Wednesday, November 02, 2005
"Chinese fascination with the Wal-Mart model is growing fast."
A Welcome to Wal-Mart - Newsweek: International Editions - MSNBC.com
Newsweek International has an indepth article about relationship between China and Wal-Mart. Wal-Mart is China's eight largest trading partner, right after Germany. Wal-Mart's influence on the Chinese way of doing business is huge:
Newsweek International has an indepth article about relationship between China and Wal-Mart. Wal-Mart is China's eight largest trading partner, right after Germany. Wal-Mart's influence on the Chinese way of doing business is huge:
The company's iron-fisted price and performance demands on suppliers are changing the way China does business, and now that Wal-Mart is free to expand inside China, that impact will grow exponentially.It seems that the WAl-Mart model of retailing and production management has attracted a lot of interest in China. The article argues that as China adopts Wal-Mart as a business model Chinese business will become even more competitive and efficient in the global market:
What is obvious is that China, more than most nations, welcomes the disruptive impact of Wal-Mart's business model, built on the scale of its stores and innovative use of information technology to keep track of what sells and what doesn't. Chinese suppliers say Wal-Mart is already having a transformative effect on everything from supply chains, to distribution networks, to customer service. The company has a network of 10,000 suppliers for its China operation, most of which are small and not part of its global supply chain. Thus, the spread of Wal-Mart stores is raising efficiency standards for a growing number of Chinese suppliers, which is likely to make the nation an even tougher competitor in the international arena as well. Government officials see Wal-Mart as a good way to accelerate China's transition from state planning to free markets and to "bring the country's economy into the 21st century," says Li Fei, a retail-marketing professor at Tsinghua University.Wal-Mart is being touted as modernizer. The new open door policy has arrived. China is welcoming the cream of capitalist efficiency into China as a way to increase productivity and efficiency in the Chinese economy. This would be an example of state planning on the part of China, not simply a triumph of the market The state is learning how to promote free market efficiency through a very carefully planned roll out of capitalism bit by bit, using the Wal-Mart model as a guide. God help us all if China is able to create corporations in the image of Wal -Mart backed by what increasingly seems to be China's mercantile policy of state-planned promotion of "free" market models based on the efficiencies made possible by the digital revolution.
