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The Comparative Research for the Distinction of Group Action
between Japanese and Chinese Entrepreneurs
Yaokai
Associate professor: Fudan University School of Management
Gujingyi
Postgraduate student at Fudan University
Outside surroundings nurture the development of entrepreneurs. There is an old saying that
“one piece of land nurtures one kind of person”. Because of the different political economics and social
cultures, as well as the internal operation mechanisms of the enterprises, the behavior of Japanese and
Chinese entrepreneurs shows different characteristics. There are considerable time gaps between the
development of Japanese and Chinese entrepreneurs. The Japanese entrepreneurs have formed a
characteristically distinctive behavior. While there have been only 20 years since China began its
opening up policy and market economic system, the development of Chinese entrepreneurs, although is
still in its infancy, shows its own distinctive behavior. This paper tries to compare the distinctive
behavior between Japanese and Chinese entrepreneurs to find out their differences and to provide
grounds for the formation of effective behavioral mechanisms of Chinese entrepreneurs.
1
The Comparative Research for the Developing Environment between Japanese Enterprises
and Chinese Enterprises
1)
Macroeconomics
Japanese macroeconomic evolution can be summed up as “great ups and downs” (see chart 1)
compared with Chinese macroevolution of “grow with each passing day” (see chart 2).
the economic growth rate of Japan
40
)
35
%
( 30
e
25
t
a
r 20
h
15
t
w
o
10
r
g 5
0
CPI
the real growth
rate of GDP
60 65 70 75 80 85 90 95 00
19 19 19 19 19 19 19 19 20
the nominal
growth rate of
GDP
per 5 years
Chart 1
the great ups and downs of Japanese economy
The main economic ratio and long term developing trend
GDP (million dollars)
1982-92
1982
1992
2001
2002
221.5
454.6
1,167.1 1,232.7
1992-02
2001
2002
2002-06
(Average annual growth rate)
GDP
9.7
9.0
7.5
8.0
7.5
GNP per capita
8.1
8.0
6.7
7.2
6.6
Chart 2 Chinese economies growing with each passing day
From the end of World War Two to the beginning of the 21st century, the Japanese economy has
undergone great ups and downs: the rapid development after the war, the depression in 1956, the low
development rate in 1970s caused by the petrol crisis, the considerable development in 1980s and
finally the sustained economic depression after the collapse of the bubble economy in 1990s. The
east-Asian financial crisis put more pressure on the Japanese economy, and the market index went
down continuously. The worsening financing conditions have made a lot of enterprises gone into
bankruptcy. In 2000, the Japanese economy seemed to recover a bit. However after 9·11 2001, it has
been threatened by terrorism and Japanese people worried about their personal safety. All these factors
have shadowed macroeconomics in Japan, and the people, especially the entrepreneurs have taken a
pessimistic view of the economy, thus there are always some restrictions on the development of the
enterprises.
Although the Chinese economy has also undergone some ups and downs, the macroeconomics
in China is continuously improving. The reform and opening up policy is a great contributor to the
rapid development of the national economy. The “reform” has changed the Chinese planned economic
system and made private enterprises appear on the market. This “opening up” policy has opened the
Chinese gate to the world, as well as stimulated the communications between the Chinese people with
the outside world, which had been stopped for decades or even hundreds of years. The Chinese
entrepreneurs are now in an unprecedented favorable environment with the stable political
surroundings and the recovery of the economy. Having safely gotten through the east-Asian financial
crises, the successful bidding for the 2008 Olympics, entering into the WTO, the successful bidding for
the world expo, etc . . . , these tell us one thing: the Chinese economy has great development potential.
According to economic theory, capital always flows to the area with high profitability which
shows expectancy for high investment return. And this expectancy, in turn, shows the confidence of the
economy. Due to global terrorism, many overseas investors now have given up on the Europe and US
markets and have entered into the Chinese market which enjoys the stable political environment as well
as the low market risks. The capital flow caused by these macroeconomics has also provided more
opportunities to the Chinese entrepreneurs.
2)
Economic system
Politics plays an important role in choosing the national economic system. Under the influence
of the European countries and the US, Japan has been transformed from a feudalistic country to a
capitalist country. The capitalist political system has determined its capitalist economic system. The
Japanese government introduced the police, judiciary and army, as well as the banking system which
were only seen in capitalist countries at that time By doing so, it quickly built up the Japanese social
system. By almost completely copying the capitalist mode of the western countries, the Japanese
economy entered into the developing road of the European and American style and thus enjoys freedom
in the existence and development of the entrepreneurs. Up until now, the system is still in operation and
is strongly consistent, which, with the organizational form of group enterprises and the stable structure
run by families, makes the entrepreneurs develop smoothly.
Unlike Japan, China didn’t go through the capitalist society and entered into the socialist
countries directly. China had a close relationship with the Soviet Union after liberation, and copied all
kinds of social system from it, thus has distinctive socialist characteristics. At that time the enterprises
belonged to the state, the capitals belonged to the people. This kind of mode didn’t put the Chinese
economy on the right track of developing; on the contrary, it strongly restricted the development of the
economy and the national economy was very depressed at that time. Since the reform and opening up,
the Chinese government has been taking the socialist market economic system and integrating the
major merits of the capitalist system as well Now the enterprises can be owned by private person or a
group of person, rather than by the state. This change has had a direct effect on the entrepreneurs: the
status of the private owners has been recognized. The population of private entrepreneurs has been
growing rapidly (see chart 3), and their contributions to the national economy are even greater (see
chart 4). Without the pressure of the state-owned enterprises, the private entrepreneurs enjoy greater
freedom and creativity.
number of enterprises
Year
Population of employees
Quantity
Growth rate
Net
( thousand)
(%)
(thousand)
growth
Quantity
Growth rate
Net
(million)
(%)
(million)
74.0
2.8
1993
238
1991
432
81.4
194
6.5
1995
654
51.4
222
9.6
47.4
3.1
1996
819
25.2
165
11.7
22.5
2.2
1997
960
17.2
141
13.5
15.2
1.8
1998
1201
25.1
241
17.1
26.7
3.6
1999
1509
25.6
308
20.2
19.0
3.9
2000
1762
16.8
253
24.1
19.0
3.9
33.1
218
30.7
2.9
Average
3.7
Resources come from the 2000-2001 Chinese Statistics Annals.
Chart 3
the development of private enterprises since 1993
growth
100
90
80
)
%
( 70
e
60
t
a
r 50
h
40
t
w
o
30
r
g 20
10
0
The output of
whole industry
State-owned
enterprises
Group-owned
enterprises
Private
enterprises
Other forms
85 90 91 92 93 94 95 96 97 98 99
19 19 19 19 19 19 19 19 19 19 19
Chart 4 the net growth rate for Chinese industry output
3)
The Policy Guidance
Policy is the real reflection of the government attitude. And the government attitude towards
the enterprise and the entrepreneurs plays an important role in the developing of enterprises. So it’s
reasonable to say that the policy guidance is the key to the success of enterprises.
Looking through history, we can see that the Japanese government has always taken an active
attitude towards local enterprises. At first, the Japanese government defined the state policy as
becoming a strong nation through a strong army, and becoming a developed country through industry.
Under this state policy, the government built up a lot of factories and boatyards and let private
entrepreneurs manage them. This action has played a decisive role in the formation of Japanese
enterprises and plutocrats. After World War II, the Japanese government took “preference production”
as the major method for achieving economic recovery. This so called “preference production” means
that the government should use the limited capitals and resources to develop key industries, including
the coal, chemical and steel industries which are indispensable for production. This method has
provided great convenience for the entrepreneurs of these industries and helped the rapid development
of the Japanese energy, steel and chemical industries. Nowadays the Japanese economy is depressed
and “preference” has the new meaning of “protection”. For instance, the Japanese government set up
insurance for investment in Asia to protect the overseas Japanese enterprises. That is to say if overseas
subsidiaries encountered some unprecedented matters, such as the war, terrorist activities, earthquakes
as well as the bankruptcy of the traders on the other side, they will receive compensation from the
Japanese governmental insurance organization. This will help boost Japanese enterprises’ overseas
investment and trade. From that we can see that the Japanese government has close connections with
the enterprises and has created great opportunities for their development through the policy guidance in
various areas.
Since China’s reform and opening up, the Chinese government has changed its policy towards
the enterprises, which means that the government will reform the state owned enterprises and relax its
control over the ownership of enterprises. This policy will provide vast space for the development of
Chinese entrepreneurs as well as private capital while bringing some pain to the reforming process of
the state owned enterprises. The government has also created a series of policies to provide the right
environment for improving investment and financial conditions for private entrepreneurs in addition to
recognizing the status of private owners. Private economy has brought competitive vitality to the
market, and challenges the state owned economy, which has dominated the country for a long period of
time. After entering the 1990s, the government policy changed its aim to the new economic mode, and
the high-tech industry developed rapidly. In 2000 the total value of Chinese information industry
reached 1000 billion RMB. At the end of 1990s, with the development of the Chinese network industry,
people began to see some new entrepreneurs, also called entrepreneurs with risk capitals. Although the
network economy was called the “biggest Chinese bubble economy in the 21st century” we can not
deny that the bubble is the result of policy guidance to some extent. In 2001 when China entered the
WTO, the Chinese government had been endeavoring to undertake three main works in order to
improve the overall standards of Chinese manufacturing industry and establish a complete processing
system. The three main works are as follows: a) encouraging multinational companies to set up their
research centers in China while investing in building factories
b) establishing and implementing the
strategy of improving the whole industry via information to promote the rapid development of the
traditional industry
c) .establishing the state innovative system to create an environment of
innovation for the whole society.
This will help China, under the globalization trend, to win its due
place in the world market after entering the WTO
Although the development of enterprises in Japan and China are all influenced by policies,
there are substantial differences in the preference and meaning of this policy guidance. Japan had
become a developed capitalist country in the 1970s and the domestic enterprises have all entered the
mature stage. The Japanese government has always played the parent role in its over 100 years of
development. Nowadays there is a strong cohesive force between Japanese enterprises and the
government. The government, in turn, always helps the enterprises develop. On the other side, the
Chinese government has been in the exploration period during the past two decades, thus enterprises
are not mature enough and don’t have a close relationship with the government. The government has
always guided the development of the enterprises.
4)
The Cultural Background and the Value System
Looking through history, we can see that only culture can influence the people’s modes and
method of thinking and acting generations after generations. The politics and the economy are all
periodical phenomena. The value system, a combination of national culture and the current situation,
guides people’s action.
In ancient Japan, the population was composed of three groups of people, who through
long-term mutual communication and understanding became a whole nationality living in the same
political, social and cultural environment and enjoying a homogeneous mode of thinking. Most people
in Japan used to grow the rice, which is a hard work without mutual help between neighbors. By doing
so for a long period of time, the Japanese people have developed a core culture of group cooperation.
The Japanese people usually have a strong tendency to reject overseas matters, but they
peacefully have always kept an open mind to the advanced cultures around them. Their national culture
is continuously enriched. The following is the general cultural model of Japan according to some
references (chart 5).
Influential factors
core content
typical behavior
essence
The culture of
Confucianism
Group
cooperation
The western
Tend to be close to nature
Emphasize more on feelings
and experiences than the
abstract matters
Attach
importance
to
learning, imitation and
creation
Realism
Pragmatism
Rationalism
culture
Chart 5 the general cultural modern of Japan
The traditional Chinese culture is influenced greatly by Confucianism including humanity, good
relationships, communication, and faith, kindheartedness as well as civilian and military principles. We
can say that the traditional Chinese culture is varied just like the Chinese nation. With the passing of
time, the core value system has been changed by the political environment. And we can see the
changing process as follows:
Time period
Before the Opium War
core cultural system
Prefer integration, draw great attention to rules and moral quality;
emphasis on the family, ethic and commitments the members
should take for the prosperity of the whole family.
After the Opium War
The nationalism value with strong national sentiments, emphasize on
getting rid of the humiliating status and maintaining the dignity
of the country.
1949-1979
Communist value system.
1979 to now
Rational economic development.
The change of the culture and value systems of Japan and China is just like the social evolution
of the two countries. The Japanese culture has a strong sense of consistency, develops slowly and
continuously and is quite stable over a short period of time. The evolution of Chinese culture is just like
the evolution of its social system which changes too fast. The value system has developed unstably
with the changes of the political system, which hampers the establishment of a relative stable mode of
thinking.
2
The Comparative Research For the Group Actions between Japanese and Chinese
Entrepreneurs
1)
The Tendency towards collectivism
The Japanese entrepreneurs have been influenced greatly by the core national culture, group
cooperation. They emphasize the group concept and weaken the self consciousness inside their
enterprises. From the outside, the behavior of Japanese entrepreneurs, called “the spirit of ants”—they
always gather together to compete with others, also reflects the strong sense of collectivism
A lot of Japanese enterprises are run by families. And the traditional culture of Japan
emphasizes loyalty to the family. But when the interest of the family conflicts with that of the nation,
the Japanese will give the interest of the state greater priority, and weaken the concept of the family.
The Japanese entrepreneurs have a tendency towards collectivism which is demonstrated by the
following example. In 1965 Japan encountered the first real depression after the war, but it only lasted
1 year. During that year, the Japanese enterprises were facing a lot of difficulties, and there were some
possibilities that the enterprises would be merged with some overseas, especially American, companies.
So the Japanese enterprises gathered together to avoid being merged through purchasing each others
stocks. These enterprises are not only purchasing] each other’s stocks but also exchanging some of the
leaderships. This kind of enterprise is called a “series”. The most famous 6 series in Japanese economic
development were formed at that period.
The collectivism of Chinese enterprises is not strong compared with their Japanese counterparts.
Although there are some examples to show that Chinese can also gather together to face the outside
threats, nowadays the cohesiveness of the collectivism seems to be weaker. Take last year’s successful
anti-dumping case of Chinese lighter enterprises as an example. There were no enterprises standing out
to appeal for the antidumping case in the first 7 of the 16 day appealing period. At last only the
association of smoking in Wengzhou (Zhejiang province) came out to settle the problem. Actually if
China loses the antidumping case this time, the whole lighter industry will be attacked seriously.
However no enterprises were willing to appeal for themselves. We should think carefully about why all
Chinese enterprises will scatter rather than gather together when facing difficulties.
Nowadays the Chinese economy is developing rapidly, and the Chinese enterprises are
beginning to enter the world market. These entrepreneurs are not only the backbones of their own
enterprises but also the representatives of the whole Chinese enterprises. Even now China places great
emphasis on self ability; Chinese people should have strong feelings for their own countries. Chinese
entrepreneurs could learn something from the Japanese entrepreneurs.
2)
The Methods to Face Competition
There is an old saying that those who can adapt to the outside surroundings will survive in
severe competition. It need not only apply to natural environments, but also to human society.
Entrepreneurs must lead their enterprises into battle in this “war”. As leaders in their enterprises,
entrepreneurs should think of how to view competition, how to encourage internal competition and
how to participate in market competition on the outside. These are all among the most important
characteristics of entrepreneurial behavior.
The group cooperation spirit as a core of Japanese culture has formed a unique concept of
management: to compete outside and be harmonious inside. The essence of this concept is how to view
harmoniousness and competition inside and outside. This so called harmoniousness inside a company
is meant to create good relationships between colleagues and to provide equal competitive
opportunities for everyone. Only if the employees inside the company enjoy this harmonious
relationship will the group be full of energy to develop its revenue and the interests of every employee
insured. As for internal competition, entrepreneurs should pay attention to the ability and contribution
of each employee, and give each one a suitable position and salary. Although this competitive system
may have some restrictions, it does bring vitality as well as effectiveness to Japanese enterprises.
Influenced by Japanese collectivistic culture, Japanese employees compete for promotions and
cooperate for the success of the department. Every department will cooperate with the others for
interest which improves the competitiveness of the enterprise as a whole while maintaining its
cohesiveness.
China and Japan are both influenced by Confucianism, and place emphasis on humanity, the
relationships between human beings and the golden mean. What is important is that Chinese
entrepreneurs learn from their Japanese counterparts to be harmonious and competitive outside the
enterprises. The essence of this theory is that Japanese entrepreneurs respect the market order and have
a special understanding of market competition. To be harmonious outside the enterprise, which they
applaud, means each enterprise on the market should obey the rules of the market, enjoy equal
competition and try to win through its own strength rather than by improper competition and monopoly.
This kind of harmonious competition can avoid waste of resources and attain a win-win situation. As
for outside competition, what they want is harmonious competition, which will provide a good
environment for the development of enterprise.
Why should Chinese entrepreneurs learn from their Japanese counterparts in this respect? The
market is the prerequisite for existence of the enterprises as well as the entrepreneurs and market rules
are the necessary methods to secure the sound existence of entrepreneurs. The foundation of market
economy is market competition, and how entrepreneurs view and participate in competition will
influence the final result. The competition can be seen directly from price. Chinese people can still
remember the vicious price competition between the VCD manufactures. Of course price competition
is partially caused by a lack of core technology, but the entrepreneurs who do not respect market rules
and try to get the market share by lowering prices deliberately should also be blamed. These
entrepreneurs care only about their short term interests and what they have done caused the whole VCD
industry to face the danger of extinction. Those entrepreneurs with no regard to the rules, at the same
time influence the entrepreneurs of that industry a lot. According to a report, the manager of “Ai Duo”
VCD company is now in prison for his wrongdoings in the market. Here is another example,
Wubingxin, the general manager of “San Mei” Toothpaste Company, is well known for his
management theory: to run the enterprise as if you are guiding an army onto the battle field. It is a great
theory for management itself, but the extreme side should never be reached. In his theory the final
result in the market is only dying. In the world today, the main idea for competition is to compete in a
harmonious environment or what Japanese entrepreneurs refer to as harmonious competition. Through
that kind of competition, enterprises will reach a win-win situation.
Entrepreneurs should be responsible for the market, and the market is a fair place for everyone.
It will pay one back according to how one treats it. Only when entrepreneurs respect the order of the
market will industry become prosperous and the core industry of a nation will develop rapidly. Michael
E. Porter’s model of the Competitive Advantage of Nations demonstrates national competitiveness
from certain industries. The core industry of Japan in the 1980s and 1990s was electrical appliances.
What is the core industry in today’s China? We firmly believe that with a suitable environment and
cooperative people, Chinese entrepreneurs will perform well on the world market.
3)
Morality and the Concept of Caring People
Confucianism is not only the cultural treasure of the Chinese nation but also has a significant
influence on Japanese culture. We can see Confucianism throughout the Japanese value system.
Japanese entrepreneurs place great emphasis on morality and the Confucian concept of caring for
people. Therefore their mode of behavior has distinctive Confucian characteristics.
“The Analects and Abaci” written by a Japanese professor, who is known as the father of
modern Japanese enterprises, uses the Analects of Confucius as the theoretic foundation of all business
activities. They applied Confucianism to modern business administration. This book has become
necessary reading material for the management departments of Japanese enterprises. Another example
is: One of the most important characteristics of management of Japanese enterprises is the application
of a harmonious and kindhearted spirit to the management of enterprises. These Japanese entrepreneurs
greatly applaud the philosophy that harmonious management can bring wealth, and have thus formed a
cultural environment full of the milk of human kindness in enterprises. The founder of Toyota Textile
Company’s motto is “time, surroundings and people”, which originated from the famous Mencius
saying: harmoniousness among people is more important than good surroundings, while good
surroundings are more important than suitable time. The reason why we call Japanese enterprise an
association is that Japanese enterprise is just like a big family, and everyone in the family has the
responsibility to maintain harmoniousness and solidarity and to avoid the confrontations inside the
family.
State owned enterprises in China also attach great importance to morality and the concept of
caring. But certain groups of Chinese entrepreneurs in the early 1990s were utilitarian idealists, who
would take any means necessary to win. There is a vicious morality among these groups of people.
Take Shiyuzhu and Wubinxin as examples, as for personal quality and morality they are good enough
and can not be blamed for wrong, but their behaviors in the market should not be praised at all. They
always exaggerate the function of their products in marketing and promotion activities. The general
manager of The Giant Company Shiyuzhu has greatly exaggerated the functions of his product and has
no trust from the masses at all. They don’t obey the rules of the market and are marble hearted towards
their counterparts. Another manager Wubinxin faces the market as if he is on a battle field, and is
severe to the employees without a concept of caring. In the battle field, there are only living or dying
and there is no win-win situation at all. In fact, their utilitarian mentality is somewhat developed by the
judging standard of society, which is known as the winner is the owner of the land and the loser is the
invader. At the same time people seldom care about the morality of successful entrepreneurs also cause
the utilitarian mentality.
At that period of time the behavior of Chinese entrepreneurs was not mature enough; it can
even be considered childish. Behind this phenomenon the incompleteness of the market system is
demonstrated, the wrong knowledge structure of entrepreneurs and the lacking of a concept of
enterprise culture, etc. All these are internal reasons for the lacking of morality and caring concept in
these groups of entrepreneurs. It’s urgent for Chinese enterprises to complete these internal systems
while making the entrepreneurs think over their wrong doings.
4)
Dependence on the Government
The value systems which dominate Japan and China put politics on the first place of both. So
politics play an important role in the promotion of the economy.
The Japanese government tries to create an advantageous environment for the development of
enterprises by their industry policy. While trying to increase revenues, the entrepreneurs also want to
do something good for the country and are willing to accept help from the government. The
government officers and entrepreneurs have formed a mutually beneficial relationship and exchange
information regularly to coordinate the problems between each other. Those entrepreneurs who lack
this good relationship with government officers should rely on themselves to accumulate their precious
resources. Generally speaking, Japanese entrepreneurs are dependent on the government, and they are
willing to pay back what they get from the government. But although it will be beneficial for
enterprises to get necessary information and resources by establishing a relationship with the
government, it may also lead to some moral risks of people bribing officials in exchange for such
relationships.
The relationships between Chinese state-owned enterprises and the government are as close as
their Japanese counterparts. But these relationships are largely caused by political factors. The
managers of state-owned enterprises are always members of the Communist Party, and demonstrate a
communistic value system through their behavior. Their enthusiasm for politics and their concept of
obeying organizational rules are the main motivations of their management. These subtle relationships
between government and enterprises lead the entrepreneurs to have some wrong thinking: they are
diligent in their works only for promotion in the future. This kind of thought can be viewed as self
consciousness; it does no good for the states’ interest and the development of state-owned enterprises.
Some entrepreneurs even rely completely on the government and are not willing to devote themselves
to the enterprises. With the ongoing reform of state-owned enterprises, the entrepreneurs are getting rid
of this bad metal habit. In fact the close relationship with the government gives a comparative
advantage to the state-owned enterprises and is a rare resource. If entrepreneurs at state owned
enterprises could take full advantage of this and participate in management affairs actively, the
possibility of success in the market will be increased. For instance, some state-owned enterprises in the
same industry get into a union or a group for restructuring under the guidance of the government. Take
Bai Lian Group in the retail industry as an example. By restructuring, the resources will be used
economically and the whole group will improve its competitiveness.
As for private enterprises, their relationships with the government are not as close as their
state-owned counterparts, and who have fewer opportunities to enjoy favorable policy from the
government. After China’s reform and opening up, especially in the early 1990s, in order to cater to the
interest of and be recognized by the government and society, many entrepreneurs have made several
mistakes in decision making. For example, when building the Giant Mansion, the Giant Group
increased the floor several times to cater to political interest, but at last didn’t have any more capital to
continue and was in hot water. This demonstrates that private entrepreneurs are eager to establish close
relationships with the government and want protection from the government. But what they did before
is a little bit childish. In recent years, the government has been improving its policy towards private
enterprises, and private entrepreneurs now enjoy more protection and preference from the government
preference policy. It is a good developing trend. Just as the protection and help from the Japanese
government towards its private enterprises to encourage their development, the private entrepreneurs
will have affections towards the government. They will try to devote themselves to the development of
the industry and the nation as well. Only by having this idea in mind can we realize the dream of
renovating the whole nation’s industry.
5)
Innovation
Japan is not like America, which is quite good at innovation. The Japanese mode of thinking
pays more attention to feeling and experience while ignoring abstraction and thoughts, which makes
Japanese people’s behavior become more realistic, practical and reasonable. Their creation is actually
recreation on the basis of learning and imitating. But I believe, to some extent, it is a new
understanding of creation by the Japanese nation. Japan won’t be able to grasp so many important high
technologies by simply imitating others.
After the Japanese economic depression in 1980s, Chinese entrepreneurs, who once admired
Japanese enterprise so much, began to cooperate with enterprises from Europe and America, and
seldom mentioned Japanese enterprise. In this transition period, Japan continued its innovation strides
and made some progress and renovation in the areas of mobile phones, digital cameras, pickup cameras,
DVDs, etc. All the key components of these innovations are made by Japanese companies. The
Japanese entrepreneurs controlled from 70% to 90% of the market share in this area of innovation. The
mass creation of Japanese enterprises can not be ignored when they move the production base from
domestic to overseas which leads to strange phenomenon such as the “hole” industry Learned via
multimedia such as TV and computer network that Japan has some areas full of developing potentiality,
such as the cartoon industry, the animation industry, the visual game industry, etc., and it enjoys high
market share in these areas.
One thing Chinese entrepreneurs should learn from their Japanese counterparts is the
continuous creative spirit. But please pay attention to the great differences in technology and method
between the true creation and imitation. Creation itself is a process which requires trying, practicing
and creating. As China is now lagging behind the world in some technological areas, Chinese
entrepreneurs can learn from their Japanese counterparts in changing to another method, another mode
of thinking and trying another kind of innovation. According to a book called Japanese Manufacture,
the founder of Sony (at that time, the company had another name) refused to become an original
equipment manufacturer (known as OEM) for other companies, although the company, at that time,
enjoyed great competence in designing transistor radios. He created the new name—Sony—for the
company and tried to use Sony as the name of brand. It’s this kind of mind changing that began
creating the road to Sony. And today, Sony has become a very famous world brand. From this story we
can see the dignity and the vision of an entrepreneur.
After China entering the WTO, more and more overseas companies moved their production
bases to China. For a period of time, Chinese entrepreneurs were quite satisfied with the name of World
Factory. To be the OEM for a renowned overseas enterprise will increase a company’s revenue and job
opportunities, which in turn will increase the country’s GDP. So a lot of enterprises are willing to be the
OEM. Now we have entered the 21st century, the Chinese enterprises have come through the period of
making money only in the fields they are good at. What they should do is to draw more attention to the
market rather then manufacturing. Manufacturing accounts for less than 10% on the chain of value. If
Chinese entrepreneurs want to compete on the world market, they should pursue a share of the market
and an increase of sales, which are the most valuable sections on the value chain. In order to get rid of
the allocation of the so called cheap labor, I suggest that our Chinese entrepreneurs learn from the
founder of Sony to establish a brand of your own and to improve it by using the technology acquired
during the process of being an OEM for others. Thus Chinese enterprises can compete with their
counterparts on the world market in both quality and performance.
Entering into the WTO will provide more opportunities for overseas enterprises to come into
Chinese market. And there is no need for us to feel sad about the name of World Factory. In fact, the
WTO also provides great opportunities for Chinese entrepreneurs to develop overseas. We are glad to
see that some famous Chinese brand, such as Haier and Lenovo, have already entered the world market.
And the Huawei Company in Shenzhen and the East Software Company in Shengyang have also won
the recognition of the world market for their good performance and quality. We need more
entrepreneurs with that kind of thought, braveness and vision to create our national brands and develop
our national industry. Only by doing so can we realize our dream of national renovation.
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