“Copycat strategy has led the Chinese industrial innovation”, said CKGSB Professor Teng Bingsheng at the 5th Asia Leadership Conference on March 4th in Seoul. He explained that “the technologies learned from the overseas products over the last 20 to 30 years has become a shortcut to our innovation.”
Professor Teng explained that “China has been successful in the global market based on a business model that copies products as well as sales networks” and “Chinese companies have imitated the overseas companies’ advantages and gradually tailored them to the local market.” Yet, Professor Teng commented that controversy still remains over the breach of intellectual property rights.
The development of the mobile and internet sectors have also become a cornerstone in the innovation of Chinese enterprises. Professor Teng explained that China has now transitioned to the global market, driven by internet giants such as Tencent, Alibaba and Baidu. He stressed that the Chinese governments’ censorship of international websites actually contributed to the growth of the Chinese internet companies – for example, the Chinese government’s censorship of Google ultimately led Tencent to rise.
Professor Teng highlighted that the Chinese government is putting much effort into creating a creative economy such as that of Korea. He also pointed to Samsung as one of the role models for both the Chinese private and public sectors since it reflects GE’s product diversity, Apple’s product innovation, and manages a close relationship with the government.
As a word of advice to overseas companies aiming to enter Chinese market, Professor Teng viewed cost management as a major factor in maintaining competitiveness. “Overseas companies should have a valid reason to justify their product cost, which is approximately 20% higher than Chinese companies. The reality is that the Chinese heavy-industrial products are as competitive as those of Caterpillar from the U.S., yet price their products nearly 50% lower.”