itself.General Electric, under the leadership of CEO Jeff Immelt, is committed to providing greener products and services that minimize the greenhouse gas emissions of its products.GE calls the effort "ecomagination" and sees a promising market in China.In the process of rapid industrialization, the Chinese government is facing the unfavorable situation of environmental degradation.In this case, General Electric is the direct beneficiary.Some divisions of the company have annual revenues of $1 billion in China, including making train locomotives and selling power turbines to power stations.In order to help China reverse the situation of "polluting" growth, GE's goal is to become the promoter of China's next round of low-carbon sustainable development.This means that General Electric will provide China with cleaner coal power technology and hydroelectric power generation equipment.

In 2006, General Electric's sales in China reached US$6 billion.Company executives work with Chinese officials to encourage people to use more energy-efficient equipment at both the national and local levels.This action is simultaneously idealistic and pragmatic.On the one hand, Immelt emphasized the need to produce more sustainable and environmentally friendly products, and on the other hand, he required companies to achieve ideal economic growth goals.By encouraging the application of new technologies, GE has drawn up a "green action schedule", which means that the company will produce and sell more advanced environmental protection equipment in the future.

GE has aligned its sales and marketing with China's goal of building a harmonious society.The advantage of this is that the Chinese government encourages units and individuals to purchase products produced by General Electric.Coal power generation equipment is a major source of pollution and greenhouse gas emissions in Chinese cities.Upgrading coal power generation equipment is critical to achieving environmental protection goals.GE also sells wind turbines and water purification and desalination systems to major Chinese cities.Of course, GE's expansion comes with some hidden costs.Its competitors, such as Germany's Siemens and Japan's Mitsubishi, also want to get involved in these business areas.The demand prospects of Chinese consumers and the sharing conditions of enterprises' intellectual property rights are factors that intensify market competition.Western companies that are willing to share their designs with local Chinese companies can capture more market share.Therefore, General Electric had to choose between short-term sales goals and long-term transfer of corporate intellectual property rights.In many cases, General Electric decided to share more of the company's technology with Chinese companies.It argues that the gains from research, development and innovation of next-generation competitive products outweigh the losses it has from transferring intellectual property to Chinese producers.

China offers hope to struggling American companies.The automobile industry used to be the leading industry of American industrialization and technological innovation, but since the late 1990s, the American automobile industry has encountered difficulties.Higher gasoline prices have sent sales of SUVs soaring, and Detroit's Big Three automakers have struggled with their own high costs and competition from foreign rivals.And in China, General Motors, the largest of the Big Three, is undergoing a transformation. Until the end of the 20th century, China was still a big bicycle country.People can often see from movie screens that the streets and alleys of China are filled with thousands of bicycles.With the acceleration of urbanization and the change of people's consumption concept, China's demand for automobiles is increasing day by day.Cars can take people where they want to go, while trucks can transport the goods people need between factories and points of sale. At the end of 2003, the sales volume of passenger cars in China was only 2 million, while the sales volume of passenger cars in the United States reached 10 million.For China, cars are still an expensive luxury, because compared to the West, the cost of buying a car in China is nearly double.But China's apparent demand for cars quickly exploded.According to surveys, China has a huge demand for cars, and young people regard owning a car as a symbol of their status and success.Facing a market with such huge potential, automakers all over the world are eager to get a piece of this huge cake.

Major automakers in the world have established joint ventures in China, from German Volkswagen to Japanese Nissan, from Korean Hyundai to French Peugeot, from German Audi to American GM.Just like the United States in the 1920s and 1930s, China's auto market is divided up, and there are many small and medium competitors involved.The growth trend of China's auto market is also unprecedented. In 2007, China became the second largest auto market in the world, and the sales volume of passenger cars reached 5 million.Volkswagen ranks first in sales in China, followed by General Motors of the United States.General Motors was struggling and going bankrupt in the United States, but it was reborn in China across the ocean.

Beginning in 1997, General Motors invested US$1.5 billion to establish a joint venture factory outside Shanghai.At first, the investment was seen as a huge loss.But in 2005, the original investment in building a factory has become the most sensible thing General Motors has done in recent years. In 2007, General Motors sold more than 1 million vehicles in China, accounting for 11 percent of its global sales and keeping pace with Japan's Toyota and Germany's Volkswagen.GM's market in China is growing at a rate of nearly 25 percent, and even with reduced sales in 2008, the growth rate of the Chinese market is still above double digits, which is in stark contrast to the sluggishness of the U.S. and European markets .However, behind the rapid growth of China's auto market, General Motors is facing the problem of illegal theft of intellectual property rights.Driven by demand in the short term, the automobile market is booming, and intellectual property rights are the core competitiveness of enterprises and the basis for long-term benefits to enterprises.GM can produce new products faster and more efficiently than local Chinese automakers.GM is hoping to offset losses elsewhere in the world by expanding aggressively in China.But, perhaps too late, if GM had recognized the sense of urgency earlier in the US and stepped up innovation and R&D, things could have changed.