The Core Competence

Abstract:The China’s productivity will catch up with America, according to the McKinsey & Company, which is devoted to the consulting service. The result of the survey indicated that Chinese manufacturing productivity is higher one fifth than the main European countries, mostly approaching to America currently.
Keywords: Core Competence, Reform and Opening, Economics For some transnational enterprises aimed at lower costs and moved the most manufacturing operation to China, it’s provided that there is significance. Before this, many experts considered that the Chinese enterprises’ productivity was lower than other countries. McKinsey found that Chinese enterprises are better at adopting the advanced technologies instead. For example, in correcting their shortcomings and adapting the consumer’s demands aspects, the Chinese labors’ flexibility and passion will play a role. However, because of the small sapling survey for only 20 enterprises from McKinsey, this result might cause the controversy. And Professor Daudi said that this small sapling survey stood up to elaborate. Accepting this statement, the analysis result for England was much worse. McKinsey summarized that the Chinese total productivity factors were 31% higher than England. And the productivity in China was only 8% lower than America. And he also said that Chinese enterprises didn’t only depend on the most advanced technologies, but improve the productivity by the perfect staff works. No matter how much the error in that survey, say 1979 to 2003, the Chinese economic growth average rate kept upon 9%. In terms of the GDP, China has already stood the very front in the world, and no doubt that our per capital annual income was higher than 3000 dollar. Why modern China developed so rapidly? Basically, China brought the Core Competence into using of the reform and opening up policy. It’s the fundamental driving force for modern China to develop rapidly and steadily. China's growth comes both from huge state investment in infrastructure and heavy industry and from private sector expansion in light industry instead of just exports, whose role in the economy appears to have been significantly overestimated. The smaller but highly concentrated public sector dominated by 159 large SOEs, provided key inputs from utilities, heavy industries, and energy resources that facilitated private sector growth and drove investment, the foundation of national growth. The government's decision to permit China to be used by Multinational Corporation as an export platform has made the country a vital competitor to other Asian export-led economies, such as South Korea, Singapore, and Malaysia. China has emphasized raising personal income and consumption and introducing new management systems to help increase productivity. The government has also focused on foreign trade as a major vehicle for economic growth. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. No matter what countries or organizations, the core competence is consisted of ideas, human resources, and cultural transmission efficient. And the correct idea is the premise to win the total morale. China sticking on the human-beings’ just cause and the correct idea won the most of the people’s support in most of the countries so that the sustainable development was under the wonderful international condition. And in the right direction, it’s also important that the Chinese quality has being improving widely and the human resources have being increasing rapidly. As the difficulties appeared in college students recent years, it also appeared that the Chinese human resources were not only abundant, but also high quality in most aspects. And this, was providing the high quality and low cost human resources for the whole world, thus there being requirement that China can produce all kinds of goods filling at the price. And most foreign investment transferred into China. So China became the very world factory. After financial crisis, the world structure was different. Especially On January 14, 2009 as confirmed by the World Bank the NBS published the revised figures for 2007 financial year in which growth happened at 13 percent instead of 11.9 percent (provisional figures). China's gross domestic product stood at US $3.4 trillion while Germany's GDP was USD $3.3 trillion for 2007. This made China the world's third largest economy by gross domestic product. Based on these figures, in 2007 China recorded its fastest growth since 1994 when the GDP grew by 13.1 percent. China may have already overtaken Germany even earlier as China's informal economy (including the Grey market and underground economy) is larger than Germany's. Louis Kuijs, a senior economist at World Bank China Office in Beijing, said that China's economy may even be (as of January 2009) as much as 15 percent larger than Germany's. According to Merrill Lynch China economist Ting Lu, China is projected to overtake Japan in "three to four years". And most of this was from the core competence. The Core Competence must become the big power to promote China into the top of the world.

References:
Financial Times, 6/17, 2009
Economics of PRC, Wikipedia