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Building Brands in Global Markets Stressed

On the road to internationalization, Chinese companies must meet international corporate standards as well as establish their names in global markets, Asia's business leaders said at a conference at the annual Boao Forum for Asia yesterday.

"The globalization of Chinese enterprises is an unavoidable trend, we must develop our domestic advantages into international ones," said Zhang Ruimin, chief executive officer of Haier Group.

Zhang stressed that China's firms should only venture into overseas markets after consolidating their businesses at home.

"If we cannot win in our own market, we will not succeed internationally," he said.

"When we have entered the global market, we must bring our products into the mainstream and establish a firm awareness in the consciousness of the Western consumer."

Speakers at the event maintained that the globalization of Chinese companies must involve thorough business reform.

"We should never internationalize just for the sake of it, and we must be prepared to implement comprehensive restructuring measures to align ourselves with international corporate standards," said Yang Yuanqing, president and CEO of Lenovo Group.

Citing Lenovo's successful partnership with IBM, Yang said it was important for Chinese enterprises to enhance their international profile.

"Our strategic acquisition of the IBM brand name and human resources are solid steps that accelerated the internationalization of our company."

Yang said the general awareness of Asian brands is still very low in Western markets, and they are often thought of as low quality.

Chinese firms could enhance their brand positions considerably with the right strategic partners, and the hiring of Western talent would offer significant insights into international corporate culture and governance, he said.

Participants at the conference also agreed that the globalization of the world economy has compelled Asian companies to rethink their growth strategies, with internationalization as a dominant theme.

"Internationalization is an evolutionary process comprising a number of steps needed to be taken by firms," said Lee Yi Shyan, chief executive officer of International Enterprise Singapore.

Lee said the many Asian disappointments when venturing overseas came about through attempts to penetrate too many markets at once, the lack of a well-defined strategy and an inability to introduce domestic products into foreign markets due to a poor understanding of local environments.

"Compared to their Western counterparts, relatively few Asian companies invested in building extensive networks of subsidiaries with sales, manufacturing and service operations, as well as support functions around the world," Lee said.

(China Daily April 25, 2005)

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