Chinas Industries Preliminaries: industry characteristics The new industries Adjusting: the established industries How far has China come? Current Trends

The New Industries Some well known patterns Excess entry (Klepper et al) Shake-out/escalation (Klepper, Sutton, etc.)

Fridges W/Machine s

Color TVs

The Established Industries Cement Steel Clothing Machine Tools Beer

Cement High Transport Costs Segment Market Regulatory Regime Strengthens This A Quiet Life … The BBMG Company A Turnaround at Sunnsy

Clothing and Textiles Key to Turnaround is Not Privatisation but Permission to Export Directly (Lanyan) Hangsu in Silk: Capability Building and Direct Exporting Ever Glory: Fast Growing Private Firm

Steel Slow but Steady Technical Progress Key Role Played by Equipment Suppliers (Jiangsu link with Fuchs) Joint Ventures: Jiangsu with Posco (Korea) Still High Volume Moderate Quality… with a Large Fringe of Small Producers

Machine Tools Slow but Adequate Adjustment Towards CNC Machines Transition Cushioned by Profits from Conventional Machines Joint Ventures Established over Past Few Years are Building Capability in Advanced CNC Machines (Dalian Company with Index of Germany etc.)

Beer First Moves towards Classic Pattern become Evident Interaction of Scale Economies and Advertising Foreign Stakeholders Move In

How Far Has China Come? Two Methods – 1. Benchmarking in Autocomponents 2. Trade Statistics by Product Line

Current Trends Seeking a Foothold: Air Conditioners for Saudi Arabia The Nineties see a Move in FDI Away from Low wage Seeking Towards the Pull of the Large Domestic Market. Illustration from DVD Market etc Chinese Firms seek Low Labour Cost Locations … Ever Glory … Making Fridges in Italy … A Reverse Process