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China has a lot of promises to honor after entry the WTO, such as lowering the tariff level, canceling 400 import quotas, and allowing foreign companies investing into our telecommunications, banking, insurance, and tourism sectors. The Chinese government will also relieve the red tap for both the Chinese and foreign companies to do business in China.
The first challenge is the sharp competition brought by the foreign companies. Lowering tariff level, reducing quota, and relieving red tape means domestic companies lose the price superiority. Enormous amount of foreign companies will flow into Chinese market. Many famous big companies with good reputation and long history provide high level of services and products with lower price. They are consumer ¨C oriented and have rich experiences on marketing and advanced technology. They are sensitive to changing and very creative. Our domestic consumers will benefit from the competition, but many national companies are under the threaten of being eliminated from the market if they can not keep up with the latest technology to lower costs and provide the same level of services and products.
The second challenge is that our state-owned enterprises are still weak and poor ¨Cperforming. China has huge amount of state ¨Cowned enterprises that are under the government¡¯s protection for decades Although the government has been helping reform the state-owned enterprises, most of them are still suffer from low efficiency, outdated technology, backward style of management. Some managers are still not market-oriented. They retain the ways of thinking based on the planned economy that use absolute power to make decisions. Without the tariff and quota¡¯s protection, many of them will fall victim of market competition, which follows the principle of survival of the fittest.
The third challenge is how to keep the talents stay in national companies .As we know, most of the young people want to find a job in the foreign company because of the higher salary, better welfare, more arena for personal development, and high chances of self ¨Crealization. Many famous CEOs of the big companies know how to communicate with their employees, how to encourage and influence their employees, how to sale their ideas. However, Chinese CEOs are lacking of the experiences and concepts of how to be a real CEO. It is hard for them to keep their talent employees who are the foundation to the success of a company.
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