| Research Abstract |
Objectives of this project are 1) to analyze the dynamism of South China Economy and the shift in its industrial structure, 2) clarify the process of Chinese investment, investment and management patterns and 3) investigate differences between Chinese and Japanese business styles and their background factors.
Behind the dynamic development of Guangdong Province is the accelerating pace of industrialization due to the favorable interrelation between export and investment. In particular, through the favorable cycle of rising income * increasing demand for durable consumer goods* reducing cost thanks to scale merit * rising exports due to greater international competitiveness, the industrial structure of the Province is rapidly becoming sophisticated although still centering on light industries.
Such development owes significantly to active Chinese investments, which have the following features.
1) Investments have expanded from South China to China's coastal regions and the entire mainland.
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2) Investments are mainly in processing industries based on production consignment agreements utilizing low-cost labor. They are small in scale and aim at quick recovery of investments. Although the capital invested is considerable, the enterprises do not generally have advanced technologies which China desires. Investments are brisk in real estate taking advantage of the international liberalization of services industry and in commerce and distribution targeting the growing domestic market.
3) Human network is developed and utilized as a powerful weapon to not only cultivate and exploit relationships with foreign and mainland Chinese firms but also maintain useful channels with government authorities.
4) Chinese firms enjoy the advantage of the commonalty of race, language and life style. They also benefit from the preferential treatment of Chinese capital.
In contrast, Japanese investments in China have the following characteristics.
1) South China is regarded as a processing base fully utilizing Hongkong's distribution, financial and information expertise. Thus, Japanese direct investments concentrate on the coastal regions such as Talien and Tientsin and the Changchiang delta.
2) By industry type, light manufacturing and processing industries are in the main. Shift from labor intensive to technology and labor intensive type is under way but high-technology enterprises are still rare.
3) Advancement of services industry is in prospect as approval is expected soon of establishing trading company subsidiaries, bank branches and distribution and transport enterprises.
Henceforth, it is quite conceivable that Japanese enterprises enhance tie-ups with Chinese counterparts to promote business with China by relying on the financial, human network and marketing clout of Chinese firms and offering Japanese technological and business management experience. Less
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