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Globalization of the Chinese Manufactories Research Paper


Introduction

In the contemporary settings, globalization executes a significant role in changing different economies. Fundamentally, globalization facilitates the creation of an environment that is characterized by efficient networks that make the world appear as a village. Currently, China boasts as the largest manufacturing economy globally (Henderson, Appelbaum, and Ho 1224). The wave of globalization has influenced the Chinese economy considerably as denoted by the growth of the country’s industrial sector. Particularly, players in the manufacturing sector in China have expanded their operations in different countries, thereby leading to heightened competition in various sectors. The unprecedented growth of Chinese manufacturers, including Lenovo in the computers sector, and Huawei in the telecoms sector, among other players, has enhanced the country’s competitiveness of in the global markets (Cooke 1834).

Additionally, the penetration of Chinese manufactories in the global settings has influenced the growth of the country’s economy considerably as portrayed by its growing Gross Domestic Product (GDP) over the last few years (Lai, Wong, and Lun 288). Nonetheless, the globalization of industries in China has negative implications, including the degradation of the environment. In this light, this paper examines the degree to which the globalization of Chinese manufactories contributes to the competitiveness of its industry players in the international markets. Further, the paper addresses the contribution of the globalization of Chinese manufactories towards the growth of the country’s economy. Finally, the paper also focuses on the negative implications of globalizing Chinese manufactories.

The Globalization of Chinese Manufactories

Over the last one and a half decades, Chinese manufactories have embraced the concept of globalization significantly. Currently, industrial players in the Chinese economy join foreign markets for several reasons. Notably, the need to foster the integration of technology has been one of the major factors that contribute to the growth of their competitiveness. The operation of Chinese companies in foreign markets has been characterized by the search for advanced technology, as well as managerial expertise (Cooke 1837). The embracement of technological advancements and management talent in the Chinese manufactories has been one of the essential factors that players in the country regard as influencers of competitiveness. Furthermore, the globalization of Chinese manufactories is shaped by the development of global brands that seek to appeal to customers in overseas companies (Cooke 1836). Therefore, the aspects of technology, management, and brand acquisition have been integral in fostering the globalization of Chinese manufactories.

As such, the absorption of technological advancements among Chinese manufactories has seen the emergence of companies such as Huawei as a global competitor that rivals with phone makers, including Samsung and Apple (Cooke 1839). Besides, the company has adopted innovation as one of its core strategies to boost its competitiveness in the global markets. The presence of the Huawei in more than 100 countries shows the extent to which the player has penetrated new markets, thanks to globalization. For this reason, at least 45 out of 50 telecom operators apply the technology offered by Huawei (Henderson, Appelbaum, and Ho 1230).

The establishment of diverse teams and the embracement of global leadership have been integral in fostering the globalization of Chinese manufactories. Currently, industrial players in China have created a business environment that integrates managers from foreign countries. The managers bring their talent in the companies, thus fostering management efficiency. The management teams characterized by individuals from diverse backgrounds have facilitated the continued competitiveness of Chinese manufactories (Henderson, Appelbaum, and Ho 1228). Further, the talent that foreign managers bring to the domestic manufacturing companies has been crucial in promoting efficiency.

Notably, Chinese companies consider the development of global brands for the sake of improving competitiveness. As such, several global brands, for instance, Lenovo, a PC manufacturing company, are now considered among of the largest in the global industry. The company’s move to acquire IBM denotes the extent of its share in the computer hardware and electronics industry (Taylor 89). Therefore, the impact of Chinese companies is fostered by the presence of Chinese brands in several countries. In this regard, the globalization of Chinese manufactories has been a significant move that denotes the capacity of the country’s industrial sector. Amid the few global brands tracing their roots from China, the current markets offer the Chinese people with an opportunity for growth. Thus, more companies consider the globalization of their activities a move in the right direction.

The Globalization of Chinese Manufactories and the Competitiveness of Players

The globalization of Chinese firms would play a great role in fostering the competitive edge of different operators. Noticeably, more Chinese companies join new markets in the Asian, European, African, and American markets, thereby posing a significant threat to the survival of domestic manufactories (Mathews and Yang 99). Several Chinese companies that rival other major corporations in the world today have set the trend.

Haier, one of the manufacturers of household goods, has underlined its competitiveness in the global markets. Amid its Chinese roots, the path taken by the company has played a central role in widening its market share, especially in the European market. Initially, the company focused on acquiring domestic competitors before widening its operations in foreign markets. Through the support of the government, the company acquired local rivals, thereby bolstering its competitiveness in the domestic market. Later, the forces of globalization forced the company to seize the opportunities for growth presented by the international markets. Consequently, the company has secured an 8% share of the global market for household appliances (Henderson, Appelbaum, and Ho 1232).

In the industrial sector, globalization influences the manufacturing of products that meet the international standards. In this respect, several Chinese companies concentrate on the manufacturing of high-quality goods that appeal to customers who are situated both locally and abroad. The production of quality goods has been integral in reinforcing the competitiveness of Chinese manufactories, especially in the international arena. In the recent years, people have been associating Chinese products with substandard quality. However, currently, the embracement of a globalized manufacturing sector has changed the perceptions considerably (Mathews and Yang 99).

The Chinese government has been introducing initiatives that seek to facilitate the expansion of the country’s manufactories to erase the country’s image as a producer of cheap and low-tech products. In this light, players in the computer-manufacturing sector, including Lenovo, have displayed the extent to which the country can offer customers who are situated globally products of desirable quality. Therefore, the placement of Lenovo as a global brand boosts the competitiveness of the Chinese company. It also fosters the growth of the country’s manufacturing sector (Mathews and Yang 101). Therefore, by changing the perceptions of clients regarding the quality of Chinese products, the globalization of the country’s manufactories fosters the aggressiveness of the industry players significantly.

Moreover, the globalization of Chinese manufactories promotes their operations through the establishment of a new category of products to meet the changing needs of customers in the contemporary setting. Currently, the development of new and surprising products in China accounts for the new face of the domestic market. The extension of such approaches to the manufacturing sector boosts the effectiveness of players who offer their products not only in the local market but also in the international frontier (Henderson, Appelbaum, and Ho 1227). For example, the introduction of Nutri-Express by Wahala, the leading beverage company in China, prompted competitors such as Coca-Cola to consider creating new beverage categories. Thus, Chinese manufactories would gain a greater competitive edge through the establishment of strategies that facilitate the globalization of operations.

Economic Growth through the Globalization of Chinese Manufactories

The Chinese economy is regarded as one of the rapidly developing consumer markets, as well as the largest e-commerce markets. Over the last few decades, the creation of policies that embrace the globalization of the economy in China has seen a substantial growth of the country’s manufactories. Importantly, the creation of a market-oriented economy instead of a planned one since the 1980s has been integral in promoting the current economic shifts (Tan and Mathews 422). As a result, the globalization and liberalization of players in different sectors, including the manufacturing field, have bolstered the growth of the country’s GDP.

The country witnessed a yearly GDP growth of 9.8% between 1978 and 2012, thanks to the globalization of Chinese manufacturing companies (Lai, Wong, and Lun 289). The growth is substantial since it has boosted the country’s economy. The growth is also a depiction of social prosperity since it embraces the economic ideas applied in different societies to bolster success. Besides, the mentioned period saw China realize a GDP growth by 22.5 times. Furthermore, the same period was marked by the growth of the Chinese per capita GDP that reached an amazing 8.5% annually. The GDP per capita also witnessed a 15 times progression between 1978 and 2012 (Lai, Wong, and Lun 286). Therefore, the widening of the manufacturing sector bears significant results on the country’s economy.

In China, industry players that embrace the forces of globalization in their operations foster the economic growth and development of the country at the global scale. Notably, China has secured the second spot as the largest economy in the world today after the United States. The manufacturing sector also contributes to the growth of the country’s export volume, thereby surpassing the point reached by international exporters such as Germany. As such, the manufacturing sector in China has secured the country’s position as the top exporter globally in terms of volume (Lai, Wong, and Lun 286). For this reason, the heightening GDP has facilitated the improvement of the living standards of the Chinese people over the last decade. Notably, the income of the Chinese citizens has doubled over the last few years, thanks to the intensification and widening of manufacturing activities in the country and abroad.

The manufacturing sector accounts for a considerable proportion of China’s workforce. In 2006, Chinese manufacturing companies accounted for 11.3% of the country’s employment growth. The following year, the sector accounted for a substantial 27% of the workforce in the country (Tan and Mathews 420). The sector has continually facilitated the creation of employment opportunities for the citizens, as well as foreigners. Undoubtedly, further globalization of the Chinese manufactories would promote the creation of more employment opportunities in the country, thereby improving its social and economic wellbeing (Taylor 9).

The Negative Implications of the Globalization of Chinese Manufactories

Besides the positive implications brought about by the globalization of Chinese manufactories, the move also influences adverse outcomes on the country’s wellbeing. The establishment of Chinese manufactories in foreign countries implies that they would integrate the local labor, which is usually cheap, to foster cost efficiency in a way that bolsters their competitiveness (Mathews and Yang 103). However, the outsourcing of labor in foreign countries implies that the country would experience higher unemployment rates in the near future. The issue may impose an adverse effect on the economy to the extent of affecting the social environment significantly.

Further, the heightening of operations in the manufacturing sector could also have negative outcomes on the rights of laborers. In most scenarios, the heightened economic activities in the corporate world lead to the exploitation of the human resources. Notably, cases of child labor in the manufacturing sector have been a major humanitarian concern. Thus, the unprecedented growth of the manufactories in China could have an influence on the issue (Henderson, Appelbaum, and Ho 1224). Therefore, there is a need to put in place measures that prevent the exploitation of the workforce working in the country’s manufacturing sector.

Currently, the heightened industrial activities in China account for the degradation and pollution of the environment. Manufactories in the country emit substantial quantities of poisonous gasses, including carbon dioxide (CO2) and Sulphur dioxide (SO2) that threaten the sustainability of the environment (Zhu, Sarkis, and Lai 144). Further, the improper disposal of wastes produced by the manufactories undermines the sustainability of the environment in China. Besides threatening the ecosystem and biodiversity, the pollution of the environment also has negative implications on the health of the people of China. Notably, the residents of cities such as Shanghai report cases of respiratory problems induced by the polluted air. Thus, the globalization of Chinese manufactories should consider the environmental sustainability aspect of operations.

The implementation of measures geared towards the widening of the manufactories in China would pose a considerable jeopardy on the survival of the country’s cottage industry. The Chinese government sponsors at least 50% of the factories that seek to bolster its growth (Tan and Mathews 419). Therefore, the move towards widening the operations of state-owned factories would create a disadvantage to the local industrial players, especially those in the private sector. The weakening of the local players has a considerable negative influence on the overall economic growth of the country, despite the efforts geared towards improving the efficiency of manufactories at the global scale (Zhu and Geng 7). Therefore, there is a need to heighten the competitiveness of the players to avoid the creation of the inequitable growth of industries.

Conclusion

The globalization of Chinese manufactories is currently denoted by the integration of technology, the embracement of diversity in management, and the creation of global brands. Notably, the move has been integral in fostering the competitiveness of Chinese manufacturers, including Haier, Lenovo, and Huawei among others. Further, the expansion of the manufacturing sector in the country has positive contributions to the growth of its economy as denoted by the increasing GDP and employment rates, thereby making it one of the largest economies in the globe today. Nonetheless, the move poses several negative implications on China and the entire globe by triggering environmental degradation, labor exploitation, and unfair competition to the cottage industries in China.

Works Cited

Cooke, Fang. “The Globalization of Chinese Telecom Corporations: Strategy, Challenges and HR Implications for the MNCS and Host Countries.” The International Journal of Human Resource Management, vol. 23, no. 9, 2012, pp. 1832-1852.

Henderson, Jeffrey, Richard Appelbaum, and Suet Ho. “Globalization with Chinese Characteristics: Externalization, Dynamics and Transformations.” Development and Change, vol. 44, no. 6, 2013, pp. 1221-1253.

Lai, Kee-hung, Christina Wong, and Venus Lun. “The Role of Customer Integration in Extended Producer Responsibility: A Study of Chinese Export Manufacturers.” International Journal of Production Economics, vol. 147, no. 1, 2014, pp. 284-293.

Mathews, Gordon, and Yang Yang. “How Africans Pursue Low-end Globalization in Hong Kong and Mainland China.” Journal of Current Chinese Affairs, vol. 41, no. 2, 2012, pp. 95-120.

Tan, Hao, and John Mathews. “Accelerated Internationalization and Resource Leverage Strategizing: The Case of Chinese Wind Turbine Manufacturers.” Journal of World Business, vol. 50, no. 3, 2015, pp. 417-427.

Taylor, Robert. The Globalization of Chinese Business. Chandos Publishing, 2014.

Zhu, Qinghua, and Yong Geng. “Drivers and Barriers of Extended Supply Chain Practices for Energy Saving and Emission Reduction among Chinese Manufacturers.” Journal of Cleaner Production, vol. 40, no. 1, 2013, pp. 6-12.

Zhu, Qinghua, Joseph Sarkis, and Kee-hung Lai. “Internationalization and Environmentally-Related Organizational Learning among Chinese Manufacturers.” Technological Forecasting and Social Change, vol. 79, no. 1, 2012, pp. 142-154.

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