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Local and international companies face problems and countermeasures

Author: LiuShuDian From: www.yourpaper.net Posted: 2007-11-19 03:02:16 Read:
Review of history
Local and international companies (international contracted projects and labor export-based industry, provinces, municipalities and International Economic and Technical Cooperation) is a product of China's reform and opening up, mostly founded in the early 1980s of the last century, most of its predecessor, the Province City Manager Foreign Trade and Economic Cooperation Bureau. The countries initially approved scope of business: international project contracting, national commitment to foreign aid projects, foreign labor output and held in foreign owned or joint ventures; later added import and export trade. It can be said that the local and international companies in the reform and opening up, in accordance with the national "going out" strategy to enter the international market, to compete, to seek a way out.
Only local and international companies in various provinces and municipalities have carried out in the foreign project contracting, labor export and to start a business the right to operate, local enterprises to carry out these operations, can only be made on behalf of central or local international companies to carry out. Which determines the local and international companies established with the nature of the window and trade monopoly nature of foreign economic relations company. Therefore, under the planned economy, many domestic enterprises, especially in the professional engineering company is asking local and international companies, hoping to brand and help of local and international companies doing business abroad.
Local and international entrepreneurial very difficult. First, there is not enough capital, the government allocated to the small initial working capital. The second is no facility does not have its own office premises domestic, foreign construction machinery. Third, there is no off-the-shelf team, not familiar with international engineering contracting and technical personnel and management personnel. Fourth, there is no management infrastructure, let alone management experience. Fifth, there is no market, thanks to open up their own.
In short, when the local and international companies almost nothing, there is only a right to operate and national policy support. Two decades, local and international companies struggle to survive development. Compared with the venture, the local and international companies already have a certain size and strength, and some also became a listed company. Especially in the mid-80s of the last century to the mid-1990s, the golden era of local companies. During this period, the contract amount and turnover of local and international companies on the international project contracting and labor output in the country occupies a large proportion.
major problem
With the in-depth development of reform and opening up, the gradual improvement of the domestic market economic system and international changes in market conditions, the planned economy system, the birth place of international companies own the problems gradually emerging, and are unable to deal with other aspects of the harsh challenges. Are just a few of the local and international companies both internal and external factors that make the most of the local and international companies slow business development in the recent years, the decline in performance, especially in project contracting business atrophy, and even some operating difficulties, maintained a good momentum of development . Address the problems faced by local and international companies mainly in the following areas:
the , poor implementation of contracted projects, had to rely on the window role in maintaining or improving the turnover of contracted projects.
Poor ability to "deficiencies" in the local international companies, and thus the implementation of contracted projects. First of all, can only undertake the low-tech general engineering, can not afford to projects involving high technology content. Second, the limited self, even ordinary projects, relying on the operation and management of their own strength, can not be open at the same time a number of projects, and slightly larger than the size of the project organization and implementation is difficult. The capacity constraints, but in order to maintain and increase the contract amount and turnover, local and international companies in contract projects tend to be very blind, as long as it is a small technical difficulty is not high, what the project wants to get involved, or even go to the same business country where competition in the local small projects, and to offend local small companies and public opinion. On the other hand, had still rely on cooperation with the professional engineering company to implement most of the works contract.
In cooperation with the professional engineering company, local and international companies basically in two ways:
First, both funded the operation and management of the project is responsible for all domestic professional engineering company.
Project subcontracted to a professional engineering company, local and international companies only charge a brand fee (in fact, this approach is contrary to engineering contracts and FIDIC contract).
For the first form of cooperation, cooperation between the two sides is not much better. In the project implementation process, the two sides often conflict, contradictory and often by foreign idea to the domestic. Jointly funded, party management caused too many contradictions, so local and international companies in the later more cooperation on the full subcontract, thinking that both save and secure. However, the continued occurrence of cases prove, the brand fee collection is not foolproof, once the project is a problem, all risks fall on local and international companies who first.
However, local and international companies due to the self-employed poor engineering or technical force, knows the risk is great, but forced to take this cooperation, in most projects still brand fee less and lower. In addition, local and international companies selling brand of cooperation right to operate outside the domestic engineering company to the foreign countries, eventually become competitors operating the country, exacerbated by the disorderly competition between the Chinese.
Even when relying on cooperation with domestic professional engineering company to implement construction projects, many local and international companies to bid for the contract amount of the project and turnover is pitiful, it can be said that the workshop-style scale of operation, it is difficult to establish a strong international contract The supplier of image, but, it is difficult to achieve better economic efficiency.
unprecedented fierce competition, the mistake of taking the low price strategy.
Local and international companies can only participate in the competition of low-tech project, but even in the 80s of the last century to the early 1990s, China's foreign economic relations companies to enter the international contracting market is the tradition of the Western National Engineering Company market, so the local and international companies face major competitors are one of the few Western countries engineering company. Our price is low, but it is just slightly lower than the Western countries works long-term to maintain the market price level, the implementation of the project, there is still much room for profit. But now the situation is different. First of all, the competitors and the number of major changes. Secondly, the lower the price more competitive.
Over the years, local and international companies involved in the project is basically not changed much, still low-tech general engineering, but the project's main rival general contracting company is no longer in Western countries (most of these companies have withdrawn in the small competition), but many get the right to operate outside of the professional engineering company and local companies operating the country. The main competition has undergone a fundamental change, and the surge in the number.
In recent years, more and more companies the right to operate foreign economic operations in China has been nearly 2000. Many of which are domestic strength of the professional engineering company, its capital, technology, human resources and on-site construction organization is a local international companies can not match, local and international companies have temporary advantage, but is familiar with the action of the international engineering contracting business personnel and occupy a seat in foreign markets. From the overall situation of the development of foreign economic relations career, to lead the professional engineering company competitive international market is undoubtedly correct, but it also has had an impact to the local and international companies. A dramatic change, a dozen years ago, a professional engineering company also took the initiative to find a place to international companies, but now it is the industry of local and international companies take the initiative to the domestic industry engineering firms. This change indicates that the inevitable weakening of the role of the local and international companies trade monopoly and the same professional engineering company to compete in the international market.
The local company operating the country is an emerging competitive forces. In the last 20 years, the developing countries in support of the national industry in the country, this policy also enables local contracting company to develop, grow, and they are involved in some of the international engineering contracting projects competition, access to a large market share , forcing some foreign companies be obliged to vote in this business for many years, they became the Commonwealth, and even some just get out of this market.
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