Page 40 - 2018 White Paper on the Business Environment in China
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8 White Paper on the Business Environment in China
million in imports in 2016. A substantial share of these result has been a substantial contribution to scientific
imports is sourced by U.S. companies, many of which and technological capabilities in China. U.S. and other
source much, most, or in some cases, nearly all of the FIE/FA R&D has also been a substantial source of high-
goods they sell from China, not just for the U.S. market, tech and other start-ups in China (Cai et al.).
but for global markets. There is no ready source of data
on how much of China’s manufacturing and trade is Improving Business Practices and Standards in China:
sourced by U.S. companies. However, they have the same U.S. companies have been instrumental in improving
sort of direct, indirect, and induced impacts as goods business practices and standards in the China. The Big
produced by USFAs and other FIEs/FAs in China. Six, and subsequently Big Four accounting firms, several
with American roots, helped create China’s accounting
Modernizing and Creating Industries in China: U.S. standards, provided auditing services for most of the
companies such as GM, Ford, Coca-Cola, McDonald’s, early Chinese international IPOs, and trained entire
KFC, Starbucks, Cargill, Kodak, and Walmart have generations of local accountants. U.S. and other FIE/
helped to modernize industries in China, including the FA management consulting firms facilitated the entry
auto, beverage, food, agribusiness, photographic, and and expansion of foreign firms in China, allowed for
retailing industries. U.S. companies like P&G, Omnicon, the transfer of international best practice to Chinese
Nike, and others have helped create the consumer firms, and provided training for many founders of
packaged goods, advertising, athletic footwear, and Chinese consulting firms. Even more important than
other industries. These have brought benefits to Chinese the professional service firms has been the examples
consumers and have provided examples emulated by of foreign firm management practices that have been
Chinese companies all over the country. In many of these learned by former employees, as well as Chinese
industries and others, Chinese companies have learned suppliers, customers, and competitors.
from USFAs and other FIEs/FAs and have developed into
strong competitors in their own right. Improving the Financial Sector in China: The
activities of U.S. and other foreign firms have resulted
Creating Supply and Distribution Channels in China: in significant improvements in China’s financial sector.
U.S. companies like HP, Apple, Coca-Cola, P&G, Walmart, Foreign competition has been credited with raising the
Costco, GM, Ford, United Technologies, GE, and others efficiency of Chinese banks, improving the availability
have helped develop complete supply and distribution of local bank credit, and having a positive impact on
chains in China. In many cases, the U.S. and other FIEs/ domestic risk management (Zhang and Wu 72; Mao
FAs provided technical, financial, and business assistance 115; Lv 27). Companies, like Citibank, Goldman Sachs,
to develop supply and distribution channels that did not Bank of America, Morgan Stanley, JP Morgan, and others
exist in China before the economic opening. Many of the have provided support on systems, risk-management,
Chinese suppliers are now strong companies in their own customer operations, human resources, and other areas to
right and sell throughout China and internationally. The Chinese partners and counterparts. AIG and other foreign
distribution channels set up with the support of foreign insurance companies have been instrumental in the
companies in many cases serve Chinese companies as development of China’s insurance industry. U.S. firms, such
well, dramatically facilitating the emergence of a strong as IDG, Goldman Sachs, Walden International, H&Q, Intel
indigenous economy. Capital, ASIMCO, and other U.S. firms have been credited
with introducing modern venture capital (VC) to China, as
Expanding R&D Capabilities in China: U.S. companies well as training generations of Chinese VCs.
have been instrumental in expanding research and
development capabilities in China. According to a PwC Bringing Modern Management Training to China:
study, in 2015, U.S. companies accounted for US$18.2 U.S. entities have been instrumental in bringing modern
billion in research and development (R&D) funding management training and education to China. A U.S.
in China (Jaruzelski et al.). Companies like Boeing, sponsored training program in Dalian began offering
Microsoft, Yahoo, IBM, GE, Ford, GM, Intel, Motorola one of China’s first MBAs in 1984. U.S. companies like
Solutions, FMC, Genzyme, EMC, Cummins, PepsiCo, P&G, Motorola, P&G, GE, IBM, Amway, McDonald’s, and HP
and many others carry out substantial R&D activities have all set up corporate universities in China, a practice
in China. These centers employ local scientists and now copied by hundreds of Chinese firms. Several U.S.
engineers, cooperate with local research institutes and and other FIEs/FAs have provided business-specific
universities, and generate numerous spillovers. The training in China. Boeing, for example, has provided
40
million in imports in 2016. A substantial share of these result has been a substantial contribution to scientific
imports is sourced by U.S. companies, many of which and technological capabilities in China. U.S. and other
source much, most, or in some cases, nearly all of the FIE/FA R&D has also been a substantial source of high-
goods they sell from China, not just for the U.S. market, tech and other start-ups in China (Cai et al.).
but for global markets. There is no ready source of data
on how much of China’s manufacturing and trade is Improving Business Practices and Standards in China:
sourced by U.S. companies. However, they have the same U.S. companies have been instrumental in improving
sort of direct, indirect, and induced impacts as goods business practices and standards in the China. The Big
produced by USFAs and other FIEs/FAs in China. Six, and subsequently Big Four accounting firms, several
with American roots, helped create China’s accounting
Modernizing and Creating Industries in China: U.S. standards, provided auditing services for most of the
companies such as GM, Ford, Coca-Cola, McDonald’s, early Chinese international IPOs, and trained entire
KFC, Starbucks, Cargill, Kodak, and Walmart have generations of local accountants. U.S. and other FIE/
helped to modernize industries in China, including the FA management consulting firms facilitated the entry
auto, beverage, food, agribusiness, photographic, and and expansion of foreign firms in China, allowed for
retailing industries. U.S. companies like P&G, Omnicon, the transfer of international best practice to Chinese
Nike, and others have helped create the consumer firms, and provided training for many founders of
packaged goods, advertising, athletic footwear, and Chinese consulting firms. Even more important than
other industries. These have brought benefits to Chinese the professional service firms has been the examples
consumers and have provided examples emulated by of foreign firm management practices that have been
Chinese companies all over the country. In many of these learned by former employees, as well as Chinese
industries and others, Chinese companies have learned suppliers, customers, and competitors.
from USFAs and other FIEs/FAs and have developed into
strong competitors in their own right. Improving the Financial Sector in China: The
activities of U.S. and other foreign firms have resulted
Creating Supply and Distribution Channels in China: in significant improvements in China’s financial sector.
U.S. companies like HP, Apple, Coca-Cola, P&G, Walmart, Foreign competition has been credited with raising the
Costco, GM, Ford, United Technologies, GE, and others efficiency of Chinese banks, improving the availability
have helped develop complete supply and distribution of local bank credit, and having a positive impact on
chains in China. In many cases, the U.S. and other FIEs/ domestic risk management (Zhang and Wu 72; Mao
FAs provided technical, financial, and business assistance 115; Lv 27). Companies, like Citibank, Goldman Sachs,
to develop supply and distribution channels that did not Bank of America, Morgan Stanley, JP Morgan, and others
exist in China before the economic opening. Many of the have provided support on systems, risk-management,
Chinese suppliers are now strong companies in their own customer operations, human resources, and other areas to
right and sell throughout China and internationally. The Chinese partners and counterparts. AIG and other foreign
distribution channels set up with the support of foreign insurance companies have been instrumental in the
companies in many cases serve Chinese companies as development of China’s insurance industry. U.S. firms, such
well, dramatically facilitating the emergence of a strong as IDG, Goldman Sachs, Walden International, H&Q, Intel
indigenous economy. Capital, ASIMCO, and other U.S. firms have been credited
with introducing modern venture capital (VC) to China, as
Expanding R&D Capabilities in China: U.S. companies well as training generations of Chinese VCs.
have been instrumental in expanding research and
development capabilities in China. According to a PwC Bringing Modern Management Training to China:
study, in 2015, U.S. companies accounted for US$18.2 U.S. entities have been instrumental in bringing modern
billion in research and development (R&D) funding management training and education to China. A U.S.
in China (Jaruzelski et al.). Companies like Boeing, sponsored training program in Dalian began offering
Microsoft, Yahoo, IBM, GE, Ford, GM, Intel, Motorola one of China’s first MBAs in 1984. U.S. companies like
Solutions, FMC, Genzyme, EMC, Cummins, PepsiCo, P&G, Motorola, P&G, GE, IBM, Amway, McDonald’s, and HP
and many others carry out substantial R&D activities have all set up corporate universities in China, a practice
in China. These centers employ local scientists and now copied by hundreds of Chinese firms. Several U.S.
engineers, cooperate with local research institutes and and other FIEs/FAs have provided business-specific
universities, and generate numerous spillovers. The training in China. Boeing, for example, has provided
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