China Inc 2.0: The New Machine
China’s State Owned Enterprises, or SOE are not going away — but they will never develop global brands or foster the kind of innovation that China’s economy needs to move to the next level.
MNCs already have their own brands, and will continue to develop their global strategies in their foreign corporate HQs. They may localize brands, work with Matrix Org Charts and put regional operations centers in Shanghai — but these organizations will never be Chinese.
Existing JVs and Chinese privates are small niche players, feeding the MNC supply chain or executing policy for the bureaucracy. They are important as pioneers, but lack the ability to develop the global brands that China needs.
Which of these options will lead the Chinese economy to the next step? Where will the Chinese Toyota or Siemens or Apple come from? Which management style and organizational paradigm will lead the China Inc to global prominence?
We haven’t seen it yet –but we have hints about what it will look like. The development of a truly Chinese multinational has already begun, and we will all see the pieces come together over the next few years.
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