Market Competitiveness for SOEs in China - Essay Example

However, in spite of its attractions and potential, Western businesses are still apprehensive about the business environment in China. Its huge population has resulted in unique problems for China. Thus, the government has had to adopt a very cautious approach to guide the country towards its future. One such assiduous yet formidable step towards reassuring the world community about the intentions of Chinese government is the Reforming of the ‘State Owned Enterprises’ (SOE). Despite China’s future potential, there are still some strict regulations, political interference, guanxi (a need for relationships to operate in the market) and low disposable incomes of the Chinese consumers.

Hence, China’s recently opened market presents both challenges as well as opportunities for the foreign businesses. This dissertation examines the status of SOEs and recommends some positive steps to make these enterprises more competitive. Further, the author analyzes the effect of the removal of the excessive state cover over the business enterprises which pave the way for a competitive environment in China. Industries that provide better employment opportunities for the people and a reliable source of income for the poor have been established to reduce poverty and to achieve equitable and sustainable development.

Therefore, it is imperative that the growth of labour-intensive industries be a central theme of development economics and policies. The proponents of liberalization and globalization claim that globalization has granted access to newer vistas of trade and business all around the globe. Interestingly, several theorists believe that the launching of these economies have tilted the balance in favour of market forces. This is no doubt helping the consumer by way of providing quality at reasonable prices but at the same time the profit motive is leading to some aberrations where the welfare measures