Preface Chapter 1 Chapter 2 Chapter 3

Notes

Preface 1. See, e.g., Wang (1998a). Wang and Nolan (1998) contains several of Dr Wang’s papers on Chinese enterprise reform as well as one long paper of my own.

Chapter 1 1. My own contributions to that debate, especially in relation to China, were published in various places (Nolan, 1990, 1993a,b, 1994, 1995). 2. The Pennsylvania Railroad employed 110 000 people by 1891, probably the world’s then largest business (Schmitz, 1993: 19).

Chapter 2 1. For example, between 1992 and 1997, revenues rose by 59 per cent at GE, 53 per cent at Ford, 33 per cent at Shell and 34 per cent at GM. Employment in these giant firms rose by just 19 per cent at GE, 12 per cent at Ford, and fell by 17 per cent at Shell and 19 per cent at GM (UNCTAD, 1995, 1999).

Chapter 3 1. These 100 enterprises were chosen in November 1994. Of these 28 were classi- fied as super-large, 67 large and five medium-sized enterprises. They employed over 1.5 million people and most were members of large enterprise groups in their own right (Huang, Wu and Yao, 1998: 35) with an average of 20 members per trial enterprise group (Zou and Zhang, 1991). 2. These measures, shrouded in greater secrecy than those related to business group development, orient around closer relationships between the banking sector and the chosen LMEs. The 512 LMEs in this ‘vanguard’ were among the largest in the state sector. Although they constituted just 1 per cent of all state firms they accounted for 55 per cent of assets, 60 per cent of sales and 80 per cent of taxes of the state industrial sector (CDBW, 14 January 1998). 3. It is not clear to what extent the 512 ‘focal’ (zhongdian) LMEs are integrated within the 120 business groups. Wu Bangguo in a speech referred to the LMEs as ‘belonging to’ 937 938 Notes the trial groups (Sun, 1998: 4). Elsewhere it has been suggested ‘the central government has chosen 512 enterprises to form the basis of these enterprise groups’ (Smyth, 2000: 722). However, many of the LMEs appear to remain independent and there is no mention in the most important policies related to the trial business group development of the role the 512 LMEs play. Nonetheless, at least 70 of the LMEs are core enterprises in the 120 trial business groups (see Table 3-2 for provincial spread and Table 3-5 in Appendix 1, p. 101 for enterprise examples). Yuchai, a large diesel engine manufacturer, is but one example of a trial LME that is not part of the trial business groups. 4. AVIC and CNMEG. Sinopec was not included in the national team. 5. In particular, publicity has been attached to six groups (Baoshan, Haier, Founder, Changhong, North China Pharmaceutical and Jiangnan groups) which have been granted annual injections of no less than 20 million yuan to help them enter the ranks of the Fortune 500. However, this is not part of a wider parcel of measures specifically aimed at these six groups but instead part of the ‘Ninth Five Year Plan state guide on key technological developments’. This plan has also chosen 166 key technology projects to be funded with state backing. These projects are related to the businesses of the 120 trial business groups and 512 preferred LMEs (CASS, ZGFB, 1998: 120). 6. By 2000 the number of trial groups had fallen below 120 because of a few strong/strong mergers between the trial groups, such as the formation in chemicals of the Donglian Group (Table 3-5 in Appendix 1). In total there are 203 enterprise groups registered at the national level with the State Industrial and Commercial Bureau. By the middle of 1998 there were also a further 1311 with ongoing applications (SCDRC, ZJN, 1998: 705). 7. The Association for the Promotion of China’s Business Groups, established in April 1994 with members from 74 groups, including most of the 57 groups in the first batch of trials. It now has representatives from over 100 of the trial business groups per- manently posted at its headquarters in Beijing. These representatives have all held important posts and are familiar with the problems facing their business groups. The forum for discussion between groups facilitates the introduction of policies that can be beneficially applied across all the groups. The evidence and descriptions presented here are based upon visits to several of China’s largest business groups in 1998 and 1999 and interviews at the Association for the Promotion of China’s Business Groups. 8. A further two groups were later added to the first batch, increasing the total to 57. 9. There were only 7199 large enterprises in China in 1997 (Table 3-2). Given that enterprise groups are usually based on a large-scale enterprise this would imply that at least a third of all large enterprises were in fact core members of provincially or national- ly supported enterprise groups. 10. These data imply that even within the large-scale sector there are large size disparities but that the national team players are amongst the largest. A 1997 study into 1254 large enterprises found only 23 had sales over 10 billion yuan, accounting for only 2 per cent of the enterprises but over 30 per cent of sales and 55 per cent of the profits of these enterprises (CASS, ZGFB, 1998: 115). Table 3-5 in Appendix 1 also describes how the trial business groups in the national team are among the largest in China. 11. See CRES, ZJTGN for yearly updates on provincial- and city-level efforts at nur- turing groups. Lower levels of governments have also initiated their own trials with the modern corporate system, there now being over 2500 provincial level groups undergoing trials. Chapter 3 939

12. According to Jiang Qiangui, vice-minister of the State Economic and Trade Commission (SETC) (CDBW, 17 January 2000). 13. The five mainland companies were: China National Petrochemical Corporation (Sinopec), Industrial and Commercial Bank of China, Bank of China, China National Chemical Import and Export Corporation (Sinochem) and China National Cereals, Oils and Foodstuff Import and Export Corporation (COFCO). The last two are included in the national team and Sinopec is experimenting as a national holding company. 14. In 1999, 435 LMEs were closed, 78 SOEs were involved in debt– equity swaps involving $10.9 billion and 11 million workers were laid-off (CDBW,26 January 2000). 15. The term ‘enterprise’ is used in this chapter even though it is unclear just when autonomous ‘enterprises’ started to emerge from the centrally planned system. ‘Plant’ may in fact be more accurate as many production units were still bound to the planning apparatus and governmental control. Building enterprises out of state plants and departments has been a key objective of enterprise reform. 16. During the early and mid-1980s the policy of ‘three no changes’ (san bu bian) held back enterprise reorganisation. 17. This document is published in CRES, ZJTGN (1988: 9–17). 18. It was also at this time that the first articles on business groups began to be published in Chinese academia. 19. LMEs are defined by industry on standard criteria specified by the State Statistical Bureau (SSB). 20. Of these 431 groups 261 are reported as having large-scale enterprises at their core and 27 had assets exceeding one billion yuan (CRES, ZJTGN, 1992: 308). 21. They had also grown quickly. In the period 1991–6 the four trial steel groups increased their total capital by 295 per cent, and sales by 146 per cent. In chemicals the same respective figures were 314 per cent and 131 per cent (SCDRC, ZJN 1998: 708). 22. Although not all of the groups are industrial enterprises, at least 19 are classi- fied as trade or agricultural groups (Table 3-3), the majority are in fact based around industrial enterprises or have industrial enterprises as members of the groups. The trade groups, for example, appear to possess their own manufacturing facilities. 23. It was at about this time that the policy of ‘three no changes’ (san bu bian) started to be relaxed. 24. Zhang Qi, Head of the Ministry of Electronics (Far Eastern Economic Review, 2 May 1998). 25. Among the first 57 groups there were 46 industrial groups, two foreign trade groups and five in transportation. In the second batch there were 39 industrial groups, six in foreign trade, eight in domestic trade and transportation, four other groups (investment, regional development) and five in agriculture. In total there were therefore 85 industrial groups. 26. Members of The Association for the Promotion of China’s Business Groups have undertaken trips to Japan to discuss industrial policy with leading academics and policy makers and also are great admirers of South Korea’s development model, which they claim to have tried to imitate (interview, Beijing: April 1999). 940 Notes

27. These documents are published in CRES, ZJTGN (1992: 67–71; 1998: 159–62). 28. The groups had established 30 trade companies. 29. Ten of these were listed on foreign stock markets. 30. In 1997 it is reported there were 209 A-share issues, 79 of which were affiliated to the 120 enterprise groups and 100 enterprises experimenting with the modern enterprise system (SCDRC, ZJN, 1998: 709).

Chapter 4 1. All references in the following two sections are taken from these sources. For example, the BAe 146’s engines are imported from Allied Signal in the USA. 2. For example, British Aerospace is converting early generation Airbuses to freighters, and anticipates that the aircraft’s total working life may then be as long as forty or more years. 3. I am grateful to Paul Heffernan for drawing my attention to the earlier development and operation of the De Havilland Comet. 4. The consortium consisted of BAe (at that time BAC), Messerschmitt– Bolkow–Blohm and Aeritalia. 5. For a few years the Ministry also included the production of rockets (extra- atmospheric), but in 1993 these were again cut away from the rest of the aviation industry, and placed into a separately organized rocket company. 6. National defence expenditure stood at 9.1 per cent of the total budget in 1986–90 and 9.5 per cent in 1991–5 (SSB, ZTN, 1997: 243). 7. It must be emphasized that these estimates are extremely rough. 8. The figure ‘2’ refers to the fact that this was the second time that China and Russia had been ‘close brothers’, the first time being in the 1950s. 9. China is reported to have ordered four AWACs from Israel in 1997, using converted Il-76 aircraft as the platform (IISS, 1998: 171). The delivery date is not known. 10. These are derivations from a variety of other figures, as no complete series of sales or output was available to the author. It must be emphasized that these are only the roughest of estimates. For example, the total sales value is itself a derived figure, and the price index used is the general index of industrial prices rather than the index of prices of aerospace products. 11. The price deflator used is simply the general index of industrial prices, so the estimate of ‘real’ growth is only a rough estimate. 12. These were: Jincheng, Nanfang, Changhe and Hafei. 13. These included the main landing gear and nose landing gear doors, the aft service door jamb, aft service door, avionics access door and the cargo door. 14. One proposal involved a partnership with a South Korean company and included building two production lines, one in China and one in South Korea. 15. A rough approximation derived from other sources of information. 16. It appears to operate with separate financial responsibility and a separate budget. 17. A rough guess, assuming approximately one-third of total sales revenue generated by each of the branches. Chapter 5 941

Chapter 5 1. Report of the Centre for Medicines Research quoted in FT (24 April 1997) and Observer (8 February 1998). 2. In 1997, prior to the take-over of Unilever’s downstream chemical business, ICI employed 663 chemical engineers, compared to 647 at British Petroleum, 356 at Kvaerner John Brown and 335 at Shell (FT, 3 April 1997). 3. See Yeung (1995) for an analysis of the PLA’s commercial activities from the ‘entrepreneurial state’ perspective. 4. The PLA maintains direct ownership and control of defence firms. 5. In 1992, over 90 per cent of the value of output from the defence electronics industry consisted of civilian goods (Frankenstein and Gill, 1996: 417). 6. According to the SSB, 81 per cent of weapons ammunition producers were loss- making in mid-1994 (Frankenstein and Gill, 1996: 396). 7. Mr Wang Jun was the former head of the arms trader Polytechnologies under the China Poly Group. 8. To avoid the tedious and time-consuming procedures necessary for forming a public company, China Poly Group acquired Continental Mariner as a vehicle to gene- rate capital in the Hong Kong stock market, a form of ‘back-door listing’ (Yeung, 1995: 164). 9. The authors are extremely grateful to Zhao Xinxian, the President and Chief Executive Officer of Sanjiu Group, for allowing us to carry out research at the Company in 1995–6, on which this paper is based. 10. In 1984 they had 8993 and 7086 employees, respectively (SSB, ZGJTZ, 1985: 294). The next largest plants were Beijing Pharmaceuticals, Shanghai No. 4 and Shanghai No. 6, each with under 3000 employees (SSB, ZGJTZ, 1985: 294). 11. It was registered in November 1986. 12. Similar advertisements are prominently displayed on the control towers at several of China’s airports. 13. The cost of the sign was estimated to be $240 000–300 000 per year (Stuart Eniott, New York Times, 1 May 1995). 14. At seminars we have given on the paper that is the basis of this chapter, there are always members of the audience who assert confidently that this must be the ‘real’ explanation for Sanjiu’s explosive growth. 15. Curiously, in 1992 it was ranked 73rd by sales volume and Nanfang was ranked 74th within the top 100 firms in China (DRC, 1994: 3). 16. Nanfang thereafter paid land rent to both the wujing and the Shenzhen City Government. 17. Li Zoukeng and Li Cunhou (1995: 64). 18. Nanfang’s main plant has been visited by General Liu Huaqing and General Zhang Zhen, both Vice-Chairmen of the Central Committee of the PLA; Chi Haotian, Chinese National Defence Minister; General Fu Quanyu, Minister of the General Logistics Department of the PLA; Zhou Keyu, Party Leader of the General Logistics Department of the PLA; General Zhang Aiping, former Chinese Defence Minister. 942 Notes

19. Regarding the business ban, an official of the Sanjiu pharmaceutical factory said: ‘We are waiting for an official notice … Whatever is the order we will follow’ (SCMP, 24 July 1998). 20. Between 1985 and 1993, output had risen from 3250 tons to 11 650 tons, and exports had risen from 1840 tons to 8490 tons. 21. China’s trademark law was promulgated in 1982. 22. Neither the price nor the method of purchase was disclosed to us. 23. In 1995 the ratio for state-owned enterprises in Shenzhen was 76 per cent. 24. There are nine Party Committees, 36 Party branches with 428 Party members, totalling 14 per cent of the permanent employees in the Group. 25. The minimum wage necessary to survive in Shenzhen is thought to have been around 400 yuan in 1995. 26. Shenzhen’s wage levels are far above those elsewhere in China, partially owing to the fact that Shenzhen’s labour market is not fully integrated with the rest of China. Moreover, it was becoming more and more integrated with that of Hong Kong over the course of the reform years, with the impact of Hong Kong forcing up the real value of incomes here compared to elsewhere (Yeung, 1996). However, to a considerable degree, the higher monetary value of earnings in Shenzhen reflects the much higher costs of living in the zone. The average monthly family income in the zone in 1995 was reported to be around 3700 yuan (Yeung, 1996: 19). 27. The average annual wage of China’s staff and workers in 1993 was around 290 yuan per month (SSB, ZTN, 1995: 113). 28. See below, n. 30. 29. The xian is to the West of Beijing, around 75 kilometres from downtown Beijing. 30. Under this scheme, the General Manager of any affiliated enterprise who turns over profits in excess of 50 million yuan will be promoted to be a Special Assistant General Manager within the Group. One who turns over profits in excess of 100 million yuan will be promoted to be Group Assistant General Manager (SJB, 8 April 1998b: 1). 31. Like many Western firms, Nanfang was reluctant to disclose the amount it spent on advertising.

Chapter 6 1. In July 1992 Westinghouse began an alliance with Rolls-Royce in order to improve its gas turbine technology (FT, 3 June 1996). Rolls-Royce agreed to transfer aero-engine technology for incorporation into existing and future industrial combustion turbine designs for Westinghouse and its other alliance partners, Mitsubishi Heavy Industry and Fiat Avio. In return Westinghouse agreed to transfer selected steam turbine, combustion turbine and combined cycle technologies to Rolls-Royce. Westinghouse agreed to join with Rolls-Royce in marketing its 50 MW industrial Trent engine in the USA, and Rolls-Royce agreed to work with Westinghouse in marketing Westinghouse’s turbine in India (FT, 16 May 1996). 2. In its new range of turbines, Siemens uses Pratt and Whitney’s advanced aerody- namics, materials, and thermal barrier coating technology. Siemens could have developed this technology independently, but it would have taken much longer (FT, 16 May 1995). Chapter 6 943

3. An interesting speculation in early 1998 was the possibility that Rolls-Royce aero-engines might merge with GEC–Alsthom: ‘New GEC is thought to be keen to emulate General Electric of the US which owns power and aero-engine manufacturers’ (FT, 28 February 1998). 4. The Asian crisis has reduced somewhat the medium-term predictions for the whole of Asia, but this has been compensated for by a faster than expected growth in demand from Latin America. Moreover, the long-term forecasts for Asia are still strong, with 49 per cent of new orders predicted to come from the region between 1998 and 2002 (FT, 4 June 1998). 5. The proportion will increase much further with its acquisition of Westinghouse’s non-nuclear business. 6. For example, the French government was unwilling to allow Framatome to merge with GEC–Alsthom for fear of allowing control to pass out of French hands. Westinghouse suddenly and unexpectedly withdrew the nuclear part of the power equipment business from consideration for purchase by Siemens in 1997. This was widely thought to be due to pressure from the US government (FT, 17 November 1997) 7. The steam turbine business that Rolls-Royce was putting up for sale comprised two segments, International Combustion and Parsons engineering. Ironically, Sir Charles Parsons, who founded Parsons engineering, patented the modern steam turbine in 1884: ‘Sir Charles’ turbines laid the basis of the modern electricity industry, making it possible to build efficient large modern power stations’ (FT, 29 July 1996). Parsons did not fully cap- italize on the invention, and by the 1930s had been overtaken by rival manufacturers, notably Siemens of Germany, and General Electric and Westinghouse in the USA. After the Second World War the nationalization of the electricity industry created a captive market in the UK for domestic equipment producers. By the mid-1960s, Parsons had expanded to employ 12 000 people, flourishing on orders from the state-run Electricity Generating Board. In 1968 it merged with Reyrolle, a neighbouring maker of electrical switchgear, to form Reyrolle Parsons. At around the same time the British General Electric Company (GEC) was formed by the merger between English Electric and AEI. By the early 1970s, Britain had two turbine makers, GEC and Reyrolle Parsons, and two boiler makers, Clarke Chapman and Babcock International. The government wanted a four-way merger that would create a national champion, but the proposals foundered on local and corporate rivalries, including Reyrolle Parsons’ fear of being swallowed by GEC. Instead, Reyrolle Parsons merged with Clarke Chapman to form Northern Engineering (NEI) in 1977, in order to try to compete with the ‘giants’ of the industry. By the 1980s it was obvious that the effort had failed, and the break-up of the Central Electricity Generating Board (CEGB) made it clear that the old world in which it had operated was over. In 1989, NEI agreed to be taken over by Rolls-Royce (see FT, 20 July 1996). 8. In 1980, reported GDP per kilogram of energy used (oil-equivalent) was just $0.5. In almost all developing countries for which there are data, the figure was above 1 dollar, and in most was considerably higher, for example, Egypt:$1.5, Pakistan:$2.0, Indonesia:$3.1, Brazil:$3.3, Bangladesh:$4.6 (World Bank, 1996: 202–3). It must be stressed that these data are of the roughest order of magnitude. 9. In 1994, China’s total energy consumption was 770 million metric tons (oil equivalent), compared to 222 million tons in India, 110 million tons in Brazil, 140 million tons in Mexico, and 133 million tons in Korea, and 75 million tons in Indonesia (World Bank, 1996: 202–3). 944 Notes

10. This move attempted to end some of the ambiguity surrounding the ownership of power generating assets. In the past, state funding mainly came in the shape of loans to the local state generator. This meant that the local partner could claim that the central authorities investment in the plant was merely debt rather than equity (BZW, 1996: 31). 11. The Three Gorges Project provides a good example of the diversified approach to funding China’s immense power-generating needs (CDBW, 7 September 1997). The total requirements for the whole project are estimated to be around $24 billion, the bulk of which would come from domestic sources (CDBW, 2 November 1997). In the first phase of the project (1992–7), The State Development Bank will provide $3.6 billion in loans over a 10 year period. The Gezhouba Power Station will provide $96.4 million annu- ally from its profits from selling power. The Chinese government is levying a special electricity fee that will provide $481 million per annum. The China Three Gorges Project Company raised $120 million through the issuance of a domestic bond. Foreign funds from commercial loans and export credits will provide around $1.1 billion. 12. For example, the prospectus for Shandong Huaneng Power states on the one hand that tariffs will be set so as to achieve a predetermined payout ratio, but on the other hand it states quite clearly: ‘[I]n approving tariff increases … the Shandong Price Bureau may take account of the ability of consumers to absorb tariff increases. If the proposed tariff increases exceed the Shandong Price Bureau’s estimate of the tariffs that consumers are able to absorb, or if the tariffs would result in yearly increases that are considered too great, the Shandong Price Bureau may revise the tariffs accordingly’ (CSFB,1994: 41). 13. For example, at Shandong Huaneng’s Dezhou plant around one-half of the coal was bought from such mines at spot prices on a month-by-month basis (CSFB, 1994: 40). 14. ABB, for example, thought that it was unlikely that the Chinese government would allow a rate of return above around 15 per cent. At this rate of return it had reser- vations about committing ABB to heavy investment in Build–Operate–Transfer investments. Goran Lindahl, ABB’s chief executive, warned: ‘We have some requirements on rate of return. Common practice is plus or minus 20 per cent, depending on whether you are operating in a predictable environment’. He felt that China was ‘predictable’, but that its laws and regulations for BOT-type projects were still incomplete (quoted in FT, 6 January 1997). 15. This was the estimated cost of the Yangcheng Power Plant, with a total capacity of 2100 MW (FT, 23 August 1996). 16. The other owners are Lineng Hydropower Development Company, Yichang Three Gorges Project Duoneng Company and Beijing Three Gorges Yangtze Hydropower Technological Development Centre (CDBW, 30 November 1997). 17. Shandong Huaneng Power in turn owns 100 per cent of the Dezhou Power Plant, 75 per cent of the Jining Plant, and 60 per cent of the Weihai Plant, all in Shandong Province (CSFB, 1994: 9). It also owns 25 per cent of another plant, the Rizhao Plant, also in Shandong Province. The three wholly-owned or majority owned plants were set to expand from an installed capacity of 1325 MW in 1993 to 1750 MW in 1998. The Rizhao Plant is a greenfield site, with a planned installed capacity of 2500 MW by 1998, and a project cost of around $300 million, and plans for further expansion beyond that date. 18. As one potential investor expressed it: ‘With such a high level of uncertainty about the regulatory environment, one would need a 30 per cent predicted return on equity Chapter 6 945 rather than the 15 per cent available on a comparable investment in the US, and that is far beyond what the Chinese government is willing to allow.’ 19. The institutions were France’s Banque Nationale de Paris and Société Générale, Britain’s Hong Kong and Shanghai Banking Corporation, Germany’s Dresdner Bank and Canada’s Export Development Corporation (CDBW, 31 August 1997). 20. After intense, prolonged competition to win the orders to supply the power units, the Chinese government officially named the suppliers in August 1997. One consortium, consisting of GEC–Alsthom and ABB, received contracts for eight units, with the hydraulic design undertaken by Kvaerner. A second consortium, consisting of Voith, Siemens and GE (Canada), won the contract to supply the other six units (CDBW,31 August 1997). Not only were the turbines of large size, but there were also large technical difficulties associated with the fact that the water level behind the dam will rise almost 100 metres between the first operation of the project in 2002 and its completion in 2009. In order to win the contract, competing companies needed to investigate the technical problems for around a decade. The bidding contest resulted in large progress in world hydro technology. Paul Chan, Vice-President of ABB China, says that success will ‘provide a world-wide entry ticket for the next two decades to large-scale hydro-power projects’ (quoted in FT, 17 February 1997). 21. For the third phase of the Qinshan project, Atomic Energy of Canada will supply two 700 MW heavy water reactors, at a total cost of $4 billion, of which $1.5 billion will be financed by a loan from the Canadian Government’s Export Development Corporation (China: Economic Digest, Winter 1996–7: 41). 22. The Guangdong No. 2 nuclear power plant will be co-designed by Framatome and domestic Chinese firms. Framatome will co-operate with domestic firms in producing large-scale equipment for the project (FT, 18 July 1996). 23. The former USSR had considerable capability in nuclear engineering, Chernobyl notwithstanding. In 1997, China signed an agreement with Russian companies to design and build two 1000 MW nuclear reactors for a new power plant in Jiangsu Province on China’s eastern seaboard. Construction was due to start in 1999, and the plants were planned to become operational in 2004–5 (FT, 30 December 1997). 24. Li Donghui, deputy Director General of the China National Nuclear Corporation said that ‘localization is a strategic priority in China’s long-term nuclear power development’ (quoted in China: Economic Digest, Summer 1997: 16). 25. Westinghouse submitted successful tenders for around 14 power plant contracts in 1994–5. 26. In 1995, the average coal consumption rate at the four thermal plants was 325 grams of coal per kWh of net electricity generation, around the same level as the OECD average of 350 grams/kWh, compared to a Chinese national average of 411 grams (BZW, 1996: 94). 27. Moreover, all the generators were to be equipped with advanced imported sub-critical pressure turbines, reheating boilers and electrostatic precipitators. 28. This was the first ‘trust’ to be formed in the Machine Building Ministry. 29. As well as the other plants, typically over 200 for a single complete unit. 30. In 1992 the sales value of the four main plants in HPECG was around 1600 million yuan, compared to around 1700 million yuan in the three main plants in the Liaoning’s Northeast China Transformer Group (DRC, 1994: 296–7, 300–1). 946 Notes

31. Only three foreign institutional investors own more than 10 per cent of the Com- pany’s shares, and these together amount to just 20 per cent of the total number of Company shares (HPEC, 1998: 27). Among the foreign shareholders subscribing to the initial offer- ing, three institutions acquired substantial holdings: Hongkong and Shanghai Bank held around 34 per cent of the shares issued in Hong Kong, Chase Manhattan held around 18 per cent, Standard Chartered held around 16 per cent and ABB held around 4–5 per cent. After the listing, the maximum overseas ownership share in the total company, therefore, was the 13.3 per cent held by the Hongkong and Shanghai Banking Corporation. 32. In 1995 it received around 25.8 million yuan in dividends from its share ownership. 33. In 1995, HPEC paid 21.3 million yuan in taxation. 34. In 1995, HPEC paid 35.8 million yuan in pension and 93.6 million yuan in service fees to HPEGC. 35. The Harbin Cigarette Company generates more profits than HPEC, but it is not under the jurisdiction of the City authorities. 36. These are: Acheng Relay Works, Harbin Insulation Material Plant, Liancai, Number Two Rolled Steel Plant, and Harbin Sanlian ‘Development’ Company (Shiye kaifa gongsi). (The Chinese characters are indistinct in the source being used for the name ‘Liancai’, so this might not be the accurate name of this plant.) 37. These include the Lanzhou Fayang Electric Power Company, Jiangyang Special Steel Company, Shenzhen Kaiye’er Service Company, Hong Kong Zhonglian Power Materials Company, Beijing Quansantui Power Engineering Company, and Shanghai Xinhua Control Technology Group Company. 38. Thirty-six of these are considered to be of sufficient importance to be listed for- mally in the printed chart of the firm’s organisational structure. Eleven of these are in Harbin, and nine in Shenyang, including the constituent plants in the former Dongdian. 39. This sum vastly exceeded the annual profits in the 1990s. In 1995, for example, the post-tax profits of HPEC were 122 million yuan, of which 41.6 million yuan was allocated as dividends. 40. The executive directors in 1997 were: Tian Yushi. Joined HPEC directly from graduation in 1964. Deputy general manager of the Boiler Works, vice-chairman of HPEGC since 1991 and vice- chairman of the Company HPEC since December 1996. Wang Wenxiang. Joined HPEGC in 1966 immediately after graduating from Qinghua University. Head of the Generator Works from 1990 to 1994, and became general manager of HPEC in October 1996. Hu Jianqing. Joined HPEGC in 1954. Chief engineer of the generator Works, and appointed general manager of the Engineering Company of HPEGC in 1993. Wang Cunna. Joined HPEGC in 1954. Chief accountant of the Boiler Works and from 1994 to 1997 was general manager of the HPEC. Xu Damao. Joined HPEGC after graduating from Qinghua University in 1961. Chief engineer at the Turbine Works. Deputy general manager of HPEC from 1994 to 1997. Yuan Qihong. Joined HPEGC immediately after graduating in 1982. Chief production controller at the Boiler Works. Appointed deputy general manager of HPEC in 1994. Chapter 6 947

Geng Lei. Joined HPEGC in 1968. Director and secretary of the Communist Party in the Boiler Works. Appointed chairman of HPEC in 1994. Lao Daqian. Joined HPEGC in 1954 immediately after graduation. Deputy head of the generator Works. Liu Jie. Joined HPEGC in 1962, immediately after graduating. Became general manager and chairman of the Turbine Works. In 1994 appointed deputy general manager of HPEC. 41. The non-executive directors in 1997 were: Hong Qipeng. A turbine expert who worked in Harbin No. 1 Workshop from 1961 to 1985. Transferred to become vice-mayor of Harbin City and assistant director of Harbin City’s Economic Commission, responsible for Harbin’s industrial, technological and economic development. In 1993 transferred to the Harbin Municipal People’s Congress. Liang Weiyan. Joined HPEGC in 1951 immediately after graduating and rose to be chief engineer, initially of the Generator Works, and subsequently, of the whole of HPEGC. In 1992 transferred to become head of the Consultative Committee of HPEGC. Simultaneously became assistant director of the Three Gorges Project Equipment Office under the Ministry of Machinery. This position is strategically important for HPEC, since an important part of its prospects are linked to the possible orders it may derive from the Three Gorges Project. Zhang Zhuoyuan. Director of the Industry and Economics Research Institute of the Chinese Academy of Social Sciences. Lu Yansun. Joined HPEGC on graduating in 1954, and rose to become head of the Boiler Works in 1983. Transferred to the central government in Beijing in 1984, rising to become deputy head of the former Ministry of Machinery and Electronics 1989 to 1994. Since then has been a member of the Financial Committee of the National People’s Congress, and chairman of the PRC’s Association of Power Generation Equipment Manufacturing Industry. Has been a powerful public advocate of the need for government policy to support China’s indigenous power equipment manufacturers. Zhang Yichen. Studied at the Harbin Institute of Technology and then in the USA at MIT. Appointed director of the Asia–Pacific Region for the Merrill Lynch Group in 1996. He is also a consultant to the Ministry of Finance, and a member of the Harbin Municipal Government’s Political Consultative Committee. 42. Moreover, there had been many internal problems arising also from the listing of the Electric Machine segment of Dongfang Power Equipment Company (Sichuan). 43. In its own company history (Harbin Boiler Works, 1994), prior to the 1980s almost all significant decisions affecting the company’s development are prefaced by the statement ‘according to the “disposition” (bushu) “notice” (tongzhi) “ratification” ( pizhun) and so on of the No. 1 Ministry of Machinery’. 44. Much of the equipment is still functioning today, being used alongside state-of- the-art modern machines. The Leningrad Power Equipment Plant was the principal partner for HPEC. During the first phase of construction from 1954 to 1957, HBW alone had a total budgetary allocation of 80.4 million yuan. Following the withdrawal of Soviet assistance, and the disruption caused by the Great Leap Forward, HPEC began its second phase of construction in 1961 under the plans laid down by the First Ministry of Machine Building. 948 Notes

45. For example, by 1960 HBW was able to build power station boilers ranging from 35 tons/hour to 280 tons/hour. By the late 1960s–early 1970s it was able to build high-pressure power station boilers of between 220 and 410 tons/hour, and super-high- pressure power station boilers of 670 tons/hour. 46. For HBW alone it allocated 25.7 million yuan of investment to help achieve this goal. 47. Altogether, HBW supplied around 300 pieces of equipment, and sent 1200 staff and workers to construct the new plant. 48. In fact, the technical transfer deal was brought about through the activities of the China National Import–Export Corporation, which negotiated with the major multinational power generation equipment companies. 49. Circulation fluidized bed boilers offer potential advantages both for their environmental and operating efficiency in comparison with conventional boilers. They repre- sent a major avenue of technical progress for boilers in the future. 50. For example, in 1996 HTC had 2651 ‘engineers and technicians’, including 358 senior engineers. Over 200 of its engineers had been abroad for training. In 1996 HEC had 1800 ‘technicians’ of whom 450 had ‘high-level’ scientific qualifications. 51. The advanced imports of machine tools include a German-made DH 2200/80 numerical-control lathe and a USA-made numerical-control side-entry slotting miller, both for processing steam turbine rotors, a PAG-224 numerical-control horizontal milling and boring machine from Italy, and a 20-10 FP500 numerical-control double-column milling machine from Germany, both for processing steam chambers. In addition, HTC has purchased a German-made 320 ton high speed dynamic balancing machine (8.5 metres high and 26 metres long), for final assembly and testing. Among the advanced machine tools that HEC has imported are a German-made high-speed 6 K numerical-control rotor milling machine, for processing generator rotors, a German-made HU2-500 automatic high-speed punching machine for processing iron core laminations, and a German-made high-speed numerical-control 5-coordinates blade milling machine, for processing hydro-turbine blades. 52. These include Narrow Gap welding machines from Sweden and Italy, an MIG arc welding machine from Japan, an X-ray industrial monitor for inspecting weld seams from Japan and an MPM automatic welding production line from Japan, for manufacturing heavy walls. 53. For example, HTC has bought a large numerically-controlled double-column milling machine from Beijing No. 1 Machine Tool Company, produced in a joint venture with the German company Waldrich Coburg. The frame is made by the Beijing plant and the main engine and control system are made by the German partner. It has also purchased a large new numerically-controlled machine tool from a joint venture between Waldrich Siegen (Germany) and Qiqihar Heavy Engineering. 54. These were being installed while we were at the plant by a team of Romanian technicians. 55. We were unable to obtain the exact purchase price for the second hand machinery. 56. Its main source of control systems is the Fulaerji Plant near Qiqihar, also in Heilongjiang Province. 57. Other areas in which it is pursuing technological advance in the immediate period ahead are integrated coal gasification combined cycle systems, and 500 MW Francis-type power generator sets suitable for the Sichuan Ertan power station; as well as a variety of Chapter 6 949 smaller projects, such as 50 MW or above circulation fluidized bed boilers, large capacity combined cycle fluidized bed boilers, 200 MW low temperature nuclear heat supply systems and large-scale pressurized petrochemical vessels. 58. For example, in 1996 it invested 101 million yuan ($12 million) and used a further 138 million yuan ($17 million) from the proceeds of the listing, to modernize its facilities. These included continuing the work of upgrading valve production, completing a test centre for large-scale generators and turbines, and installing a five-axle numerical-control horizontal boring and milling machine (HPEC, 1997: 16). 59. In 1995 HPEC as a whole paid a total of 93.6 million yuan to HPEGC’s service companies, including 16 million yuan in medical fees, 10 million yuan in hospital costs, 19 million yuan in education fees, and 20.4 million yuan in heating fees. 60. HPEC agreed to pay 15 per cent of the aggregate wages into a pension fund run by HPEGC, with the balance of pensions payments being met by HPEGC. 61. Under this scheme, HPEC would pay 10 per cent of the wage bill to the City as a contribution to the City’s medical insurance and 5 per cent for the City’s housing fund. If the reforms are implemented, then HPEC will hand over altogether, from the retirement pension and other social service contributions, around 38 per cent of the total wage bill, compared to around 33 per cent under the previous arrangement. However, the HPEC workers are opposed to this as they think the standard of service will fall. Also the workers in the service companies, such as teachers and doctors are opposed as they think it likely that their income will fall. Thus, by 1996–7 the service activities had still not ‘gone to society’. 62. These stipulate that 22 per cent of the wage bill should be paid into the Harbin City pension fund, which means an ‘extra 15 million yuan per annum’ from 1996. 63. The average price of steel surged from 2600 yuan in January 1993 to a peak of 3800 yuan per ton in June 1993, and then fell to 2500 yuan at the end of 1994. At the then current rate of exchange the average world steel price was around 3000 yuan per ton (Nolan, 1996). 64. Even if one made the heroic assumption that all of the 1500 staff involved in R & D at HPEC ought to be re-valued at the average wage levels of US scientific personnel, then the total expenditure on R & D at HPEC would still be a maximum of around $70 million. Properly adjusted for technical levels, it may well be substantially less than this. 65. For example, in 1995 HPEC experienced large difficulties, with a fall of almost 15 per cent in total installed capacity and 31 per cent in pre-tax profits (HPEC, 1995: 6). This was mainly owing to the shortage of funding in the industry, which caused two of their main customers to put their orders on hold. 66. For example, there still are local content regulations in both the USA and the EC for such products as motor vehicles, electronics, and integrated circuits (Ruigrok and van Tulder, 1995: 228–9). 67. In developing countries, political factors generally play an even greater role in the allocation of power contracts. For example, India has a policy of giving strong preference to domestic manufacturers in awarding contracts for power plants. The Iranian government requires that around 65–70 per cent of the value of any given power plant project must be supplied by domestic manufacturers. 68. The US government investigation of the proposed Siemens take-over of Westing- house’s non-nuclear division is the exception that proves the rule, and even this may be much more related to international politics than to narrowly economic issues. 950 Notes

Chapter 8 1. MITI skillfully played off one firm against another by promoting the fear that if they did not sell-out now the Japanese would simply buy from another foreign firm (Nester, 1991: 104). 2. From 1973 to 1980 Japan’s global market share rose from 18 per cent to 30 per cent. By 1996, Japanese producers occupied 24 per cent of the US market for automobiles and light trucks. 3. In the 1970s, bought-in components accounted for 46 per cent of General Motors’ material costs and 60 per cent of Ford’s (Prais, 1981: 147). 4. For example, Bosch is able to produce anti-lock braking systems equipment in the USA at a wage rate of about $20 an hour compared with around $44 an hour from GM’s internal brake business (FT, 26 June 1996). 5. ‘The car-makers’ search for economies of scale has led them to promote ratio- nalisation among suppliers, the process will inevitably make them more dependent on their suppliers’ (FT, 28 October 1996). 6. In VW’s new plant at Mlada Bolesaw, north of Prague, six important component suppliers have been allocated special zones adjacent to the production line to pre-assem- ble parts just before they are required by the new Octava saloon (FT, 4 November 1996). 7. In 1994, ‘almost all’ the government’s funds for the auto industry were allocated to three projects, Shanghai Volkswagen, Erqi’s joint venture with Citroen, and Tianjin’s joint venture for the production of Charades (Huang Wei, 1995). 8. For example, in 1997, Tianjin Engine Works agreed a joint venture with Varity–Perkins to manufacture diesel engines. The share held by the foreign partner was reported to be 60 per cent (China: Economic Digest, Summer 1997: 44). 9. The products of the different joint ventures are: Ninguo: rubber seals and parts; hydraulic jacks; NYC: diesel engine fuel injection systems; Danling: gears; Langfang: brake parts, air brake compressors and castings; BYC: diesel engine fuel injection systems; Harbin: ignition coils, horns, relays and other electrical parts; HSE: starter motors, alternators and mini-motors; Shanghai: wheels and wheel rims; CYPR: piston rings; Delphi sub-JV: alternators; CR sub-JV: oil seals; Shanxi: engine castings; CAC: brake pads and linings; clutch facings. 10. The main equipment for the new production line was manufactured at the Dalian Machine Tool Plant. 11. In fact the price was around $20 million after taking into account the transport costs. 12. The terms ‘loose’ and ‘tight’ are routinely used to describe the relationship between the core firm and their subsidiary ‘second-’ and ‘third-’tier enterprises. 13. For accounts of the evolution of Dongfeng see Byrd (1992); Marukawa (1995). Chapter 9 951

14. Nanchong was a small plant in the mid-1990s, the main product of which was a 102 mm bore engine, principally the four cylinder 4102 series. 15. In fact, despite being selected by the Chinese government as an eligible firm, by late 1997 Dongfeng had not yet been floated on international stock markets. 16. Personal communication from Tim Clissold (Asimco). 17. In 1991, average per capita consumption stood at just 72 per cent of the national average, and only 60 per cent of that in China’s richest province, Guangdong (SSB, ZTN, 1992: 277–8). 18. In fact, the rise in profits was so rapid, that Yuchai seems to have agreed to a pre- mature re-negotiation of the contract in 1988. 19. The others are Liem Sioe Liong, Robert Kuok, Lim Goh Tong and Ting Pek Khiing. 20. Derived from the stated figure for total dividends, of 99.3 million yuan, and the total reported share ownership of the State Holding Company, of 22.1 per cent in Yuchai Machinery Company (Bear, Stearns, 1994: 10; Peat Marwick Huazhen, 1995: 16). 21. The original hope with the New York listing was to obtain $15 per share, but they had to settle for $10 per share. The listing obtained $75 million gross and $64 million net, after the deduction of costs. 22. The intended foundry was in Shanxi. This was a colossal plant, part of the ‘Third Front’ investment programme. It had originally been owned by the People’s Liberation Army, producing castings for tanks. The plant was bought by CITIC from the Army, along with six other military plants. Asimco purchased a 57 per cent ownership share, with Caterpillar (USA) purchasing 27 per cent, and CITIC owning the balance. A main goal of the joint venture is to supply engine castings to Yuchai. Caterpillar are intended to make an important technology input in order to upgrade the quality of the products. 23. It is hard to see that the arrival of Hong Leong as the foreign partner in a Sino– foreign joint venture played any negative role in Yuchai’s development.

Chapter 9 1. I have been unable to locate a reliable long-term series for the growth of real value of global steel output. 2. These figures were given for Ispat’s Mexican subsidiary, Ispat Mexicana. 3. Including the privately-owned companies in Kazakhstan and Indonesia. Excluding these companies, Ispat’s annual output will be around 16 million tons (FT,19 March 1998). 4. For example, Japan’s rise to world dominance in the steel industry in the 1960s and 1970s owed a great deal to huge investment in R & D. Great advances occurred in an inter-related set of technologies – the Basic Oxygen Furnace (BOF) technology, continuous casting and computerizing the production process: ‘[T]he adoption of the BOF led to the successive adoption of the innovations in the integrated production system and made Japanese industry the most efficient and productive in the world’ (Yonekura, 1994: 222). Nippon Steel’s central research institute alone had over 2000 engineers in the mid-1980s (Yonekura, 1994: 255). 5. In fact, the industry was already far from being an ‘infant’ and the removal of protection had no noticeable effect (Lake, 1988: 159). 952 Notes

6. Between 1887 and 1890 Britain, without tariff protection, accepted around 52 per cent of all US exports, yet the US market was highly protected against British exports. The proportion only fell slightly between 1891 and 1897 (Lake, 1988: Ch. 3). 7. Still in 1969 it produced 31.5 million tons of crude steel, compared to 19.8 million tons produced by Bethlehem Steel, its closest domestic competitor (Cockerill, 1974: 57). At that point, US Steel still accounted for one-quarter of total US steel output (Cockerill, 1974: 57). 8. In the 1950s, almost half of Japanese steel industry investment was from bor- rowings (Yonekura, 1994: 226). 9. Thirty per cent is owned by the government directly, 40 per cent by the Korea Development Bank (government-owned) and 30 per cent by private commercial banks, themselves government-controlled (Amsden, 1989: 315). 10. Krupps–Hoesch and Usinor–Sacilor together had around one-third of the world market between them in the mid-1990s (FT, 14 March 1996). 11. In fact, the bid was subsequently raised to $490 million in the face of competition from Allegheny Teledyne (FT, 6 January 1998). Bethlehem Steel disposed of its loss-making structural products division (makes structural steel shapes for construction industry), BethForge (makes large steel parts), Centec (makes parts for rolling mills) and BethShip (ship repair yard) in 1996. It is focusing on its core operation of flat-rolled steel business (FT, 31 October 1996). 12. Bethlehem Steel will sell the unprofitable but highly capital-intensive stainless steel unit from Lukens as the imports of stainless steel are surging in recent years. After the restructuring, Bethlehem Steel will have the broadest range of steel plate products in the industry, for example, used in shipbuilding, construction and mining (FT,16 December 1997). 13. By the late 1970s the largest single steel plant in the USA was at Inland Steel, Indiana, with an annual capacity of 8.5 million tons. The largest Japanese plant was 17.6 million tons, more than twice the size (Yonekura, 1994: 7). Japan had no fewer than nine plants with an annual capacity larger than 8 million tons, four of which belonged to New Japan Steel (Yonekura, 1994: 7). 14. Faced with an adverse macroeconomic environment and rampant smuggling, a joint order from the SBMI and the State Development Planning Commission banned the dumping of steel by domestic enterprises from 1 October 1998. The ban covered steel rods, hot-rolled steel and threading steel. Under the new regulations, the SBMI would publish the average prices (based on the production costs, management fees, financial fees, marketing costs and sales taxes of the 35 major steel-makers) of steel products 20 days after the end of each quarter. Offenders who persistently sold steel below the guidance price floor were to be forbidden to have access to commercial bank loans and were to have their manufacturing permits rescinded (Hong Kong Standard, 26, 30 September 1998). 15. This is a rough approximation converting the total investment to US dollars at the 1996 exchange rate. 16. Defined as less than 10 million yuan. 17. A further six enterprises gave no data on profits. 18. Baogang has been able to shed about 2000 workers every year since its establishment by using two strategies. First, some workers are relocated into other subsidiaries Chapter 9 953 of Baogang. Second, some of its subsidiaries are ‘spun-off’ from the head company and become legal entities with their own managerial and financial autonomy (CDBW, 5–11 January 1997). 19. For a different interpretation of the Shougang story, see Steinfeld (1998). 20. Zhou Beifang was charged with having committed ‘economic crimes’. 21. In the advanced economies, very little steel is now produced with the open hearth technique (Table 9-3). Compared to oxygen converter furnaces, open hearth furnaces produce steel more slowly and consume large amounts of energy (WCFL, 1993: 41). 22. Continuous-casting has the advantage over ingot casting that billets produced by this method do not require primary rolling, resulting in lower energy costs, higher yield of billets and shorter production time (WCFL, 1993: 42). 23. Over 5 per cent of Shougang’s steel was produced with electric furnaces, compared with less than 1–3 per cent in most other large integrated steel plants. 24. Steinfeld (1998: 169–70) comments: ‘Over the years, there have been a number of allegations levelled at the Beijing steel company, allegations that when taken together constitute a sort of “myth of Shougang”. The overriding element of this myth is that Shougang’s achievement throughout the 1980s and early 1990s were the product of a “sweetheart” deal with Beijing in the sense that the firm’s profit contract granted a position in which failure would be absolutely impossible.’ 25. In the initial contract in 1981, Shougang was to deliver to the state an amount that rose by 6 per cent each year on the initial base year figure. In 1983, the company volunteered to raise the annual increase to 7.2 per cent. 26. From 1980 to 1993, the average annual increase in the retail price index was 6.8 per cent (SSB, ZTN, 1994: 231). 27. The gross value of industrial output grew by just 4 per cent in real terms in 1981, the lowest figure in the whole period from 1978 to 1994, and even in 1982 the real growth was just 8 per cent, compared to 12 per cent per annum over the whole period 1978–94 (SSB, ZTN, 1995: 32, 377). 28. The retail price index rose from 100 in 1978 to 310 in 1994 (SSB, ZTN, 1995: 233). 29. Company officials at Shougang once fought through red tape to get 400 yuan to buy a 7.5 kilowatt electric motor. Under the existing rules, motors of any size were deemed to be a part of the enterprise’s fixed assets and, as such, their replacement had to be approved by higher authorities (CDBW, 17 February 1984). 30. While he was head of Shougang, Zhou lived in a six–seven room two-storey house allocated to him by the MMI. 31. In 1994, it consumed 115 million tons of coal, 65 million tons of coke, and 1.7 million tons of crude oil (SSB, ZTN, 1995: 204–5). 32. In 1996, Shougang’s coke output was only 55 per cent of that of Baogang, and 40 per cent of that of Angang (ISIC, 1997: 128). 33. For example, the iron ore content of Shougang’s domestic iron ore is 25 per cent compared to a national average of 30 per cent, but China’s best iron ore mines reach as high as 51 per cent (ISIC, 1997: 169–70). 34. Shougang’s markets are nation-wide, with around 60–70 per cent of its sales located north of the Yangtze River and 30–40 per cent in Southern China. 954 Notes

35. In 1992, the official price for reinforced steels was about 1200–1400 yuan, but on the free market, especially in the densely populated coastal areas, the price was as high as 3000–3100 yuan (Metal Bulletin Monday, 23 November 1992). 36. For example, in 1988 Shougang’s planned steel output was 2.1 million tons. Shougang was allowed to sell 15 per cent of this output (that is, 350000 tons) at the market price. Shougang also produced 1.5 million tons above the plan. According to the contract, Shougang could sell all of this 1.5 million tons of steel at market prices. This meant that around 1.8 million tons or around 51 per cent of the total output (by weight) in 1988 was sold to the free market. Moreover, the ‘within-plan’ requirements for different products were based on a physical output figure set in tons. This produced a very clear incentive to raise the quality (and hence the unit price) of extra-plan output. 37. For example, its contract with Beijing Steel Company (Beijing gantie gongsi) estimated its planned profits for 1995 to be 5 billion yuan. The contract with Shougang stipulated that 3.7 billion yuan be handed over to the headquarters, and the remaining profits were to be distributed in the proportion of 4:3:3 (development funds, collective welfare funds, and workers’ bonuses, respectively). 38. For example, in 1990 Shougang merged with three factories employing around 10 000 people. It attempted to develop their capability to make electronic equipment. The venture was unsuccessful, and Shougang simply returned them to their original administrative authority. 39. These include a 6000 ton hydropress, 100 ton vacuum smelting furnace and 15 metre well-annealing furnace that can process comprehensive heavy machinery for the metallurgical, mining and power industries. The annual hot-working capacity is 35 000 tons and the cold-working capacity is 30 000 tons. 40. The attempts to solve the problems of these factories also involved administrative co-ordination with the state at a local level. For example, in Gansu province, Shougang closed down two of the factories and moved them and their workers to the site of a third of the merged military factories in Lanzhou, the capital of Gansu. Shougang and the state together invested in restructuring the equipment so that the plant shifted to producing ball bearings. A major issue in attempting to salvage loss-making military enterprises was the housing costs of re-locating the workers. Both Shougang and the state contributed towards the cost of re-housing them. 41. It was common for enterprises that failed to meet their profit targets to contin- ue to pay welfare and bonuses to workers as if they had met their targets, so that the enterprises were unable to pay over their stipulated profits and/or reduced reinvestment out of retained profits. See for example the detailed account of the Nanning Silk and Ramie Factory (Byrd, 1992: 296). This factory was one of the early experimenters with the profit retention contract. As profits fell in the early 1980s, the factory sharply reduced profits handed over to the state, and even more drastically reduced the share of retained profits allocated to investment. The proportion of retained profits allocated to workers’ welfare and bonuses rose from 42 per cent in 1979 to over 86 per cent in 1982. 42. It is beyond the scope of this chapter to investigate the precise details of the level at which the decision was taken for Zhou Guanwu to go into retirement. 43. By the late 1990s, some of the keypoint plants were lagging considerably in their average wages. For example, in 1996 the average wage at the 33 keypoint plants was 10 500 yuan. Six plants had a less than 7000 yuan average wage, and one had less than 5000 yuan. Average wages at that plant, Shuicheng Iron and Steel Group stood at just 45 per cent of Chapter 9 955 the national average for keypoint plants and a mere 19 per cent of the average wage at Baogang, with the highest wage level among the keypoint plants (ISIC, 1997: 122–3). 44. Byrd makes the same point forcefully in his analysis of Erqi (Byrd, 1992). 45. From 1979 to 1986, it is estimated that 44 per cent of Shougang’s profits was attributable to improved product quality, 16 per cent to reducing costs of production and 40 per cent to increased sales. 46. Two generators manufactured by Siemens in the 1920s were still in use. Siemens offered to replace them with new ones free of charge because they wanted to use the old ones to advertise the company’s ‘sixty years’ of quality production’ (Beijing Review, 13–19 January 1992: 18). Some boilers and steam turbines, which had been imported in 1918, when the company was first established, were still in use (CDBW,6 November 1982). 47. State investment in Shougang fell from 150 million yuan in 1978, to 70 million yuan in 1979, 50 million yuan in 1980 and 10 million yuan in 1981, falling to zero in 1982 (CDBW, 10 November 1982). 48. The former Belgian owner of the machine visited Shougang in February 1990. When he was told the daily production capacity of the machine, he was doubtful. However, after he checked the speed of the rolled steel coming out of the machine, he said: ‘You’ve done better than we did’ (Beijing Review, 27 January–2 February 1992: 23–4). 49. For example, in May 1989, one of the iron plants missed the total monthly output by 1000 tons. The resulting penalty was not merely exacted from those directly responsible. Instead none of the 1500 workers in the plant was given a bonus (which amounted to more than 25 per cent of their take-home pay) (Xu and Liu, 1992a: 202). In October 1989, the Corporation failed to fulfil its monthly growth target due to a big accident at the No. 3 Blast Furnace. This stopped production for five days and the Corporation lost the equivalent of $11 million as a result. In that month, no-one in the whole Corporation was given their monthly bonus (CDBW, 6 December 1989). 50. Shougang’s approach, which combined relatively high remuneration for regular employees in the core firm with tight discipline, is similar to that at Posco. 51. The trade unions, which are responsible for monitoring the service systems, distributed more than 4000 questionnaires each month to investigate whether the workers were satisfied with the service systems. The company ruled that, for example, canteen staff could only obtain their full bonuses if the ratio of satisfied answers was over 89 per cent (Hao, 1992: 159). This pressure contributed to a rise in the quality of service in the canteens, with the proportion of Shougang employees who ate there rising from around 50 per cent before 1980 to 98 per cent in 1990. 52. From 1979 to 1990, around 20 000 families moved into new apartments, and around 11 000 families added to their living space. Basically all the workers at the main site in Beijing were in Corporation housing. 53. The proportion of people with infectious disease fell from 28 per cent before the reform to 7 per cent in 1990. Absence due to illness fell from 3.8 per cent to 1.7 per cent over the same period. 54. It was the biggest joint venture deal in Beijing in that year (CDBW, 29 July 1990). The joint venture was scheduled to last for 20 years, with a 60 per cent controlling share ownership in the hands of Shougang. Shougang chose the chairman of the Board of Directors and NEC chose the General Manager. 956 Notes

55. The new production line was scheduled to begin mass production of 4-megabit D-Rams in November 1996. The number of chips manufactured was planned to rise to 6.7 million units in 1997. NEC was also schedules to manufacture advanced 16- megabit D-Rams from July (FT, 24 January 1996). 56. The $4.12 million leveller, which was designed by Mesta and manufactured by Shougang, was the first piece of metallurgical equipment exported by China to a developed country (Beijing Review, 4–10 October 1993: 19). 57. Angang has taken a 40 per cent holding in the Koolyanobing Mine in Western Australia, and China Metallurgical Import and Export Corporation has also taken a 40 per cent holding in CRA Hammersley Iron’s new mine in Western Australia. In each case 100 per cent of the iron ore output from the mine was purchased by the Chinese partner (FT, 2 February 1995) 58. At the end of 1985, the reported prices of Shougang shipping to China the second-hand equipment it had bought in Belgium was $115–120 per ton. It purchased 50 000 tons of equipment and so was required to pay $6 million in shipping costs, equivalent to over one-half of the amount that Shougang had paid to purchase the equipment in the first place. 59. Diversification into shipping is not unusual among large steel firms. For example, in the late 1950s, Japan’s leading steel firms, co-ordinated by MITI, also vertically integrated into the shipping business. They together formed a separate company and, with loans from the government, bought a fleet of large, specialised iron-ore transporting ships (Yonekura, 1994: 218). 60. Four months later, Shougang bought a 25.12 per cent interest in Eastern Century Holdings, which produces and trades in manganese ore and manganese ferrous-alloys, an essential raw material for steel production (SCMP, 27 February 1993). In 1992, Eastern Century expanded into the production of manganese ferrous-alloys within China by setting up the domestic firms of Xinyu Far East Ferro Manganese and Shanghai Shenjia Ferro-alloys (SCMP, 25 February 1993). By July 1993, Shougang joined forces with Li Kashing jointly to establish the Kader Investment Group (SCMP, 19 May 1993) and Santai Manufacturing, which is in the steel and electronic-related manufacturing industries (SCMP, 8 July 1993). 61. 1996 sales for the three companies were $4.4 billion for Shougang, compared with $4.7 billion for Hutchison Whampoa and $5.1 billion for Singapore Airlines (UNC- TAD, 1998: 48). 62. Indeed, Byrd’s (1992) meticulous account of Erqi specifically discounts this as the main explanation of Erqi’s rapid growth and modernization. 63. Such as the British Monopolies and Mergers Commission (MMC) and the European Commission. 64. A recent dramatic example of government-mediated merger is the business revolution in the US defence industry in the 1990s. Under the close guidance of the Pentagon the number of defence equipment companies was reduced from over 20 to just four (Boeing–McDonnell Douglas, Lockheed–Martin, Northrop Grumman and Raytheon) (Nolan and Wang, 1997). 65. This is a highly sensitive issue, which it is not possible to investigate directly. It involves also complex psychological issues. 66. Indeed, it appeared to be the case that after 1995, the City government and Shougang simply manipulated the accounting procedures in order to produce the desired Chapter 10 957 outcome in terms of total hand-overs to the City government. Under the new turnover tax system, Shougang, with the agreement of the government would simply place under the heading of ‘costs’, many items that formerly were included in ‘profits’. The main ‘flexible’ item is depreciation, which can be altered ‘more or less at the Corporation’s discretion’. Under the contract system Shougang ‘raised’ their reported profits by having a ‘low’ depreciation figure and under the new system they are increasing the reported depreciation rate, thereby lowering reported profits. Shougang’s reported post-tax profits plummeted with the ending of the contract system. Shougang’s reported post-tax profits in 1993 were 3.0 billion yuan (MMI, 1994: 411) and in 1995 were 3.1 billion yuan, declining to 183 million yuan in 1996 and 209 million yuan in 1997 (CMISI, 1997: 170, 288). 67. It was initially planned to do this in 1998, but, for obvious reasons, the listing was postponed. 68. These data are ambiguous. Another source lists Shougang’s total overseas assets in 1997 as only $0.73 billion, amounting to 12 per cent of the Group’s total assets (Luo Bingsheng, 1998). 69. In 1997 the profit rate on sales revenue was 3.1 per cent for Krupps, 6.9 per cent for British Steel, 7.3 per cent for Usinor and 9.2 per cent for Thyssen (DTI, 1998: 22, 62–3). 70. The approach to merger and acquisition taken by the Chinese government is likely to be strongly influenced by the pace of merger and acquisition in the international steel industry. If this continues at the present high speed it is more likely that central government will encourage large mergers across regions.

Chapter 10 1. The international price of coal rose by 11 per cent from 1980 to 1995 (i.e. it fell substantially in real terms), compared to a 29 per cent fall in the price of natural gas, and a 53 per cent fall in the price of oil (MGB, ZMGN, 1997: 332–3). 2. These kinds of international comparisons of energy-efficiency are fraught with huge conceptual difficulties. Smil (1993: 72–3) has vividly illustrated this. Using official exchange rates to convert national product, China is one of the world’s most energy-inefficient large economies. Using purchasing power parity (PPP) measures of national product, ‘China’s position is completely reversed’, and it becomes ‘the world’s most energy-efficient large economy’. 3. It is, of course, of much lower quality than washed coal from large coal mines. 4. The 14 fees’ are: goods yard rental fee (3.5 yuan), vehicle dispatching fee (1.5 yuan), coal handling fee (2.0 yuan), coal loading fee (2.2 yuan), coal weighing fee (1 yuan), inlet monitoring and keeping fee (0.4 yuan), special railway usage fee (1 yuan), goods yard storage fee (0.35 yuan), labour and service fee (0.75 yuan), site cleaning fee (0.25 yuan), coal pushing and coal way opening fee (2.55 yuan), security fee (0.10 yuan), self-coal train car management fee (2 yuan) and ‘agreement to transport’ fee (6 yuan) (China Coal Consultancy, 1998). 5. Prices are for Australian steam coal to Japan. 6. Chinese coal prices are for cities in non-mining areas, and the range reflects different transport costs. The US coal prices are for power utilities (low) and industry (high), and vary depending on quality. The spot market price is for Australian exports. 958 Notes

7. The information in this paragraph is based on an interview with Ye Qing, con- ducted in June 2000, by my PhD student, Ms Rui Huaichuan. 8. For a pioneering study of the informal sector in India, see Breman, 1997. There is nothing remotely comparable for China. A vast array of human activity takes place vir- tually unrecorded.

Chapter 12 1. Noted by the author. 2. In fact, the passage was in 1987, but implementation was from 1992. 3. Internal expansion here refers to establishing branches and subsidiaries directly rather than through M & A. 4. Berger et al. (2000) found that, from 1986 to 1998, about three-quarters of the value of the intra-EU M & A was generated by the same EU nation. But the truly domestic M & As have declined as a fraction of total EU merger activity since the mid-1990s. 5. Before the passage of the new act, the Bank Holding Companies (BHCs) could own up to only 5 per cent of non-financial companies. 6. In fact, with the globalization of German universal banks, giants like Deutsche and Dresdner are restructuring to build more focused businesses. (See FT, May and July 2000.) 7. According to the industry categories of Fortune, the financial services industry is divided into ‘commercial and savings banks’, ‘diversified financials’, ‘insurance-life & heath’, ‘insurance-P & C’, and ‘securities’. 8. They are Citigroup, Bank of America, HSBC, Bank of Tokyo– Mitsubishi and Chase Manhattan. 9. Following the acquisition of Morgan Grenfell by Deutsche Bank, the acquisition of Warburgs by UBS, Kleinwort Benson by Dresdner, Barings by ING, Schroders by Salomon Smith Barney, and the Rothschild alliance with ABN Amro, Fleming (now Chase Fleming) was almost the only big merchant bank that remained in British hands. 10. In August, the new securities company, named China Galaxy Securities Co., was established, as the only securities company wholly owned by the central government. 11. In fact, it is not the year of ABC’s most severe losses in recent years. 12. See especially, Lardy (1998) for an extended discussion. 13. Insurance density:Insurance premium/GDP. 14. See , and EU and White House Website. 15. Wang Xiaoqiang, personal communication.

Chapter 14 1. See Nolan (1995) for a comprehensive account. 2. This table updates a similar table in Smil (1993). I am indebted to Smil for this simple and vivid illustration of the deficiencies of both approaches to measuring national product. 3. These included the China Development Forum, organized by the Development Research Centre of the Chinese State Council, and the 21st Century Forum, organized by the Chinese People’s Political Consultative Conference. Bibliography

ABN–AMRO. Yanzhou Coal Mining Co Ltd (Hong Kong: ABN–AMRO, 1998). AI FENG. ‘Shougang’s Enlightenment’, in Editorial Commission of Reform in Shougang, 1 (1992), 188–98 (in Chinese). AMSDEN, A. A. Asia’s Next Giant: South Korea and Late Industrialization (New York and Oxford: Oxford University Press, 1989). AMSDEN, A. and T. HIKINO. ‘Project execution capability, organizational know-how and conglomerate corporate growth in late industrialization’, Industrial and Corporate Change, 3(1) (1994), 111–47. AMSDEN, A. and A. SINGH. ‘The optimal degree of competition and dynamic efficiency in Japan and Korea’, European Economic Review, 38 (1994), 941–51. ANDREWS-SPEED, C. P. and S. DOW. ‘Reform of China’s electric power industry: challenges facing the government’ (1999) (mimeo). ANDREWS-SPEED, C. P. and GAO ZHIGUO. ‘China’s petroleum legal regime foreign participation in upstream operations: the foreign oil company’s view’, Journal of Energy and Natural Resources Law (1996), 161–78. AOKI, M. ‘The Japanese firm in transition’, in Yammamura and Yasuba (1987). AOKI, M. ‘The Japanese firm as a system of attributes: a survey and research agenda’, in Aoki and Dore (1994). AOKI, M. and R. DORE (eds). The Japanese Firm: the Sources of Competitive Advantage (London: Oxford University Press, 1994). AOKI, M., B. GUSTAFFSON and O. WILLIAMSON (eds). The Firm as a Nexus of Treaties (London: Sage, 1990). ARNETT, E. ‘Beyond the threat perception: assessing military capacity and reducing the risk of war in Southern Asia’, in Arnett (1997). ARNETT, E. (ed.). Military Capacity and the Risk of War: China, India, Pakistan and Iran (Oxford: Oxford University Press, 1997). Asimco. Asimco, Asimco publicity brochure (1997). ÅSLUND, A. Gorbachev’s Struggle for Economic Reform (London: Pinter, 1991). AU SHUN,EBISAKI MIYUKI,HUNG MAY and WU QING. Has HSBC’s Acquisition of Midland Bank Created Value? (Judge Institute of Management Studies, University of Cambridge, 2000) (unpublished report).

959 960 Bibliography

AVIC. Aviation Industries of China (Beijing: AVIC, 1998). Bank for International Settlements (BIS). 70th Annual Report (2000). Baosteel, Baosteel Marching toward one of the Larger Modernised Integrated Complexes in the World (1998) (mimeo). BARSHEFSKY, C. ‘China’s WTO accession: American interests, values and strategy’, Testimony before the House Committee on Ways and Means (2000a). BARSHEFSKY, C. ‘Trade and American national security: the case of China’s WTO accession’, Speech at the United States Military Academy, (2000b). BAUMOL, W., R. NELSON and E. N. WOLFF (eds). Convergence of Productivity: Cross- National Studies and Historical Evidence (New York: Oxford University Press, 1994). Bear, Stearns. China Yuchai International Limited, Prospectus (New York, 1994). Bear, Stearns. Yanzhou Coal Mining Company Limited, Prospectus (Hong Kong, 1998). BENEWICK, R. and P. WINGROVE (eds). China in the 1990s (London: Macmillan, 1995). BENJAMIN, J. and D. SABALOT. Embracing Smoke: The Internet and Financial Services Regulation (Centre for the Study of Financial Innovation, 1999). BERGER, A., R. YOUNG, H. GENAY and H. UDELL. Globalization of Financial Institutions: Evidence from Cross-Border Banking Performance (Washington, DC: Federal Reserve, 2000). BERNSTEIN R. and R. H. MUNRO. The Coming Conflict with China (New York, Random House, 1998). BEST, M. The New Competition (Cambridge: Polity Press, 1990). BLANCHARD, O., M. BOYCKO, M. DABROWSKI, R. LAYARD and A. SHLIEFER. Post- Communist Reform (Cambridge, MA: MIT Press, 1993). BOLTHO, A. Japan: An Economic Survey, 1953–7 (Oxford: Oxford University Press, 1975). BOSERUP, E. Population and Technology (Oxford: Blackwell, 1981). BREMAN, J. Footloose Labour (Cambridge: Cambridge University Press, 1997). British Petroleum (BP). BP Statistical Review of World Energy (1996). British Petroleum (BP). BP Statistical Review of World Energy (1997). British Petroleum (BP). BP Statistical Review of World Energy (1998). BP Amoco. ‘BP Amoco targets faster delivery of $2 billion savings’, BP Amoco press release, 17 February 1999 (1999a). BP Amoco. ‘BP Amoco–ARCO announcement’ (1999b). BP Amoco. Annual Report & Accounts, 1998 (1999c). BP Amoco. Presentation to the Financial Community, 15/16 July 1999 (1999d). BUCK, J. L. Land Utilisation in China (New York: Paragon Reprint, 1968) (originally published 1937). BYRD, W. A. ‘The Second Motor Vehicle Manufacturing Plant’, in Byrd (1992). BYRD, W. A. (ed.). Chinese Industrial Firms under Reform (Washington, DC: Oxford University Press, 1992). Bibliography 961

BZW. Power Asia (London: BZW, 1996).

CAMPBELL, J. L., J. R. HOLLINGSWORTH and L. N. LINDBERG (eds). Governance of the American Economy (Cambridge: Cambridge University Press, 1991). CAO, Y. Z.,Y. Y. QIAN and B. R. WEINGAST. ‘From federalism, Chinese style to privatization, Chinese style’, Economics of Transition, 7 (1999), 103–31. Centre for Medicines Research International (CMR). World-wide Pharmaceuticals R&D Expenditure 1986–1996 (Internet Edition, 1998). CHAI, JOSEPH C. H. CHINA Transition to a Market Economy (New York: Oxford University Press, 1997). CHANDLER,A. Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, MA: Harvard University Press, 1990). CHANDLER, A., F. AMATORI and T. HIKINO (eds). Big Business and the Wealth of Nations (Cambridge: Cambridge University Press, 1997). CHANDLER, A. and T. HIKINO. ‘The large industrial enterprise and the dynamics of modern economic growth’, in Chandler et al. (1997). CHANG HA-JOON. The Political Economy of Industrial Policy (New York: St Martin’s Press, 1994). CHEN FANG. The Foreign Armies Grab China (Haiwai bingtuan qianggou zhongguo) (Beijing: Zhongguo shehui chubanshe, 1999). CHEN QIAOSHENG. ‘Erqi jituan jihua danlie de huiti huigu he qishi’, Zhongguo Jingji Yanjiu, 8 (1992), 63–9. CHEN QIAOSHENG. ‘Fazhan qiye jituan tuijin guoyou jingji zhanlue chongzu’, Contemporary Finance and Economics (Dangdai Caijing), 4 (1998), 18–25. CHEN ZHUN et al. Restructuring the Assets of the Chinese Oil and Petrochemical Industry (Beijing: Jingji kexue chubanshe, 1998). CHIANG KAISHEK. China’s Destiny (London: Dennis Dobson, 1947). CHIANG, P. K. A Window on Taiwan’s Economic Development Experience (Taiwan, ROC: Council for Economic Planning and Development, 1999). China Chemical Information Centre. China Chemical Industry Yearbook (Beijing: China National Chemical Information Centre, 1997). China Coal Consultancy (Technology Consulting Committee of the Ministry of Coal Industry, China Technical Economic Consulting Centre of the Coal Industry). Research Materials on the Chinese Coal industry (mimeos of unpublished documents) (1998). China International Capital Corporation (CICC). China Telecom Hong Kong: Embracing a Competitive Era (Beijing: CICC, 1999). China International Capital Corporation (CICC). China Unicom: Approaching Our Near Term Target (Beijing: CICC, 2000). China Metallurgical Information and Standardization Institute (CMISI). China Steel Statistics 1997 (Beijing: The Developing and Planning Department, Ministry of Metallurgical Industry, 1997). China National Petroleum Corporation (CNPC). Chinese Oil and Natural Gas Industry Yearbook (Zhongguo shiyou tianranqi gongye ninajian) (ZSTGN) (Beijing: Shiyou gongye chubanshe, various years). 962 Bibliography

China National Petroleum Corporation (CNPC). China Petroleum Corporation, Annual Report, 1998 (1999). China Petrochemical Corporation (Sinopec). Annual Report, 1994 (1995). China Petrochemical Corporation (Sinopec). Annual Report, 1995 (1996). China Petrochemical Corporation (Sinopec). Annual Report, 1998 (1999). China Petrochemical Corporation (Sinopec). China Petrochemical Corporation Yearbook 1994 (Zhongguo shiyou gongye gongsi nianjian) (ZSGGN) (Beijing: Sinopec, 1995). China Petrochemical Corporation (Sinopec). China Petrochemical Corporation Yearbook 1997 (Zhongguo shiyou gongye gongsi nianjian) (ZSGGN) (Beijing: Sinopec, 1998). China Pharmaceutical Yearbook 1997 (CPY). (Beijing: China Pharmaceutical Technology Publication, 1997) (in Chinese). China Reform and Development Report Expert Group (China Reform Group). ‘Growing up to Maturity’: Case Studies of China’s Outstanding Large Enterprises (Zhongguo jiyou da qiye anli yanjiu) ( Shanghai: Far East Publishing Company, 1999). China Telecom (Hong Kong) (CTHK). Annual Report, 1999 (2000). China Unicom. Prospectus, 2000. Chinese Academy of Social Sciences (CASS). Industrial Economics Research Department, China’s Industrial Development Report (Zhongguo gongye fazhan bao- gao) (ZGFB) (Beijing: Jingji guanli chubanshe,1996–8). Chinese Auto Technology Research Centre (Zhongguo qiche jishu yanjiu zhongxin) (ZQJYZ). Chinese Auto Industry Yearbook (Zhongguo qiye gongye nianjian) (ZQGN) (Beijing: Chinese Auto Technology Research Centre, 1999). CHOUNG, E. and D. TERRESON. China’s Emerging Energy Landscape: A Bird’s Eye View (Hong Kong: MSDW, 1998). CIPOLLA, C. (ed). The Fontana Economic History of Europe: The Industrial Revolution (Glasgow: Collins, 1973a). CIPOLLA, C. (ed). The Fontana Economic History of Europe: The Emergence of Industrial Societies (2) (Glasgow: Collins,1973b). CIPOLLA, C. (ed). The Fontana Economic History of Europe: Contemporary Economies (Glasgow: Collins/Fontana, 1976). CLARKE, R. A. Soviet Economic Facts (London: Macmillan, 1983). CLINTON,W. The Clinton Administration Statement on PNTR for China: A Strong Deal in the Best Interest of America, in White House Website (2000). COASE, R. H. ‘The nature of the firm’, reprinted in Coase (1988) (originally published 1937). COASE, R. H. The Firm, the Market and the Law (Chicago: University of Chicago Press, 1988). Coca-Cola. Annual Report, 1995 (1996). Coca-Cola. Annual Report, 1998 (1999). COCKERILL, A. The Steel Industry (Cambridge: Cambridge University Press, 1974). Commission for the Reform of the Economic System (CRES). China Economic System Reform Yearbook (Zhongguo jingji tizhi gaige nianjian) (ZJTGN) (Beijing: Zhongguo gaige chubanshe, various years). Bibliography 963

Commission for the Reform of the Economic System (CRES Research Group). Guoyou qiye gaige gongjian (GQGG) (Beijing: Gaige chubanshe, 1998).

COOPER, R. Speech at China Development Forum (Beijing 2000). Council for Economic Planning and Development (CEPD). Taiwan Statistical Data Yearbook (Taipei: CEPD, 1998). Crédit Suisse First Boston (CSFB). Shandong Huaneng Power Development Co. Ltd. (CSFB, 1994). CUN FU, Robbing China (Qiangtan Zhongguo) (Beijing: Zhongguo minhang chubanshe, 1998). CUSUMANO, M. A. The Japanese Automobile Industry (Cambridge, MA: Harvard University Press, 1985). Daimler–Chrysler. Annual Report, 1998 (1999). DENG XIAOPING. Selected Works of Deng Xiaoping (1975–1982) (Beijing: Foreign Languages Press, 1984). DENG XIAOPING. ‘Speech [1977] at a plenary meeting of the military commission of the Central Committee of the CPC’, in Deng Xiaoping (1984). DENG YINGTAO. A New Mode of Development and China’s Future (Xin fazhan moshi yu zhongguo de weilai) (Beijing: Zhongxin chubanshe, 1991). Denso. Annual Report, 1999 (2000). Department of Trade and Industry (DTI). The UK R&D Scoreboard 1994 (Edinburgh: DTI, 1994). Department of Trade and Industry (DTI). The UK R&D Scoreboard 1995 (Edinburgh: DTI, 1995). Department of Trade and Industry (DTI). The UK R&D Scoreboard 1996 (Edinburgh: DTI, 1996). Department of Trade and Industry (DTI). The UK R&D Scoreboard 1998 (Edinburgh: DTI, 1998). Department of Trade and Industry (DTI). The UK R&D Scoreboard 1999 (Edinburgh: DTI, 1999). Detroit Diesel. Annual Report, 1998 (1999). Development Research Centre of the State Council (DRC). Listings of China’s Largest Enterprises, 1993 (Zhongguo daxing qiye paixu) (ZDQP) (Beijing: Management World, 1994). DICKEN, P. Global Shift (London: Paul Chapman, 1992). DICKEN, P. Global Shift, 2nd edn (London: Paul Chapman, 1998). DICKSON, I. ‘China’s steel imports: an outline of recent trade barriers’, Chinese Economy Research Unit Working Paper, 96/6 (Adelaide: University of Adelaide, 1996). DING,ARTHUR S. ‘China defence finance: content, process and administration’, The China Quarterly, 146 (1996), 428–42. Economic Co-ordination Bureau, Metallurgy Ministry (ECB). ‘Analysis of the economic performance of the metallurgy industry in 1994’, Metallurgy Economic Study 4 (1995), 1–10 (in Chinese). 964 Bibliography

Editorial Commission of Reform in Shougang (Beijing 1992) (in Chinese). ENG, M., F. LEES and L. MAUER. Global Finance (New York: Addison-Wesley, 1998). European Bank for Reconstruction and Development (EBRD). Transition Report, 1998 (London: EBRD, 1998). Exxon. Annual Report, 1997 (1998). Exxon. Annual Report, 1998 (1999). FEUERWERKER,A. The Chinese Economy, 1912–1949 (Ann Arbor, Michigan: University of Michigan, 1968). Financial Times. Survey: Power Generation Equipment (London: FT, 19 June 1997). FINDLAY, R. ‘Trade development and the state’, in Ranis and Schultz (1988). Fortune. The Fortune Global 500, 138 (3) (3 August 1998). Fortune. 1999 Fortune 500 (1999) . FRANK, A. G. ReOrient (Berkeley: University of California Press, 1998). FRANKENSTEIN, J. and B. GILL. ‘Current and future challenges facing Chinese defence industries’, The China Quarterly, 146 (June 1996). FRANSMAN, M. ‘Is industrial policy obsolete?’, Cambridge Journal of Economics, Vol. 19 (1995). FREELAND, C. Sale of the Century: The Inside Story of the Second Russian Revolution (London: Little Brown, 2000). FRIEDMAN, M. Capitalism and Freedom (Chicago: University of Chicago Press, 1962). FRIEDMAN, W. ‘Arms procurement in China: poorly understood processes and unclear results’, in Arnett (1997). GALBRAITH, J. K. The New Industrial State (Harmondsworth: Penguin, 1967). GE. Annual Report, 1998 (1999). GERLACH, M. L. Alliance Capitalism: The Social Organization of Japanese Business (Berkeley: University of California Press, 1992). Glaxo Wellcome. Annual Report, 1999 (2000). GODWIN, P. H. B. ‘Military technology and doctrine in Chinese military planning: com- pensating for weakness’, in Arnett (1997). GOMULKA, S. ‘Shock needed for the Polish economy’, The Guardian, 19 August 1989. GROOMRIDGE, M. A. and C. E. BARFIELD. Tiger by the Tail: China and the World Trade Organization (Washington, DC: American Enterprise Institute, 1999). GURTOV, M. ‘Swords into market shares: China’s conversion of military industry into civilian products’, The China Quarterly, 134 (June 1993). HADDOCK, F. ‘A tough act to follow’, Global Finance (January 2000). HAKANSON,H. Corporate Technological Behaviour: Co-operation and Networks (London: Routledge, 1989). HAMILTON, A. The Financial Revolution – The Big Bang World-Wide (Harmondsworth: Penguin, 1986). HAN DEQIANG. The Globalisation Trap and China’s Realistic Choices (Quznqiuhua xianjing yu zhongguo xianshi xuanze) (Beijing: Jingji guanli chubanshe, 2000). Bibliography 965

HAO ZHEN. ‘Innovation: the path for the socialist firm with Chinese characteristics’, in Editorial Commission of Reform in Shougang, 1. (Beijing: Beijing Press, 1992), 153–62 (in Chinese). Harbin Boiler Works. Harbin Boiler : Forty Years, 1954–1994 (Harbin guolu chang: sishi nian) (Harbin: Harbin Boiler Works, 1994). Harbin Power Equipment Company (HPEC). Annual Report, 1994 (1995). Harbin Power Equipment Company (HPEC). Annual Report, 1995 (1996). Harbin Power Equipment Company (HPEC). Annual Report, 1996 (1997). Harbin Power Equipment Company (HPEC). Interim Report, 1997 (1998). Harbin Power Equipment Company (HPEC). Annual Report, 1998 (1999). HASHIMOTO, M. and J. RAISIAN. ‘Employment tenure and earnings profiles in Japan and the United States’, American Economic Review, 75(4) (1985), 721–35. HASSARD, J. et al. The Contract Responsibility System at the Shougang Steel Works, Beijing: A Review of the System and Recent Developments (Keele: Department of Management, Keele University, 1992) (mimeo). HIKINO, T. and A. AMSDEN. ‘Staying behind, stumbling back, sneaking up, soaring ahead: late industrialization in historical perspective’, in Baumol et al. (1994). HIRST, P. and G. THOMPSON. Globalization in Question (London: Routledge, 1995). HO PING-TI. Studies on the Population of China, 1368–1953 (Cambridge, MA: Harvard University Press, 1959). HOGAN, W. T. Steel in the 21st Century (New York: Lexington Books, 1994). HOLSCHUH, L. J. Short and Medium Term Outlook for Steel Demand – Annual Report of the Secretary General, Presentation to the 32nd Annual Conference of the International Iron and Steel Institute, Taipei, Taiwan (5 October 1998). HUA DI. ‘Threat perception and military planning in China: domestic instability and the importance of prestige’, in Arnett (1997). HUANG LANGHUI,WU ZHONGHUA, and YAO YUMIN.‘Bai hu shidian zhidu chuangxin chengxiao xianzhu’, Modern Enterprise Herald, 1 (1998), 35–9. HUANG WEI. ‘Auto industry faces challenge and opportunities’, Beijing Review, 38, (45) (6 November 1995). HUNTINGTON, S. P. The Clash of Civilizations and the Remaking of the World Order (New York: Simon & Schuster, 1996). HYMER, S. ‘The multinational corporation and the law of uneven development’ (1975), reprinted in Radice (1975). IBM. Annual Report, 2000 (2000). IMF World Bank, OECD and EBRD. The Economy of the USSR: Summary and Recommendations (Washington DC: World Bank, 1990). ING–Barings. Angang New Steel Company (New Issue and Placing) (Hong Kong: ING–Barings, 1997). International Energy Agency. Coal Information (1998 Edition). International Institute for Strategic Studies (IISS). Military Balance, 1998/99 (London: IISS, 1998). 966 Bibliography

International Institute for Strategic Studies (IISS). Military Balance, 1999/2000 (London: IISS, 1999). Iron and Steel Industry of China (ISIC). The Yearbook of Iron and Steel Industry of China 1997 (Beijing: The Editorial Board of the Yearbook of Iron and Steel Industry of China, 1997) (in Chinese).

JANELLI,R.Making Capitalism (Stanford: Stanford University Press, 1993). Jane’s Combat Aircraft (Glasgow: Collins, 1995). Jane’s Civil Aircraft (Glasgow: Collins, 1996).

JI D. and Q. SHAO (eds). The Situation and Management of China’s Population Movement (Beijing, 1995).

JOHNSON,C. MITI and the Japanese Miracle (Stanford: Stanford University Press, 1982). Joint Research Group. ‘New changes in the employees after Shougang’s reform’, in Editorial Commission of Reform in Shougang (Beijing: Beijing Press, 1992), 89–109 (in Chinese).

KANTER, R. M. ‘Transcending business boundaries: 12 000 world managers view change’, Harvard Business Review, 69 (3) (1991), 151–64.

KAO, A. ‘China: electric utilities’, Morgan Stanley Dean Witter, Asia/Pacific Investment Research (23 March 1998).

KEISTER, L. ‘Engineering growth: business group structure and firm performance in China’s transition economy’, American Journal of Sociology, 104 (1998), 404–40.

KOIKE, K. ‘Human resources development and labour-management relations’, in Yammamura and Yasuba (1987).

KORNAI, J. The Road to a Free Economy (New York: Norton, 1990).

KRUGMAN, P. R. ‘New thinking about trade policy’, in Krugman (1987).

KRUGMAN, P. R. (ed.). Strategic Trade Policy (Cambridge, MA: MIT Press, 1987).

LAKE, D. A. Power, Protection and Free Trade (Ithaca: Cornell University Press, 1988).

LARDY,N.China’s Unfinished Revolution (Washington, DC: Brookings Institution, 1998).

LAU, L. Speech at meeting held to discuss China’s impending entry to the WTO, organized by the State Council’s Development Research Centre, Beijing (February 2000).

LAU, L. ‘Economic globalization and the information technology revolution’, paper presented to the 21st Century Forum, Beijing (14–16 June 2000).

LEE KUAN YEW. Speech to the 21st Century Forum, Beijing (14–16 June 2000). Legend Holdings. Annual Report, 1999 (2000). LEUCHTER, M. ‘Getting rich with merchant banking’, US Banker (April 2000).

LI BOZHONG. The Development of Agriculture and Industry in Jiangnan, 1644–1850: Trends and Prospects (Hangzhou: Zhejiang Academy of Social Sciences, 1986). LI BOZHONG. Agricultural Development Jiangnan, 1620–1850 (London: Macmillan, 1998). LI JIAJIE,ZHAI HUISHENG, and LIU LUSHA. ‘The model of enterprise technological advance’, in Editorial Commission of Reform in Shougang (Beijing: Beijing Press 1992), 223–6 (in Chinese). Bibliography 967

LI R. ‘Some considerations on the floating population in Contemporary China’ (Renkou yu jingji), Population and Economics, 94 (1996). LI XIAOXUE. Speech at China Big Business Programme, Cambridge (17 October 1999). LI YIXUE. ‘Zhongguo chanye jishu jinbu de wentie he duice’, Management World, 1 (1999), 139–43. LI ZUOKENG and LI CUNHOU (eds). Exploring Sanjiu (Sanjiu tansuo) (Guangzhou: Guangdong renmin chubanshe, 1995). LICHTENBERG, F. R. and G. M. PUSHNER. ‘Ownership structures and corporate performance in Japan’, NBER Working Papers Series, 4092 (Princeton: National Bureau of Economic Research, 1992). LILLEY, S. ‘Technological progress and the Industrial Revolution 1700–1914’, in Cipolla (1973a). LIN,JUSTIN Y. F. , FANG CAI and ZHOU LI. The China Miracle (Hong Kong: Chinese University Press, 1996). LINDBERG, L. N. and J. L. CAMPBELL. ‘The state and the organisation of economic activity’, in Campbell et al. (1991). LIPSEY, R. An Introduction to Positive Economics (London: Wiedenfeld & Nicolson, 1963). LIU JINGHAI. ‘Resources and promoting competitiveness of steel industry’, in Metallurgy Economic Study 23, 24 (1994) (in Chinese). LIU LI,JIANG DONGSHENG, and SHANG ZENGJIAN. ‘Jingji fazhan, tizhi zhuanji, dui wai kaifang yu Zhongguo daxing gong qiye de chengchang’, Management World, 5 (1999), 118–31. LIU X., H. SONG, and P. ROMILLY. ‘Stock returns and volatility: an empirical study of Chinese stock markets’, International Review of Applied Economics, 12 (1998), 129–39. LIU ZHIYONG,LIU LEI, and GAN XIAOQING. ‘An Empirical Study on Transnationalisation of Shougang Corporation’, in Shougang Research and Development, 3 (1994), 61–5 (in Chinese). LO DIC. Market and Institutional Regulation in Chinese Industrialization, 1978–94 (London: Macmillan, 1997). LO DIC. ‘Re-appraising the performance of China’s state-owned industrial enterprises, 1980–1996’, Cambridge Journal of Economics, 23 (1999), 693–718. LO DIC and T. CHAN. ‘Machinery and China’s nexus of foreign trade and economic growth’, Journal of International Development, 10 (1998), 733–49. LU YANSUN. ‘Outlook for China’s power industry’, in Lu Yansun (1997). LU YANSUN (ed.). China Power and Electrical Equipment (Beijing: Chinese Power and Electrical Equipment Association, 1997). LUO BINGSHENG. ‘Reform of the Shougang Group for the twenty-first century’ (1998) (mimeo). MA WEIJIE and MA WEIGANG. Shijie jingji 500 qiang (Guangdong: Guangdong luyou chubanshe, 1998). MADDISON, A. ‘Explaining the economic performance of nations, 1820–1989’, in Baumol et al. (1994). 968 Bibliography

MALONE, T. W. and R. L. LAUBACHER. ‘The dawn of the e-Lance economy’, Harvard Business Review, September–October (1998). MARKHAM, J. W. ‘Survey of evidence and findings on mergers’, NBER Working Papers (Business Concentration and Price Policy) (Princeton: National Bureau of Economic Research, 1955). MARSHALL, A. Principles of Economics (London: Macmillan, 1920; 1st edn, 1890). MARUKAWA, T. ‘Industrial groups and division of labour in China’s automobile industry’, The Developing Economies, 33, (3) (1995), 330–55. MARX, K., Capital, 1, (1867) (New York: International Publishers, 1967 edn). MARX,K.The Communist Manifesto (1888) English edn, reprinted in Karl Marx and Frederick Engels, Selected Works, (London: Lawrence & Wishart, 1968). MAO ZEDONG. ‘The Chinese people have stood up’ (1949), in Mao Zedong (1977). MAO ZEDONG. Selected Works of Mao Zedong (Beijing: Foreign Languages Press, 1977). MCEVEDY, C. and R. JONES. Atlas of Population History (Harmondsworth: Penguin, 1978). Merck. Annual Report, 1998 (1999). MILLER, J. Mikhail Gorbachev and the End of Soviet Power (London: Macmillan, 1993). MIN CHEN. Asian Management Systems (London: Routledge, 1995). MINCER, J. and Y. HIGUCHI. ‘Wage structures and labour turnover in the United States and Japan’, Journal of the Japanese and International Economies, 2, (2) (1988) 97–133. Ministry of Coal Industry (Meitan gongye bu) (MGB). Yearbook of China’s Coal Industry (Zhongguo meitan gongye nianjian) (ZMGN) (Beijing: Meitan gongye chubanshe, 1997). Ministry of Electric Power. Annual Report, 1997 (1998). Ministry of Machine Building (MMB). Chinese Automobile Industry Yearbook (Zhongguo qiche gongye nianjian) (ZQGN) (Beijing: Chinese Automobile Industry Publishing House, 1996, 1998). Ministry of Metallurgy Industry (MMI). Statistics on China’s Iron and Steel (Beijing: Ministry of Metallurgy Industry, 1994) (in Chinese). MITCHELL, B. ‘Statistical Appendix’, in Cipolla (1976). Mobil. Annual Report, 1998 (1999). Morgan Stanley Asia. China Eastern Airlines Prospectus (Hong Kong: Morgan Stanley Asia, 1997a). Morgan Stanley Asia. Beijing Datang Power Generation Company (Hong Kong: Morgan Stanley Asia, 1997b). Morgan Stanley Dean Witter (MSDW). The Competitive Edge (New York and London: MSDW, 1997) Morgan Stanley Dean Witter (MSDW). The Competitive Edge. 14 January 1998, (New York: MSDW, 1998a) Morgan Stanley Dean Witter (MSDW). The Competitive Edge: April Update (New York: MSDW, 1998b). Morgan Stanley Dean Witter (MSDW). The Asian Edge: A Closer Look: 29 May 1998 (New York: MSDW, 1998c). Bibliography 969

Morgan Stanley Dean Witter (MSDW). The Competitive Edge: 16 July 1998 (New York: MSDW, 1998d). Morgan Stanley Dean Witter (MSDW). Yanzhou Coal Mining Company Ltd: A Natural Advantage (Hong Kong: MSDW, 1998e). Morgan Stanley Dean Witter (MSDW). The Competitive Edge (New York and London, 1999). Morgan Stanley Dean Witter (MSDW). The Competitive Edge: April Update (New York and London, 2000). MUKHERJEE, A. and T. SASTRY. ‘Automotive industry in emerging economies’, Economic and Political Weekly (30 November 1996). Nanfang Pharmaceutical Factory, Collection about Nanfang Pharmaceutical Factory, 1987–1995 (Guanyu Nanfang zhiyao Chang Xuanji) (Shenzhen, 1996) NAUGHTON, B. ‘The third front: defence industrialisation in the Chinese interior’, The China Quarterly, 115 (September 1988). NAUGHTON,B. Growing Out of the Plan : Chinese Economic Reform, 1978–1993 (Cambridge: Cambridge University Press, 1995). NEEDHAM, J. Science and Civilization in China (Cambridge: Cambridge University Press, 1954-). NEEDHAM. J. Science and Civilization in China, Vol. 4, Part 2: Mechanical Engineering (Cambridge: Cambridge University Press, 1965). NEEDHAM, J. ‘Iron and steel production in ancient and medieval China’, in Needham (1970). NEEDHAM,J.Clerks and craftsmen in China and the West (Cambridge, Cambridge University Press, 1970). NESTER, W. R. Japanese Industrial Targeting (London: Macmillan, 1991). New Star Press. Selected Documents of the 15th CPC National Congress (Beijing: New Star Publishers, 1997). NOLAN, P. ‘China’s new development path’, in Nolan and Dong Fureng (1990). NOLAN, P. State and Market in the Chinese Economy (London: Macmillan, 1993a). NOLAN, P. ‘Political economy and the reform of Stalinism: the Chinese puzzle’, Contributions to Political Economy, 12 (1993b). NOLAN, P. ‘Democratisation, human rights and economic reform: the case of China’, Democratisation, 1 (1) (1994). NOLAN, P. China’s Rise, Russia’s Fall (London: Macmillan, 1995). NOLAN, P. ‘Large firms and industrial reform in former planned economies: the case of China’, Cambridge Journal of Economics, 20 (1996), 1–29. NOLAN,P.Indigenous Large Firms in China’s Economic Reforms: the Case of Shougang Iron and Steel Corporation (London: Contemporary China Institute, 1998). NOLAN,P. Coca-Cola and the Global Business Revolution: A Study with Special Reference to the EU (Cambridge: Polity Press, 1999). NOLAN, P. and DONG FURENG (eds). The Chinese Economy and its Future (Cambridge: Polity Press, 1990). NOLAN, P. and WANG XIAOQIANG. ‘Enlightenment from US military restructuring for Chinese industrial adjustment’, Strategy and Management, 6 (1997), 60–7 (in Chinese). 970 Bibliography

NOLAN, P. and WANG XIAOQIANG. ‘Beyond privatization: institutional innovation and growth in China’s large state-owned enterprises’, World Development, 27 (1) (1998), 169–200. NOLAN, P. Case Studies China Big Business Programme, 1996–99. NYE, J. and W. A. OWENS. ‘America’s information edge’, Foreign Affairs, March–April 1996. OHMAE,KENICHI (ed.). The Evolving Global Economy – Making Sense of the New World Order (Boston: Harvard Business School Publishing, 1995). OKIMOTO, D. I. Between the MITI and the Market (Stanford: Stanford University Press, 1989). Peat Marwick Huazhen. Guangxi Machinery Company Limited: Statutory Accounts of the Company (Beijing: Peat Marwick Huazhen, 1995). PENROSE,E.The Theory of the Growth of the Firm (Oxford: Oxford University Press, 1995). People’s Bank of China (PBC). Almanac of China’s Finance and Banking, 1999 (Beijing: PBC, 1999). Peregrine Capital Limited. Consolidated Electric Power Asia Limited (Hong Kong: Peregrine Capital Limited, 1993a) Peregrine Capital Limited. Denway Investment Limited Prospectus (Hong Kong: Peregrine Capital Limited, 1993b) PERKINS, D. H. Agricultural development in China, 1368-1968 ( Edinburgh: Edinburgh University Press, 1968) PIORE, M. and C. SABEL. The Second Industrial Divide: Possibilities for Prosperity (New York: Basic Books, 1984) PORTER,M.The Competitive Advantage of Nations (London: Macmillan, 1990) PRAIS, S. J. Productivity and Industrial Structure (Cambridge: Cambridge University Press, 1981) PRATTEN, C. F. Economics of Scale in Manufacturing Industry (Cambridge: Cambridge University Press, 1971). QIN YUEXING. ‘Opportunities and Challenges – the Impact on Chinese Insurance from WTO entry’, International Financial Research (Guo ji jin rong yan jiu) Vol. 2 (2000). RADICE, H., ed. International Firms and Modern Imperialism (Harmondsworth: Penguin, 1975). RAMANGKURA,VIRABONGSA. ‘Financial globalisation and globalism’, Speech at the 21st Century Forum, Beijing, 14–16 June 2000 RANIS, G. and T. P. SCHULTZ, eds. The State of Development Economics (Oxford: Basil Blackwell, 1988). RAWSKI, T. G. Economic Growth in Pre-War China (Berkeley: University of California Press, 1989). REICH, R. ‘Who is them?’ in Kenichi Ohmae (1995). Research Centre of Metallurgy Economic Development (RCMED). ‘The summary of investment efficiency of fixed assets in eight largest steel complexes in the periods of the Sixth and Seventh Five-Year Plans’ in Editorial Commission of Reform in Shougang, Vol. 2 ( Beijing: Beijing Press, 1992), 134–43 (in Chinese). Bibliography 971

Research Centre of Metallurgy Economic Development (RCMED). ‘Total steel demand in the World will be 720 million tons in 2000’, in Reference for Enterprise Decision Making, 26 (1994) 13–14 (in Chinese). RHYS, G. ‘Smaller car firms – Will they survive?’, Long Range Planning, Vol. 22 (1989) 107–35. Rio Tinto. Annual Report, 1997 (1998).

ROBERTSON, D. H. The Control of Industry (Cambridge: Cambridge University Press, 1923).

ROBINSON, A. ‘Energy policy’, in Nolan and Dong Fureng (1990).

RODZINSKI, W. The Walled Kingdom (London: Fontana, 1984). Rolls-Royce. Annual Report, 1997.

RUIGROK, W. and R. VA N TULDER. The Logic of International Restructuring (London and New York: Routledge, 1995). Salomon Brothers. Shougang Concord International – A Multifaceted China play (Hong Kong: Salomon Brothers, 1994). Sanjiu Enterprise Group (SEG). Unpublished report (1997) (in Chinese). Sanjiu Enterprise Group (SEG). Report Submitted to the General Logistics Department by Zhao Xinxian (1998) (internal document, in Chinese). Sanjiu Jituan Bao (SJB). ‘Establish risk monitor mechanism’, 8 (231), 25 Feb. 1998 (in Chinese) Sanjiu Jituan Bao (SJB). ‘New mechanism for promotion’, 14 (237) (8 April 1998 (in Chinese). Sanjiu Jituan Bao (SJB). ‘Ya’an Pharmaceuticals: can it be the second “Nanfang”?’ 15 (233) (15 April 1998). (in Chinese). Sanjiu Jituan Bao (SJB). ‘Stock-ownership Reform’, 16, (239), (22 April 1998) (in Chinese). Sanjiu Jituan Bao (SJB). ‘Sanjiu Mechanism and the development of Sanjiu’, 18 (241) (6 May 1998) (in Chinese).

SCHERER, F. M. and D. ROSS. Industrial Market Structure and Economic Performance,3rd edn (Boston: Houghton Mifflin, 1990).

SCHERER, F. M. Industry, structure, strategy and public policy (New York: Harper Collins, 1996).

SCHMITZ, C. J. The Growth of Big Business in the United States and Western Europe, 1850–1939 (London Macmillan, 1993).

SCHURMANN, F. and O. SCHELL (eds.) Imperial China (Harmondsworth: Penguin, 1967).

SCHWAB, K. Speech at the 21st Century Forum, Beijing (14–16 June 2000). Sciences and Technology Department, the Ministry of Metallurgical Industry (STD), Research in the Technological Innovation Strategy in the Iron and Steel Industry: Final Report (December 1997) (mimeo). Shanghai Petrochemical Company (SPC). Interim Report for 1997 (1998). Shanghai Petrochemical Company (SPC). Report to the US Securities and Exchange Commission for 1998 (1999). 972 Bibliography

Shanghai Turbine Company. Annual Report, 1999 (1999).

SHAO JIANYUN. ‘Zhongguo qiye goubing shichang de fazhan yu zhengce jianyi’, Management World, 4 (1997) 83–92. Shell. Royal Dutch Petroleum Company: Summary Annual Report 1998 (1999a). Shell. The Shell Report 1999: People, Planet & Profits (1999b). Shell. Shell Financial and Operational Information 1994–98 (1999c). Shenhua Group. Annual Report, 1997 (1998). Shougang Group (SG). Shougang Corporation (Beijing: Shougang Assiqi Advertising Company, 1995). Shougang Group (SG). The Reform Agendas of the Shougang Group (30 June 1998) (internal document). Sidel. Annual Report, 1998 (1999). Siemens. Annual Report, 1998 (1999).

SLATER, J. ‘What does the 21st century hold for the coal industry?’ Website: World Coal Institute (1998).

SMIL,V.China’s Environmental Crisis (London: M.E. Sharpe, 1993).

SMITH,A. The Wealth of Nations (1776) (Chicago: University of Chicago Press, 1976 edn).

SMYTHE, D. J. Technological Change, Competitive Capital Markets, and the Turn of the Century Merger Movement (1995) (mimeo).

SMYTH, R. ‘Should China be promoting large-scale enterprises and enterprise groups?’, World Development, 28 (2000), 721–37.

SONG QIANG et al. China Can Say No? (Zhongguo keyi shuo bu?) (Beijing: Zhongguo wenlian chubanshe, 1996). State Bureau of Metallurgical Industry (SBMI). Chinese Steel Industry into the 21st Century (1998) (mimeo). State Capital Management Bureau (SCMB). China State Capital Yearbook (Zhongguo guoyou zichan nianjian (ZGZN) (Beijing: Jingji kexue chubanshe, 1993). State Council Development Research Centre (SCDRC), China Economic Yearbook (Zhongguo jingji nianjian) (ZJN) (Beijing: Zhongguo jingji nianjian chubanshe, various years). State Planning Commission (SPC). China Energy Report ( Zhongguo nengyuan) (Beijing: China Prices Publishing House, 1997). State Statistical Bureau (SSB). Statistical Yearbook of China (SYC) (English language edn) (Hong Kong: Economic Information and Agency, 1981). State Statistical Bureau (SSB). Chinese Industrial Economy Statistical Materials (Zhongguo gongye jingji tongji ziliao) ( ZGJTZ) (Beijing: Tongji chubanshe, various years). State Statistical Bureau (SSB). A Guide to Industrial Statistics (Xinbian gongye tongji gongzuo zhinan) (XGTGZ) (Beijing: Zhongguo tongji chubanshe, 1999). State Statistical Bureau (SSB). Chinese Large and Medium-Sized Enterprises Yearbook (Zhongguo daxing qiye nianjian) (ZDQN) (Beijing: Tongji chubanshe, various years). Bibliography 973

State Statistical Bureau (SSB). Chinese Industrial Economy Statistical Yearbook (Zhongguo gongye jingji tongji nianjian) (ZGJTN)) (Beijing: Tongji chubanshe, various years). State Statistical Bureau (SSB). China Statistical Yearbook (Zhongguo tongji nianjian) (ZTN) (Beijing: Zhongguo tongji chubanshe, various years). State Statistical Bureau (SSB). Guangdong Statistical Yearbook (Guangdong tongji nianjian) (GTN) (Guangzhou: Zhongguo tongji chubanshe, various years). Steinfeld, E. Forging Reform in China (Cambridge: Cambridge University Press, 1998). STOKES,E. The English Utilitarians (Oxford: Clarendon Press, 1959). SUN RUIHUA. ‘Jiakuai da qiye jituan fazhan bufa’, Modern Enterprise Herald (1998) 4–7. SUN WU. The Essentials of Warfare (Beijing: New World Press, 1996). SUZUKI, Y. Japanese Management Structures, 1920–80 (London: Macmillan, 1991). SWAMY, S. ‘The response to economic challenge: a comparative economic history of China and India, 1870–1952’, Quarterly Journal of Economics, (February 1979), 25–46. TAN CHENGDONG. ‘Optimising the structure is the main target of developing the steel and iron industry at socialist market economic system’ Metallurgy Economic Study,3 (1994). 1–16 (in Chinese). Tasman Asia Pacific. Australia’s Black Coal Industry: The Scope for Productivity Improvement (Canberra: Tasman Asia Pacific, 1993). THOMPSON, E. ‘Reforming China’s coal industry’, The China Quarterly, 147 (1996) 726–50. Thomson Financial Data Services Website www.fds.com. THUROW., C. Japan: the Challenge of Producer Economics, Marshall Lecture, Cambridge University (1991) (mimeo). UNCTAD (United Nations Conference on Trade and Development). World Investment Report 1994: Transnational Corporations, Employment and the Workplace (Geneva: UN Publications, 1994). UNCTAD (United Nations Conference on Trade and Development). World Investment Report 1995: Transnational Corporations and Competitiveness (Geneva: UN Publications, 1995). UNCTAD (United Nations Conference on Trade and Development). World Investment Report 1996: Investment, Trade and International Policy Arrangements (Geneva: UN Publications, 1996). UNCTAD (United Nations Conference on Trade and Development). World Investment Report 1997: Transnational Corporations, Market Structure and Competition Policy (Geneva: UN Publications, 1997). UNCTAD (United Nations Conference on Trade and Development). World Investment Report 1998: Trends and Determinants (Geneva: UN Publications, 1998). UNCTAD (United Nations Conference on Trade and Development). World Investment Report 1999: Foreign Direct Investment and the Challenge of Development (Geneva: UN Publications, 1999). UNDP (United Nations Development Programme) Human Development Report (New York: Oxford University Press, 1999). 974 Bibliography

United States Energy Information Agency, Country Analysis Brief: China (1998). US–China Trade Council, ‘Questions and answers: US–China WTO Agreement’, 1 December, The White House (1999). Usinor. Annual Report, 1997 (1998). Valeo. Annual Report, 1997 (1998). Valeo. Annual Report, 1998 (1999). VOGEL, E. The Four Little Dragons (Cambridge, MA: Harvard University Press, 1991). WADE,R.Governing the Market: Economic Theory and the Role of Government in East Asian industrialization (Princeton: Princeton University Press, 1990). WAGNER,D.The Traditional Tron and Steel Industry and its Modern Fate (Richmond: Curzon Press, 1997) WANG WEIJUN. ‘The market-oriented management system in HPEC’ (1996) (mimeo). WANG XIAOQIANG. China’s Price and Ownership Reform (London: Macmillan, 1998) WANG XIAOQIANG. Development strategies for China’s telecommunications industry (Cambridge: China Big Business Programme, 1998.). WANG XIAOQIANG and P. NOLAN, Strategic Restructuring (Zhanlue chongzu) (Shanghai: Wenhui chubanshe, 1998) (in Chinese). WANG ZONGREN. Zhou Guanwu and Shougang – Record of Reform in Shougang (Tianjin: Hundred Flowers Art Press, 1993) (in Chinese). Warburg Securities. Harbin Power Equipment Company Limited, (Hong Kong: Warburg, 1994). Warburg Securities. Yizheng Chemical Fibre Company (Hong Kong: Warburg, 1991). Wardley Corporate Finance Limited (WCFL). Maanshan Iron and Steel Company Limited (Hong Kong: WCFL, 1993). White House, the US government web site on the China–US WTO accession agreement (2000). World Bank. China: Macroeconomic Stability in a Decentralised Economy, (Washington, DC: World Bank, 1995). World Bank. China: Reform of State-owned Enterprises (Washington, DC: World Bank, 1996a). World Bank. Clear Water, Blue Skies (Washington, DC: World Bank, 1997a). World Bank. China 2020 (Washington, DC: World Bank, 1997b). World Bank. World Development Report (New York: Oxford University Press, 1981a). World Bank. World Development Report (New York: Oxford University Press, 1990). World Bank. World Development Report (New York: Oxford University Press, 1991). World Bank. World Development Report (New York: Oxford University Press, 1992). World Bank. World Development Report (New York: Oxford University Press, 1996). World Bank. World Development Report (New York: Oxford University Press, 1998). World Bank. World Development Report, 1999/2000: Entering the 21st Century (New York: Oxford University Press, 2000). Bibliography 975

World Bank. China: Socialist Development, (Washington, DC: World Bank, 1981b). XIE, A. ‘From quantity to quality growth’, MSDW Asia/Pacific, China Monthly, Investment Review (26 May 2000). XIE PING. ‘WTO and the Financial Reform of China’, Forum of Innovation and Risk Management in Securities Brokerage (2000). XU DIXIN and WU CHENGMING (eds). Capitalism in China 1644–1840 (London: Macmillan, 2000) C. Curwen (ed), (English en). XU RENZHONG and LIU PUQUAN. ‘Contract system in Shougang: inducing public ownership in everyone’, in Editorial Commission of Reform in Shougang, 1 (Beijing: Beijing Press, 1992), 199–204 (in Chinese). XU RENZHONG and LIU PUQUAN. ‘Breaking the big pot to establish true equality’, in Editorial Commission of Reform in Shougang, 1 (Beijing: Beijing Press, 1992b), 213–17 (in Chinese). YAMMAMURA, K. and Y. YASUBA (eds). The political economy of Japan, Vol. 1 (Stanford: Stanford University Press, 1987). YATSKO, P. ‘The bigger, the better’, Far Eastern Economic Review, 161 (21) (1998), 10–13. YERGIN, D. The Prize (London: Simon & Schuster, 1991). YEUNG, G. ‘The People’s Liberation Army and the market economy’, in Benewick and Wingrove (1995). YEUNG, G. ‘The political economy of Hong Kong–Shenzhen integration with special reference to corporate structure’ (Cambridge: Department of Land Economy, 1996) (mimeo). YIN WENRU,YUAN JIALU, and ZANG YAORU. ‘Mianxiang 21 shijie de qiye jituan fazhan zhanlue’, Management World, 5 (1999), 132–45. YING WENQUAN. ‘Wo guo qiye jituan fazhan zhong de zhengfu jiaose dingwei’, Zhongguo gongye jingji (Chinese Industrial Economics), 6 (1999), 34–8. YONEKURA SEIICHIRO. The Japanese Iron and Steel Industry, 1850–1990 ( London: Macmillan, 1994). YU JIANMING. ‘Shenhua daxing qiye jituan shidian tuijin liang ge genbenxing zhuanji’, Hongguan jingji guanli (Macro Economics Management), 8 (1997). ZHOU PINGJUN. ‘Bai hu xiandai qiye zhidu shidian de xiaoguo yu jingyan’, Zhongguo gongye jingji (Chinese Industrial Economics), 7 (1997) 60–7. ZHANG SHOURONG. ‘Trend of international steel and iron industry development’ Metallurgy Economic Study, 1 (1994), 26–32 (in Chinese). ZHANG WUCHANG. ‘China and the WTO’ (2000) (mimeo). ZHONG CHANGYUAN and HUANG JIAN. Drilling and Gas Recovery Technology in Ancient China (London: Shell, 1997). ZOU DONGYAO and ZHANG XIAOWEN.‘30 jia xiandai qiye zhidu shidian qiye de diaocha yu fenxi’, Management World, 1 (1991), 154–61. Index

ABB (Switzerland/Sweden), 59, 336, 398 Acesita (Brazil): investment by Usinor, 611 ‘close relationship’ with HPEC, 382 Acheng Relay Works (Harbin), 363–4, 365 ‘expands aggressively in PRC’, 362–3 main statistics (1992), 364 involvement in Three Gorges Project, part of HPEGC, 365 945(n20) wholly-owned subsidiary of HPEGC, [367,] joint tenders with HPEC, 387 946(n36) joint venture with ‘HEC’ (1996–), 371 acid merger with GEC-Alsthom (1999), 338 acetic, 423 ‘national champion’ (Sweden/Switzerland), nitric, 466 396 phthalic acid, 466 operations in PRC, 391 sulphuric, 466 origins, 336 see also pollution/acid rain R&D expenditure, 329 acknowledgements, xxiv-xxvi rate of return in PRC, 944(n14) to Zhao Xinxian, 941(n9) re-location of manufacturing base, 333 acrylics, 452, 456, 472 revenues, profits, employees, R&D (1998), acrylonite technology, 423 882 ADP, 786 servicing, 394 advanced economies (incorporating ‘high- shareholder in HPEC Limited, 946(n31) income countries’), 848–9, 854, 855, 892 size (late 1990s), 330 big business, 62–4 supply network, 384 differences from developing countries, 844 technology transfer (nuclear) to PRC, 358 dominance of firms based in, 46, 47 ABB-Alstom, 59, 848 dominant position of large firm, 13–14 ancillary equipment, 365 economic growth (1980–98), 851 ‘European’ credentials, 338 expenditure on health, 767 globalization, 335 financial services, 814 market share worldwide (power generation GNP (1998), 932 equipment, 1993–8), 337 internet hosts per 1,000 people (1997), 789 merger of ABB and GEC-Alsthom (1999), internet-users, 805 338, 339 IT development (1997), 789 one of the top three, 339 IT firms, 770, 788, 790 size (late 1990s), 330 oil and petrochemicals, 884 source of profits, 333 per capita energy use (1994), 341 ABB China, 945(n20) personal computers per 1,000 people (1997), Abbott (pharmaceuticals), 249, 250 789 Abu Dhabi National Oil Company: output pollution, 703 (1996), 409 public health expenditure (1900–7), 243 AC/DC motors, 371, 394 steel, 592 Acadiania BancShares (Lafayette, LA), 819 stock market capitalization (1998), 932 ‘accelerator’ principle, 714 strict view of PRC undertakings (WTO accounting, 70, 282, 849 accession), 870 Acer Computer (Taiwan), 21 tariff barriers, 28 Aceralia (Arbed Group), 602n telecommunications development (1997), 789 976 Index 977 advanced economies (incorporating ‘high- Trent 900, 177 income countries’) – continued V2500, 172, 208 telephone main lines per 1,000 people see also CEC (1997), 789 Aeroflot, 179 TV sets per 1,000 people (1997), 789 aerospace industry (global), 3, 12, 141–240, wages, 891 615, 844–5, 854, 859, 860, 861, 863, wireless telephones per 1,000 people (1997), 876–8, 929 789 aero-engines, 171–3 see also global business revolution; OECD barriers to entry, 63–4, 173–6 countries conclusion, 231–40 Advanced Micro Devices (AMD), 768–9 consolidation in USA, 152–6 advertising, 9, 11, 34, 856 consolidation in ‘Europe’, 156–70 economies of scale (automobile industry), demand, 149–52 503, 510 drivers of international change, 141–52 global market share, 37 engine makers, 39 internet companies, 780 example of Brazil, 180–3 mass media, 781 example of Japan, 176–8 minimum economy of scale (auto industry), example of USSR, 178–80 503 general difficulties for ‘Europe’, 170–1 Nanfang, 298–9, 321, 323, 943(n31) importance of scale, 142 pharmaceutical sector, 251 internal systems integration capabilities, Sanjiu hotel chain, 313–14 147–9 television (PRC), 557 international trends, 141–84 tyres, 526 oligopoly, 37, 39, 40 Yuchai, 557, 885 on-line procurement networks, 45 advertising companies, 781 options facing developing countries, 183–4 AEI, 943(n7) PRC, 184–240 Aeoleus, see Dongfeng Group privatization (general), 32 Aeritalia, 940(n4) process of aerospace consolidation, 152–73 aero-engines (general), 145, 171–3, 329–30, research and development, 49, 596 332, 398, 942(n1) Samsung, 53 AVIC, 186, 199, 227, 229, 877 South Korea, 54 BMW, 173 Soviet bloc, 149 barriers to entry, 64, 171, 173 strategic choices for developing countries, design, 43 173–84 global triopoly, 141 suppliers, 39 Harbin Aero-engine Company, 205 supply, 142–7 high-thrust, 173 technological gap (facing Third World), 184 jet, 142, 171, 177, 180–1 transatlantic option, 162–5, 235, 236, 338 joint ventures, 216–17 aerospace industry (PRC): 184–240, 921 Mitsubishi, 173 AVIC, 184–7 Pratt and Whitney, 142, 172, 180, 204, 205 barriers to entry, 195–6 PRC, 175, 200, 222, 877 building a modern jet airliner, 206–13 technology useful in power generation catch-up, 188, 195–6, 240 equipment sector, 329–30, 942(n1) ‘children’ and ‘grandchildren’, 221–6 Trent series (Rolls Royce), 172, 174–5, 177 civilian aircraft, 202–21 Volvo, 173 competitive capability (1997), 877 aero-engines (specific) conclusion, 231–40 CF34–8C, 177 cooperation with Russian Federation, 233 F120 engine, 164 declining military orders, 187–95 GE-90, 172 end of holding company experiment, 226–31 JT3D, 202 first batch of trial business groups, 109 JT8D, 217 importance of ‘indigenous’ industry, 240 PW400, 172 institutional change, 221–31 RB-211, 174–5 institutional re-structuring, 226–31 RB211–535, 179 joint ventures, 217–21 Rolls Royce Spey, 190 leading companies, 200 SNECMA, 173 lessons for PRC from Brazil, 238–40 Trent 500, 175 lessons for PRC from Euro-American Trent 600, 175 relations, 234–6 978 Index aerospace industry (PRC) – continued Shougang expansion, 690 lessons for PRC from ‘Europe’, 232–4 steel production (1991–7), 589 lessons for PRC from Japan, 236–7 TotalFinaElf, 417 lessons for PRC from USA, 231–2 after-sales service, 512 lessons for PRC from USSR, 237–8 afterword, 935 market prospects, 202–3, 234 agribusiness, 261, 262 military aircraft, 187–96 agricultural modern jet airliner, 206–13 equipment (PRC national team), 76 national team, 76, 84, 85, 112–13 groups (PRC national team), 135 need for ‘indigenous’ aircraft industry, 240 machinery, 75, 104, 108, 346, 548 non-aviation production, 196–202, 222 productivity, 767 policy change, 196–7 technology (Sanjiu), 315–16 production, 197, 940(n10) Agricultural Bank of China (ABC), 96 production of military aircraft (1974–94), key indicators, 1999 (global-leaders 189–90 comparison), 827 restructuring, 500 losses, 830–1, 958(n11) sub-contract/subsystem joint ventures, productivity, 830–1 213–17 agriculture, 316 sub-contracts, 217–21 China (pre-1949), 901, 906 Xian Aircraft Company, 199–202 employment (PRC 1998), 919 Yun-10 (Y-10), 203–5 growth (PRC 1980–97), 913 Yun-7 (Y-7), 205–6 migration (PRC), 894 see also AVIC; Xian Aircraft Company PRC, 926 aerospace machinery: competitive advantage, 36 restructuring (PRC), 894 Aérospatiale (France), 499, 840, 920 share of national product (Mao era), 907 dwarfed, 146 WTO rules (PRC implementation), 868–9, grants sub-contracts in PRC, 209, 214 870–1, 871–2 part-owner of Airbus Industrie, 167 agro-chemicals, 252 privatization, 859, 892 Ahdab oilfield (Iraq), 441 and proposed EADC, 159–60 Ahlstrom Group (USA), 378 research and development, 142, 143, 175, AHP, see American Home Products 536 air brake compressions and castings, 950(n9) size (1998), 166 air conditioners, 197, 198 state-owned, 499 air defence systems, 148 turbo-prop feeder aircraft, 205–6 Air France, 149, 213 Aérospatiale–Matra (6.1999–), 160, 165, air intake systems, 520 169–70, 235, 499, 854 Air New Zealand, 149 market capitalization (1999), 236 air pollution, 430 merger with Dasa, 161 Air Touch, 778 still partly state-owned, 499 air transport: PRC (1978–97), 432 see also EADS airbags, 526 Aetna (US insurer), 822 airborne warning and control (AWAC) system Affymax (USA), 255, 258 PRC, 191, 940(n9) acquired by Glaxo (1995), 253[–]8 Airbus Industrie (1970–), 161, 162, 164, 165, Africa 171, 182, 203, 208, 239, 498, 848, 940(n2) economic growth (sub-Sahara, 1980–98), 851 civilian aircraft, 149 electricity generation capacity (1990–2010), corporate structure, 167 697 creates difficulties for MD (1993), 209 lack of indigenous ‘competitive edge’ economies of scale (procurement), 846 corporations, 63 employees, 168 natural gas production and reserves (1997), fails to become a single company, 170 405 formation ‘owed to government intervention’, oil production (1987–97), 405 498 PRC aircraft exports, 205 grants sub-contracts in PRC, 209, 216, 221 production and sales of automobiles (1998), importance of PRC market, 237 508 joint venture with AVIC (scrapped), 211–13 projected demand for power equipment lessons for PRC, 232–4 (1980–2010), 334 origins, 166 share of world electricity generation owners, 167 (1995–2015), 335 ‘plans to build 100–seater aircraft’, 183, 211 Index 979

Airbus Industrie (1970–) – continued Airbus A-319, 167, 182, 209, 211, 216 and proposed EADC, 160 Airbus A-320, 173, 179, 209, 213, 214, 216, restructuring, 168–71 221 rivalry with Boeing 149–50, 155, 167–9, 184, Airbus A-321, 167, 209, 216 220, 233 Airbus A330/340, 144 role model for PRC, 206 Airbus A-340, 173, 179–80 sales, 144, 167, 203 Airbus A-340–600, 173 structure, 230 Antonov 12, 202, success story despite the textbook, 498–9 Antonov 24, 202, 205 suppliers, 145 ATR-42, 205–6, 209, 214 turnover, 168 ATR-72, 209 ‘uncertain future’, 170, 233, 234, 235 ATR72–500, 206 Air Canada, 149 Avro RJ (formerly BAe 146), 211 Air China, 80, 122, 213, 931 AWACs, 191, 193, 940(n9) national team player (first batch), 123 B-6 bomber (PRC), 101 talks with CSA, 123–4 B-52 (heavy bomber), 155 air combat weapons (USA), 147 B-707 (1958–), 144, 155, 202, 204 air conditioners (vehicles), 523, 524–5, 526, ‘world’s most successful commercial 536, 546, 547 jet’, 155 aircraft (general) B-717, 179, 183, 211, 212, 214, 219, 221 attack, 189 B-720s, 144 bombers, 168, 178, 179, 189, 190, 201 B-727, 144, 179 civilian, 141, 149–50, 166–70, 175, 177, 179, B-737, 144, 173, 182, 202, 208, 209, 211, 202–21, 230, 236, 238, 867–8 213, 214, 215 combat, 148 B-747, 144, 155, 166, 173, 202, 214 commercial, 181, 182 B-757, 144, 202, 208, 213, 215, 216 dual use, 174 B-767, 144, 178, 202 ‘Europe’, 166–70 B-777, 144 fighters, 157–8, 178, 179, 188, 189, 190, 195, BAC 1–11, 211 197, 199, 217, 233, 849, 877 BAe 146 (regional jet), 144, 145, 183, 202, global duopoly, 141 211, 214, 940(n1) helicopters, 179 re-named Avro RJ, 211 jets, 144, 171, 175, 177, 180–1, 199, 203, Bombardier 70–seater, 181 206–13, 860 C-17 globemaster transport aircraft, 164 mentioned, 15, 42, 43, 45, 848, 860, 855 C-130J, 164 military, 150–66, 173, 175, 176, 178, 186, Canadair RJ-500, 181 187–90, 193, 195–6, 210, 230, 237, 239 Dash 8, 205, 214 modern jet airliner, 206–13 De Havilland Comet (1952–), 155, 166, operational timespan, 148, 940(n2) 940(n3) passenger airliner fleet (PRC), 202–3 ERJ-135, 181 PRC, 871 ERJ-145, 181 size (passenger capacity), 142 ERJ-170, 182, 183 small regional jets, 180–2 ERJ-190, 239 supersonic, 199 ERJ-190–200, 182, 183 trainers, 189, 190, 197 Eurofighter, 158–9, 161, 162, 170 transporters, 179 F-1, 193 turbo-prop, 180, 205–6, 876–7 F-4 (fighter), 190 USA, 154–6 F-4 (McDonnell-Douglas), 193 world demand (projected to 2017), 142, 149 F-5, 193 WTO rules (implementation by PRC), 867–8 F-10 (PRC fighter), 193 see also aircraft (specific); individual F-15, 157, 193, 195 companies F-16 (Lockheed Martin fighter), 144, 152, aircraft (specific) 158, 193, 195, 233 AE-100 (Air Express 100; scrapped), 212, F-18, 195 214, 216, 221, 237, 238, 860 F-22 (USA Air Force), 143, 144 Airbus (general), [148], 166, 940(n2) Fokker 28, 211 Airbus A3XX, 143, 167, 212 Fokker 100, 202, 211 Airbus A300–600, 202 Grumman E-2 Hawkeye AWAC, 193 Airbus A-310, 202 H-5 bomber, 189 Airbus A-318, 213 H-6 bomber, 189 980 Index aircraft (specific) – continued first batch of trial groups (PRC 1991), 85 Harrier, 158, 163 foreign ownership restrictions, 149 Hawker Siddeley Trident, 166 international alliances, 149–50 HJ-5 trainer, 189 PRC, 77, 80 Il-76, 192, 940(n9) privatization, 32, 149, 150 Il-86, 179–80 state-owned, 203 Il-96, 180 airports, 126 J-7 fighter, 189, 190 Airtours (UK), 227 J-8 fighter, 189, 190 AIDS, 246, 319 J-11 fighter, 191 Alaska, 404, 416 JJ-5 trainer, 189 Alcatel (France), 861, 920 JJ-6 trainer, 189 fibre optic transmission trunk (PRC), 795 JJ-7 trainer, 189, 190 merger (1989) with GEC (UK), 336 Joint Strike Fighter (JSF) (USA), 144, 152, missed merger opportunity, 862 153, 157, 158, 159, 163, 164 privatization, 892 KC135, 155 Alcatel Alsthom, 396 Lockheed Tristar, 144, 166, 174 Alcoa (Aluminium Company of America), 591 McDonnell Douglas DC-9, 179 Alenia (Italy) McDonnell Douglas DC-10, 166 Eurofighter project (1983–), 158 MD-11, 202 grants sub-contracts in PRC, 209, 214 MD-80, 206–8, 209, 216, 219, 221, 237 proposed EADC, 160 MD-82, 202, 208, 213 turbo-prop feeder aircraft, 205–6 MD-82/83, 207 Alenia Marconi Systems, 162 MD-90, 208–10, 213, 214, 216, 219, 221, Algeria, 408, 416 237 Alison (helicopter engines company), 164, 181 MD-95, 179, 183, 211, 219 Alitalia, 149 Mikoyan-Gurevich (MiG) fighters, 178 all international convertibles, 823 Mirage, 157 All Nippon Airways, 149 Mirage-2000, 193 Allegheny Teledyne, 952(n11) Mitsubishi FS-X (fighter), 233 Allianz (Germany), 826, 828 Nimrod 2000, 163 Allied Signal (USA), 239, 940(n1) Q-5 attack, 189, 190 merger with Honeywell (announced 6.1999), Rafale fighter, 158–9 146–7 RAH-66 (US Army), 143 sale of seatbelt business (1997), 526 Saab fighters, 157, 159 size (1998), 166 Saab 200, 205 supplier to Embraer, 181 Short 360, 202 top five global aerospace company, 146 Soviet (old), 195 alloy steel, 596 Su-27 (‘Flanker’, 1984–), 178, 191–2, 877 Almanac of China’s Economy, 100 Su-30, 178, 192, 877 Alstom, 59, 398 Su-35 (‘Flanker’), 178 origins, 336 T-45 (Hawk), 163 see also ABB-Alstom; GEC-Alsthom Tornado, 157, 158, 159, 233 alternative energy sources, 426–7 Tu-134, 144, 179 alternators (automobile component), 547, Tu-154, 144, 179, 202 950(n9) Tu-204, 179, 180 aluminium, 39, 45, 112, 590, 592 Tupolev bombers, 178 advantages, 590 Vickers VC 10, 166 alternative to steel, 590, 595 YS-11, 177 Hoogovens, 610 YS-X, 177 Rio Tinto, 708 Yun-7 or Y-7 (civilian aircraft), 197, 201, Ambev (Brazil), 858 202, 205–6, 215, 229, 239, 845, 846 American Airlines, 149 Yun-10 or Y-10 (large jet airliner), 203–5, American Eagle (airline), 181 206, 239, 876 American Eximbank, 174 aircraft carriers, 148, 191 American Farm Bureau, 871 Aircraft and Shipbuilding Industries Act (UK American Home Products (AHP), 247, 250, 1977), 498 259, 262 airlines abortive merger with Monsanto (1998), 266 approved trial groups (PRC), 77 buys American Cyanamid (1994), 259 competition, 149 market share, 267 Index 981

American Home Products (AHP) – continued steel production methods (1997), 597 merger activity, 259 technological modernization, 629–30 research and development (1994–7), 248 top ten steel producer (PRC 1997), 634 American Insurance Group, 935 wages, 658 America Online (AOL), 780, 781 workforce, 639 market capitalization (2000), 764 world rank (1996), 638 merger with Time Warner (2000), 782 Anshan Passenger Car Works, 565 sales revenue (2000), 764 Antaibao mine, see Pingshuo targets PRC market, 781 anti-aircraft missiles (AAM), 191 America Online/Time Warner, 782–3, 806 anti-dumping (AD) measures, 29, 607, 868 AOL TV, 783 anti-lock braking systems equipment, 950(n4) market capitalization, 782 anti-lock brake systems (auto components), 544 Ameritech: CCF partner of China Unicom, 810 anti-ship missile systems, 192 Amgen (USA), 301 antibiotics, 283 ammonia, 490 Anyang Iron and Steel Group Company, 633, ammunition producers (PRC), 941(n6) 635 Amoco: merger with BP (1998), 414–15 apples, 869 Amro-Fleming (Chase Fleming), 958(n9) appliances, 592 Andersen Consulting, 251 Arbed (Luxembourg), 602, 602n, 609, 612–13, Angang, see Anshan Iron and Steel Corporation 889 Angang New Steel, 643 acquisitions, 612–13 Angat Plant, 387 crude steel output (1996–7), 602, 602n angina, 250 emerging European ‘steel oligopoly’, 609 Anglo-Saxon business structure, 46, 52, 58 largest producer in Europe, 613 influence in East Asia, 52 arbitrage activities, 275 literature on ‘apparent disadvantages’ of, 46 Arch Coal (1997–), 710 ‘rise to dominance’, 58 Arch Mineral Corporation, 710 Angola, 404 Arco, see Atlantic Richfield Company Anhui, 307, 352, 391, 719, 810 Argentina, 47n, 409, 611, 870 Anhui Electric Power Company, 110 investment by Usinor, 611 Anhui Hailuo Group, 128 number of companies in FT 500 (1998), 47n Ansett Australia (airline), 149 oil sector, 409 Anshan Iron and Steel Corporation/Group WTO enforcement proceedings, 870 (Angang jituan) Ariane, 171 coke output, 953(n32) Aristotle, 935 continuous casting, 627, 629–30 Aristrain, 602n crude steel output (1996–7), 602 Armco Steel: Kawasaki investment in, 608 debt, 684 armoured personnel carriers, 156 energy efficiency, 638 arms trade, 151, 152, 157–8, 274 holding in Koolyanobing Mine (WA), Army Police (PRC), 291, 941(n16) 956(n57) army veterans, 382 joint-ventures sought, 629 Arnett, E., 189 listed on the HK stock market, 640 Arrow Point (IT company), 774 mentioned, 384, 464, 496, 638 arthritis, 247, 261, 267, 307 missed merger opportunity, 862 arts and crafts, 130 national team player (first batch), 115, 116 Arun LNG business (Indonesia), 416 non-core businesses, 642 Arvedi (Italy): investment by Usinor, 611 output structure (1997), 646 Arvin: exhaust systems and shock absorbers, ‘over-manning’, 640 525 principal steel products (1997), 636 Asahi Glass: reduction of workforce (1999), 56 product quality, 638 Ascend Communications, 773 production costs, 659 Asea (Sweden), 336 productivity, 642, 659 Ashland Coal, 710 profitability, 638 Asia remuneration and labour productivity (1997), coal consumption (1986–96), 698 641 coal output (1980–95), 698 reports directly to SBMI, 622 exporter of oil to PRC (1995–7), 434 return on investment (1980–90), 660 internet race, 780–1 rivalry from Shougang, 670 number of ‘competitive edge’ companies sales (1997), 888 (outside Japan, 1997–8), 50 982 Index

Asia – continued Associates First Capital Corporation, 822 production and sales of automobiles (1998), Association for Peaceful Use of Military 508 Industrial Technology (PRC 1987–), 272 share of world electricity generation Association of Power Generation Equipment (1995–2015), 335, 943(n4) Manufacturing Industry, 947(n41) steel consumption per capita, 595 Association for the Promotion of China’s steel production (1991–7), 589 Business Groups (4.1994–), 138, 938(n7) Asia-Pacific Association of South-East Asian Nations coal reserves, 407 (ASEAN), 927–8 coal as source of primary energy, 705 ‘ASEAN Free Trade Area’, 928 electricity generation capacity (1990–2010), ‘ASEAN plus three’ (PRC, Japan, South 697 Korea), 927–8 Exxon Mobil’s interests, 416 asthma and allergy drugs, 263, 268 largest companies, 23 Aston Martin (Ford), 515 lorry sales (1995, 2005), 509 Astra (Sweden), 59, 861 natural gas production and reserves (1997), best sellers (drugs), 250 405 joint venture with Merck, 264 oil production (1987–97), 405 merger with Zeneca, 264 ‘poorly endowed’ (hydrocarbons), 406–7 missed merger opportunity, 861 population (including South Asia), 406–7 research and development (1994–7), 249 primary energy consumption (1987–97), 402 AstraZeneca, 250, 262, 264–5, 267, 268 share in global electricity generation best sellers (drugs), 250 (1990–2010), 696 market share, 267 shortage of natural gas, 705 R&D expenditure, 264 tyres, 526 sales, 264 Asia America Telecom, 810 A.T. Kearney management consultants, 146 Asia Cement (Taiwan), 718 AT&T (American Telephone and Telegraph), Asian financial crisis (1997–), 23, 71, 72, 124, 777, 782, 786 242 ‘giant of broadband age’, 782 effect on electricity demand, 334–5, 943(n4) international comparison (12.1999), 800 effect on world coal price, 729, 759 market capitalization (2000), 764, 800 GM takeover of Isuzu (1999), 518 revenue, profits (12.1999), 800 hits Shanghai Petrochemical Corporation, sales revenue (2000), 764 455 Athlon chips, 768–9 impact on demand for cars (PRC), 536 Atlantic Richfield Company (Arco), 861 impact on PRC flotation plans, 746 discussions with Shenhua (1995–), 750 impact on Sanjiu, 290, 318 missed merger opportunity, 862 impetus to exports of steel from East Asia, sale of coal-mining interests (USA), 710 595 takeover by BP Amoco (1999), 416 implications for Shenhua, 749 Atomic Energy of Canada, 945(n21) Kia Motors bought by Hyundai, 506 audiovisual: WTO rules (implementation by Posco and Nippon Steel share-swap (1999), PRC), 869 613 auditing, 226–7, 276 PRC immune, 833–4, 916 Australasia, 434, 589 prospects for car sales remain good, 526 Australia, 145 resentment, 926 bank restructuring (1980–97), 821 ridden by Posco, 604–5 BP-Solarex manufacturing facilities, 426 South-East Asia (1997–8), 833 coal, 710 ‘worst may be over’, 746 coal exports, 706, 728, 729, 957(n5–6) Asimco (Beijing), 545, 951(n22) coal output (1980–95), 699 investment company, 545 comparatively-cheap open-cast mining, 710 joint ventures in PRC (1994–), 545, 553, 576, exports of iron ore to PRC, 640 580, 950(n9) iron ore, 675 ‘major force’ (PRC components industry), iron ore costs (1997), 619 580 IT companies (2000), 765 specializes in auto components, 545 labour productivity (coal-mining, 1996), Aspin, Les, 152 711 aspirin: catch-up possibilities, 64 land rights, 709 ASRAAM missile, 164 output per worker (coal), 751 asset management companies (PRC), 71 port charges (Queensland), 740 Index 983

Australia – continued national team (various indicators, 1995), 78 PRC and South Korean investment (coal national team (PRC), 77 industry), 718 non-aviation output of AVIC, 198 production and sales of automobiles (1998), privatization (general), 32 508 PRC, 197, 536–86, 921, 926 strength of trade union movement, 711, 712 prospective mergers, 517 top twenty steel-producing country (1991–8), research and development expenditure (1995, 617 1998), 49 transport costs (coal), 750 Sanjiu, 316, 317, 320, 321 wage costs (steel industry, 1997), 620 second batch of trial groups (1997), 86 wages (coal industry), 752 sectoral share of PRC national team (1991, working days lost (1992–6), 712 1997), 84 world’s leading coal exporter, 717 size, 590 Austria: bank restructuring (1980–97), 820 smuggling, 275, 874 Austrian Airlines, 149 South Korea, 19, 22, 53, 54, 604 Auto Industry, 524 state intervention and industrial structure, Autolina, 513 504–6 Autoliv, 522, 525 state protection, 533, 534 automobile companies steel industry, 590–1 foreign assets, sales, employment (1997), 509 suppliers, 39 role (1990s), 511 Sweden, 59 automobile design, 503, 511, 512, 521 tooling costs, 503 automobile groups (PRC), 74 top ten companies (1998), 533 automobile industry (global), 6, 45, 501–86, traditional industry, 502–7 859, 861, 950–1 transatlantic corporations, 338 alliances, 512–13 tyres, 39 aluminium prototypes, 590 world-beating corporations (Japan and South autos in the global business revolution, Korea), 176 507–12 world lorry sales (1995, 2005), 509 barriers to entry, 63, 64, 532–6 world market (project growth, 1995–2001), brake systems, 39 507 central to Japan’s industrial rise, 57 WTO rules (implementation by PRC), 867 components, 519–32 WTO enforcement proceedings, 870 conclusions, 532–6, 581–5 Yuchai, 548–86 dealerships, 503, 887 automobile industry (PRC), 197, 536–86, 921, developing countries, 532–6 926 drivers of industry change, 507–12 ability to compete on global level playing economic determinants of industrial field, 885–7 structure, 502–4 approved trial groups (PRC), 77, 87 extending the value chain beyond car assembly plants, 538 manufacture, 512 barriers to entry (components), 535 first batch of trial business groups, 109 car production (comparative), 534 fuel-cell technology, 427 components, 537, 540, 543–8 global context, 502–36 components industry investment companies, global market share, 37, 39 545–6 global oligopoly, 40–1 conclusion, 581–5 global production and sales (1998), 508 decision-making autonomy (PRC 1986–), 91 globalization of outsourcing, 511–12 diesel engine producers (1995), 562 impact of global competition on diesel engine producers (1998), 559 manufacturers’ costs, 509–10 diesel engines, 529, 558–60 industrial structure: autos, 512–17 economies of scale, 538 industrial structure: lorries, 517–19 failure to catch up, 541 institutional structure and change, 506–7 foreign investment (components), 545–6 Japanese competition and the global industry, foreign investment (engines), 546–7 510–11 four key enterprises (PRC), 463–4 largest companies (foreign assets, 1997), 509 government funds, 950(n7) lifetime expenditure, 512 heavy duty trucks, 565–6 mergers and acquisitions, 514–18 imports, 536, 537 miscellaneous, 3, 43, 271, 346, 854, 860, institutional structure, 538–47 863, 929 Japanese example, 504–5, 532 984 Index automobile industry (PRC) – continued downsizing scope, 845 joint ventures, 538, 569 employment, 226, 227–9 leading car producers (1998), 556 ‘five thousand non-aviation products’, 198 lessons from Brazil, 547 growth, 197–8 lorries (output 1995–8), 551 holding company experiment, ended, 226–31 low product-development capability, 540 institutional change, 221–26 main producers of light trucks (1998), 554 joint venture with Airbus (scrapped), 211–13 market size, 537 micro-vans, 199 mergers, 80 motorcycles, 198–9 missed merger opportunities, 861 non-aviation production, 196–202, 222, 227, national champions, 76, 101–3, 539 229, 846 nature of entrepreneurship, 585 ‘now split into two’, 79 output growth, 536–9 ‘overall responsibility for domestic aircraft petrol engine production, 567–8 industry’, 218 plant size (1995), 539 policy change, 196–7 policy announcement (1994), 539 ‘reform’ (1999), 877 production and imports (1978–98), 536 relative size (1997), 228–9 production and sales of automobiles (1998), research and development budget (1997), 175 508 restructuring, 226–31 road system, 541, 551, 566 revenues, profits, employees, R&D (1997), saloon car production (1998), 540 877 South Korean example, 532 sales, 227 tariffs, 536–7 ‘simply a minnow on the world stage’, 227, tyre sector, 526 230 vehicles, 538–43 size, 226 Yuchai, 548–85 slump in military aircraft orders, 196–7 automobile lighting, 546 split into two (AVIC 1, AVIC 2), 112, 230, automotive 930, 931 electrical motors, 546 state holding company (1996–), 186 electrical systems, 546 structure, 185, 186, 198 electronic control components (automobile sub-contracting work, 213–14 component), 546 Vickers (UK) comparison, 877 generators, 545 see also CAC; CATIC; CEC; XAC automotive industry AVIC, see Aviation Industries of China WTO enforcement proceedings, 870 avionics, 144, 146, 148, 174, 175, 179, 180, Aventis (1998/9–), 59, 256, 262–4 181, 190, 191, 192, 193, 204, 205, 208, best sellers (drugs), 250 210, 220, 237, 238, 877 Hoechst, 262 AVL (Austria), 553 Rhône-Poulenc, 263 Avon Products: competitive advantage, 35 market capitalization, 269 AXA (France), 815, 816, 826, 828, 837 sales, 269 Avery, Chris, 168 Babcock International (UK), 943(n7) Aviation Industries of China (AVIC), 79, 112, Babcock and Wilcox (USA), 368, 391 184–7, 208–9, 221, 239, 841, 845, 859, BAC, see British Aircraft Corporation 938(n4) BAe, see British Aerospace ability to compete on global level playing BAe – GEC Marconi, 60 field, 876–8 BAe Matra Dynamics, 162 aerospace component, 227, 940(n17) BAe Systems (1999–), 161, 163, 165, 235 auto and motorcycle components, 199 Avro-RJ, 182 ‘bleak prospects’, 877 ‘legacy of distrust’ with Dasa, 170 bucks world trend towards merger, 230 market capitalization, 236 buses, 199, 210, 229 state aid, 167 business structure, 225–6 twenty per cent stake in Airbus Industrie, 170 catch-up difficulties, 233 see also mergers ‘children’ and ‘grandchildren’ companies, Baiyun Hotel (Guangzhou Airport), 558 221–6 Baiyunshan (Guangzhou), 279, 298 ‘competitive global supplier of components’, ‘dynamic new business’, 291 214 ‘largest pharmaceutical manufacturer’ (PRC, core business, 877 late 1980s), 291 diversification, 877 listed company, 307 Index 985

Baiyunshan (Guangzhou) – continued Baoshan Iron and Steel Corporation (Baogang non-SOE national champion (PRC), 862 1982–98), 464, 496 ‘relies mainly on single product’, 297 approach to modernization, 661 sales (1992), 941(n15) began production in 1982, 639 ball bearings, 954(n40) capacity (1998), 639 Bangladesh, 943(n8) capital construction spending (1996), 639 Bank America (USA), 815, 817, 824 coke output, 953(n32) conversion to FHC, 819 continuous casting, 627 global top five bank, [822], 958(n8) crude steel output (1996–7), 602 key indicators, 1999 (PRC comparison), downsizing, 952–3(n18) 827 employees (1997), 888 productivity and profits, 831 energy efficiency, 638 top five firm (syndicated credit arrangements, external funding, 661–2 2000), 824 high value-added steel, 639 Bank of China (BOC), 93, 96, 107, 831, joint venture in Ningbo, 629 939(n13) local champion (Shanghai), 454 key indicators, 1999 (global-leaders mergers, 639 comparison), 827 ‘most advanced integrated steel producer’, Bank Holding Companies, 819, 958(n5) 629 Bank for International Settlements (BIS), 815, no space constraints, 651 833 principal steel products (1997), 636 Bank One, 817 product quality, 638 Bank of Tokyo-Mitsubishi profitability, 638, 639, 643 global top five bank, [822], 958(n8) remuneration and labour productivity (1997), The Banker, 822 641 banking, 501, 646 renamed Shanghai Baoshan Iron and Steel Big Four (PRC), 827, 829, 830, 831 Group (1998), 639 doctors of mathematics and physics, 818 reports directly to SBMI, 622 financial engineering, 818–19 research and development, 629 global market share, 37 return on investment (1980–90), 660 Japanese, 56 revenues, profits (1998), 888 mergers (continental Europe), 58 sales (1997), 888 on-line, 782 sheet steel output, 636, 638 PRC, 68–9, 95, 937(n2 to ch3), 813, 926 Shenhua comparison, 749 PRC-US Agreement (11.1999), 825 steel production methods (1997), 597 productivity gap (PRC v global leaders), 831 technological modernization, 629 quality of assets (PRC), 831, 958(n12) top ten steel producer (PRC 1997), 634 regional (USA), 814 wages, 658 restructuring (1980–97), 820–1 welfare costs, 639 shortcomings (PRC), 93 workforce, 639 state-run enterprises in Singapore, 23 world rank (1996), 638 support for enterprise groups (PRC), 70, 95, see also Shanghai Baoshan Iron and Steel 96–8 Group widening scope, 817 Baoshan Steel Group (‘Baogang’), 384, 938(n5) see also financial services ‘aims to become multi-national’, 115 bankruptcies (PRC), 97 assets, 77[–]79 banks, 351 grooming for entry into Fortune 500, 115 corruption (PRC), 874 involved in mergers, 80, 114 PRC, 70, 939(n13) national team player (first batch), 115 re-nationalized (South Korea), 54 revenues, profits (1998), 888 ‘soft loans’ (PRC), 349 suggested merger with Wugang Group, 115 state-owned (PRC), 873 Baosteel Group International Trade Banque Nationale de Paris, 945(n19) Corporation, 639–40, 646 Banque Paribas, 168 Baotou (coal-mine), 753–4 Baoan county, 315 Baotou (place), 747, 755 Baoding, 137 Baotou Iron and Steel Company (Inner baogan (‘contract for hand-overs’), 440 Mongolia), 753 Baogang, see Baoshan Iron and Steel output structure (1997), 646 Corporation; Shanghai Baoshan Iron and possible merger with Shougang, 694 Steel Group principal steel products (1997), 636 986 Index

Baotou Iron and Steel Company (Inner pharmaceuticals, 307 Mongolia) – continued real estate, 688 productivity, 659 Shangri La Hotel, 130 purchases Kaiser Steel, 686 steel, 464 remuneration and labour productivity (1997), telephone installation (waiting time), 807 641 thermal coal price (7.1997), 729 steel production methods (1997), 597 Beijing Automotive Industry Corporation top ten steel producer (PRC 1997), 634 in-house engine production, 567 Barclays Bank (UK), 824 joint venture with Chrysler (1984–), 539, Barfield, C.E., see Groomridge, M.A. 540, 567 Barings (UK), 817, 958(n9) sales, profits, employees, output (1998), 556 Barnet Bank, 817 saloon car production (1998), 540 barriers to entry, 9, 63, 930 same as ‘Beijing Jeep’, 537, [539], 541 aero-engines, 171, 173 second layer enterprises, 560 aerospace, 141, 148, 173–6, 195–6 Beijing Aviation College auto industry, 532–6 Yuchai MBA Programme, 579 ‘catch-22’ problem, 148 Beijing Boiler Works (Beiguo), 391 financial services, 816, 833 Beijing CATCH Communications, 809 impact of IT, 818 Beijing Construction Group, 126 internet, 780, 786–7 Beijing Datang Power Generation Company IT sector, 762, 769, 786–7, 789–90, 793 Limited, 110 military aircraft, 195–6 ‘fast-growing’, 359 ‘normal path of capitalist development’, 13 floated on an international stock market, 349, pharmaceuticals, 267, 270–1 359 power equipment, 332 major pieces of equipment (1960–2002), steel (developing countries), 618–22 360–1 telecommunications, 770–1, 777, 786–7 shareholders, 359 TRIPs Agreement (1994), 786–7 subsidiary of North China Power Generating barriers to growth Group, 344, 359 inadequate energy supply (PRC), 340 Beijing gantie gongsi, see Beijing Steel Barshefsky, Charlene, 607, 761, 786, 839, 895 Company Basel Accord, 833 Beijing Group Company, 562 BASF, 118, 249, 262, 454 Beijing Heavy Electrical Generator Company, basic oxygen furnace (BOF), 596, 597, 603, 391 621, 645, 659, 672, 673, 951(n4), 953(n21) Beijing Heavy Machinery, 360 batteries, 109 Beijing Heavy Machinery Factory, 656, battlefield reconnaissance system, 164 954(n39) Bayer (Germany), 248, 261, 262, 269, 307 Beijing Internal Combustion Engine Company Becker (car components manufacturer), 523 (‘Beinei’), 567–8 Beecham (UK) Beijing International Airport, 289 merged (1989) with SmithKline Beckman Beijing International Power Development and (USA), 254 Investment Company (BIPDIC), 359, 361n beef, 868 Beijing Light Vehicle Company, 554 beer, 314–15, 855, 869 Beijing Metallurgical Bureau, 654 Beijing, xxvi, 80, 123, 125, 224, 312, 935, Beijing Municipal Government, 125, 622, 938(n7) 646–8, 650, 656, 657, 659, 683–4, 685, advertising by Yuchai, 557 689, 690, 953(n25), 956–7(n66) anti-pollution measures, 748 see also Shougang Group average wages (manufacturing sector), 665 Beijing No. 1 Machine Tool Company, Boxer Rebellion, 904 948(n53) Capital Iron and Steel Group, 115 Beijing Pharmaceuticals, plant, 941(n10) Citigroup office, 835 Beijing Quansantui Power Engineering coal consumption, 748 Company, 946(n37) employment provided by Shougang, 688 Beijing Shougang (Group) Company Limited foreign investment in telecommunications (BSGCL 1995–), 647, 685 (post-WTO accession), 791–2 core company (1995–) of Shougang Group, geographical location of national team 685, 694 members, 82, 83 previously (until 1995) known as ‘Shougang Men Tou Gou coal-mine (‘nearby’), 748 Corporation’, 685 Motorola production centre, 795–6 profits (1997), 692 Index 987

Beijing Shougang Stock Holding Company beverages, 316–17, 318, 592, 858 Limited (planned) cans, 592 listing postponed, 685, 957(n67) lightweighting, 592 Beijing Steel Company, 954(n37) BHP (Australia), 602, 710, 755, 891 Beijing Three Gorges Yangtze Hydropower bicycles, 198, 849 Technological Development Centre, big business, 242 944(n16) advanced economies, xxiv Beijing University: Centre for Economic ‘anti-consumer tendencies’, 16 Research, 4 benefits, 61–2 Beijing Yanshan Petrochemical [corporation], central to development of capitalism, 61 469 continental European response, 58 Beilun Port (Ningbo), 640 Four Little Tigers (1999), 21 Beinei, see Beijing Internal Combustion Engine France, 18 Company gap between advanced economies and Belgium developing countries, 62–4 bank restructuring (1980–97), 820 Germany, 18 investment by Usinor, 611 Hong Kong, 23 production of plastics (1989–96), 451 Japan, 16–18 purchase of missiles from USA, 158 market share, 38–9 steel output (1974–96), 593 ‘merger frenzy’, 38 top twenty steel-producing country (1991–8), PRC, 24–5 617 regional distribution, 46–51 Bell Atlantic, 800 reinvigorated in Japan and Europe, 60 Bell Atlantic/GTE, 777 Singapore, 23 Bell Canada/AIG, 810 South Korea, 22 Bell South, 777, 800 Taiwan, 21 Belridge (oil company), 411 UK, 15, 18 Benelux; steel production, 594 unprecedented power (1990s), 64 Bengang, see Benxi Iron and Steel Group USA, 15–16 Benxi Iron and Steel Group (‘Bengang jituan’) Western, 462 national team player (second batch), 115, 116 Bilger, Pierre (CEO ABB-Alstom), 338 output structure (1997), 646 billing, 8 principal steel products (1997), 637 Billiton (mining corporation), 695, 891 productivity, 659 bio-informatics, 246, 258 remuneration and labour productivity (1997), bio-technology, 246, 261, 325, 763 641 mergers and acquisitions (1988–98), 769 return on investment (1980–90), 660 Sanjiu, 307 steel production methods (1997), 597 biomass energy, 426 suggested merger with Anshan Steel Group, BIPDIC, see Beijing International Power 115, 116 Development and Investment Company top ten steel producer (PRC 1997), 634 Bischoff, Manfred, 160, 164, 169, 170 benzene, 466 Blanchard, O., 2 Berger, A., R. Young, H. Genay and H. Udell blast furnaces, 598, 619–20, 621, 630 (2000), 958(n4) cheaper alternatives, 598 Bernabe, Franco, 841 Shougang, 645, 659, 672, 676, 690 Bernstein, R. and R.H. Munro (1998), 435 blood pressure, 250 Bestfoods: competitive advantage, 35 Bloomberg, 781 BethForge, 952(n11) Bluetooth (wireless linking technology), 782 Bethlehem Steel (USA), 861 BMG (music), 781 acquisition of Lukens (1997–8), 613, BMW, 173, 509, 513 952(n11–12) BNP Paribas (France) crude steel output (1996–7), 602 top five firm (all international convertibles, disposal of loss-making segments, 2000), 823 952(n11–12) BOC, see Bank of China industrial concentration, 613 body technology (cars), 522 missed merger opportunity, 862 Boeing (USA), 13, 164, 182, 183, 239, 848, output (1969), 951(n7) 860, 897 remuneration and labour productivity (1995), civil airliners, 154–5 641 competition with Lockheed, 157 BethShip, 952(n11) competitive advantage, 173–4 988 Index

Boeing (USA) – continued bourgeoisie, 897 delivers 8,000 jet aircraft, 144 Bowden, John, 608 divide and rule tactics (PRC v South Korea), Boxer Rebellion, 904 suggested, 219 Bozano Simonson, 180 dominates PRC market (pre-1997), 203 BP, see British Petroleum economies of scale (procurement), 846 BP Amoco, 848, 854, 935 employees, 168 business units, 424 grants sub-contracts in PRC, 209, 214–15 chemicals division, 423 importance of PRC market, 237 comparison with New CNPC and New keiretsu, 145 Sinopec, 479 lessons drawn by PRC from, 71 cost-cutting, 414 market capitalization, 236 employees, 480 ‘massive, integrated defence and civilian ethylene crackers, 422 company’, 230 exploration, 414 mergers, 152 financial indicators, 480 military aircraft, 152–4 Fortune 500 ranking, 414, 416 relative size (1997), 228, 236 headquarters staff, 424 research and development, 142, 143, 175, largest producer outside OPEC, 416 510, 535 merger with Arco (1999), 413 revenues, profits, employees, R&D (1997), new fuel technologies, 426 877 oil and gas production, 481 rivalry with Airbus, 149–50, 155, 167–9, 184, oil and gas reserves, 416 220, 233, 499 performance monitoring, 424–5 sales, 144, 227 petrochemicals, 414 size (1998), 166 production and exploration in 27 countries, state aid for research and development, 176 481 sub-contracts let to CAC, 216 profitability, 414 sub-contracts let to PRC, 213, 219–20, 221 profits, 480 suppliers, 145–6 refinery throughput, 421 turnover, 161, 168 research and development, 423 World War II, 154 revenues, profits, employees, R&D ‘world’s largest aircraft company’, 145 (pro-forma, 1997), 884 Boeing-McDonnell Douglas, 956(n64) sale of assets in refining division, 426 boiler-makers (UK), 943(n7) state-of-the-art integrated site, 422 boilers, 328–9, 368, 377, 378, 391, 948(n45, takeover of Atlantic Richfield (Arco), 416 49) turnover, 480 HPEC output (1959–98), 374 turnover (‘revenues’), 414 Bombardier (Canada), 180–4, 211, 239, 240, use of information technology, 425 860 see also BP Amoco/Arco; British Petroleum turbo-prop feeder aircraft, 205 BP Amoco: Company Capital Approvals WTO ruling (4.2000), 878 Committee, 425 bombing, 163 BP Amoco/Arco (UK-USA) laser-guided, 163, 192 basic statistics, 418–20 BondBook, 818 comparison with New CNPC and New bonds, 540, 932 Sinopec, 479 CNPC, 440 30,000 petrol stations, 422 corporate, 37 BP Solar, 426 PRC, 944(n11 BP-Solarex [takeover of Solarex by BP Solar], Sinopec, 465 426 Three Gorges Finance Company, 350 brakes, 521, 535, 950(n9) book of Dao and De (Lao Zi), 401, 501, 695 brands, 9, 11, 24, 32, 42, 51, 61, 125, 873, 929 borrowing, 37 absent, 844 Japanese steel industry, 603, 952(n8) automobiles, 503, 509, 511 keiretsu,55 barriers to entry, 64 PRC oil sector, 453, 471 coal sector, 712 Bosch, see Robert Bosch competitive advantage, 34, 35 Boserup, E., 763 cost of building an internet brand, 780 BOT, see Build-Operate-Transfer projects diesel engines, 530 Botelho, Mauricio, 183 Dongfeng, 563 bottling (Coca-Cola), 530 ‘dragon head’ products, 75 Index 989 brands – continued Bretton Woods System, 814 financial services, 826, 832 brewing, 37, 545 GE (USA), 332 bribery, 842, 873–4 global leaders, 856 bridges, 126, 133 global giants (oil), 486 Bridgestone (Japan), 19, 527, 535, 850, 886 global, 34, 37, 486, 856 Briggs, Elizabeth, xxvi Huawei, 795 Bristol-Myers Squibb, 249, 282 internet companies, 779–80, 806 Britain, see United Kingdom IT sector, 769 British Aerospace (BAe), xxvi, 840, 848, 854, Legend (PRC), 794 920, 940(n2) mass media, 781 acquires Siemens Plessey business (1997), non-SOE national champions (PRC), 862 147 oil, 420, 427–8, 486, 493, 883 proposed EADC, 159–60 oil (PRC), 883 dwarfed, 146 pharmaceuticals, 246, 247, 251, 270, 286, Eurofighter project (1983–), 158–9 298 formed through Act of Parliament (1977), PRC, 75, 841, 850, 862, 880, 883 498 Sanjiu (general), 314, 315, 319, 324 merger activity, 170 Sanjiu, 880 merger with GEC (1999), 147 Sanjiu hotels, 313 offers sub-contracts in PRC, 214 steel sector, 693 origins, 166 tyre industry, 527 overseas sales (1997), 174 Yuchai, 557, 558, 885 part-owner of Airbus Industrie, 167 see also competitive advantage; Sanjiu Weitai partnership with Boeing, 163, 164 Brazil, 20, 531, 858, 878 partnership with Lockheed-Martin, 163–4 aerospace industry, 180–3 previously BAC, 940(n4) catch-up (steel), 621 privatization, 169, 859, 892 comparative advantage, 20 product of state-orchestrated merger (1960s), ‘competitive edge’ companies (1997–8), 62–3 858 energy, 340, 943(n8–9) production of 100–seater jets, 211 enforcement of WTO rules, 919 Regional Jet, 144, 145, 940(n1) ethylene crackers, 421 relative size (1997), 228 exports of iron ore to PRC, 640 research and development, 143, 175 FDI inflow, 31 restructuring, 169 Fortune 500 (1998), 47n revenues, profits, employees, R&D (1997), FT 500 (1998), 47n 877 iron ore, 618, 619, 675 sales, 227 job losses (steel), 606, 640, 688, 692 size (1998), 166 labour cost per ton of coal, 620 state aid, 167, 174–5 lessons for PRC, 238–40, 548 state-owned, 498, 499 major exporter of steel (mid-1990s), 606 suppliers, 145, 146 per capita energy use (1994), 341 30% foreign-owned (1998), 163 Posco iron-ore pellet-manufacturing facility, wings, 221 609 British Aircraft Corporation (BAC), 15, 163, privatization (steel), 606, 640, 688, 692 498 production and sales of automobiles (1998), British Airways, 149, 203, 787 508 British Leyland, 858 share in Fortune Global 500 (1997), 50 British Motor Corporation, 15 steel, 593, 606, 616, 620, 621, 640, 688, 692 British Nuclear Industry Forum, 704 steel output (1974–96), 593 British Petroleum (BP), 65, 407, 410, 840, 892, Thyssen-Krupp willingness to produce in, 920 612 chemical engineers, 941(n2) TNCs (1999), 21 corporate culture, 411 top ten steel-producing country (1991–8), cost-cutting (use of IT, 1996–), 422–3 616 internationalization, 493 wage costs (steel industry, 1997), 620 job losses, 427 WTO enforcement proceedings, 870 joint venture with Mobil, 415 breast cancer, 250 joint venture with Shanghai Petrochemical Breed (car components sector), 525 Corporation, 454, 455, 472 ‘60 plants in 30 countries’, 525 LNG project (Shenzhen), 717 990 Index

British Petroleum (BP) – continued power plants (PRC), 345, 349, 352–3, 354, merger with Amoco (1998), 413, 414–15 386, 944(n14), 944–5(n18) origins, 407 building materials, 77, 118, 120, 133 output (1996), 409 Bureau of Metallurgical Statistics, 689 privatization (1987), 407, 493, 892 bureaucracy (PRC), 911 purchase of oil supplies from outside the buses, 112, 199, 201, 210, 229, 513, 541–2, 551 company, 411 coaches, 513, 541 purchase of Sohio, 411 minibuses, 546 sale of coal-mining interests (USA), 710 PRC, 112, 537, 565 sale of non-core businesses, 425–6 production and imports (PRC 1978–98), 536 transformation (SOE national champion into bushu (‘disposition’), 947(n43) privatized TNC), 859 business US shareholders, 415 activity (‘meso’ level), 8 see also BP Amoco administration, 2, 10 British Steel Corporation (1967–99), 15, 498, bureaucracies, 13 600, 609–10, 840, 841, 848, 920 history (textbook v reality), 13 crude steel output (1996–7), 602 systems, xxiv efficient, 610 see also trial business groups emerging European ‘steel oligopoly’, 609 BYC, 576 exports, 610 Byrd, W.A., 955(n44), 956(n62) ‘largest loss in British corporate history’ (1979), 609 CAAC, see Civil Aviation Administration of management (Shougang contrast), 671 China merger with Hoogovens (1999), 610 cable companies, 781, 808 origins, 609, 670 cable television, 783, 784 privatization (1988–9), 498, 610, 859, 892 fierce competition, 808 product of state-orchestrated mergers internet, 782 (1960s), 858 PRC network, 808 profitable (by 1985), 610 security considerations (PRC), 808 profits (1997), 957(n69) telephony via, 803 remuneration and labour productivity (1995), Cable and Wireless, 784 641 CAC, see Chengdu Aircraft Corporation research and development, 595–6, 618, 694 Cadbury Schweppes: competitive advantage, 35 restructuring, 609–10 CAIC, see China Auto Industrial Corporation sales (1997), 888 Caihong Group, 107–8 British Telecommunications (BT), 786, 803, Caiyang Engine Plant (1995), 562 840, 854 calicoes, 15 international comparison (12.1999), 800 California Iron Industrial Company, 662 market capitalization, revenue, profits California Iron and Steel Company, 662 (12.1999), 800 Caltex (1936–): Chevron-Texaco joint venture, market capitalization (4.2000), 931 417 privatization, 892 Cambridge: Judge Institute of Management Britoil, 411 Studies, xxvi broad spectrum penicillin, 250 Campbell, J.L., see Lindberg, L.N. broadband equipment, 771, 774–5 Canada, 878 broadband services, 782–4, 803, 805, 808–9 bank restructuring (1980–97), 821 broadcasting, 53, 761 Hyundai plant, 506 Brown Boveri (Switzerland), 336 Ispat, 600 Browne, (Sir) John (CEO BP Amoco), 426, 703 IT companies (2000), 764–5 ‘Brundtland’ Report, 704 labour productivity (coal-mining, 1997), 711 Brunner, 264 land rights, 709 Brusch, Howard, 358 production of ethylene (1989–96), 451 BSGCL, see Beijing Shougang (Group) steel output (1974–96), 593 Company Limited supplier of nuclear power units to PRC, 357, BT, see British Telecommunications 945(n21) BTI (Israel): Chinese sub-contractor (CEC), top twenty steel-producing country (1991–8), 217 617 Buck, J.L., 906 Canadair, 214 Buicks, 103 Canadian Airlines, 149 Build-Operate-Transfer (BOT) projects cancer, 246, 307 Index 991 cangu (mixed share ownership), 314 merged with Federal Steel, 601 Canon, 19, 850 cars, see automobiles cans, 43, 45 Casa (Spain), 840 Canton, see Guangzhou Eurofighter project (1983–), 158 Cantor, Mickey, 935 part-owner of Airbus Industrie, 167 capital, 9 privatized, 161 accumulation, 1 proposed EADC, 160 allocation (Japan), 54 taken over by Daimler-Chrysler, 161, 170 components sector (PRC), 545 CASC, see Civil Aviation Supply Company developing countries, 5–6 cascade effect, 38, 39, 923 enterprise groups (PRC), 75 see also suppliers foreign (PRC), 90 cash-back, 818 GE (USA), 334 Caspian Sea, 415, 416 globalization, 855 Catalytic Partial Oxidation, 427 international, 860 ‘catch-up’ process, 14–24, 785, 848, 923 international flows, 849 dangers of ‘catch-up’ strategy, 240 international mobility (UK), 814 developing countries, 857 liberalization, 29–32 first-tier Asian NICs, 785 ‘no nationality’, 65 Four Little Tigers, 19–24, 858, 876 Norwegian oil sector, 499 influence of China, 24 oil sector, 421, 425 IT sector, 768 power equipment companies, 331 Japan, 16–19, 24, 785, 850, 852, 854, 855, power generation (PRC), 348–9 858, 876 PRC, 68–9, 71, 73, 76, 92, 97, 133, 932, new entrants, 49, 241 938(n5) possibilities, 64, 618–22, 693, 929 raising (PRC), 96 PRC, 852, 855, 857, 858, 876, 878, 929, 930 redistribution (PRC), 72 South Korea, 852, 854, 855 service activities, 333 steel industry, 600, 618–22, 693 Shanghai Petrochemical Corporation, 472 West, 14–16, 24 Sinopec, 465, catering, 8 state-owned (PRC), 89, 93–4 Caterpillar, 529, 535, 559, 951(n22) venture, 371 acquisitions, 529 working, 97 joint venture in PRC, 105 working (HPEC subsidiaries), 370 ‘largest producer of diesel engines’, 529 Capital, Volume I (Marx 1867), 9 ‘major US exporter’, 13 Capital Iron and Steel Corporation, 115 sales, profits, employees, R&D (1998), 584, Capital Iron and Steel Group, 115–16 886 capital markets, 72, 129, 130, 282 Yuchai comparison, 583, 584 pharmaceutical sector (PRC), 282 Cathay Investment Fund Ltd, 573, 575 undeveloped (PRC), 72 Cathay Pacific, 149 foreign, 130 Cathay Clement (HK), 306 capitalism CATIC, see China Aviation Technology advanced, 4, 37 Company ‘competitive market system’, 4 CATIC Shenzhen ‘distortions’, 4 floated in Hong Kong, 226 nature, 2 subsidiary of CATIC, 224, 225, 226 tendency to concentration, 9, 13 CBBP, see China Big Business Programme see also advanced economies; industrial CBS, 787 concentration CCB, see China Construction Bank car braking systems, 525, 535 CCF, see China-China-Foreign; Commercial carbon dioxide emissions, 430, 702–4 Crédit de France carbon steel, 596 CCP, see Chinese Communist Party Cargill Inc., 256, 265 CCP: Central Military Commission, 188 Caribbean: economic growth (1980–98), 851 CCP: Organizations Department, 448 Carnegie, Andrew (1835–1919), 670, 678; cited, CDI amplifiers (automobile component), 547 587 CE, see Combustion Engineering (USA) Carnegie Mellon Software Engineering CEC, see Chengdu Aero-engine Company Institute, 787 Celanese, 263 Carnegie Steel Company (1864–1900), 601, cellular telephones: smuggling, 275 681–2 cement, 128, 590, 716, 913 992 Index

Centec, 952(n11) CESEC, see China Electronic Systems and Central America, 434, 595 Engineering Company Central Asia, 441, 706, 851 CEUPEC, 469 Central China Electric Power Group, 110, 345 CFM: joint venture between SNECMA and GE, Central Committee for Economics and Finance 173 (PRC), 137 chaebol (South Korea), 22, 52–4, 604, 692 Central and Eastern Europe: FDI inflow Chagra Steel (Indonesia), 676 (1984–98), 30 Chai Tai Company (Thailand), 306 Central Electricity Generating Board (UK), Chambers, John (CEO, Cisco Systems), 762, 943(n7) 771 central government (PRC), 131, 275, 277, 346, Chan, Paul (Vice-President, ABB China), 842, 859–60 945(n20) aircraft purchase policy, 218 Chandler, Alfred, 11–12, 84–5, 393, 551 ban on commercial activity by local PLA Chandler, A. and T. Hikino (1997), 14 units (1993), 276 Changchun (Jilin province) blocks prospective joint ventures, 311 FAW, 101 closure of small-scale mining operations Yiqi-VW joint venture, 539 (1998–9), 759 Changhe (Jingdezhen) Aviation Industry control of oil groups by headquarters, 488 Company, 199, 200, 940(n12) creation of Donglian, 466–7 Changhong Group, 97, 109, 938(n5) creation of national champions (oil sector), Changjiang Computer Group, 107 472 Changjiang Shipping Group, 124 creation of ‘super-large’ companies, 650, 654 Changjiang United Economic Development curbs on Shougang, 651, 686 Group, 86, 121 Dongfeng, 563, 564 Changsha (Hunan Province), 353 Erqi, 563, 885–6 Changsha Electrical Equipment Manufacturing financial services, 830, 831, 958(n10) Plant, 108 flotation of oil groups (1999), 471, 476 Changsha Medical Materials Company, 300 funding for power sector investment, 349, Changshu Special-Purpose Vehicle Works (HK), 944–5(n18) 564 industrial policy ‘lacking clear direction’, 853 Chaoyang Diesel Engine Company, see injection of capital (Wugang), 629 Dongfeng Laibin B power plant, 352–3 Charade mini-car (Tianjin-Daihatsu), 539, 540, lobbied by Wang Jianming (Yuchai), 568 546, 950(n7) lorry-makers (PRC), 542 Charterhouse Securities, 822 oil sector, 444–5, 455, 488, 497–8, 883 Chase Manhattan Bank (USA), 815, 817, 818, pharmaceutical sector, 286 822, 824, 830 power station construction, 355 acquisitions, 822 powerful CEOs, 841, 842 conversion to FHC, 819 Qilu steel works vetoed, 842, 888 global top five bank, [822], 958(n8) rail network, 742 shareholder in HPEC Limited, 946(n31) Shenhua, 750, 757, 758, 759 takeover of J.P. Morgan, 813, 822 Shougang, 656, 657, 685 top five firm (syndicated credit arrangements, vetoed steel plant at Qilu (1995), 671, 686 2000), 824 Yiqi, 561, 885 cheese, 869 Yuchai, 885, 887 Chemical Bank, 817 see also national champions; state-owned chemical businesses enterprises; state intervention conglomerates, 252 Central Military Commission (CMC), PRC, de-merged by pharmaceutical companies 272, 273, 276 (1990s), 252 central planning (PRC), 72, 939(n15) diversification into pharmaceuticals, 244 Central Trade Development Company (CTDC), chemical fertilizers, 133, 433, 450, 452, 458, Taiwan, 387 466 Centre for the Study of Financial Innovation chemical fibres, 113–14, 118, 433, 466, 913 (CSFI), 834 Chemical Overseas Co-operation Centre (PRC), CEOs, see chief executive officers 468 CEPA, see Consolidated Electric Power Asia chemicals, 3, 11, 12 14, 107, 119, 262, 263, ceramics, 77, 131, 590 265, 452 cereals: PRC world ranking (1949–98), 913 barriers to entry (1998), 63, 64 Cerent (IT company), 773 import and export (PRC), 129 Index 993 chemicals – continued civil war, 905–6 Japanese leadership, 56 ‘concessions’, 903 national team (PRC), 77, 78, 117–18, ‘early masterly development of steel-making’ 939(n21) (Needham), 587, 628 PRC, 77, 431[–]433, 926, 938(n6), 939(n21) humiliation, 902–7 research and development (1995, 1998), 49 industrial policy challenge, 65 restructuring, 80 intellectuals and policy-makers, 903 second batch of trial groups (1997), 86 Japanese invasion, 905 South Korea, 22 long superiority, 897–902 speciality, 64 long-term view, 897–33, 958 Taiwan, 20 in 1949, 906–7 UK, 264 origins of oil industry, 433 chemotherapy, 246 past, 898–916 Cheng Kejie: death sentence, 874 Revolution (1911) and warlordism, 904 chengbao wei ben (‘the contract is the base’), Revolution (1927), 904–5 668 share of world manufacturing output Chengdu (Sichuan), 391 (1750–1998), 900 aircraft manufacturing, 186 single market, 899 China Unicom joint venture activity, 810 Sino-Japanese warfare, 903–4, 905 pharmaceuticals, 283 ‘spheres of influence’, 903 Zhufeng Hotel, 312–13 technological advance (mediaeval era), 899 Chengdu Aero-engine Company/Corporation textile industry, 15 (CEC), 200, 216–17 trade, 899 assigned to ‘AVIC 2’, 230 wars with western powers (C19), 902–3 investments, 222–3 see also People’s Republic of China subsidiary companies, 222–3 China (PRC investment bank), 829 survival strategies, 222 China-China-Foreign (CCF) arrangement, 792, Chengdu Aircraft Company (CAC), 208, 877, 799, 809–10 950(n9) China.com (HKSAR), 781 assigned to ‘AVIC 1’ (no date, c.1999), 230 China Administrative Centre for New Drug competition with XAC, 215, [218–]219 Research and Development, 286 statistics, 200 China Aerospace Automotive Industry Group, sub-contracting work, 209, 210, 214, 216, 547 218 China Aircraft Industry Company, 562 Chengdu Engine Company China Auto Industrial Corporation (CAIC), main product, output, profits, taxes (1995), 103 562 China Aviation Technology Company for Chengdu Engine Plant, 562 Import and Export of Aviation Products Chengdu Kaiwei Internal Combustion, 560 (CATIC 1979–), 186, 214, 215–16, 272, Chengfei: missed merger opportunity, 861 940(n16) chengshi jianshe shui (city construction tax, AVIC subsidiary, 224 (‘technically’, 226) PRC), 648 business structure, 224 Cherepovets (Russian Federation): crude steel flotation of subsidiaries, 226 output (1996–7), 602 place within AVIC structure, 225–6 Chernobyl (1986), 402, 945(n23) China Big Business Programme (CBBP), Cherokee (high quality vehicle), 567 xxv–xxvi, 851, 876, 926 Cheung Kong Holdings (HK), 351 China Can Say No? (Song Qiang et al., 1996), Cheung Kong Infrastructure (HK), 351 925 Chevron, 411, 417, 418, 420, 481, 710 China Coal Consultancy (CCC), 718, 723, 731 Chi Haotian, 941(n18) China Construction Bank (CCB), 96, 97, 128, Chiang Kaishek, 20 827 chicken, 871 China Development Forum, 935, 958(n3) child mortality: PRC (1980–97), 914, 915 China Dongfeng Automotive Industry Export children, 381 and Import Corporation, 565 chief executive officers (CEOs), 841 China Eastern Airlines, 80, 122, 123, 207, ‘Europe’, 859 931 power (PRC), 847–8, 859 China Eastern Power Group: national team China (pre-1949) player, 110 Boxer Rebellion, 904 China Economic Daily, 435 centre of world economy, 899 China Economic Reform Yearbook, 100 994 Index

China Education and Research Network (ISP), owned by MII, 802 808 partial flotation on international market China Electronic Systems and Engineering (under discussion), 801 Company (CESEC), 272, 274 previously part of China Telecom, 798, 801 China Electronics Industry Corporation segments (telecommunications) and market (Chinatron), 272, 273 share, 798 China Everbright (‘Guangda’), 574, 575, 809 SOE, 799 ‘essentially a Mainland institution’, 574 see also CTHK ‘red chip’ company (HK), 574 China National Aerospace Industries General SOE, 801 Company, 231 China Everbright Holdings Company Ltd China National Armaments General Company, affiliate of China Everbright (‘Guangda’), 231 574 China National Cereals, Oils and Foodstuff CYI Limited ownership structure, 575 Import and Export Corporation (COFCO), owns 47% of Diesel Machinery Limited, 574 130, 939(n13) China Galaxy Securities Company, 958(n10) included in national team, 939(n13) China General Purpose Airline Company, 123 represented in Fortune 500, 130 China General Technology (Group) Holding China National Chemicals Import and Export Ltd, 129 Corporation (Sinochem), 444, 809, China Great Wall Industry Corporation 939(n13) (GWIC), 272 activities, 129 China Hualu Group: national team player, 109 included in national team, 939(n13) China Huaneng Group, 343, 350, 740, 809 national team player (first batch), 129 absorbs Huaneng Power Corporation (1988), China National Coal Import and Export 740 Company (CNCIEC), 752 assets, 740 ‘China National Coal Export Company’, 718 first batch, 109, 740 China National Corporation for Overseas SOE, 801 Economic Cooperation, 129 subsidiary of State Power Corporation of China National Crafts Import and Export China, 343–5 Corporation, 130 twelve main subsidiaries, 350 China National Electricity Equipment assets (1993), 350 Company, 377 national team player (first batch), 350 China National Foreign Trade Transportation China Huitong, 272, 274 Group (Sinotrans), 122 China Instruments Import and Export China National Heavy Duty Truck Corporation, Corporation, 129 541 China International Capital Corporation joint venture with Hino, 547 (CICC), 835 joint venture with Volvo, 566 China International Trust and Investment produces Steyer trucks and engines, 566 Corporation (CITIC), xxvi, 274, 801, 809, sales, profits, employees, output (1998), 831–2, 951(n22) 556 China Jilin Chemical Industry, 117 second-largest producer of heavy-duty lorries China Jitong, 798, 800, 801, 808 (PRC), 566 China Light and Power (CLP), 351 China National Import and Export Commission dominant electricity producer (HK), 351 (CMEC), 387 China Lucky Film Group, 132–3 China National Minerals and Metals Import and national team player (first batch), 131–2 Export Corporation (China Minmetals), China Machinery Corporation, 129 129–30 China Merchant Bank (Shenzhen), 809, 832 China National New Building Materials China Metallurgical Import and Export Corporation (1984–), 127 Corporation, 956(n57) China National New Building Materials Group China Minmetals, see China National Minerals (CNNBMG), 127–8 and Metals Import and Export China National Non-Ferrous Metals Corporation Corporation, xxv, 655 China Miracle (Justin Yifu Lin et al. 1996), 4 China National Non-Metallic Minerals China Mobile, 797 Enterprise Group (CNMEG 1983–), 79, high-speed growth, 804 120, 938(n4) IP licensee, 808 China National Nuclear Corporation, 945(n24) ISP, 808 China National Nuclear Industries General mobile phone licensee, 807 Company, 231 Index 995

China National Offshore Oil Corporation refineries transferred to New CNPC, 478 (CNOOC 1982–), 436, 456, 489–90, 500 research and development, 465 aborted flotation in HKSAR and New York resource and product allocation, 449 (1999), 490 restructuring (1998), 453, 467, 468 containment of costs, 490 roles (‘seriously conflicting’), 446–9 contracts with multinationals, 489 selection of managers, 448, 465 ENI comparison, 490 state holding company, 436, 448, 452 foreign participation, 440 subordinate enterprises, 446, 452–7 IPO withdrawn (10.1999), 884 subordinate enterprises (numbering 36), joint venture with Shell at Huizhou, 454 446 LNG project (Shenzhen), 717 turnover, 480 new role (mid-1990s), 464 vertical integration, 465–6 production, 489 see also New China National Petrochemical reserves (oil and gas), 490 Group (New Sinopec, 1998–) SOE, 489 China National Petroleum Corporation (CNPC ‘uncertain prospects’, 490 1988–98), 80, 436–45 vertical integration, 490 annual report, 439 workforce, 490 casts off ‘ministerial’ functions (1998), 437 WTO rules (implementation by PRC), 867 clash of interests with Sinopec, 462 China National Petrochemical Corporation corporate structure, 460–1 (Sinopec 1983–98), 436, 445 Daqing, 441–5 assets value (1995), 446 employees, 480 auditing, 465 financial control, 439–41 business operations, 465 financial indicators, 480 clash of interests with CNPC, 462 formerly the Ministry of Petroleum Industry ‘complementary to CNPC’, 446 (pre-1988), 436 corporate structure, 460–1, 465 internal tensions, 437 decision-making, 465 ‘limited authority over regional companies’, distribution function, 457 440 ‘downstream’, 445–52 main production units, 437–9 employees, 480 monopoly of onshore oil production, 436–7 ethylene output (1995), 447 oil products, 458 experimenting as a national holding oil refining, 450 company, 79, 939(n13) output (1996), 409 financial indicators, 480 output, sales and pre-tax profit (1996), 442 financial autonomy, 448–9 overseas investments, 441 floatation of subsidiaries (1990s), 453 period of experimentation (1988–98), 437 functions, 464, 465 petrol, kerosene, diesel oil, lubricants, 450 government organ, 446–8 petrol stations, 460 holding company experiment, 464–6 produces 89% of PRC’s oil (1997), 436 included in Fortune Global 500 (1999), [70], profits, 439, 442, 480 939(n13) refineries transferred to New CNPC, 477 independent rights to import crude oil restructuring (1998), 467, 468 (1997–), 457 right to import oil (1998–), 457 industrial association, 448 state holding company, 436 investment, 465 turnover, 480 joint ventures, 453–4 see also New China National Petroleum management of capital and property, 465 Corporation (New CNPC 1998–) ‘massively dominant’, 452 China National Shipbuilding General Company, mergers and acquisitions, 454 231 ‘Ministry-level enterprise’, 445–6 China National Star Petroleum Resources ‘not included in national team’, 938(n4) (1996–), 468 oil products, 458 China National Technology Import and Export oil refining, 446–7, 449–50, 457, 459, 883 Corporation, 809 personnel arrangements, 465 China National Technology Import and Export petrochemicals, 450–2 Group (CNTIC), 81, 129 petrol stations, 460 China National Textiles Import and Export production (1989–98), 450 Corporation (Chinatex), 130 profits, 446, 449, 465, 480 China Netcom Corporation (10.1999–), 798, range of activity, 446 800, 801, 808 996 Index

China North Industries Corporation floated 25% on international markets (1997), (NORINCO), 272–4, 275 799 China North Western Electric Group, 110 high-speed growth, 804 China Northeastern Pharmaceutical Group, international comparison (12.1999), 800 110 international share issue (1999), 799 China Northern (airline), 123, 207 IPO, 799, 801 China Ocean Shipping Corporation (COSCO), joint ventures (possibility), 807 130 market capitalization, 799, 800, 931 debt-asset ratio, 121 market capitalization, revenue, profits national team player (first batch), 121–2 (12.1999), 800 China Oil (New CNPC’s newspaper), 478 mergers, 858–9, 931 China Poly Group (1984–), 272–4, 277, nature of ‘firm’, 802 941(n7–8) operational mechanism, 802 subsidiaries, 274 six subsidiaries, 802 China Poly Investments Holdings, 274 SOE, 799 China Ports Construction Group, 133 still 75% owned by China Mobile, 802 China Resources, 801, 809 usage fee per subscriber, 804 China Science and Technology Network (ISP), wireless telecommunications assets (various 808 provinces), 799 China Shareholding Enterprises Evaluation China Textile Machinery Group Company Centre, 272 (CTMC), 79, 104 China Shenma Group, 113–14 national team player (PRC), 104 China Shougang International Trading and China Unicom (PRC 1993–) Engineering Corporation (CSITEC), 647, bureaucratic struggle, 801 690 CCF partners, 809, 810 China South (PRC investment bank), 829 cellular phones, 804 China Southern Aero-equipment debt, 801 Company/Corporation, 200, 230 equipment from Lucent and Cisco, 795 China Southern Airlines (CSA), 80, 122–3, fibre optic transmission network (PRC), 799 123–4, 931 flotation (25%) on international markets, China State Construction Engineering 799–800 Corporation (CSCEC), 126 international comparison (12.1999), 800 China State Construction Engineering Group, internet, 799, 808 75 IPO (6.2000), 801, 931 China State Development and Investment largest shareholder (MII PRC), 802 Corporation (SDIC), 133 market capitalization, revenue, profits China State Farms Agribusiness Group, 135 (12.1999), 800 China Steel (Taiwan), 21, 600, 602, 641, 854 mobile phone licensee, 807 China Telecom (PRC) ‘mostly non-telecom stakeholders’, 801, 809 equipment supplied by Cisco, 795 ownership structure, 809 550,000 employees, 807 pager market, 804 fixed-line telecommunications, 797–8, 807 segments (telecommunications) and market international comparison (12.1999), 800 share, 798 internet protocol (IP) licensee, 808 SOE, 799 market capitalization, revenue, profits sources of finance, 799 (12.1999), 800 started operations in 1994, 801 mentioned, 274 usage fee per subscriber, 804 partial flotation on international market wireless telecommunications, 799–800 (under discussion), 801, 807 see also China Unicom Group PRC’s ‘main telecoms operator’, 804 China Unicom Group: owner of China Unicom, sales revenue (1999), 798 801 segments (telecommunications) and market China Xinjiang Construction Group, 121 share, 798 China Xinxing Corporation (1989–), 272, 273, separation of China Mobile, 801 274, 277 wholly state-owned, 797, 800–1, 804 China Yangtze Three Gorges Project see also CTHK; Shanghai Telecom Corporation (CYTGPC), 350, 944(n11) China Telecom (Hong Kong) (CTHK 1997–) subsidiaries, 350 DoCoMo comparison, 799, 804 under auspices of MOEP (latterly SPEC), ‘encirclement’, 803 350 established by China Mobile (1997), 798–9 China Yaohua Glass Group, 128 Index 997

China Yuchai International Limited (CYI cholesterol, 247, 250, 259, 260, 268 1994–) Chongqing, 391, 547, 810 appoints most directors of Yuchai, 574 Chongqing Iron and Steel Group ‘Bermuda-based holding company’, 573 assets, 77[–]79 failed to raise as much capital as hoped, listed on HK stock market, 640 951(n21) national team player (second batch), 116 floated on Wall Street, 571n, 573, 585, profitability, 643 951(n21) top twenty steel producer (PRC 1997), 635 IPO (NY 1994), 581 Chromatis (IT company, Israel), 773 main shareholder, 573 Chrysler, 101 ‘majority owner of Yuchai’, 571n interests in Mercosur, 508 ownership structure, 574 joint venture with Beijing Automotive prospectus, 575, 581 Industry Corporation (1984–), 539 public shareholders, 574 model of lean production, 514 see also Yuchai Diesel Engine Company saved by a US government loan guarantee China Zhenhua Electronics Group, 106 (1982), 510 ChinaNet (ISP), 808 twice nearly bankrupt, 514, 532 Chinatex, see China National Textiles Import chuangjian jieduan (‘developmental’ stage), 80, and Export Corporation 137 Chinese Academy of Sciences: Computer Chung Ju-Yung: Institute, 107 diversification of Hyundai Group (1938–87), Chinese characters, 732–3 53 Chinese Communist Party (CCP 1921–), 20, Ciba-Geigy (Switzerland) 188, 904, 917 demerges Ciba Speciality Chemicals (1996), discipline enforced, 911 261 14th Conference (11.1993), 138 ‘life sciences’, 261 15th Conference (1997), 70–1, 96 merges with Sandoz to form ‘Novartis’ galvanizing tradition, 667 (1996), 261 Geng Lei, 947[n40] origins (1970), 261 ‘imbued with corruption’, 854 cigarettes (smuggling), 275 leadership, 71 cinemas, 44, 869 Li Genshen, 372 circuit design: TRIPs Agreement (1994), 785 military struggle with KMT (1927–34), 905 Cisco Systems (USA), 771, 773–4, 786 need global giants (oil sector), 476 acquisitions, 771, 773 ‘plays important role in Nanfang’, 304, 323 ‘biggest player in data networking market’, resistance to Japan (WW2), 905 773 ‘rich legacy of motivational skills’, 680 internet, 773–4, 775 role in Sanjiu Enterprise Group, 316–17 competition with Lucent, 773 Shougang, 643, 670 equipment used by China Unicom, 795 US and EU desire to overturn, 792–3 hardware revenues, 772 US hopes for overthrow of, 917 Indian IT sector (comparison), 788 victory in civil war (1945–9), 905–6 ‘largest corporation in world’, 774 Chinese Insurance Regulatory Commission little to fear from PRC competition (post- (CIRC), 836 WTO accession), 863 Chinese language: internet sites, 780 market capitalization (2000), 764, 772 Chinese Large and Medium-Sized Enterprises ‘market leader in networking equipment’, 795 Yearbook (1997), 100 sales revenue (2000), 764 Chinese National Foreign Trade Corporation, telecommunications hardware, 771 377 Citibank, 817, 818 Chinese People’s Political Consultative Citibank Salomon Smith Barney (USA), 824 Conference (Beijing, 6.2000), 926–7, Citicorp (USA), 306, 817 958(n3) Citigroup, 815, 818, 819, 822, 824, 826, 827, Chinese State Pharmaceutical Corporation, 286 830, 831, 835, 837, 958(n8) Chinese State Planning Commission citrus fruits, 869 ‘drastically reorganized’ (1998), 345 civil aviation: PRC national team (1991, 1997), electricity generation needs, 342 84 power generation industry, 343 Civil Aviation Administration of China Chirac, Jacques (b 1932), 212 (CAAC), 203, 204, 205, 210, 212, 214, Chiron (USA), 261 215, 218, 237, 238, 239 chlorine, 252: catch-up possibilities, 64 ‘lets down’ indigenous aviation industry, 213 998 Index

Civil Aviation Supply Company (CASC, PRC), output (1980–95), 699 203 output per worker, 706 civil transportation: PRC national team, 77 output and energy use (PRC, Japan, USA CITIC, see China International Trust and 1992–5), 700 Investment Corporation pollution, 699–702 Clariant, 261, 262 power station input, 349, 944(n13) Clarify (IT company), 774 PRC, 697, 698–9, 704, 705, 707, 713–60, Clarke Chapman (UK boiler-maker), 943(n7) 957–8 Clean Air Act (USA), 593 price, 697, 728–30, 732, 749, 957(n1, n5) Clean Coal Corporation (PRC 1988), 740, 741 primary energy consumption (1986–96), Clinton, William Jefferson (b 1946), 193, 607 696 Clissold, Tim, 951(n16) primary energy consumption (1996), 697 clocks and watches, 198 privatization, 32 clothing, 6, 133, 274, 311 reserves, 696, 706 CLP, see China Light and Power share of world primary energy consumption clutches, 546, 526, 950(n9) (1987–97), 402 CMC, see Central Military Commission Shenhua Project, 731, 732–3, 734–60, CMEC, see China National Import and Export 958(n7) Commission subsidies, 731–4 CNMEG, see China National Non-Metallic supply, 706–13 Minerals Enterprise Group transportation costs, 355 CNNBMG, see China National New Building USA, 405–6 Materials Group varieties, 378 CNOOC, see China National Offshore Oil world consumption (1986–96), 698 Corporation world output, 404 CNPC, see China National Petroleum world reserves v world population (1998), Corporation 406 CNPC: Research Institute of Petroleum coal (PRC): 355–6, 378, 619, 713–60, 957–8 Exploration and Development, 439 ability to compete on global level playing CNTIC, see China National Technology Import field, 890–2 and Export Group anthracite, 718 coal (global), 695–760, 957–8 assets, 727 bulk cargo, 705 best-practice technology, 716 catch-up possibilities, 64 bituminous, 718 catch-up (developing countries), 712–13 carbon dioxide emissions, 703, 746 consolidation, 707–12 chemistry, 748–9 decline (in ‘Europe’), 891 coking, 619, 718, 753 demand, 695–706, 745 conclusions, 756–60 diversified portfolio of global industry consumption, 698, 716 leaders, 712–13 consumption per unit of power supply (PRC electricity generation (1990–2010), 696, 697 1979–95), 355 employment, 706–7 cost structure of different producers (1995), energy, 696–9 722 energy demand, 695–6 costs, 717, 720, 722–3 forecasts, 699, 705, 706 demand, 713–18, 745 global perspective, 695–713 depth, 718 global warming, 702–5 domestic demand, 713–17 globalization, 707, 710 electricity generation (fuel type, 1996), 698 international trade, 705–6, 713 employment, 707, 727, 749, 920 investment, 708, 709, 713 employees (1991), 727 ‘key issue in international relations’, 705 employment (1980–95), 707 labour costs (1996), 710, 711 employment (early 1990s), 749 labour productivity (1996), 711 energy reserves, 716 labour relations ‘confrontational’, 711–12 exports, 706, 717–18 low-sulphur (USA), 710 ‘fees’, 723, 957(n4) management, 713 forecasts, 714, 717, 734, 749 mentioned, 119, 133, 596, 598, 618, 687 foreign investment, 729, 750, 755 mine development (initial costs), 708 importance, 714 open-cast mining, 706 imports, 748 output (1980–98), 341 industrial and domestic use, 748 Index 999 coal (PRC) – continued TVE mines, [720–]721, 722, 723, 724, 726, institutional distribution of output (1979–97), 727, 745, 746–7, 753, 755, 759 721 underground, 718, 737 international demand, 717–18 unlicensed mining, 724–5 investment, 734 use in steel industry, 652, 953(n31) keypoint state mines, 721, 723, 724, 725, wages (1995), 722 729–31 world ranking (1949–98), 913 labour cost per ton of coal, 620 world’s largest producer (1990), 429 labour unrest feared, 745 see also Shenhua Project liberalization of markets, 726, 728–9 Coal Bureau (PRC), 731 lignite, 718 coal companies: importance of size, 713 local taxation (1995), 722 Coase, R.H., 7 map, 732–3 ‘Coasian’ terms, 563 mine closures (issues surrounding), 726, 731, Coca-Cola, 35, 65, 863 745 Cockerill-Sambrell (Belgium), 611, 861, 862 mines, 714, 720–6, 729–31, 744, 745 Cockerill Mechanical Industries (Belgium), 378 national team, 77, 80–1, 84 Coface (French government’s credit agency), open-cast, 718, 722, 736–7, 753 353 output (1980–95), 698–9 COFCO, see China National Cereals, Oils and output (1980–98), 341 Foodstuff Import and Export Corporation, output (1995), 725 130 output (1995–2050), 714 COFCO Capital Corporation, 130 output and consumption (1996), 719 coke ovens, 593 output, reserves, mine depths (1996), 736 coking coal, 598, 600, 652–3, 705 policing, 725 use in steel industry (PRC), 652–3, 953(n31) pollution, 429–31, 701–3 Cold War, 158, 761 prices, 723–4, 728–9, 759, 957(n6) Colgate, 259 prices (dual-track system), 728 Colgate Palmolive: competitive advantage, 35 prices, profits and losses, 729–34 Colombia, 706, 710, 711, 751 primary energy consumption (1986–96), combinatorial chemistry, 246, 258 696 Combustion Engineering (USA), 351, 372, 377, primary energy consumption (1996), 697 397 productivity, 620 command and control systems, 157, 192 profit margins, 725 command economy / planned economy profitability, 726 (communist), 2, 3, 241, 283, 369, 385, 464 profits (1991), 727 coal, 729–30, 751 quality, 718, 723, 737, 748, 752, 957(n3) ‘inefficient’, 340, 943(n8) recovery rate, 725 Maoist, 340 redundancies, 726 ‘no concept of marketing’, 557 by region (1996), 719 PRC, 67, 87, 91–2, 502, 554, 561, 563, 570, reserves, 706, 716, 718–20, 735, 741 581, 622, 653, 657, 671, 680–1, 908 reserves per capita, 715 transition (PRC) from, 72 safety (1995–6), 725 vehicle-makers (PRC), 544–5 share of PRC’s energy requirements see also market economy (1980–96), 354–5 commanding heights (PRC), 892–3, 920 Shenhua Project, 731, 732–3, 734–60, commerce, 121 958(n7) Commercial Bank Law (PRC 1995), 834 size distribution of output (1997), 721 Commercial Crédit de France (CCF), 822 size structure (1991), 727 commercial vehicles (PRC), 537 small local mines, 720–7, 740–1, 758–9 WTO enforcement proceedings, 870 state-owned mines, 720–8, 741, 744, 745, Commission for the Reform of the Economic 753–5, 759 System (CRES, PRC), xxiv, 74, 76, 136–8, strategic choices, 749, 759–60 364, 373, 572, 793, 947(n42) subsidies, 731 Commission on Science, Technology and sulphur content, 718, 737 Industry for National Defence (COSTIND, supply, 718–29 PRC 1982–), 273, 276 taxation, 722, 723 commodities, 9 technology, 716 Commonwealth of Independent States (CIS) thermal coal prices (7.1997), 729 share of world electricity generation transport costs, 717, 720, 726 (1995–2015), 335 1000 Index communications equipment, 107, 148 Competitive Edge studies (MSDW 1997–2000), communism (collapse), 32, 910 49–51, 62–3 communist countries, 32, 408, 507, 707 competitive markets, 28 Communist Party of China (CCP), see Chinese competitiveness, 46, 51, 57, 72 Communist Party complex capital goods, 43 Company Law (PRC 1994), 90, 437 complex equipment/machinery Compaq, 768, 772, 794 barriers to entry (1998), 63–4 comparative advantage, 1, 12 global oligopoly, 41 Brazil, 20 components, 45, 57, 145, 346, 199, 519–29, small firms, 4–6 535–6, 856, 886, 950 USA (information), 761 accelerated globalization of production, 520 competition, 2–8 aerospace, 38, 142, 143, 184, 186, 229 defence industries (PRC), 231 air conditioners, 524, 535 ‘driving force of concentration’, 9 airbags and seatbelts, 525 new entrants, 6–7 aligned suppliers, 519 oligopolistic, 61 auto, 38, 43 power equipment, 384–92 auto industry (South Korea), 505 PRC, 73 automobile parts, 133 ‘Schumpeterian’, 18 automobile glass, 525 threat to large firms, 6–7 car braking systems, 525, 535 competition authorities, 45 Caterpillar, 529 competitive advantage, 13, 33–7, 44 concentration pressures, 38 ability to obtain loans, 354, 945(n19) constant velocity joints, 524, 535 aerospace, 142, 162, 173–4 Cummins, 530–1 brands, 34 Detroit Diesel (DDC), 531 core business, 33–4 economies of scale (automobile industry), defence sector, 157 504, 535 diesel engines, 529, 531 exhaust systems and shock absorbers, 524, financial resources, 36–7 535 financial services, 818, 830, 832–3 global oligopoly, 41 GE (USA), 329 global value, 856 HPEC, 386 growth of producers with cross-functional innovation and execution (IT sector), 775 specializations, 525 Indian software companies, 787–8 incorporating IT into components systems, IT expenditure, 36 522 IT sector, 769 liberalization of global vehicles markets, 520 mining, 708, 712–13 ‘mega-suppliers’, 519 oil sector, 426 missed merger opportunities for PRC, 861 pharmaceutical industry (1998), 247 modularization, 521 pharmaceuticals, 267, 270 non-aviation output of AVIC (auto), 198 research and development, 34–6 outsourcing, 520 Sanjiu, 320 procurement capabilities, 522 Shenhua, 739, 748, 749, 750–1, 752, 756–8, rapid evolution of ‘global’ vehicles, 520–1 759 relentless pressure on prices, 523 Three Gorges Project, 353–4 seats, 523, 535 through investment in R&D, 64 spinning off components makers from vehicle tyre industry, 526–7 assembly, 520 Yuchai, 557–8, 566 spiralling R&D costs, 521 see also competitive edge companies tyres, 526–9 competitive edge companies, 52 vehicle engines, 529–32 aerospace (‘big is beautiful’), 148 wheels, 524 IT sector, 766–7, 770 components (PRC) Japanese steel industry, 621 ability to compete on global level playing oil sector, 421 field, 885–7 pharmaceutical sector, 269 consolidation, 543–5 by sector (2000), 767 domestic content requirement (PRC), 537, steel sector, 693 543 US dominance (2000), 767, 770, 771–2, economies of scale, 545 775 Erqi, 544 see also brands; global business revolution foreign investment, 543 Index 1001 components (PRC) – continued employment (PRC, 1998), 919 in-house manufacturing, 582 first batch of trial groups (PRC, 1991), 85 institutional structure (PRC), 543–7 Japan, 603 investment companies, 544–5 mentioned, 116, 118, 119, 311, 847, investments by multinationals, 545–7 952(n12) joint ventures, 544, 545 national team (PRC), 77, 78, 84, 126–7 lessons from Brazil, 547 Samsung, 53 mentioned, 538, 921 Sanjiu, 315, 318 national team, 76 second batch of trial groups (PRC, 1997), 86 sales (1995), 543 South Korea, 54, 604 size of manufacturers (1995), 543 Three Gorges Dam, 315 specialist-makers, 545 construction machinery, 64 compressor discs, 145 construction materials, 75, 84, 127–8, 198, 274 computer-aided design (CAD), 214 national team players, 127–8 computer industry non-aviation output of AVIC, 198 mergers and acquisitions (1988–98), 769 PRC, 75 ‘year 2000 problem’, 788 sectoral share of PRC national team (1991, computer programming: TRIPs Agreement 1997), 84 (1994), 785 consultancy, 127 computerization (steel industry), 603, 951(n4) consumer appliances, 272 computers, 15 consumer confidence, 503 allow greater efficiency (steel industry), 598 consumer electronics invention of, 142 non-SOE national champions (PRC), 862 USA, 761 South Korea, 53, 54 see also information technology world-beating corporations (Japan and South conclusions Korea), 176 aerospace, 231–40 consumer goods, 64, 86 autos and auto components, 532–6, 581–5 see also fast-moving consumer goods coal, 756–60 consumers, 34 financial services, 837 consumption, 64 global business revolution, 61–5 PRC (Deng era), 912 global business revolution (PRC response), Third Technological Revolution, 763 850–2, 863–4, 892–6 container fleet, 121 Harbin Power Equipment Company, 372–3 containers, 591–2 large firms and economic development, 24–5 Continental (airline), 149 oil and petrochemicals, 491–500 Continental (tyre-maker), 529, 860 pharmaceuticals, 320–6 Continental Express (US airline), 181 power equipment, 392–9 Continental Mariner (shipping company), 274, Shougang Group, 678–83 941(n8) third technological revolution, 810–11 continuous casting (steel industry, 1997), 596, Yuchai, 581–5 597, 603, 627, 628, 645, 674, 690, 951(n4) concrete: alternative to steel, 595 contract system (PRC), 678, 852, 956(n62) condenser (component), 581 see also Shougang Group Condit, Philip (head of Boeing), 212 Cooper (drug distributor), 263 conglomerates Cooper, Richard, 869–70 developing countries, 51–2 copper, 708, 900 ‘failing’ (Asia), 72 copyright (TRIPs Agreement, 1994), 785 out of fashion (advanced economies), 855 cord fabric, 113 pharmaceutical sector, [251–]252 core business, 8, 52, 58, 61, 81, 842, 843, 846, Congressional Research Service (USA), 872 849, 855 ‘connections’ (PRC), 873 AVIC, 877 Conoco (oil division of Du Pont), 265, 411 competitive advantage, 33–4, 37 Consol, 710 keiretsu,54 Consolidated Electric Power Asia (CEPA), 351, market share, 39 353 mining companies, 709 constant velocity joints, 525, 536 pharmaceutical sector, 251–2 Construction Bank (PRC), 440 Sanjiu, 296–309, 318–20 construction industry South Korea, 54 alternatives to steel, 591, 595 core systems integrator, 42–5 boom (PRC), 126 core technology, 51 1002 Index

Cork, 614 tyre industry, 526–8 Corporación de la Siderúrgica Integral (CSI), use of IT, 422–3 613 see also outsourcing corporate bond issues (PRC), 90, 114, 122, 130 COSTIND, see Commission on Science, corporations, 923 Technology and Industry for National attempt to construct (PRC), 69 Defence boundaries, 44 COSTIND, see State Defence Industries challenges to US dominance, 37 Commission competitive modern, xxiv cotton, 265, 871, 913 European champions, 59 Cox Report, 193, 194 fast-growing, 33–4 CRA, 707–8 giant, xxiv CRA Hammersley Iron global, xxv, 2 new iron-ore mine (WA), 956(n57) global business revolution, 919 credit, 54 Japanese, 54–8 credit control (South Korea), 54 large, 4, 6–7, 14, 24 Crédit Suisse, 817, 822, 827 ‘large modern industrial’, 84–5 Crédit Suisse First Boston (Switzerland), 823, life sciences, 767 833 ‘less and less important’, 8 CRES, see PRC: Commission for the Reform of ‘most explosive change in history’, 65 the Economic System multinational, 27 criminal activity, 275 national champions, 58, 65 Cromme, Gerhard, 612 PRC, 24–5, 925 cross-holdings (keiretsu), 54 R&D expenditure, 35–6 Crossair (subsidiary of Swissair), 182 state-owned (UK), 15 CSA, see China Southern Airlines ‘strategic industries’, 338 CSCEC, see China State Construction transatlantic giants, 59–60 Engineering Corporation transatlantic, 338 CSN (largest steel producer in Brazil), 612 TRIPs Agreement (1994), 786 CSRC, 836 US-owned, 31 CST (Brazil): investment by Usinor, 611 vertically-integrated, 44–5 CTHK, see China Telecom (Hong Kong) corrosion, 590 CTMC, see China Textile Machinery Group corruption, 873–5 Cuba, 178 death sentences, 874–5 cultural chauvinism, 194 potential political repercussions (PRC), 874 Cultural Revolution (PRC), 187, 376, 907, 911 PRC, 911 Cummins Diesel Engine, 530–1, 535, 848, 886 Russian Federation, 910 acquisitions, 530 WTO membership (possible solution), 875 joint venture with Dongfeng, 583 Corus, 854, 899 joint venture in PRC, 547, 548, 566, 567 COSCO, see China Ocean Shipping presence in PRC, 530, 531 Corporation sales, profits, employees, R&D (1998), 584, COSCO Pacific, 122 886 cost-cutting Yuchai comparison, 584 auto industry, 512, 514, 515, 521, 523, 532, Cummins Perkins Diesel, 559 535 cun (village), 727 Bethlehem Steel, 613, 952(n11–12) currency (PRC), 717 British Steel Corporation, 600, 610 currency swaps, 928 coal-mining, 706, 708 CYI, see China Yuchai International Limited CSI, 613 Cyprus (US coal company), 710 global leaders, 856 CYTGPC, see China Yangtze Three Gorges impact of IT, 818 Project Corporation Ispat, 614 Japan (steel sector), 607 mentioned, 58, 62 da er quan, xiao er quan (large and complete, multi-national corporations, 44 small and complete) problem (PRC), 72 oil sector, 412, 422 Da La Te power station, 746–7, 755 Renault, 515, 519 Da Zhong (Japanese pharmaceutical company), Shougang, 955(n45) 283 SOEs (PRC), 892 Dadong (big buses), 578 Thyssen-Krupp, 612 Daewoo Aviation Manufacturing Industry, 218 Index 1003

Daewoo Motor Corporation (South Korea), 23, capacity, 561 505, 506, 532, 860 competitive advantage, 565 capacity, 506 competitor to Yuchai, 552 car-manufacturer, 54 output, 561 CCF partner of China Unicom, 810 6110 series (engine), 561 debts (1999), 54, 516 Yiqi takes full control (1995), 561 interests in Eastern Europe, [508–]509 Dalian Machine Tool Plant, 950(n10) interests in India, 508 Dalian Petrochemical Corporation, 469, 478 joint venture with GM, 506 Dalian Vastone Enterprise Development missed merger opportunity, 861 Company, 809 negotiations with Daewoo (1999), 54 Dalian West Pacific Petrochemical [enterprise] outright bankruptcy, 532 transferred to New CNPC by New Sinopec overseas operations, 506 (1998), 469 restructuring (1998), 54 Dana, 522, 535, 547 DAF (Netherlands lorry company), 517, 534 dangan (‘file’), 318 Daihatsu, 103, 508, 539–40 Danling, 950(n9) interests in Turkey, 508 Daqing complex joint venture with Tianjin Auto (1988–), managed by New CNPC (1998–), 470 539–40 Daqing (General) Petrochemical Corporation Daimaru: reduction of workforce (1999), 56 transferred to New CNPC by New Sinopec Daimler-Benz (1998), 469, 478 foreign assets, sales, employment (1997), 509 Daqing Lianyi Oil refineries, 842 Daimler-Benz Aerospace (Dasa) Daqing oilfield (Heilongjiang Province), 429, Eurofighter project (1983–), 158–9 433, 441–5 Daimler-Benz-Chrysler, see Daimler-Chrysler comparative size, 437, 438, 486 Daimler-Chrysler (Dasa), 160, 169 ‘diversified undertakings’, 846 aerospace division, 165 local patriotism, 443 candidate to merge with Fiat, 517 population, 443 comparative size (global, 1998), 561 price of Daqing crude oil, 457 diesel engine purchases (1998), 531 refinery (run by Sinopec, not CNPC), 486 fuel-cell technology, 427 Daqing Petroleum Administration, 441–5, 456, internet procurement network, 856 470, 495, 497, 841, 842, 855, 883 ‘legacy of distrust’ with BAe Systems, 170 corporate ambition, 443–5, 474, 495, 496 language (English), 514 hopes for stock market flotation, 474[–]476 management ‘blood-letting’ (9.1999), 497 joint ventures, 445 merger (1998), 514 merger philosophy, 444 merger activity, 161, 164, 170 merger talks with Shanghai Petrochemicals, on-line procurement networks, 45 842 output (truck), sales, profits, employees missed merger opportunity, 862 (1998), 542 most profitable enterprise in PRC, 442 output, turnover, profit, R&D (1998), 533 new role (mid-1990s), 464 part-owner of Airbus Industrie, 167 non-core business, 445 Powertrain division, 532 not allowed to float internationally, 842 profits, 514 output, sales and pre-tax profit (1996), 442 and proposed EADC, 159–60 place in New CNPC structure, 475 research and development, 510 profits, 439, 474 revenues, profits, employees, R&D (1998), restructuring (1998–9), 445 887 struggle with New CNPC headquarters, sales, profits, employees, R&D (1998), 561 474[–]476, 497–8 share of European bus market, 513 subsidiaries, 445 takeover of DDC (7.2000), 531 wages, 443 takeover of Casa (Spain), 161, 235 welfare system, 443 workforce, 514 Darnell, Robert, 615 world’s leading lorry-maker, 518, 532, 535 Dasa, see Daimler-Chrysler world’s second largest company, 415 Dassault, 159; and proposed EADC, 160 world’s third largest auto producer, 514 data processing (Samsung), 53 see also EADS data systems, 43 Dalian, 444, 729 Datong Mining Bureau (Shanxi) Dalian (engine-maker) average mining depth, 737 ‘bulk of output supplied to Yiqi’, 561, 566 largest coal-mining company (PRC), 749 1004 Index

Datong Mining Bureau (Shanxi) – continued re-thinking of national priorities, 196 mine-mouth coal price (6.1994), 728 visits Shougang (5.1992), 650 national team player (second batch), 118 Deng Yingtao, 763 output, reserves, mine depths (1996), 736 Denmark: purchase of missiles from USA, 158 quality of coal, 737 dense wavelength division multiplexing transport costs, 720, 723 (DWDM) equipment, 774 workforce, 79 Denso, 19, 535 alternative usage: ‘Datong Group’; ‘Datong air conditioners, 524, 535 Mine Group’ globalization, 521 Daya Bay nuclear power plant (Guangdong incorporating IT into components systems, Province 1993–), 351, 357, 358 522 Daye Steel (company), 640 IPO (5.1999), 522n DBB Fuel Cell Engines, 427 joint ventures (PRC), 546 dealers: diesel engines, 529, 530, 531 research and development, 522, 535–6 dealerships (auto industry), 503, 887 revenues, profits, employees, R&D (1998), Dean Witter, 817 886 death rates, 906, 907, 910 turnover, profit, R&D (1998), 522 debt, 818 department stores, 132 Air China, 123 deregulation: financial services, 814 COSCO, 121 derivatives, 818, 836 Monsanto, 266 deserts (PRC), 438 oil sector (PRC), 489 design, 674–5 PRC, 71, 136, 939(n14) auto industry, 521 Shanghai Petrochemical Corporation, 472 costs (lorries), 518 TVEs, 133 ‘designated key users’ (PRC), 459 defence Desmarest, Thierry (chairman, TotalFina), 417 barriers to entry (1998), 63–4 destroyers (Sovremenny), 192 industrial concentration (global), 141 Detroit Diesel (DDC), 529, 531, 559, 568, research and development expenditure (1995, 861 1998), 49 growth and acquisitions, 531 defence budget missed merger opportunity, 861 NATO Europe, 156, 233 ‘originally part of GM’, 531 post-Cold War, 150, 233 profits, 567 PRC, 188, 194, 271, 940(n6) sales, profits, employees, R&D (1998), 584, USA, 156 886 defence electronics, 147 taken over by Daimler-Chrysler (7.2000), defence equipment: privatization (general), 32 531 defence sector: global market share, 37 Yuchai comparison, 585 DeKalb Genetics (USA), 256, 265 Deutsche Bank (Germany), 815 Dell, 863 acquisition of Morgan Grenfell, 817, 958(n9) Delphi Automotive Systems, 535, 950(n9) assets managed (1999), 837 de-merger from GM (1999), 886 key indicators, 1999 (PRC comparison), 827 globalization, 521 retreat to core business, 958(n6) joint ventures (PRC), 545 top five firm (all international convertibles, research and development, 535 2000), 823 seat business acquired by Lear (1997), 524 top five firm (international equities turnover, profit, R&D (1998), 522 bookrunners, 2000), 823 world’s joint largest component-maker top five firm (syndicated credit arrangements, (1999), 521 2000), 824 see also General Motors Deutsche Telekom, 58, 786, 840, 854 Delta (airline, USA), 149 international comparison (12.1999), 800 Delta (airline alliance), 149 market capitalization, revenue, profits Delta & Pine, 256, 265 (12.1999), 800 Deng Xiaoping, 190, 274, 646 partially-privatized, 802, 803, 892 approach to reform process, 911–12 state ownership (barriers to international cited, 141, 195 acquisition), 804 concentrates on economic construction, 195 developing countries, xxiii, 1, 5, 23, 46, 860, ‘most successful’, 912, 915 929 1977 speech, 188 ‘ability to leapfrog’, 918 ‘opening up and advancing’, 910–16 aerospace, 173–84 Index 1005 developing countries – continued steel, 593, 594–5, 604, 605, 608 barriers to entry, 141, 231, 173–6, 195, strategic choices (aerospace), 173–84 270–1, 532, 535, 618–22 telecommunications, 779, 787 big business, 62–4 Third Technological Revolution, 762 BOT, 352 TNCs (PRC comparison), 79 ‘capital-scarce, labour-abundant’, 5 trade policy, 13 catch-up (coal industry), 712–13 TRIPs Agreement (1994), 785–6 co-finance of industrial development vehicle industry, 536 (aerospace), 174–5 World Telecoms Agreement, 786 competitive capability, 787–90 see also Embraer difficulty of building large firms, 844–6, Development Bank of Singapore, 23 857 Dezhou plant (power generation), 944(n13, 17) difficulty of competing, 62 diabetes, 319 difficulty of framing industrial policy, 60 Diageo, 34, 35 energy demand, 695–6 Dictionary of National Biography (UK), 290 energy-intensive activities, 699 Diesel Engine Machinery (BVI) Limited entire GNP smaller than wealth of some CYI Limited ownership structure, 573 multinational companies, 534 ‘DML’, 574 example of Brazil (aerospace), 180–3 ‘main shareholder of CYI’, 573 example of Japan (aerospace), 176–8 owned 53% by HLA, 574 example of USSR (aerospace), 178–80 owners, 574 export credit guarantees (aerospace), 174 diesel engines, 848, 861 FDI inflow, 29–31 manufacture (PRC), 938(n3) financial services, 824 diesel oil, 460: smuggling, 275 foreign investment (benefits), 789 difang qiye (local firm), 367 growth rate, 916 see also HPEC importance for drugs companies, 243 Ding Guiming, 443, 445, 495, 841 industrial policy, 12, 64–5 Direct Digital Device (DDD), 782 industrial structure, 6 directly-reduced iron (DRI), 598, 614 internet sector, 780 Disney (USA), 781, 787 Japanese investment (steel, 1990s), 608 distilled spirits, 870 largest private industrial enterprises, 51–2 distribution leap forward strategy, 1 automobile industry, 511 liberalization, 507, 707 costs, 44 loss of skilled labour, 33 networks (WTO rules), 866 market capitalization, 51 PRC, 923 ‘massively disadvantaged’, 46 diversification military procurement (aerospace), 174 ‘defensive tactic for growth’, 52 mini-mills inappropriate (steel industry), European and US businesses, 51 599–600 HPEC, 381–2 ‘normal’ sequence of development, 6 illusion of scale (PRC), 849–50 oil sector, 421, 461 PRC, 846–50 options (aerospace), 183–4 dividends pollution, 701, 703, 704 international comparison, 18 poverty, 704 Sinopec, 465 power equipment producers, 339 Yuchai, 574, 951(n20) power generation, 332, 943(n8) division of labour, 7 power stations, 891 among countries, 12 PRC achievements (Mao era), 907 vehicle sector (PRC), 545 privatization, 32, 336, 413 DLJ (US investment bank), 822 production by global car giants, 520 Dobb, Maurice, 7 protectionism, 28–9 DoCoMo, 799, 803, 804 research and development, 48, 175–6 doctors (PRC), 300 scrap steel availability, 599 dogs, 291 share in Fortune ‘Global 500’, 46, 50, 62 domestic content requirements, 395–6, share in FT 500, 46 949(n67) shortage of ‘competitive edge’ companies domestic trade/services (1991, 1997), 84 (1997–8), 50, 62–3 domestic workers, 33 Shougang expansion, 690 Dongbei, 307[–]9 software sector, 787–8 plant at Shenyang, 283, 941(n10) 1006 Index

Dongbei – continued main product, output, profits, taxes (1995), listed (pharmaceutical) company (1996–), 562 282 merger activity, 848 Dongbei Dianli Shebei Tuoluosi (Northeast middle-level player (global lorry output), 542 Power Equipment Trust), 946(n38) minuscule (in international comparison), 534, Dongdian for short, 364 538 six plants, 383 missed merger opportunity, 861 wound up in 1967, 364 output of light trucks (1998), 554 Dongfang Boiler Works (Deyang, Sichuan, output (truck), sales, profits, employees 1971–), 376, 948(n47) (1998), 542 Dongfang Electric Power Group, 111 purchases of engines from Yuchai (1995), Dongfang Electric Corporation, 389 554 Dongfang Group, 93 revenues, profits, employees, R&D (1998), Dongfang International Group, 130 887 Dongfang Power Equipment Company sales, profits, employees, output (1998), 562 (Sichuan), 346, 356, 360–1, 371, 387, sales, profits, employees, R&D (1998), 561 390–1, 398, 947(n42) saloon car production (1998), 540 boiler plant at Jiaxiang, 390 second-tier subsidiaries, 563 first 600MW thermal power station (1998), Second Automobile Manufacturing Factory, 377 136 ‘floated its turbine generator plant’ (HK stock ‘Shougang’ contract system, 678, 956(n62) market, 1994), 390 ‘terrible year’ (1996–7), 549 joint ventures, 389, 390 state capital management rights (1990–), shareholders, 390 93–4, 137 technical ownership by local authority, 370 super-large plant (Wuhan), 102 Three Gorges Project, 356–7, 881 third largest automobile firm (PRC), 556 unit production capability, 377 vertical integration, 544 Dongfeng Automobile Company, 73, 74, 136, and Yuchai, 551, 554, 557, 569, 567–8, 138, 223, 444, 464, 496, 539, 563–6, 885, 577–8 887 alternative usage ‘Dongfeng’; ‘Erqi’; ‘Erqi ability to compete on global level playing Motor Corporation’; ‘Number Two field, 885–7 Auto’; ‘No 2 Automobile Works’ centred at Erqi, 557 Dongfeng Automobile Industry Finance Chaoyang (diesel engine enterprise), 560 Company comparative size (global, 1998), 561 directly-controlled subsidiary of Dongfeng ‘core firm’ of Dongfeng Group, 564 Group, 564 customer preference for Yuchai engines, Dongfeng Automobile Trade Corporation 557 directly-controlled subsidiary of Dongfeng decision-making autonomy (1986–), 91 Group, 564 demand for diesel engines, 557 Dongfeng Chaoyang Diesel Engine Company deteriorating relations with Yuchai, 557 4102 diesel engine, 565 diesel engine production (1998), 559 6102 diesel engine, 565 engine guarantees, 557 6105 diesel engine, 565 enhanced autonomy, [658], 955(n44) changes of ownership, 565 favoured enterprise (by PRC state), 563 diesel engine production (1998), 559 first internal finance company (7.1987), 92 engines not as powerful as those produced by first-tier subsidiaries, 563 other PRC engine-makers, 565 formed Dongfeng with eight other vehicle leaves Yiqi system (1993), 565 enterprises (1981), 563 main product, output, profits, taxes (1995), ‘group’ structure, 563 562 in-house components production, 563 quality problems, 565 in-house production (diesel engines), 582 ‘second layer’ enterprise (Dongfeng Group), influence with central government, 563 564 joint venture with Citroën (Hubei Province), supplier to Yiqi, 563, 565 539, 540, 950(n7) taken over by Dongfeng Group (1994), 565 joint venture with Cummins, 547, 566, 567, technology transfer by Cummins, 565, 567 568 Dongfeng Group (Aeoleus), 74, 75, 80, 87, 102, leading lorry-maker (PRC), 518, 534, 542, 127 543, 554, 567 Chinese name, 102 lobbying power, 577 decision-making autonomy (1986–), 91 Index 1007

Dongfeng Group (Aeoleus) – continued ‘second layer’ enterprise (Dongfeng), 564 first internal finance company (7.1987), 92 Dongfeng Nanchong state capital management rights (1990–), diesel engine production (1998), 559 93–4, 137 Dongfeng Nanjing Auto Company, 542 super-large plant (Wuhan), 102 ‘Nanjing (Special Automobile Plant)’, Dongfeng Group Corporation (1981–) 554[–]557 capital participation, 565 ‘Nanjing Dongfeng Special Automobile’, 554 components suppliers, 563 part of ‘Dongfeng system’, 554[–]7 components plants, 563 purchases of engines from Yuchai (1995), diesel engine manufacture, 559[–]566, 568 555 division of labour, 563 Yuchai sales, 554, 555 Erqi ‘core firm’, 563 Dongfeng Sichuan: diesel engine production evolution, 950(n13) (1998), 560 factories, 563 Dongfeng system, 557 first layer enterprises (directly controlled), Dongfeng Xinjiang, 577 564, 565, 566 Dongfeng Yunnan, 554, 555, 577 four layers (1990s), 564 Dongfeng-Thomson (joint venture), 565 fourth layer enterprises, 564, 565 Dongguan Power Plant, 352 headquarters, 563 Donglian Petrochemical Group (Nanjing investments, 563 1997–), 80, 117, 464, 938(n6) joint ventures with foreign companies, 565 commences operations (1998–), 466 long-term ambition, 566 experiment (1997–), 466–7 losses (1996), 576 international joint ventures, 466 majority-controlled subsidiaries, 564 merger of four companies, 117, 454, 466 managerial autonomy, 563 origins, 117 one of PRC’s earliest ‘enterprise groups’ super-group, 80 (1981–), 563 wishes (1997) to issue new shares, 466 prospectus for New York flotation, 567–8, Dongsheng mining company (PRC), 735 951(n15) Dou He Plant, 360, 362 raised to status of Ministry (1987), 563 Dow Chemical/s, 262, 454 research centres and schools, 564 downsizing, 61, 64 responsible for 300 enterprises (by 1989), aviation industry (PRC), 220–1 563 avoidance (by Shougang), 657, 688, 692, 694 second layer enterprises, 561, 564, 565, 566 BAe, 169 structure of ownership and capital (1992), HPEC, 381–2, 385 564 Japan, 56 third layer enterprises, 564, 565 mining sector (PRC), 920–1 Xiangfan engine plant, 565, 566 mining sector (UK), 921 and Yuchai, 566–7 political considerations (PRC), 845 Dongfeng Group Nanchong Engine Plant PRC, 71, 640–2, 845, 920–1, 939(n14) main product, output, profits, taxes (1995), steel industry (PRC), 640–2 562 strikes and violence (PRC, late 1990s), 920 Dongfeng Hangzhou Automobile Corporation, Yuchai, 581 542, 565, 577 see also unemployment majority owned by Dongfeng, 554 downstream capability purchases of engines from Yuchai (1995), iron and steel (Shougang), 655 554 oil, 460, 461–2, 464, 471, 472, 485, 490, ‘second layer’ enterprise (Dongfeng), 564 495, 883 Yuchai sales, 554, 555 oil (PRC), 883 Dongfeng Hangzhou Heavy Machinery Plant Shougang (diversification), 673, 682, 692 ‘second layer’ enterprise (Dongfeng), 564 steel, 609, 611 Dongfeng Joint Management Company, 73, 74, Thyssen-Krupp, 612 136 TotalFinaElf, 417 preferential planning status, 74 WTO rules, 884 Dongfeng Lianying Company, 542 Dr Reddy’s Laboratories (Hyderabad), 245 Dongfeng Liuzhou Auto Company, 542, 577 Dresdner Bank (Germany), 945(n19), majority owned by Dongfeng, 554 958(n6, 9) purchase of engines from Yuchai (1995), 555 drivers of change Yuchai sales, 554, 555 aerospace, 141–52 Dongfeng Liuzhou Automobile Works autos and auto components, 507–12 1008 Index drivers of change – continued Dunlop, 527 collapse of communism, 32 duo zhong jing ying (‘diversified business’), 496 global business revolution, 28–33 duozhong jingying (‘diversified production’), information technology, 32 475, 846 migration, 32–3 DVDs, 108 pharmaceutical sector, 242–52 dyes, 502, 503 privatization, 32 Dystar (industrial dyes), 263 trade liberalization, 28–32 tyre industry, 527 e-commerce, see electronic commerce drugs (general) E-Systems (defence electronics company), 147 anti-depressant, 250, 268 E*Trade, 818 anti-herpes, 268 EADC, see European Aerospace and Defence anti-histamine, 250 Company anti-infective, 268 EADS, see European Aircraft, Defence and anti-obesity, 250 Space Company anti-ulcer, 268 EADS-Casa, 170 top ten world-wide (1998), 250 earth-moving equipment, 43 products selling over US$500 per annum East Africa: immigration (pre-World War I), (1998), 250 32–3 drugs (specific) East Asia Augmentin (SKB), 250 arms deliveries (1987–98), 151, 152 Ceftriaxon, 306 business revolution, 51–8 Celebrex (Monsanto), 247 catch-up strategy for big business, 51 Claritin (Schering-Plough), 250 coal supplies, 717–18 ENU (Amgen), 301 diversification, 51 EPO (Amgen), 301 ‘diversified conglomerates’, 290, 316, 323, Examethasene (Upjohn), 301 324 Flixotide (Glaxo Wellcome), 247 economic growth (1980–98), 851 Lipitor (Warner-Lambert), 247, 250, 259, 260 energy demand, 695–6 Locekin, 306 influence of List, 12 Losec (Astra), 250, 264 ‘limited wars’, 196 Novasc (Pfizer), 250 pharmaceuticals market, 243 Premarin (American Home Products), 247, privately-owned businesses, 51 259 rapid growth rates (1990s), 507 Prozac (Eli-Lilly), 247, 250 rapid industrialization, 699 Renitec (Merck), 250 renewed business confidence, 929 Seroxat/Paxil (SKB), 247, 250 steel output (1974–96), 593, 594 statin group (Merck), 268 strategic re-thinking, 51 Vasotec (Merck), 247 success of ‘latecomers’, 46 Viagra (Pfizer), 247, 251, 259 East Asian crisis, see Asian financial crisis Zantac (Glaxo), 247 East Asian Economic Caucus (EAEC), 927 Zocor (Pfizer), 250 ‘East Asian miracle’: neo-classical view, 4 Zoloft (Pfizer), 250 East Asian model Du Halde, Father, 899 crisis, 51–8 Du Pont, 265, 897 USA absorbs lessons, 48 acquisitions, 256, 265 East China (regional electricity grid), 345 advantages, 265 East Germany, 699n joint venture (coal) with RWE (Germany), Eastern Century Holdings (HK), 956(n60) 710 Eastern China Electric Group, 391 joint ventures in PRC, 118 Eastern Europe (communist era), 2, 37, 178 lessons drawn by PRC from, 71 Eastern Europe (post-communist), 506 ‘life sciences’, 261, 265 approach to industrial reform, 3 oil division (Conoco), 265 arms deliveries, 152 products, 265 automobile industry, 508–9 purchase of Conoco, 411 Daewoo operations, 506 purchases ICI Titanium Dioxide business, economic growth, 2 265 electricity generation capacity (1990–2010), sale of coal-mining interests (USA), 710 697 duli hesuan faren (‘child’ companies lack of indigenous ‘competitive edge’ independent legal persons), 475 corporations, 63 Index 1009

Eastern Europe (post-communist) – continued economies of scope lorry sales (1995, 2005), 509 components, 535 power equipment, 337 diesel engines, 531 production sector, 2 HPEC, 393 production and sales of automobiles (1998), pharmaceutical sector, 246, 270–1, 286, 300 508 power generation equipment, 328–34 projected demand for power equipment PRC, 76 (1980–2010), 334 steel industry, 600 share of world electricity generation Yuchai, 551 (1995–2015), 335 see also synergies size of firms, 2 Edison Electric, 704 steel, 588 EDS, 146, 772 steel production (1991–7), 589 education, 196, 381, 949(n59) Eastman Kodak: competitive advantage, 35 Egypt, 943(n8) Ebay, 780 arms purchases, 193 Echeng Iron and Steel (company), 640 Daewoo operations, 506 Echlin, 548 GNP no more than Ford’s global economics: free market orthodoxy, 2 procurement (1998), 535 economies of scale IBM comparison (annual revenues), 772 aerospace, 143–4, 146, 152, 167, 233, 239 per capita energy use (1994), 341 ATR 42, 206 Egyptair, 213 auto industry (general), 502, 503, 506, elasticity 509–10, 512 demand, 86, 98 auto industry (Japan), 505, 510 electricity (PRC), 340 auto industry (PRC), 538, 560 energy (PRC), 340 Boeing v Airbus, 168, 184, 232 electric components, 535, 547 fans, 272 components (PRC), 544, 559 generating equipment (PRC), 75 dedicated rail lines, 739–40 generator capability, 377 defence sector, 157 motors (PRC), energy savings (potential), 716 engines, 529 power generation, 119 fighters, 158–9 electric arc furnaces, 596, 598 financial services, 830 PRC, 628 Ford Motor Company, 506 Shougang, 645, 953(n23) general, 13 steel production method (1997), 597 global giants (procurement), 845–6 Electric Power Law (PRC 1996), 345–6 helicopters, 157 electrical HPEC, 393 equipment (Mitsubishi Electric), 55 international trade, 12–13 goods (Xinfei), 573 internet, 779 parts, 950(n9) IT sector, 775, 796 products, 11, 108 Japan, 17 systems (auto components), 545 lacking (PRC), 854 Electricité de France, 351, 353 low, 53 electricity, 329, 397, 890 modern industrial enterprise, 14 cost of anti-pollution measures, 701–2, 703 oil refineries, 412, 484–5 demand (1990–2010), 696 oil sector, 421, 427, 464, 484–5, 492 demand (PRC 1998–9), 725 pharmaceutical sector, 253, 270–1, 286 essential, 327 power generation equipment, 328–34, 338 global consumption (1980–94), 334 PRC, 72, 74, 76, 80, 81, 84, 87 global output (1980–98), 341 Shenhua, 751 grids, 345–6, 349 Shougang (tertiary sector), 668, 692 installed generating capacity (1991–7), 359 South Korea, 22 installed capacity and output (PRC steel industry, 600, 618, 621, 658, 694 1980–2010), 342 suppliers (car industry), 511, 521, 522, PRC, 340, 341, 713, 714 950(n5) steel industry, 600 Taiwan, 21 structure of output (PRC 1980–2010), 354 telecommunications, 777 tariffs (PRC), 346, 349, 944(n12) Volvo (auto division) unable to compete, 515 Tibet, 345 see also industrial concentration; oligopoly world ranking (PRC 1949–98), 913 1010 Index electricity companies, 336 suppliers, 181 electricity generation WTO ruling (4.2000), 878 anti-pollution regulations (PRC), 746 EMC: software, 775 capacity (1990–2010), 697 emergency signal sending, 523 coal-fired, 429 emerging markets, 50, 507 cost, 697 EMI, 781 de-regulation, 697–8 empennage, 214, 216 fuel type, 696, 698 employees, 13, 43, 45, 937(n2 to ch1) greenhouse gases, 702–5 Japanese, 18 international implications of coal use, 705 largest number in any one capitalist firm mentioned, 133 (GM), 44 national grid (PRC), 746 Nissan, 58 national team (PRC), 77, 84 PRC, 939(n14) PRC, 77, 703, 714, 715, 746 reduction of numbers, 36, 61 privatization, 697, 706 South Korea, 21 six trial groups (PRC), 77 Taiwan, 21 subsidized by coal industry (PRC), 728 see also labour substitution of coal for oil, 433 employment Taiwan, 20 auto industry, 507 water shortage (NW China), 747 China Xinxing Corporation, 274 Electricity Generating Board (UK), 943(n7) Daqing, 443 electro-optics, 148 General Electric (USA), 333 Electrolux, 59, 863 impact of information technology (PRC), 918 electronic commerce (e-commerce), 818, 834 modern corporate system (PRC), 937(n1 to electronic control, 673 ch3) electronic data-processing technologies, 12 national team (PRC), 77 electronic mail (e-mail), 791 New CNPC, 479 electronic products, 129 New Sinopec, 479 non-aviation output of AVIC, 198 oil refineries (PRC), 485 electronics, 12, 15, 116, 133, 191, 941(n5) over-manning (PRC), 920 ‘fastest growing industrial sector’ (PRC), 86 PRC, 72, 196, 271, 919, 923 ‘high income elasticity of demand’, 86 PRC steel industry, 640–2 mergers (PRC), 80 restructuring (PRC), 893–4 national team (PRC), 76, 77, 78, 106–9 Third Technological Revolution, 763 PRC, 75, 97 threatened by WTO entry (PRC), 924, 925 research and development (1995, 1998), 49 Xinjiang Construction Group, 86 Samsung, 53 energy, 340, 943(n8–9) second batch of trial groups (1997), 86 demand, 695–6 sectoral share of PRC national team (1991, national team (PRC), 77 1997), 84 national team (various indicators, 1995), 78 South Korea, 22, 604 on-line procurement networks, 45 US recovery of global dominance (late output (global), 341 1990s), 48 per capita use (global), 341 electronics systems, 523 sources, 696 Elf Aquitaine (France), 58, 408, 500, 840, 854 strategic issues (PRC), 717, 720, 729, 749 basic statistics (1997), 418 energy efficiency, 329, 704, 715 comparison with New CNPC and New energy intensity (PRC), 715, 957(n2) Sinopec, 479 energy supply employees, 480 sectoral share of PRC national team (1991, financial indicators, 480 1997), 84 merger with TotalFina (1998–9), 416–17, 493 engine block: key component, 581 ‘national champion’ (France), 408 engine management systems (EMS), 546 privatization, 408, 493, 500, 859, 892 engines profits, 480 castings, 950(n9) and Saga Petroleum (1999), 413 cooling systems, 526 turnover, 480 diesel, 223, 513, 529–32, 536, 537, 544, Eli-Lilly, 247, 249, 250, 269, 283 547–8, 552, 557, 558, 566 Embraer (Brazil), 180–4, 211, 239–40, 860, 861 efficiency, 532 missed merger opportunity, 861 foreign investment (PRC), 546–7 rise ‘highly significant event’, 183 guarantees, 558–9 Index 1011 engines – continued environmental protection equipment, 198 high profit margin (diesel engines, PRC), 567 erci chuangye (‘Second Enterprise importance of fuel pump, 580 Establishment’) policy, 309 lorries, 517 equipment, see machinery petrol, 529–30, 532, 552, 557, 558, 568–9 Ericsson (Sweden), 59, 786, 935 spiralling R&D costs (cars), 521 fibre optic transmission trunk (PRC), 795 vehicles, 529–32 market capitalization (2000), 764 see also aero-engines, Dalian, Wuxi, Yuchai sales, 774 engineering, 48, 49 sales revenue (2000), 764 engineers: computer software, 221 share of PRC market, 795 English language, 787, 788–9 third generation, 774–5 ENI, 407–8, 499, 840, 841, 854, 861, 920 wireless handsets, 774 basic statistics (1997), 418 erji gongsi, 654 comparison with New CNPC and New ‘second tier of one hundred enterprises’ Sinopec, 479 (Sanjiu), 318 employees, 480 Erqi Motor Corporation, see Dongfeng financial indicators, 480 Automobile Company flotation, 500 erzi gongsi (‘child’ company), 221–6, 476, 478 job losses, 427 ethanol, 422 missed merger opportunity, 862 ethyl acetate, 422 oil and gas production, 481 ethylene, 252 possible merger, 417, 420 catch-up possibilities, 64 privatization (1995–), 407, 413, 493, 892 Donglian, 466 profits, 480, 484 at Huizhou, 454, 490 transformation (SOE national champion into ‘need to expand supply’ (PRC), 487 privatized TNC), 859 New Sinopec, 447, 448, 450, 452, 454, 472 turnover, 480 PRC production, 450, 451, 452, 470, 486–7 upstream activity, 408 Shanghai Petrochemical Corporation, 454–5, enterprise: problems of definition (PRC), 472 939(n15) world production (1989–96), 451 enterprise reorganization barriers, 72, 939(n16) ethylene crackers, 421–2 enterprise groups (PRC) see national team; trial EU, see European Union business groups ‘Euro-Oil’, 417 enterprises (PRC) euro [currency] area: bank restructuring departmental relations, 94 (1980–97), 820–1 financial relations, 94 Eurofighter project (1983–), 158–9, 161, 162, ownership rights, 94 170 ‘enterprises’ (PRC), 461 ‘Europe’ entertainment, 53, 782 aerospace, 149, 156–70 entertainment companies, 781 arms trade with USA, 156–7 entrepreneurship (PRC), 242 automobile market, 537 environment, 412, 423, 427, 435, 436, 485, 487, coal consumption (1986–96), 698 758, 883, 890 consolidation (steel sector), 609–13 aerospace, 182, 183 ‘continental Europe’, 58–60 automobile design, 511 copies Japan, 57 blast furnaces, 619–20 defence sector (industrial concentration), controls (PRC), 871 141 emission standards (diesel engines), 530, 531 defence spending (post-Cold War), 150 gas-fired power stations, 339 economic growth (1980–98), 851 and investment (USA), 709 emerging ‘steel oligopoly’, 609 large-scale mining operations, 709 employment in coal industry, 706 legislation/regulation, 510, 619–20, 699, 709, general difficulties, 170–1 710, 746, 871 global business revolution, 58–60 mining companies, 709, 713 iron ore costs (1997), 619 Mitsubishi engine, 558 Japanese penetrate (automobile market), 510 PRC, 429–31, 746 Japanese production capability in, 511 pressure groups, 757 lessons for PRC (aerospace), 232–4 6112 engine, 553 military aircraft procurement, 174 USA, 699, 709, 710 multinational corporations, 27 see also pollution national champions, 58 1012 Index

‘Europe’ – continued Single Market (effective 1992–), 814, natural gas production and reserves (1997), 958(n2) 405 steel, 588, 595, 606 number of ‘competitive edge’ companies voluntary export restraints (steel), 601 (1997–8), 50 see also ‘Europe’ oil production (1987–97), 405 European Union-PRC Agreement (5.2000) primary energy consumption (1987–97), 402 WTO-accession, 864, 869 privatization, 32 Everbright Group (HK), 306 privatization of oil companies, 413 Excel Switching, 773 productivity (coal), 620 exchange rate control, 833 railways (C19), 13 exchange rates, 814 Renault, 515 Excite, 787 research and development expenditure exhausts (cars), 522, 525, 530, 536 (1997), 48 experimental, developmental position, xxiii share in Fortune Global 500 (1997), 50, 60 exploitation, vii, 907 South Korean expansion in, 23 export state ownership (steel industry), 605 credit guarantees, 97, 174, 178, 181–2 state protection (car industry), 533 credits, 353–4, 387 steel industry (consolidation), 598–9 earnings (arms sales), 152 TotalFinaElf, 417 industries (South Korea), 54 transatlantic giants, 59–60 markets (for PRC), 86, 98 wage costs (steel industry, 1997), 620 restraints (voluntary), 395 see also Eastern Europe; European Union; rights (PRC), 70 Western Europe; individual countries subsidies (WTO rules, PRC implementation), European Aerospace and Defence Company 869 (EADC), 159–62, 163, 164, 233, 234–5 Export-Import Bank of China, 97 European Aircraft, Defence and Space Company ‘Eximbank’ (PRC), 387 (EADS), 59, 60, 161–2, 169, 171 Export Development Corporation (Canada), merger between Dasa and Aérospatiale- 945(n19, n21) Matra, 161, 170 exports European champions, 59, 857, 895 drive world boom (1945–), 31 Airbus, 498 growth (PRC 1980–97), 913 aerospace, 878 HPEC, 386–7 oil sector, 493 national team (various indicators, 1995), 78 power engineering, 338 PRC (Deng era), 912 steel, 609, 889 PRC to USA, 893 European Commission, 956(n63) USA, 31 European Future Large Aircraft, 164 ‘external firm’, 39–45, 61, 145, 523 European Union (EU), 922, 930 auto sector, 512 aerospace, 165, 234–5, 237, 238 Boeing, 145 agreement with PRC (telecommunications, Coca-Cola, 530 5.2000), 791 diesel engines, 530 BOF method (steel production), 596 external firm, 847, 856 coal as source of primary energy, 705 IT sector, 769 continuous casting (steel industry), 596 PRC, 923, 924 cooperation with USA (aerospace), 233 sphere of co-ordination and planning, 39 defence procurement, 156–7 see also firm; outsourcing; sub-contracting defence forces, 162 Exxon, 414 defence restructuring, 192 merger with Mobil (1998), 413, 415 electricity generation (fuel type, 1996), 698 not state-owned (1996), 410 financial services (sectoral restrictions), 830 output (1996), 409 industrial concentration (banking), 815, production and exploration in 30 countries, 958(n4) 481 market access (PRC IT sector), 790 refinery and chemicals operations, 422 net importer of steel (1998), 607 refinery throughput, 421 ‘plummeting profits’ (steel, 1998), 607 research and development, 423 PRC accession to the WTO, 864 sale of coal-mining interests (USA), 710 relative size of US and EU aerospace unit operating expenses (1993–7), 411 companies (1998), 166 Exxon Mobil (USA), 415–16, 848 ‘relatively open’ to PRC exports, 871 basic statistics, 418–20 Index 1013

Exxon Mobil (USA) – continued technology and marketing agreement with comparison with New CNPC and New Westinghouse and MHI, 336 Sinopec, 479, 500 Fiat Avio, 942(n1) employees, 480 fibre optics, 774, 786, 795 financial indicators, 480 fibres, 265 fuel-cell technology, 426–7 film stars: used in advertising (PRC), 298 job losses, 427 films, 131 natural gas, 416 filters (cars), 530 oil and gas production, 481 finance, 42, 121, 124 oil reserves, 415 access to foreign (PRC), 88 profitability, 414, 420 aviation industry (PRC), 219, 237 profits, 480 minimum economy of scale (auto industry), revenues, profits, employees, R&D (1997 503 pro-forma), 884 power generation industry (PRC), 343, size, 415, 500 348–54, 358–9, 362, 375 turnover, 480 finance companies (PRC), 70, 88, 110, 138, 139 world’s third largest company, 415 financial assets (‘securitized’), 818 FAA, see USA: Federal Aviation Authority discipline (PRC), 71 facsimile service, 791 information, 781 fair market value, 227 innovation, 31 Falun Gong, 805 institutions, 815, 831, 958(n3) famine, 907 markets, 31 fangquan (flats), 381 regulation, 834, 835 fans and pumps (PRC): energy savings resources, 36–7 (potential), 716 sector, 640 Far East strength (power equipment), 329 dependence on Middle Eastern oil supplies, financial holding company (FHC), 817, 819, 405 835 industrial concentration, 613 financial services (global), 813–37, 958 projected demand for power equipment concentration and Americanization, 819–24 (1980–2010), 334 conclusion, 837 farm equipment, 3 consolidation, 816–17 barriers to entry (1998), 64 cross-border transactions, 815–16, 819 global market share, 37 cross-sector transactions, 816–17, 819 Farnborough Air Show, 150, 212 deregulation, 814–15, 837 fast-moving consumer goods (FMCG), 45, 113, e-banking, 818–19 921, 929 financial engineering, 818–19 global oligopoly, 41–2 globalization, 815–16 core systems integration, 42, 43, 44 innovation, 818–19 packaging, 43 intensified competition, 819 see also consumer goods mergers and acquisitions (1989–99), 816 FAW (First Automobile Works), see Yiqi new trends, 814–24 FDA, see USA: Food and Drugs Administration non-interest income (US banks), 830 FDI, see foreign direct investment PRC, 813–14, 825–37 Federation of Korean Industries (FKI), 517 problems (USA), 835 fenliu (‘main company’), 472 sectors (according to Fortune 500), 958(n7) ferrous metals: PRC (national team), 77 separation of sectors (USA), 816, 830 FEV (Germany), 553 US dominance, 823–4 Fiat (Italy), 311, 504, 860 see also Glass-Steagall Act (USA 1933) collaboration with Peugeot, 513 financial services (PRC), 813–14, 825–37, 921, foreign assets, sales, employment (1997), 958 509 banking, 825 interests in Eastern Europe (post-1989), 508 challenges after WTO entry, 813–14, 825–36 interests in India, 508 conclusion, 837 interests in Mercosur, 508 consequences of competition, 831–3 interests in Turkey, 508 consumer-protection, 835–6, 837 output, turnover, profit, R&D (1998), 533 cross-border transactions, 834–5, 836 prospective merger, 517, 533 cross-sector transactions, 835–6 state subsidies, 504 employment (PRC 1998), 919 1014 Index financial services (PRC) – continued First Tractor and Construction Machinery global level playing field, 825–6, 831 Group, 104 human resources, 832 Fisons Pharmaceuticals (UK), 255, 263, 264 implementing regulation, 836 Fitzgerald, Niall, 34 infant, 814 Five Western District mines (Inner Mongolia), insurance, 825–6 749, 753–6, 759, [843, 891] international benchmarking, 826–31 Five Year Plans (PRC) international rules, 814, 833 first (1953–7), 363, 368, 391 productivity and quality, 830–1, 837 sixth (1980–5), 659, 667 reform strategy, 825 seventh (1985–90), 373, 659 regulatory regime, 833–6, 837 ninth (1996–2000), 342, 349, 353, 357, 358, return on assets, 831 447–8, 734, 938(n5) return on equity, 831 Fleetguard (company), 530 scale, 826–9, 837 fluidized-bed combustion, 338 scope, 830, 837 Flying Horse (brand-name), 197–8 separation of sectors (PRC), 830 FMCG, see fast-moving consumer goods systemic safety, 833–4, 837 Foden (UK lorry company), 518 top four foreign and domestic commercial Fokker, 183, 205–6, 211, 212, 860, 861 banks (1999), 827 food, 14, 132, 316–17, 318, 921 top four foreign and domestic investment foodstuff packaging machinery, 198 banks (1998), 829 Ford, Henry (1863–1947), 678 top three foreign and domestic insurance Ford Motor Company (1903–), 101, 176, 264, companies (1998), 828 506 WTO rules (implementation by PRC), 868 acquires Volvo’s auto business (1999), 515 Financial Services Modernization Act (USA assets, 79 1999), 814 brought-in components (1970s), 950(n3) Financial Times, 159, 164–5, 272, 336 candidate to merge with Fiat, 517 Financial Times 500 (ranked by market co-operation with Honda and Peugeot, 513 capitalization), 19, 46, 47, 50 comparison with Shanghai Auto, 886 CTHK, 799 diesel engines, 513 dominance of IT companies (early 2000), foreign assets, sales, employment (1997), 771 509 Four Little Tiger share (1996–8), 929 fuel-cell technology, 513 Japanese share (1996–9), 929 global procurement, 515, 535 life sciences, 767 global oligopoly in the business revolution, no PRC representation (1999), 851 40 Findlay, Ronald, 19 interests in India, Mercosur, Thailand, 508 Finland, 764, 775, 820 internet procurement network, 856 Finnair, 149 Japanese operations, 505 Finnemecanica, 892, 920 joint venture with Volkswagen (Latin Firestone: purchased by Bridgestone (1988), America and Portugal), 513 528 negotiations with Daewoo (1999), 54 firm number of employees (1992–7), 937(n1 to changing nature, 762 ch2) ‘lack of consistency in identification’ (PRC), on-line procurement networks, 45 852 one of the three largest TNCs, 79 small v large, 1 output (PRC comparison), 533 theory, 605, 679 outsourcing, 511 see also ‘external firm’ potential bidder for Daewoo (1999), 516 First Automobile Works (FAW), see Yiqi purchase of Kwik-Fit (UK), 512 First Chicago NBD, 817 research and development, 510 First Heavy Machinery Group (PRC): national revenues (1992–7), 937(n1 to ch2) team player (PRC), 104 revenues, profits, employees, R&D (1998), First Industrial Revolution, 13 887 ‘First Ministry of Machine Building’, 376, sale of Visteon (announced 9.1997), 521 947(n44), 948(n46) sales, 79 ‘first movers’ stake in Mazda, 513 Carnegie Steel Company, 601 transformation to ‘consumer-service institutional, 680–1 company’, 512 Yuchai, 885 workforce, 79 Index 1015

Ford-Volvo Fortune, 146, 608 comparative size (global, 1998), 561 Fortune ‘Global 500’ (ranked by sales revenue), matches entire GNP of Thailand, 534 18–19, 44, 46, 67, 95 output, turnover, profit, R&D (1998), 534 attempt by PRC to gain entrants into, 108, sales, profits, employees, R&D (1998), 561 109, 115, 119, 126, 938(n5) Ford Foundation, 4 auto firms, 507 Fordism, 8, 44, 519 BP Amoco, 414, 416 see also vertical integration companies ranked by number of employees, Foreign Armies Grab China (Chen Fang, 1999), 44 926, 961 component-makers (vehicles), 521 foreign direct investment (FDI), xxiii, 29–30, Continental Europe, 60 520, 904 ‘diversified financials’, 819, 824, 958(n7) auto assembly (PRC), 885 financial services, 824 Brazil (1993–8), 912 IT sector, 785 coal industry (PRC), 729 Japan, 850, 929 developed countries (inflow, 1984–98), 30, life sciences, 785 31 New CNPC, 479 East Asian steel companies, 608–9 New Sinopec, 479 ‘grows much faster than trade’ (1990s), 31 oil sector, 414–17 impact of US-PRC Agreement (11.1999), pharmaceutical sector, 269, 785 872–3 PRC/HKSAR representation, 70, 130, 830, iron and steel industry (PRC), 640 851, 854, 939(n13) Japanese (in USA), 601 profit margins (1998), 245 offshore oil (PRC), 489 ‘return on revenues’, 785 oil sector (PRC), 457 research and development, 95 oilfields (PRC), 440 sales value (1998), 47, 49 pharmaceutical sector (PRC), 282 Shougang’s aspirations, 643 PRC, 30, 31, 463, 860, 908, 910, 912 software outsourcing to Indian companies, rate of return (in PRC), 349, 353, 944(n14), 787 944–5(n18) South Korean representation (2000), 23 restrictions (PRC), 881, 883 telecommunications sector, 785 Russian Federation (1993–8), 910, 912 TotalFinaElf, 416 Singapore, 23 Wal-Mart, 479 steel, 587, 595 fossil fuel power-generation, 339 telecommunications sector (PRC), 791 Founder Group, 108, 109, 938(n5) US-based companies (mid-1980s-), 48–9 foundry operations, 513 WTO rules (PRC implementation), 872–3 Four Little Tigers, 6, 858 see also investment ‘catch-up’ process, 19–24 foreign exchange, 31, 86, 501 companies in FT 500 (1996–8), 929 foreign trade, 78, 84, 87, 88, 501 comparative advantage, 6 foreign travel, 304 economic growth, 24 forestry and forests, 7, 77, 84, 134–5, 763 ‘labour-intensive structures’, 6 Forgeard, Noel, 150, 168, 212 neo-classical view, 19 ‘Former USSR’, 401, 406, 433, 488, 842, 917 role of state, 19 coal, 698, 699, 707 718 Framatome, 358, 391, 396, 943(n6), 945(n22) energy demand, 695 France example for PRC, 462–3 air force, 157 fighter aircraft sales to PRC, 877 auto industry, 504 hydrocarbon exports to PRC, 407 bank restructuring (1980–97), 820 Ispat, 614, 615 central government, 943(n6) natural gas production and reserves (1997), concentration of manufacturing output 405 (1909–63), 14 oil, 403, 405, 434, 435 cross-border mergers, 853 primary energy, 696, 697 defence spending, 157 steel, 589, 593, 594, 595, 596, 597, 608, 615, energy efficiency (PRC comparison), 914 889 German occupation, 504 see also Kazakhstan; Russian Federation; global business revolution (1990s), 58 USSR industrial concentration (steel), 605 Formosa Chemicals, 21 industrial concentration (auto industry), 507 Formosa Plastics (Taiwan), 21, 718 IT companies (2000), 764 1016 Index

France – continued mobile phone company, 931 ‘national champion’ (oil sector), 416 wireless telecommunications, 799 number of auto manufacturers (1920), 506 ‘Fujian Five’, 573, 951(n19) oil and petrochemicals, 408 Fujian Province pharmaceutical corporations, 248 new power station, 352 primary energy consumption, 401, 696, 697 nuclear power (planned), 357 production of plastics (1989–96), 451 provincial electricity grid, 345 production of ethylene (1989–96), 451 Fujitsu, 19, 764, 772, 850 protection of Elf, 493 Fulaerji Plant (Heilongjiang Province), remuneration and labour productivity (steel 948(n56) industry, 1995), 641 furnaces, 596 royalty and licensing fees (paid), 785 furniture-making, 311 share in Fortune Global 500 (1997), 50 Fushun (Liaoning), 730–1, 901 state aid for research and development Fushun Electro-magnetic Plant, 365 (aerospace), 175–6 Fushun Petrochemical [enterprise], 469 state-owned airline, 203 fuwu gongsi (‘technical service companies’), steel output (1974–96), 593 475 steel production, 594 fuwu yewu (‘non-core’ business), 476 supplier of nuclear power units to PRC, 357, Fuxin (Liaoning): loss-making coal mines, 945 730–1 top twenty steel-producing country (1991–8), Fuyo keiretsu, 53, 54, 56–7 617 France Telecom, 786, 840, 854 Gallon, Louis, 212 CCF partner of China Unicom, 810 GalvaSud, 612 international comparison (12.1999), 800 gambling, 782 market capitalization, revenue, profits gandalei (mud houses), 443 (12.1999), 800 ‘Gang of Four’, 204, 911 privatization, 892 (partial, 802) Ganmaoqing (medicine for common cold), 297 vestige of state ownership, 803 Ganmaoling (likewise), 298 franchise stores, 132 ganqing (feelings), 380 Frankenstein, J. and B. Gill (1996), 189–90 Gansler, Jacques, 150, 155–6, 165 Fraser, Sir Malcolm, 935 Gansu (province), 656, 954(n40) free markets, xxiii, 20, 150, 762, 926 electricity tariff, 346 free trade, 15, 51 geographical location of national team ASEAN Free Trade Area, 927–8 members, 82, 83 Hong Kong and Singapore, 19 petrol stations, 470 Japan and Singapore, 928 Gansu Electric Power Company, 110 Japan and South Korea, 928 Garn-St Germain Depository Institutions Act Krugman’s critique, 13 (USA 1982), 814 List’s critique, 12 Garnier, Jean-Pierre, 258, 269 UK (1840s), 15 gas, see natural gas freight transportation, 77, 432 gas stations, see petrol stations Freightliner (USA), 519, 535, 567 gasoline, see petrol Freund (Japan) pilling machine, 303 GATT, 28–9 Friedman, Milton, 3, 13, 14 restrictions on protectionism, 507 fruit: world ranking (PRC 1949–98), 913 Uruguay Round (1985–93), 28, 784–5 Fryna (Switzerland) ointment composer, 303 see also World Trade Organization FT8 (‘gas turbine non-aviation engine’), 217 GDP, see Gross Domestic Product Fu Quanyu, General, 941(n18) GE, see General Electric (USA) fuel-cell technology, 426–7, 513 GE (Canada), 357, 378, 390, 945(n20) fuel consumption, 590 GE Capital, 57, 331–2, 362, 787, 819 fuel injection, 521, 545, 950(n9) gears, 950(n9) fuel pumps, 576, 580 GEC-Alsthom, 398 Fuji: competitive advantage, 35 involvement in Three Gorges Project, Fuji Film, 19 945(n20) Fuji Steel, 603 merger with Framatome (blocked), 843(n6) see also New Japan Steel operations in PRC, 351, 353, 391 Fujian origins, 336 coal production and consumption (1996), 719 possible merger with Rolls-Royce (1998 ‘grasping the large’, 83 speculation), 943(n3) Index 1017

GEC-Alsthom – continued General Motors (GM), 101, 103, 147, 176, 506, R&D expenditure, 329 897 servicing, 394 adopts lean production system, 511 size (late 1990s), 330 alliance with Isuzu, 513 supplier to SHP, 362 anti-lock braking systems equipment, see also Alstom 950(n4) GEC-Marconi, 160 ‘broad cooperation’ with Sony (under acquires Tracor, 146 discussion), 783 merger with BAe (1999), 147–8, 161, 170 brought-in components (1970s), 950(n3) see also BAe Systems candidate to merge with Fiat, 517 Gelsenkirchen, 426 co-operation with Honda, 513 Genay, H., see Berger, A. comparative size (global, 1998), 561 gene therapy, 261 comparison with Shanghai Auto, 886 General Administration of Customs (PRC), 275 employment, 226 General Allocation Plan (GAP): coal sector engine supply, 513 (PRC), 726 foreign assets, sales, employment (1997), General Armaments Department (PRC), 276 509 General Dynamic/s, 147, 165, 231 global oligopoly in the business revolution, General Electric (USA), 164, 172–3, 178, 180, 40 181, 239, 336, 398, 848 interests in Eastern Europe (post-1989), 508 aero-engine technology, 329, 331, 943(n3) interests in India, 508 ancillary equipment, 365 interests in Mercosur, 508 assets, 79 interests in Thailand, 508 considering merger with Lockheed Martin internet procurement network, 856 (late 1998), 164 Japanese operations, 505 dealings with HPEC, 372 joint venture with Daewoo, 506 employment, 333 joint venture with Shanghai Automotive F-class gas turbine, 329, 331 Works (1997–), 539 global oligopoly in the business revolution, joint ventures with Toyota and Suzuki, 513 40, 42 largest capitalist employer world-wide, 44 government procurement contracts, 396 lessons drawn by PRC from, 71 H-series combined cycle turbines, 329 matches entire GNP of Turkey, 534 involvement in PRC power generation number of employees (1992–7), 937(n1 to industry, 362, 386 ch2) joint tenders with HPEC, 387 on-line procurement networks, 45 ‘major beneficiary’ of ABB merger with output (PRC comparison), 538 GEC-Alsthom, 338–9 output, turnover, profit, R&D (1998), 533 market leader (in USA), 338, 339 production line sold to Beinei, 567–8 market share worldwide (power generation research and development, 507 equipment, 1993–8), 337 research and development, 510 number of employees (1992–7), 937(n1 to revenues (1992–7), 937(n1 to ch2) ch2) revenues, profits, employees, R&D (1998), one of the three largest TNCs, 79, 339 887 research and development, 143, 175, 329 sale of Delphi (component-making) revenues (1992–7), 937(n1 to ch2) subsidiary (1999), 520 revenues, profits, employees, R&D (1998), sales, profits, employees, R&D (1998), 561 882 takeover of Isuzu (1999), 518, 534 sales, 79 world’s largest company, 415 servicing, 332–3, 394 see also Detroit Diesel (DDC) Six Sigma (systems management) General Motors/Isuzu: leading lorry-maker, programme, 334 518–19 size, 330, 393 genetic engineering, 265, 306 source of profits, 333 Genetic Therapy, 261 steam turbine manufacture, 943(n7) genetically-modified supplier to SHP, 362 crops, 268 supply network, 384 seeds and associated chemicals, 266 technical lead in turbine technology, 329 Geneva Steel Works, 673 workforce, 79 Geng Lei, 947[n40] General Electric Company (UK), 336, 943(n7) genomics, 246, 258 General Instruments, 771 GeoCorp (IT company), 773 1018 Index

Germany, 262, 663 hydro-power, 350 air force (Luftwaffe), 157, 158, 159 Gezhouba Water Resources and Hydropower auto industry, 504 Engineering Corporation, 127, 344 bank restructuring (1980–97), 820 national team player (first batch), 127 banking sector, 816 Ghosn, Carlos (CEO Nissan), 57, 516, 519 coal, 699, 706, 707, 732 Gilbertson, Brian (Chairman, Billiton), 695 cross-border mergers, 853 Gilbira, Samir, 527 domestic manufacturing output produced by Gill, B., see Frankenstein, J. foreign-owned firms (1986–95), 31 Gillette: competitive advantage, 35 economies of scale needed (defence GKN, 522, 525, 536 equipment), 158 Gladstone, W.E., 903 electric furnace (steel industry), 596 glass, 77, 128, 525, 591 energy efficiency (PRC comparison), 914 Glass-Steagall Act (USA 1933) enmity with UK abandoned, 233 repealed (1999), 814, 817, 819 Eurofighter, 158–9 followed in PRC (1998), 830 Fortune Global 500 (1997), 50 Glaxo (USA), 247, 255 global business revolution (1990s), 58 market share (1994), 267 globalization, 514 merger (1995) with Wellcome (UK), 255 high cost of underground coal-mining, 710 Glaxo Wellcome (1995–2000), 247, 253[–]8, Hitler government, 504 255, 257n industrial concentration (auto industry), 506 aborted merger with SKB (1998), 256, 258 industrial concentration (steel), 605 best sellers (drugs), 250 Ispat, 600 market capitalization, 269 IT companies (2000), 764 marketing expenditure, 251 joint venture (printing) in PRC, 311 merges with SKB (2000), 251, 257, 260, 262, labour productivity (coal-mining, 1996), 711 268, 269 mentioned, 676 products, 268 national output in PPP dollars (PRC research and development expenditure comparison, 1998), 914 (1994–7), 248 output per worker (coal), 706, 751 revenues, profits, employees, R&D (1997), pharmaceutical corporations, 248–9 879 power equipment (exports to PRC), 379, Glaxo Wellcome/SKB (2000–), 253, 258, 269 948(n51) joint venture in Chengdu, 283 primary energy consumption (1986–96), 696 ‘market share 1999’, 268 primary energy consumption (1996), 697 marketing, 270 production of ethylene (1989–96), 451 operational headquarters, 269 production of plastics (1989–96), 451 global protectionism, 396 capability, 52 remuneration and labour productivity (steel capital markets: revolution in, 32 industry, 1995), 641 economy, 49, 51 research and development (locale), 95 financial system, 31 royalty and licensing fees (paid), 785 market share, 37 Sanjiu Germany Pharmaceutical Co Ltd, 308 markets (opening up of), 51 Sanjiu sales offices, 300 procurement offices, 42 state aid for research and development production networks, 29 (aerospace), 175–6 global business revolution (general 1990s), xxiv, steel output (1951–60), 623 8, 25, 27–65, 269, 898, 933 steel output (1974–96), 593 advanced economies, 919, 924, 929 steel production, 594 autos, 507–12, 533, 536 steel production methods (1997), 597 benefits, 61–2 state-owned airline, 203 big business central to development of subsidies (coal industry), 731–3 capitalism, 61 top ten steel-producing country (1991–8), brand, 34 616 co-ordination and planning, 39–45 ‘universal banks’, 818, 830, 958(n6) coal industry, 695–713 getihu (private business), 315 collapse of communism, 32 Gezhouba Group competitive advantage, 33–7 hydroelectric dam construction, 85 conclusion, 61–5 Gezhouba Hydro-Power Plant (company), 350 continental Europe, 58–60 Gezhouba Power Station, 944(n11) core business, 33–4 Index 1019 global business revolution (general 1990s) – government procurement contracts, 860 continued impact on trade and investment (WTO crisis for the East Asian model, 51–8 Agreement), 870–3 dominance of firms based in advanced imperfect markets with high transaction economies, 46, 47 costs, 847 drivers, 28–33 increased autonomy for emerging European champions, 59 corporations, 859–60 external firm, 39–45 industrial policy 856–7, 857–64, 864–76 financial resources, 36–7 internal problems, 852–5 financial services, 813–24 joining WTO, 864–76 gap between advanced economies and need to provide for huge workforces, 846–7 developing countries, 62–4 non-economic objectives of WTO industrial concentration, 37–9 Agreement, 873–6 information technology, 32, 761–90 psychological problems of adjustment, 894–5 iron and steel, 587, 588–622, 693, 694 spacial distribution of industrial assets, 846 IT expenditure, 36 speed of implementation, 869–70 IT hardware, 770 state support for technological upgrading, Japan, 54–8 863 liberalization of capital flows, 29–32 state-orchestrated mergers, 858–9 market share, 38–9 structural change necessary, 892–3 mass media, 781 supplier network, 845–6 merger frenzy, 38 supporting non-SOE national champions, migration, 32–3 862–3 national champions, 58 terms of WTO agreement in specific sectors, national industrial policy undermined, 60 867–9 policy challenge, 64–5 using global competition, 860–2 potential threats from the WTO, 928–9 weakness in competing on world markets, PRC response, 839–96 848–9 privatization, 32 where is the firm?, 840–52 regional distribution of firms, 46–51 WTO Agreement: enforcement, 870 reinvigorated big business in Japan and WTO Agreement: ‘not observed by PRC’ Europe?, 60 (scenario), 895–6 research and development, 34–6 WTO Agreement: ‘observed by PRC’ revolutionary change in business systems (scenario), 892–5 outside USA, 51–60 Global Crossing, 786 South Korea, 52–4 global level playing field, see mantras telecommunications, 761–2, 777 global warming, 430, 702–5, 714 trade liberalization, 28–9 Globalisation Trap and China’s Realistic transatlantic giants, 59–60 Choices (Han Deqiang, 2000), 926, 965 US dominance, 46–51, 775, 924, 925 globalization, xxiii, 2, 46, 48–9, 51, 58, 61, 64, see also globalization; industrial 162, 242, 920, 926–7, 931 concentration; mergers automobile industry, 512, 516 global business revolution (PRC response), barriers to entry, 63 839–96 benefits, 61–2 barriers to mergers and acquisitions, 847–8 coal industry, 695–713 battle with domestic SMEs, 844–5 components, 520, 521, 523–4 central argument, 895 continental European response, 58 conclusions, 850–2, 863–4, 892–6 impact on costs (automobile manufacturing), constraints on organic growth, 848 509–10 construction of internationally-competitive impact in Sweden, 59 firms, 840–57 Japanese lean production, 511 developing countries: special difficulties, limits, 395–6, 949(n66–7) 844–6 lorries, 519 downsizing and restructuring, 845 oil sector, 401–28, 441, 491–2, 494–5 drive to diversify, 846–50 patented drugs, 243, 258 employment for displaced workers, 893–4 pharmaceuticals, 262, 263, 266–7, 269 external problems, 855–6 policy debate (PRC), 463 general measures, 865–6 power equipment companies, 335, 336–9, global level playing field (PRC ability to 389 compete), 876–92 shift to the Far East, 65 1020 Index globalization – continued expenditure on health (low-income steel, 608–17, 621, 693, 694 countries), 243 suppliers, 511–12 growth (PRC), 623–4, 713, 798, 850, 913 vehicle industry, 520 mentioned, 29 see also global business revolution; industrial Gross National Product (GNP) concentration Austria v top five IT companies, 768 GM, see General Motors Brazil v 57 hardware corporations (1997), GMAC, 819 766 GMP, see Good Manufacturing Procedures Chile v IBM, 768 GNP, see Gross National Product Egypt v IBM, 768 gold, 708 forty-six developing countries v IBM’s R&D Golden Bridge (ISP), 808 expenditure (1998), 768 Golden Palace (hotel chain), 313 Malaysia v US tax-funded R&D expenditure, Goldman Sachs (USA), 54, 818, 819, 824, 872 863 key indicators, 1998 (PRC comparison), 829 mentioned, 47 top five firm (all international convertibles, per capita (various countries), 910 2000), 823 PRC, 340, 913–14, 932 top five firm (international equities Thailand v Ford-Volvo, 534 bookrunners, 2000), 823 upper-middle-income countries v top ten IT top five firm (M&A Advisers, 2000), 823 companies, 765 Golf (car), 591 various countries (1998), 932 gongshang shui (industrial and commercial tax, Groupement d’intérêt économique, 167, 168, PRC), 648 232 Good Manufacturing Procedures (GMP) Gruma: competitive advantage, 35 pharmaceutical companies, 301–3, 323 GS Capital Partners, 573, 575 goods: globalization, 855 GSD, see PLA: General Staff Department goods and services, 7, 33, 62, 92, 918 GTE, 800 Goodyear Tyre and Rubber (USA), 57, 535, gua paizi (‘hanging signs’), 76 886 Guangdong (province), 24, 125 ‘Impact’ technology, 527 geographical location of national team industry leader (tyres), 528–9 members, 82, 83 research and development, 526 ‘grasping the large’, 83 takeover of Sumitomo, 526, 528–9 No 2 (nuclear power plant), 945(n22) turnover, profit, R&D (1998), 522 nuclear power (planned), 357 Gorbachev, Mikhail (b 1931), 908–9, 910–11 nuclear plant at Daya Bay, 351, 357 Goswami, Omkar, 873 nuclear power, 391 government pharmaceutical sector, 283 employment (PRC 1998), 919 power plant capacity, 350 Japan, 54, 505, 603 provincial government, 120 procurement, 4, 505 rail network, 124 resistance to trans-national mergers, 512 richest province (PRC), 951(n17) support, 794, 795 Shajiao ‘B’ and ‘C’ power plants, 351 grain, 705, 869, 871 wireless telecommunications, 799 Gramm-Leach-Bliley (GLB) Act (USA 1999), Guangdong Capital, xxvi 814, 815, 817, 819, 822, 958(n5) Guangdong Ceramics Group, 131 Grangemouth, 422 Guangdong Nuclear Electric Group, 110 ‘Great Leap Forward’ (1958–9), 633, 907, Guangdong Nuclear Power Group, 85 947(n44) Guangdong Telecom, 862 Great Wall of China, 935 Guangxi (province), 82, 83, 501, 573, 810 Great Wall Group: national team player, 106 China Unicom joint venture activity, 810 Greater East Asian Co-Prosperity Sphere, 905 geographical location of national team Greece, 158 members, 82, 83 greenhouse gases, 339, 406, 407, 430–1, 702–5, Laibin B power plant (BOT project), 352–3 743, 890 ‘poor region’, 569, 951(n17) grocery chains, 44 power station construction (CEPA letters of Groeningen (natural gas field), 416 intent), 353 Groomridge, M.A. and C.E. Barfield (1999) provincial government, 572, 580, 582 cited, 241 see also Yuchai ‘groping for stones’, 70 Guangxi Economic Management College, 579 Gross Domestic Product (GDP) Guangxi Guitang Group, 86, 131 Index 1021

Guangxi Liufa Joint Stock Company, 562 Haikou Weitai, 299 Guangxi Yuchai Joint Stock Company, 562 Hainan Guangxi Yuchai Machinery Company electricity tariff, 346 (7.1992–), 575n local government, 299, 321 Guangzhou (Canton), 224 provincial electricity grid, 345 advertising by Yuchai, 558 rail network, 124 China Unicom joint venture activity, 810 wireless telecommunications, 799 Citigroup office, 835 Hambrecht & Quist, 822 foreign investment in telecommunications Hamburg, 167, 427 (post-WTO accession), 791–2 Hamilton, Alexander (1757–1804), 15 GLD-owned hotel, 311 Hamilton (USA) propellers, 205 massacre of workers by British and French Hammersley Iron (Australia) (19 June 1925), 904 building a reputation, 752 mine-mouth coal price (6.1994), 728 iron ore operations, 708 Peugeot joint venture (1993–7), 539 railway to coast, 708, 739–40 pharmaceutical sector, 283 Hamre, John, 157, 164 thermal coal price (7.1997), 729 Han Deqiang, 926 Guangzhou Army Hospital, 290–1, 297, 303, Handan Iron and Steel (PRC), 633, 634 323 handbags: PRC exports, 871 continues to receive proportion of Nanfang Hangang: continuous casting, 627 profits, 294 Hangzhou (Zhejiang), 134, 283, 391 develops a skin ointment, Piyanping, 298 Hangzhou Automobile Engine Plant, 547, 559, establishes Nanfang (1986), 290, 321–2 562 sole shareholder in Nanfang, 291 Hangzhou vehicle assembly plant, 564 stomach medicine, 297 Hanjiang (Hangzhong), 199 Guangzhou Auto Hanyang Special-Purpose Vehicle Works joint venture with Peugeot (1985–), 539 ‘fourth layer’ enterprise (Dongfeng), 564 Guangzhou military region, 276 Harbin Aero-engine Company, 205 Guangzhou Rail Group, 124 Harbin Aircraft Corporation Guangzhou South-China Telecommunications assigned to ‘AVIC 2’, 230 Investment Corporation, 809 statistics, 200 gufen gongsi (‘joint-stock company’), 475, 476 Harbin Automatic Control Equipment guided weapons systems, 144 Company, 367 Guixi County (Jiangxi Province), 655 Harbin Aviation Company Guizhou Aero Industry Group, 113, 197 AVIC subsidiary, 199 Guizhou Automobile Works ‘largest producer of micro-vans’, 199 ‘third layer’ enterprise (Dongfeng), 565 Harbin Boiler Company (1994–) Guizhou Province, 82, 83, 138, 186 limited liability company (1994–), 366, 369, Guizhou Shuangyang Aircraft and Plane 371, 378 [company], 200 plant and equipment (1994 valuation), 379 Gulf of Mexico, 416 power equipment imports, 379 Gulf Oil, 411 Harbin Boiler Works (HBW 1954–94), 363, Gulf War, 162, 192, 435 365, 368, 375, 376, 377, 948(n45–7) impact on PRC military thinking, 190–1, 194 cooperation with Pyropower Corporation, Guotai (PRC insurance company), 829 378 Guotai J&A (PRC insurance company), 826 main statistics (1992), 364 Guoxin Paging, 798 part of HPEGC, 365 GWIC, see China Great Wall Industry Harbin Cigarette Company, 946(n35) Corporation Harbin City (Heilongjiang Province), 104, 363, 371, 950(n9) Hafei: subsidiary of AVIC, 940(n12) aircraft manufacturing, 186, 662 ‘Haguo people’, 368 city government, 364, 391, 393, 398 ‘Haguo spirit’, 368 ‘city of power generation equipment’, 111, Haguoren (‘Haguo people’), 368 363 Haibowan (coal-mine), 753–4 relies on HPEC for revenue, 367, 385, Haier Group (PRC), 862, 938(n5) 946(n32) Haihua Group, see Shandong Haiyanghua social services, 381, 949(n61) Group thermal coal price (7.1997), 729 Haikou Pharmaceutical Company, 299, 321 Harbin City Petroleum Company, 486 Baodao trademark, 299 Harbin Control Machinery Company, 367 1022 Index

Harbin dianzhan chengtao gongsi, see HPE lessons from advanced economies, 395–6 Harbin Dongan Aero-engine Corporation, 230 manufacturer of power equipment, 346, 356 Harbin Dongan Engine Corporation, 200 marketing, 386 Harbin Electric Cable Plant merger activity, 842, 848 excluded from the HPEGC, 365 modernization, 375–80, 948–9 main statistics (1992), 364 national champion, 391–2, 395 Harbin Electrical Generator Plant (HEC national team player (first batch), 111, 364 1951–94), 363, 365, 377–8, 379 new ownership structure, 365–8 main statistics (1992), 364 output (1959–98), 374 part of HPEGC, 365 ownership and control, 363–73 Soviet aid project, 368 ownership by local authority, 370 second hand machinery, 379 pension and service fees, 367, 946(n34) Harbin Electrical Instrument Company, 367 personnel management ethos, 380 Harbin Electrical Machinery Company, 365 plans, 379–80 ‘HEC’ (post-1994 references), 371, 378, 379, plant and equipment (1994 valuation), 379 381, 948(n50–1) policy choices, 395 housing, 381 PRC power equipment production (1991–6), limited liability company (1994–), 366 389 plant and equipment (1994 valuation), 379 prices, 383–4, 385–6 second hand machinery, 379 profits, 375, 380, 882, 946(n39), 949(n65) Harbin Engineering Company remuneration, 382–3 limited liability company (1994–), 366 revenues, profits, employees, R&D (1998), 882 Harbin Fenghua Machinery Company, 367 restructuring (10.1994–), 366, 372 Harbin guolu jingshen (‘Haguo spirit’), 368 scope, 363–5, 945(n29) Harbin Heavy Machinery Company, 367 size, 330, 392–4 Harbin Insulating Materials Plant SOE, 501 part of HPEGC, 365 Soviet aid, 375, 378, 947(n44) Harbin Insulation Material Plant state factory to competitive firm, 392 wholly-owned subsidiary of HPEGC, [367,] sub-contracting work, 391, 392 946(n36) suppliers, 367, 373, 383–4, 845 Harbin Pharmaceutical Group, 126 taxation, 367, 375, 946(n33) Harbin Power Equipment Company (HPEC technical capabilities, 376, 380, 386, 1980–), Limited (10.1994–), 328, 343, 948(n45) 355, 357, 363–92, 398 technical upgrading (self-organized), 377–8 ability to compete on global level playing technology transfer, 376–7, 394, 397 field, 881–2 Three Gorges Project, 356–7 Annual Report (1995), 369 ‘three main separate entities’, 881 basic company data (1995), 367 turnover (1996), 394 competitive mechanism, 384–5 see also Harbin Power Engineering Group competitors, 359, 376, 387–91 Company conclusions, 372–3 Harbin Power Engineering Group Company control, 371–2 (HPEGC) dividends, 367, 946(n39) constituent companies, 365 downsizing/diversification, 381–2, 385 executive directors, 372, 946–7(n40) employment (core and non-core), 380–1 four wholly-owned subsidiaries, 367, engineering services, 394 946(n36) equipment, 360, 362, 378–9, 394 integrating the merged companies, 368–71 exports, 386–7, 388 internal power struggles, 373 floated on HK stock market (10.1994–), jointly-managed companies, 367, 946(n38) 366–7, 370–1, 375, 881, 946(n31, 39) listed overseas, 365–6 four subsidiaries, 366, 369 motive for formation, 365 government-orchestrated merger, 397–9 nature, 365 growth, 373–5 new ownership structure, 365–8 housing, 381 non-controlling ownership in other installed capacity (1991–8), 390, 949(n65) companies, 367, 946(n37) ‘investment holding company’, 369, 371 one of the preferred LMEs, 392 joint tenders with multinational companies, ‘owns 62pc of HPEC share capital’, 366 387 profits, 369 joint ventures, 391 receives pension and service fees from labour organization, 380–3, 949 HPEC, 367, 946(n34) Index 1023

Harbin Power Engineering Group Company Heavy Electrical, 176 (HPEGC) – continued heavy engineering, 176 restructured (10.1994), 366, 369 Heavy Truck sales, 945(n30) sales, profits, employees, output (1998), 542 services, 383 Heavy Vehicle Group (HVG), 74, 77, 93, 102, state holding company, 366, 369, 392 136 see also Harbin Power Equipment Company heavy walls, 379, 948(n52) Harbin Power Station Engineering Company Hebei (province), 80 (HPE), 383–4 agricultural science park, 321 Harbin Research Institute of Large Electrical China Unicom joint venture activity, 810 Machinery (1958–), 378 coal production and consumption (1996), 719 Harbin Sanlian ‘Development’ Company depth of coal mines, 737 wholly-owned subsidiary of HPEGC, [367], economic development zone, 315 946(n36) new power station, 352 Harbin State Assets Management Bureau, 366 pharmaceuticals, 307 Harbin Steam Turbine Plant (HTC 1956–94), transport costs (coal), 720 363, 365, 368, 371 Hebei Power Company, 110 main statistics (1992), 364 Hebei Provincial Government, 137, 653, 742 part of HPEGC, 365 Hebei Provincial Investment Company (HPIC), purchase of second-hand machine tools 359 (1980s), 379 Hefei (Anhui Province), 391 Harbin Turbine Company (HTC 1994–) Heffernan, Paul, 940(n3) housing, 381 Heilongjiang limited liability company, 366, 371 China Unicom joint venture activity, 810 milling machine, 948(n53) coal production and consumption (1996), 719 numerical-control systems, 379, 948(n56) cost structure (TVE coal-mine, 1995), 722 plant and equipment (1994 valuation), 379 loss-makers, 730 power equipment imports, 379, 948(n51) petrol stations, 470 research workers (1996), 948(n50) Heilongjiang Anling Forestry Group, 135 hardware (IT), 107, 765, 766, 770–5, 794–7, Heilongjiang Forest Industry Group, 135 861 Heilongjiang Passenger Car Works, 564 competitive advantage, 769 Heilongjiang Province: provincial government, missed merger opportunities for PRC, 862 364, 371 networking equipment, 795 Heineken: competitive advantage, 35 non-SOE national champions (PRC), 862 Heinz, H.J., 35 personal computers, 794 helicopter and aircraft companies, 156 research and development, 766 helicopters sales revenue, 766 AH-64D (USA), 157 set-top boxes, 796–7 CH-47D (USA), 157 wireless communications, 795–6 EH-101 (Anglo-Italian), 157 Harrison, Mr (Chairman of Chase Manhattan), Kiowa Warrior, 164 817 Mi-17, 192 Harvard Business School, 862 Ka-28, 192 Hassan, Fred, 246, 266 Shmel, 192 Hawaii: Holiday Inn, 313 Henan [mobile phone company], 931 Hawker Siddeley Dynamics, 498 Henan (province), 353, 686, 719, 799 Hayes Wheels, 525 Henan Electric Power Company, 110 HCIC, 361n Hengyang (Hunan Province), 553 He Ping, Major-General, 274 herbicides, 265 health, 767 Hero Honda (joint venture), 873 damaged by pollution (PRC), 430 Hewlett-Packard (USA), 764, 772, 794 damaged in small-scale mining, 758, 759 Hiep Phuoc Plant, 387 oil sector, 427 high-income countries, see advanced economies PRC, 196 high-technology plant equipment, 129 public expenditure, 243 high-technology sector health care, 261 barriers to entry (1998), 64 heart failure, 260 PRC, 97 heart valve defects, 250 Singapore, 23 heating costs, 381, 949(n59) South Korea, 22 heavy asphalt, 466 Taiwan, 20 1024 Index high-technology sector – continued degree of state intervention, 19 US dominance, 48, 51 demand for pharmaceuticals (per capita see also information technology 1996), 277 high blood pressure, 261, 267, 268 flotation of PRC oil groups, 453, 471, 490 highways (PRC network), 541, 551, 566 influence on PRC advertising, 298 Hikino, T., see Chandler, A. joint venture (printing) in PRC, 311 Hino (affiliate of Toyota), 547 location, 23 Hitachi, 19, 360, 377, 378, 786 neo-classical view, 23 global top hundred company, 850 ‘politically-trusted companies’, 351 joint venture with Dongfang, 390 power generation, 351 profits (1998), 794 proximity, advantage to Shenzhen SEZ, 321 reduction of workforce (1999), 56 Sanjiu processing factory, 300, 308 research and development (1998), 768, 794 Shenzhen’s integration with, 942(n26) sale of unprofitable businesses, 56 Shougang’s operations, 643 turnover (1998), 794 state expenditure on education, health, HK, see Hong Kong (pre-7.1997) housing, 19 HKM, 602n stock market (1996), 282 HKSAR, see Hong Kong Special see also Hong Kong Special Administrative Administrative Region (7.1997–) Region (7.1997–) HLA, see Hong Leong Asia (HLA) Holdings Hong Kong Democratic Party, 875 (Singapore) Hong Kong Special Administrative Region Ho Xi (Guangdong merchant), 900 (HKSAR, 7.1997–), 691 Hoechst, 59, 248, 256, 261, 262, 861 advocates of PRC membership of WTO see also Aventis (political reasons), 875 Hoechst Marion Roussel (HMR), 255, 262 bankrupt red chip companies, 849 Hoesch (German steel-maker), 611 BOC investment banking arm, 831 holding companies coal imports from PRC (1997), 718 AVIC (1996–), 186 companies in FT 500 (1998), 47n PRC, 68, 138 GNP (1998), 932 state, 109 impending (1999) flotation of New CNPC Sinopec, 448–9 and New Sinopec, 479 Holiday Inn (hotel group), 313 internet, 780–1, 805 Holliday, Chad (Du Pont), 265 IT companies (2000), 764–5 Holschuh, Lernhard, 588 ‘red chip’ companies, 873 Holset (company), 530 stock market capitalization (1998), 932 home shopping, 782 stock market collapse, 746 Honda, 19 taken over by PRC (1997–), 275 alliance with Rover (UK), 513 telecommunications companies, 779 co-operation with Ford and GM, 513 see also Hong Kong (pre-7.1997) engine supply, 513 Hong Kong Telecom (HKT), 784, 861, 862 foreign assets, sales, employment (1997), 509 Hong Kong Zhonglian Power Materials fuel-cell technology, 513 Company, 946(n37) global top hundred company, 850 Hong Leong Asia (HLA) Holdings (Singapore), interests in India, 508 573, 575, 577, 581, 582–3, 951(n23) interests in Mercosur, 508 ‘appears to have real control over Yuchai’, interests in Thailand, 508 575–6 interests in Turkey, 508 appoints six of eleven directors of CYI, 575 joint venture in India (Hero Honda), 873 appreciation of Wang Jianming, 577 output, turnover, profit, R&D (1998), 533 interests, 573 share of foreign production (1989–94), 510 joint ventures, 573–4, 586 wholly-owned subsidiary in India, 873 owns 53% of Diesel [Engine] Machinery Honeywell, 146–7, 179, 181, 205, 239 Limited (DML), 574 Hong Kong (HK; pre-7.1997), 123, 565 ‘Special Share’ in CYI, 575 advertising by Sanjiu, 289 Hong Qipeng, 947(n41) big business, 23 Hongda Shipping Company (HK), 676 ceded to UK (1842), 902 Hongdou Group (Red Bean Group), 133 coal imports from PRC (1997), 718 Hongkong and Shanghai Banking Corporation ‘conforms to principle of comparative (HSBC, UK), 815, 816, 945(n19) advantage’, 4–5 conversion to FHC (USA), 819 consumption of construction steels, 676 global top five bank, [822], 958(n8) Index 1025

Hongkong and Shanghai Banking Corporation shareholder in Shandong Huaneng Power (HSBC, UK) – continued Development Company Limited, 350 joint venture (online) with Merrill Lynch, subsidiary of MOEP, 350 818, 822 subsumed into China Huaneng Group (1988), shareholder in HPEC Limited, 946(n31) 740 Hongkong Shanghai Hotels Group, 274 takes over Clean Coal Corporation (1988), Hoogovens: merger with British Steel (1999), 610 740 see also Corus tasks, 350 Hopewell Holdings (HK), 351 Huaneng Power International Inc. (HPI 1994–), horizontal economic linkages, 136 96, 344, 931 horizontal integration (PRC), 72 floated on an international stock market, 349, horns, 950(n9) 350 hospitals, 53, 282, 381, 949(n59) subsidiary of Huaneng Power Corporation, hotels, 126, 311–14, 316–17, 573, 921 350 Hou Dejian (Taiwanese film star), 298 see also Shandong Huaneng Power household appliances, 59, 198 Development Company Limited (SHP housing, 229, 304, 306, 314, 315, 321, 1994–2000) 954(n40) Huanghua Port, 733, [890] construction industry (PRC), 844 capacity, 740 Daqing, 443 further construction, 740, 742 employee-purchase, 381 investment, 742 HPEC, 381 map, 732–3 management-level (Shougang), 651, 953(n30) newly-constructed, 739, 740 PRC, 921 rail links, 738–9 rents, 381 Huawei Shougang, 668, 688 leading manufacturer of networking Yuchai, 580 equipment (PRC), 795 HPE, see Harbin Power Station Engineering missed merger opportunity, 862 Company non-SOE national champion (PRC), 862 HPEC, see Harbin Power Equipment Company profits (1998), 794 HPEGC, see Harbin Power Engineering Group research and development expenditure Company (1998), 794 HPI, see Huaneng Power International Inc. turnover (1998), 794 HPIC, see Hebei Provincial Investment Huayi Group (Shanghai 1996–), 118, 456 Company Huayin County (Shanxi Province), 655 HR Vet (animal health), 263 Hubei (province), 546, 555, 564 HSBC, see Hongkong and Shanghai Banking Hubei Automobile Body Works Corporation ‘third layer’ enterprise (Dongfeng), 564 HSE, 950(n9) Hubei Electric Power Company, 110 Hsinchu Science Park (Taiwan), 20 Hubei Special Vehicle Company, 542, 555 Hu Jianqing, 946(n40) Hubei University, 302 Hua Xia: bank owned by Shougang Group, 647, Hughes (defence electronics business), 147, 164 650 Huizhou ethylene and petrochemicals complex, Huabei (pharmaceuticals) 454, 490 missed merger opportunity, 861 Hull, 422 plant at Shijiazhuang, 283, 941(n10) human resources, 9, 762, 775, 779 Huaibei Mining Bureau, Anhui (coal producer), appropriation of best, 42 720 Hong Kong and Singapore, 19 Huaneng Group, 75, 81, 109 oil sector, 427 Huaneng (China Power) Power Corporation human rights, 501, 875, 895 (1985–), 109, 349–50, 748 abuses, 194 assets, 740 economic well-being, 915 capacity, 740 Hunan (province), 124, 352, 357, 553, 810 ‘electricity-generation company’, 741 Hunan Dongli Group, 560 joined China Huaneng Group (1988), 350 Hunan Electric Power Company, 110 origins of Shenhua Project, 740 Hunan Engine Plant, 562 (responsibility lost, 741) Hungary, 909 projects, 740 Huo Shuoping, 311–14 sets up two new subsidiaries, HPI and SHP Hutchison Whampoa (HKSAR), 677, 765, (1994), 350 956(n61) 1026 Index

Huttl, Adolf (Siemens), 337 sales revenue, 764, 788 hydraulic equipment, 198 share of PRC market (1998), 794 Hydro (oil company, Norway), 499 software, 775 hydro-electric power software revenues, 772 dam construction, 85 turnover (1998), 794 electricity generation (fuel type, 1990–2010), ICBC, see Industrial and Commercial Bank of 696 China electricity generation (PRC), 715 Idemitsu Kosan: global top hundred company, fuel for electricity generation, 698 850 fuel for electricity generation (1996), 698 ignition coils (automobile component), 547, HPEC output (1959–98), 374 950(n9) facilities, 127 Ikea, 576 plant, 111 ILVA LP, 602n plant capacity (1980–2010), 335 Ilyushin, 179 PRC, 354, 356–7, 391 imperfect competition, 13 reserves (PRC 1997), 716 Imperial Chemical Industries (ICI) reserves per capita (PRC), 715 de-merger of Zeneca (1993), 59, 264 share of PRC’s energy requirements largest employer of chemical engineers (UK), (1980–96), 354 264, 941(n2) share in primary energy consumption (1996), ‘life sciences’, 261 697 imperialism, vii, 907 share of world primary energy consumption import-export corporations, 129 (1987–97), 402 import-substitution hydro-electric power generation equipment Brazil, 20, 180 Alstom, 338 South Korea, 22 HEC, 368, 377 Taiwan, 20, 22 HPEC, 377, 392 import licences ‘Kaplan-type’, 378 WTO rules (implementation by PRC), 865, market share worldwide (1993–8), 337 866, 867–8 turbines, 378 impotence, 247 hydrogen filling station, 427 independent power producers (IPPs), 337, 350–2 Hymer, S., [1–]2, 27 India, 145, 506 hypertension, 260, 268 BP-Solarex manufacturing facilities, 426 Hyundai Group (South Korea), 54, 176, 214, brain drain (software sector), 789 221 car production (comparative), 534 acquisitions, 53 caution re TRIPs, 868 aspirations, 506 coal output (1980–95), 699 diversification (1938–87), 53 ‘copies Western medicines’, 244 interests in India, Turkey, 508 costs per ton of steel, 620–1 plans for overseas plants, 506 ‘deluge’ of foreign vehicle investment, 508 restructuring, 54 economic growth (1980–98), 851 semiconductor manufacturing, 54 energy, 340, 428, 914, 943(n9) stake owned by Mitsubishi, 515 enforcement of WTO rules, 870, 919 ‘13th largest auto producer’ (1994), 505–6 exports, 871 unable to rescue Daewoo (1999), 517 ethylene crackers, 421 vehicle exports (1986), 505 free trade (early nineteenth century), 5 human capital, 762 Iberia (airline), 149 informal sector, 958(n8) IBM (International Business Machines), 772–3, internet hosts per 1,000 people (1997), 789 786 ‘inward-looking’, 24 acquisitions (1999), 772 iron ore costs, 618, 619 hardware revenues, 772 IT development (1997), 789 joint ventures in PRC, 106 labour cost per ton of coal, 620 little to fear from PRC competition (post- liberalization, 508, 872–3 WTO accession), 863 ‘licence Raj’, 873 market capitalization (2000), 764, 772 mass media market, 781 outsourcing, 772 ‘most successful developing country’ profits (1998), 794; (1999), 772 (software), 787–8, 797 (shortcomings, research and development expenditure 788) (1998), 768, 794; (1999), 772 number of companies in FT 500 (1998), 47n Index 1027

India – continued reform, 2 number of companies in Fortune 500 (1998), sector (Deng era), 912 47n sector (transition literature), 2–3 patent laws, 244 structure, 5–6 per capita energy use (1994), 341 structure (Taiwan), 21 personal computers per 1,000 people (1997), Industrial and Commercial Bank of China 789 (ICBC), 96–7, 826, 939(n13) pharmaceutical sector, 270 key indicators, 1999 (global-leaders pharmaceuticals market (1995), 277 comparison), 827 production and sales of automobiles (1998), productivity, 830–1 508 scale (Citigroup comparison), 826 productivity (coal), 620 zero-interest-rate loans to PRC coal industry, protectionism, 949(n67) 731 share of world manufacturing output industrial concentration, 14, 37–9, 50, 61 (1750–1998), 900 aerospace, 141, 142, 148, 152–73, 240 Siemens’ plants, 338 automobiles, 506–7, 514–18, 532–6 software exports, 762, 787–8, 797 banking, 815, 820–1 steel output (1974–96), 593 coal, 707–12 tariffs on steel products (1997), 619 components (vehicles), 519–29, 535–6, telecommunications development (1997), 789 543–6 telephone main lines per 1,000 people financial services, 817, 819–24 (1997), 789 global business revolution, 37–8 textile industry, 15 information technology, 762, 768, 769–70, TNCs, 21, 23 793, 810 top ten steel-producing country (1991–8), internet, 779 616 lorry-makers, 518, 534 TV sets per 1,000 people (1997), 789 pharmaceuticals, 266, 286 value of English-language education, 787 power generation equipment, 327–8, 335–9, wage costs (steel industry, 1997), 620 397–8 war, 5 PRC, 71, 107, 939(n14) wireless telephones per 1,000 people (1997), steel, 605, 608–17 789 see also global business revolution; mergers; individualism, 1 trial business groups Indonesia, 145 Industrial and Investment Trusts (ITICs), PRC, arms deliveries (1987–98), 151 873 coal, 710 ‘industrial planning’, 37, 42 coal exports, 706 Industrial Revolution, 1, 15, 898 difficulty of framing industrial policy, 60 industrialization energy consumption per capita, 428 central importance of steel, 588 energy, 340, 943(n8–9) need for protection, 19–20 ethylene crackers, 421 western countries, 906–7 ‘fundamental economic situation’, 834 industry, 27 Ispat’s interests (steel), 614 China (pre-1949), 899–902, 906 oil producer, 413 PRC (1980–97), 913 per capita energy use (1994), 341 infant mortality, 906, 907, 914, 915 pharmaceuticals market (1995), 277 infants (PRC), 277 political turmoil, 413 inflation, 189 Posco plant, 609 information technology (IT) (global) PRC and South Korean investment (coal ‘architecture’, 775 industry), 718 companies, 764–5 steel, 600, 951(n3) competitive advantage, 36 tariffs on steel products (1997), 619 cost savings (oil sector), 422 TNCs based (1999) in, 21. 23 developing countries, 787 industrial development (1997), 789 associations, 448 driver of big business revolution, 32 boilers (PRC), 716 expenditure, 36 co-finance (aerospace), 174–5 hardware, 35, 49, 787, 929 development (aerospace), 174–5 human resources, 775 gas turbines (AVIC), 198 impact on financial services, 816, 818–19, policy, 3, 60, 83–6, 240 830, 832, 834, 836 1028 Index information technology (IT) (global) – continued oil sector (PRC), 500 incorporation into vehicle components PetroChina (4.2000), 489, 884 systems, 523 Inland Steel (Indiana, USA), 613, 614, 615, India, 23, 787 952(n13) mentioned, 8, 61, 246, 501, 763–7 inland waterways, 124 monitoring of performance within firms, 45 Inner Mongolia (China/PRC) oligopoly, 40 coal-mining region, 717, 723 outsourcing, 146 coal production and consumption (1996), 719 product specification, 43 cost structure (TVE coal-mine, 1995), 722 research and development, 49, 510, 766 depth of coal mines, 737 revolution, 48, 492, 761, 925 Five Western District mines, 749, 753–6 scarcity of high-quality human resources, 929 Japanese demands (1915), 904 services, 775–90 loss-makers, 730 state-of-the-art, 42 mentioned, 687 super-normal profits, 768 open-cast potentialities, 718 systems integration (supplier network), 543 petrol stations, 470 US dominance, 48 pithead price of coal, 723 use in oil sector, 411–12, 425, 427 problem of outward transport of coal, 739 use in outsourcing (auto industry), 511 see also Shenfu Dongsheng Coalfield used to monitor product performance, 43 Inner Mongolia Cashmere Group, 113 WTO adjustment process (PRC), 921–3 Inner Mongolia Electricity Company, 361n see also hardware; software; Third Inner Mongolia Forest Industry Group, 135 Technological Revolution Inner Mongolia Power Company, 110 information technology (PRC), 115, 789, innovation, 12, 13 790–811, 847, 924 institutional investors, 32, 37, 61, 414 battle for PRC market, 790–811 institutions (international investors in PRC), bureaucratic struggle, 800–1 349 China-China-Foreign (CCF) arrangement, insurance, 37, 819, 825–6, 926 792, 799, 809–10 global market share, 37 competitive capability, 793–7 PRC, 926 conclusion, 810–11 PRC-US Agreement (11.1999), 825–6 encirclement, 803–6 USA, 817 hardware, 794–7 insurance companies, 816–17, 824, 830 impact on economy, 917–18, 925 market share (implications of PRC WTO- joint ventures, 806–10 entry), 832, 958(n14) leading IT hardware firms (1998), 794 productivity gap (PRC v global leaders), 831 networking equipment, 795 insurance density, 832, 958(n13) personal computers, 794 Insurance Law (PRC 1995), 834 political considerations, 792–3 integrated circuits (IC), 687 problems, 800–10 Intel (USA) set-top boxes, 796–7 internet bandwidth, 805 Shougang, 687–8 joint venture in PRC, 106 software, 797 market capitalization (2000), 764 telecommunication services, 797–800 Pentium III microprocessor (10.1999–), US exports to PRC (1990–8), 790 768–9 where is the firm?, 801–3 sales revenue (2000), 764 wireless hardware, 795–6 intellectual property, 243–4, 270, 319, 785, 811, ‘wolf at the door’, 793 866, 868, 873 WTO Agreement (PRC-USA), 790–3 Inter-Continental Ballistic Missiles (ICBM), Infosys (IT firm, India), 23 195 infra-red sensors, 148 interest rates, 37, 814 infrastructure (PRC), 89, 348, 921, 922 internal finance companies, 76, 87, 92–3, 98–9 ING, 815, 817, 826, 835, 958(n9) international Initial Public Offerings (IPO), 160 competition (PRC attempts to meet challenge Aérospatiale-Matra (1999), 160 of), 70 China.com (HKSAR), 781 competitiveness, 17 China Unicom (6.2000), 801, 931 competition, 14–15, 16 CNOOC (withdrawn 10.1999), 884 economy, 4 CTHK, 799, 801 market place, 91 New CNPC, 474 market share, 17 Index 1029 international – continued technical progress (aerospace), 142–3 markets, 89, 90 see also foreign direct investment relations, 46, 463 IPO, see Initial Public Offerings trade, 4, 5, 12, 13, 29, 31 Iran International Aero Engines, 172 arms purchases, 193 International Combustion (Rolls Royce), Daewoo operations, 506 943(n7) export market for HPEC, 388 international equities bookrunners, 823 foreign investment (oil sector), 413 International Institute for Strategic Studies, 150 nationalization of oil assets (1951), 408, 411 International Iron and Steel Institute, 588 oil reserves and production (1997), 403 International Lease Finance Corporation, 213 protectionism, 949(n67) International Monetary Fund (IMF), 2, 608, 909 proven oil reserves, 404 East Asian resentment, 926–7 Iraq International Organization of Securities contracts with international consortia, 413 Commissions (IOSCO), 833 nationalization of oil and gas (1972), 408, internet, 511, 523, 769, 773, 773–4, 775–6, 778, 411 779–84, 834–5, 917 oil reserves and production (1997), 403 bandwidth, 805 proven oil reserves, 404 Chinese language, 780 Ireland: Ispat, 600, 614 competitive advantage, 769, 775 iron: average price (PRC 1980–93), 655 ‘democratic equalizer’, 793 iron ore, 596, 598, 618, 640, 653, 675, 847, encryption, 805 953(n33) financial services, 818 bulk cargo, 705 global procurement network (auto PRC, 618–19, 675, 956(n57) components), 856 PRC import requirements, 675 industrial consolidation, 779 PRC’s foreign investments, 956(n57) penetration (developing countries), 788 rail transport (Australia), 708, 739–40 PRC, 790, 791, 795, 796–7, 798, 799, 805–6, Rio Tinto, 708 922 iron and steel race into Asia, 780–1 eight trial groups (PRC), 77 Shanghai Cable, 808 industrial concentration, 114 users (PRC), 790, 798, 805 national team (PRC), 77, 84, 114–16 ‘Internet Christmas’ (USA 1999), 779–80 Ispat International, 598, 600, 613, 670 internet companies, 786–7 acquisitions, 613–15 internet hosts per 1,000 people (global 1997), annual output, 600, 951(n3) 789 based in London, 598, 889 definition, 789n cost-cutting, 614 ‘internet opium’, 924–5 ‘fastest growing international steel company’, pornography, sports, cartoons, 925 600, 951(n3) Internet Protocol (IP) traffic, 808 floated in NY and Amsterdam (1997), 614 Internet Protocol Infrastructure, 771 global steel corporation, 613–15 internet switching equipment, 774 interests in Indonesia, 614, 615, 951(n3) Interpublic, 781 interests in Kazakhstan, 614, 951(n3) Intertechnique (France), 181 mini-mills, 614 intranet: financial services, 818 privately-owned companies in Kazakhstan investment, 61 and Indonesia, 951(n3) CNPC, 440 purchase of Sicartsa complex (Mexico), 614 funds, 13, 88, 98 takeover of Inland Steel (1998), 613, 614 Japan, 17 Ispat Mexicana, 614, 951(n2) Japanese, 56 ISPs (Internet Service Providers), 801, 808 mining, 707 Israel, 191, 192–3, 218, 219, 773, 940(n9) New CNPC, 471 Isuzu, 506, 513, 518 New Sinopec, 471 IT, see information technology oil sector (PRC), 436, 453, 471 Italy patent medicines, 244 air force, 157, 158 power generation equipment, 329 auto industry, 504 PRC (Deng era), 912 bank restructuring (1980–97), 820 PRC, 77, 90, 348 cross-border mergers, 853 Sinopec, 465 Eurofighter, 158–9 South Korea, 22 global business revolution (1990s), 58 1030 Index

Italy – continued electric furnace (steel industry), 596 industrial concentration (auto industry), 507 employment practices, 18 industrial concentration (steel), 605 energy, 428, 914 IT companies (2000), 764–5 enforcement of WTO rules, 919 number of auto manufacturers (1920), 506 enterprise groups, 897–8 oil and petrochemicals, 407–8 environmentally-friendly power stations, 705 power equipment (exports to PRC), 948(n51) ethylene (1989–96), 451 primary energy consumption, 401 European protectionism, 504 purchase of missiles from USA, 158 example for PRC, 71, 462 steel output (1974–96), 593 example for rest of world, 24 top ten steel-producing country (1991–8), export-oriented firms, 54 616 exporter of oil to PRC (1995–7), 434 welding machines (exports to PRC), FDI (in USA), 601 948(n52) ‘fierce domestic competition’, 18 Itochu Corporation (Japan), 455, 810 foreign-owned firms (1986–95), 31 ITT, 545 global business revolution, 54–8 ITT Automotive Pacific, 545 globally-competitive companies (created ITT Electrical Systems, 526 1950s-70s), 850 Iveco (Fiat), 103, 518 GMP (pharmaceuticals), [301–]302 IWKA (Germany) injector-seamer, 303 government support for auto industry, 505, Izvestiya, 191 510 industrial concentration, 506, 605 J.C. Penny (department store, USA), 311 ‘insurance density’, 832 J.P. Morgan (US bank), 813, 817, 818, 819 internet, 780–1 conversion to FHC, 819 investment rates, 18 key indicators, 1998 (PRC comparison), 829, iron ore costs (1997), 619 829n IT companies (2000), 764–5 merger with Chase Manhattan, 813, 822 lessons for PRC (aerospace), 236–7 top five firm (M&A Advisers, 2000), 823 market capitalization, 51, 56 J&A Securities (Shenzhen), 276 military metaphor (in management style), JAA, see Joint Aviation Authority 669 Jacobs Ranch coal-mine (USA), 710 miscellaneous, xxiv, 68, 145, 311, 676, 854 Jaguar (Ford), 515, 533 multinational corporations, 27 Janelli, R., 669–70 national output (PPP dollars, 1998), 914 Jannsen (Belgian pharmaceutical company) oil sector, 421 joint venture in Xian, 282–3 oligopoly, 17, 86, 939(n26) Japan outflow of FDI, 49 acquisitions by foreign corporations, 57 pharmaceuticals market (1995), 277 aerospace, 175, 176–8, 845, 877 plants, 952(n13) Air Force, 193 plastics, 451 anti-trust legislation, 16–17 poverty (PRC comparison), 852 arms deliveries (1987–98), 151 PRC comparison, 70, 99 ‘ASEAN plus three’ forum, 927–8 primary energy consumption, 402, 696, 697 attitude to competition, 669 protectionism (auto industry), 505, 510 automobiles, 505, 506, 507, 508, 510–11, reduction of workforce (1999), 56 515, 538, 887, 950(n2) research and development, 48, 95 bank restructuring (1980–97), 820 role of government, 54 Big Bang (1998), 815 royalty and licensing fees (paid), 785 business organization, 510 savings, 18 business strategy, 18 sectors (financial services), 830 coal, 119, 620, 718 share of world manufacturing output ‘competitive edge’ companies (1997–8), 50 (1750–1998), 900 competitiveness problems, 55 share in Fortune Global 500 (1997), 50, 60 corporations (by value of sales, 1998), 56 state-orchestrated mergers (1930s), 858 cross-ownership, 17 steel, 593, 594, 596, 597, 600, 601, 602–4, currency appreciation (1980s), 608 605, 606, 616, 620–1, 623, 641, 677, demand for pharmaceuticals (per capita), 277 889, 951(n4), 952(n13), 956(n59) difficulties (1990s), 18–19 structure of output (1992), 700 dwarfing of companies, 55–6 sub-contractors (civil aviation), 218, 219, 220 economic effects of WW2, 37 synthetic fibres, 451 Index 1031

Japan – continued jiegu (‘sacked’), 382 third generation handsets, 775 jihua danlie (‘plan list’), 370 urbanization (PRC comparison), 852 Jilin, 83, 109, 470, 730, 810 US dominance (financial services), 824 Jilin Chemical Fibre Group, 80 US military presence, 193 Jilin Province Development Group, 135 use of profits, 18 Jilin Senlin Group, 134 vehicle output, 505 Jinan (manufacturer of small trucks), 578 wars with China, 903–4, 905 Jinan (Shandong): China Unicom joint venture welding machines (exports to PRC), activity, 810 948(n52) Jinan Iron and Steel Group Company, 635 Japan: Ministry of International Trade and Jincheng: Shanghai subsidiary of AVIC, 198, Industry (MITI), 16, 17, 57, 505, 863, 940(n12) 950(n1), 956(n59) Jincheng Mining Bureau, Shanxi, 720, 736, 737 creation of New Japan Steel (1970), 603 Jingdezhen, 900 Renault takeover of Nissan, 516 jingyingzhi (managers), 295 Japan Airlines: reduction of workforce (1999), Jini (intelligent networking technology), 776 56 Jining coal field (Shandong), 119 Japan Leasing, 57 Jining Plant (power generation), 944(n17) Japan Steel (1934–), 602–3, 858 Jinling Petrochemicals, 117 Java (programming language), 776 Jinling Petrochemical company (Nanjing), 466 jewellery, 130 jinrong sanjiao zhai (‘financial triangular Jialing Motorbikes, 103 debt’), 831 jian bing (government administrative merger), Jinzhou Petrochemical Corporation, 469 314 jituan gongsi (‘mother’ company), 475, 476, Jiang, Dr Simon, xxvi 478–9 Jiang Qiangui, [70], 939(n12) jituanhua (transformation) process, 77 Jiang Zemin, President (b 1926), 70–1, 96, 781, Jiuquan Iron and Steel Company, 635 898, 935 Jiuxin pharmaceutical plant, 306 chairman of the CMC, 276 Jiuxing Printing and Packaging (Sanjiu), 311 speech to military leaders (22.7.1998), 275, Jixi (Heilongjiang): loss-making coal mines, 276–7 730–1 Jiangnan, 901 Johansson, Leif, 515, 520 Jiangnan group, 938(n5) Johnson Controls (USA), 522, 524, 536 Jiangsu, 24, 105, 109 Johnson & Johnson coal production and consumption (1996), joint ventures in PRC, 282 719, 720 research and development expenditure geographical location of national team (1994–7), 248 members, 82, 83 Joint Aviation Authority (JAA, ‘Europe’), 205 ‘grasping the large’, 83 joint stock companies, 10 nuclear power plant (under construction, Joint Strike Fighter (JSF) (USA), 144, 152, 153, 1997–), 945(n23) 157, 158, 159, 163, 164 power station construction (CEPA letters of joint ventures (general), 103, 105, 106, 108, intent), 353 109, 118, 122, 132, 178, 222, 273, 841, transport costs (coal), 720 874 wireless telecommunications, 799 aero-engines, 216–17 Jiangsu Electric Power Company, 110 auto components, 886 Jiangsu Mobile Phone Company, 931 auto industry (Japan 1950s), 505 Jiangsu Provincial Government, 466 auto industry (PRC), 539–40, 541 Jiangxi (province) buses, 210 coal production and consumption (1996), 719 coal, 710, 729 execution of former deputy governor, 874 components sector (PRC), 544, 546–8, 559 pharmaceuticals, 307 domestic content requirements, 328, 347 nuclear power (planned), 357 Eastern Europe (automobile industry), Jiangxi Electric Power Company, 110 [508–]509 Jiangyang Special Steel Company, 946(n37) engine manufacture (PRC), 544, 547–8, Jianlibao: non-SOE national champion (PRC), 950(n8) 862 European aerospace, 162, 170, 171, 173 Jianwei: salt, 901 insurance sector (PRC), 825–6 Jiaxiang (Zhejiang Province), 390 India, 508, 872–3 Jiefang (Liberation), 74, 136 machine tool plants, 379, 948(n53) 1032 Index joint ventures (general) – continued JV, see joint ventures means of technology transfer, 842 means of access to PRC market, 389–90 Kader Investment Group, 956(n60) mobile telephone companies, 791 Kaifeng Combine Harvester Plant, 655 oil and petrochemicals, 883 Kaifeng Heavy Machinery Company, 686 oil sector, 453–4, 461, 471, 496, 497 Kailuan Mining Bureau, Hebei people’s car (in negotiation), 316 average mining depth, 737 pharmaceutical sector, 246 output, reserves, mine depths (1996), 736 pharmaceuticals, 282, 297, 300, 304, 320 quality of coal, 737 power equipment industry (PRC), 347, 358, transport costs (1997), 720 362, 363, 881, 882 Kaiser Steel (California), 662, 686, 888–9 PRC, 398, 852 kanban (‘just-in-time’) inventories (Japan), 510 PRC aviation industry, 213–17 (significance, Kanematsu (Japan): power generation company, 217–21, 940:n15) 351 PRC power equipment companies and Kang Dian, Mr, xxvi multinational corporations, 334, 391 Kaoru Yosano (MITI), 516 rarity (mining sector), 750 Karaganov, Sergei, 839 reduced incentive to establish, 872–3 Karamay oilfield (Jungar Basin, Xinjiang), 438 Sino-foreign, 197, 665, 687, 746, 854, 860, Kawasaki (Japanese steel-maker), 603, 679 881 crude steel output (1996–7), 602 Sino-foreign (electricity generation), 746 investment in Armco Steel, 608 telecommunications sector (PRC), 806–10 remuneration and labour productivity (1995), (advantages, 809–10) 641 traditional Chinese medicines, 310 Kawasaki Heavy Industries, 177 tyres, 526, 528 Kazakhstan, 441, 600, 614, 951(n3) Vitamin C, 296 Keidanren, 56 WTO rules, 884 Keiner (car components manufacturer), 524 joint ventures (specific) keiretsu (industrial groups), 17, 54, 516 ABB and PRC concerns, 362, 371 Boeing, 145 Airbus-AVIC, 211–12, 940(n14) reform (1999), 56–8 Chevron-Texaco (= Caltex), 417 Kellogg: competitive advantage, 35 China Huitong and Hongkong Shanghai Kelong (TVE), 223 Hotels Group, 274 Kennecott Energy (USA), 710 Dongfang and GE (Canada), 390 Kenworth Truck Company, 518 Dongfang and Hitachi, 390 Kerr McGee (USA), 710 Dongfeng and Citroën, 102 Kia Motors (South Korea), 505, 506, 508, 517 Du Pont and Merck, 256, 265 Kilian (Germany) RX55AM tablet-expresser, HSBC and Merrill Lynch (online), 818, 822 303 Lucent (in PRC), 795 Kim Dae Jung, President (South Korea), 718 merger of ABB and GEC-Alsthom (1999), King (UK) plastic container packing machine, 338 303 MSDW (in PRC), 835 Kingsun (PRC software company), 107 Phoenix (News Corporation and Liu Kleinwort Benson: taken over by Dresdner, Changle), 784 958(n9) Shenhua Railway Company, 742 KLM (Netherlands), 149 Sinopec, 465 Kloekner Werke (Germany), 612 SNECMA and GE, 173 KMT, see Kuomintang Star TV and Hong Kong Telecom (HKT), Kobe Steel: joint venture with US Steel, 601 784 Kodak, 132 US Steel and Kobe Steel, 601 Kombinat (East German ‘combine’), 363 US Steel and Posco, 601 konggu gongsi Vivendi and Vodafone, 784 ‘controlling company’, 478 XAC-Volvo, 201–2 ‘holding company’, 345 Yahoo! and Softbank, 780 kongzhi gufen (controlling share ownership Jones and Laughlin (US steel-maker), 611 stake), 314 Jordan, Michael (chairman, Westinghouse), 358 Konka (PRC), 97, 796 jun zhuan min (military into civilian) policy, Koolyanobing [iron-ore] Mine (WA), 956(n57) 197 Korea, Republic of (‘South Korea’) ‘just-in-time’ delivery, 510, 521, 524, 538 aerospace, 176, 877 juste retour principle, 167, 168 Air Force, 193 Index 1033

Korea, Republic of (‘South Korea’) – continued Krupp, 599, 611 arms deliveries (1987–98), 151 hostile takeover of Hoesch (early 1990s), 611 ‘ASEAN plus three’ forum, 927–8 remuneration and productivity (1995), 641 automobiles, 505–6, 508, 533, 887 Krupp-Hoesch, 611–12, 952(n10) catch-up, 21–3, 236, 533 cost-cutting, 612 coal imports from PRC (1997), 718 hostile bid for Thyssen (1997), 612 ‘conform to principle of comparative profits (1997), 957(n69) advantage’, 4–5 stainless steel, 615 degree of state intervention, 19, 21 Kunming Iron and Steel Corporation, 635 economies of scale, 22 Kuok, Robert, 951(n19) energy, 340, 943(n8–9) Kuomintang (KMT 1924–), 20, 904, 905–6 energy consumption per capita, 428 Kuss (company), 530 enterprise groups, 898 Kuwait environmentally-friendly advanced power arms purchases, 193 stations, 705 nationalization of oil and gas (1975), 408, example for PRC, 462 411 exports, 22 oil reserves and production (1997), 403 ‘fundamental economic situation’, 834 proven oil reserves, 404 heavy industry, 19, 22 service agreements with Western companies, industrial concentration, 22–3 413 internet, 780 Kuwait Petroleum Corporation: output (1996), iron ore costs (1997), 619 409 IT sector, 770 Kvaerner, 391, 945(n20) Japanese control de facto (1895–1945), 903 Kvaerner Brug A/S (Norway), 377–8 lessons drawn by PRC from, 71, 72, 99 Kvaerner John Brown: chemical engineers, market for steel in South-East Asia, 677 941(n2) mentioned, 68, 145, 854 Kyoto agreement (1997), 430–1, 702–5 military metaphor (in management style), developing countries ‘not signatory’, 703, 669 704 mini-mills (steel), 599 number of companies in Fortune 500 (1998), L Electronics (South Korea), 23 47n L’Oréal: competitive advantage, 35 number of companies in FT 500 (1998), 47n labour, 129 oligopoly, 22, 86, 939(n26) developing countries, 5–6 potential car exports to PRC, 872 discriminatory legislation (UK) against, 15 poverty (PRC comparison), 852 Eastern Europe (transitional), 2 PRC comparison, 70 globalization, 855 production of ethylene (1989–96), 451 Japan, 510 production of plastics (1989–96), 451 ‘no world market’ for, 33 production of synthetic fibre (1989–96), 451 oil sector (PRC), 492 proposed joint venture with AVIC, 940(n14) PRC (national team), 79 protection, 19 price of, 15 securities, 54 productivity, 9 share in Fortune Global 500 (1997), 50 skilled, 33, 302, 855 state banks, 53 tyre industry, 528 steel, 593, 594, 596, 597, 600, 606, 616, 619, unskilled, 33, 855 620, 623, 641, 889 Yuchai, 578–81 sub-contractors (civil aviation), 218, 219 see also employees TNCs, 21, 23 labour organization (HPEC), 380–3, 949 urbanization (PRC comparison), 852 labour unions (Japan), 18 US military presence, 193 labour unrest, 711, 712, 745 Korea Development Bank, 952(n9) Lagardère, 160, 161 Korea Telecom: CCF partner of China Unicom, Lagardère, Jean-Luc, 169 810 laissez-faire, 15, 20 Koromo (‘Toyota City’, Japan), 510 Laiwu Iron and Steel, 635 Kosovo, 163, 191, 194, 895 Lan Chile (airline), 149 Kotri Plant, 387 Lancashire, 159 Kowloon (HKSAR), 351 land rights, 709 Krakatau Steel, 615 Langfang, 950(n9) Krugman, Paul, 12–13 Lanzhou (capital of Gansu), 954(n40) 1034 Index

Lanzhou Chemical Company, 454, 469 PRC, 67, 68, 70, 117, 937–8(n1–4, 9–10) Lanzhou Fayang Electric Power Company, ‘produce over 10pc of China’s GDP’, 70 946(n37) provincial distribution (1997), 82–3 Lao Daqian, 947[n40] research institutions, 94 Lao Zi: cited, 401, 501, 695 research and development, 94–5 Laos: national airline, 205 stock exchange listings, 96, 940(n30) Lardy, N., 813, 958(n12) workforce (1995), 77 large firms (general) ‘latecomer’ industrializing countries, 46, 65, ‘catch-up’ process, 14–24 176. 768, 923 competition, 2–8 automobiles, 533 conclusion, 24–5 steel, 621 disintegration, 7–8 see also barriers to entry; catch-up dominant position in advanced capitalism, Latin America 13–14 ‘competitive edge’ companies (1997–8), economic development, 1–25 62–3 economies of scale, 9, 10, 11, 14 economic growth (1980–98), 851 forces leading to emergence of, 9 internet sector, 780 four little tigers, 19–24 privatization (steel), 606 Hong Kong, 23–4 projected demand for power equipment Japan, 16–19 (1980–2010), 334, 335 limits to size and stability, 6–7 share of world electricity generation neo-classical view, 2–8 (1995–2015), 335, 943(n4) ‘no theoretical limits to size’, 11 telecommunications, 779, 802–3 outsourcing, 7–8 Lau, Professor Laurence, 917, 918 power, 14 Lavi programme (Israel), 193 rise and fall, 6–7 law role of state, 14–24 amendments required post-WTO accession Singapore, 23 (PRC), 864–5 small firms, 2–8 on BOT-type projects (PRC) ‘incomplete’, South Korea, 21–3 944(n14) stability, 10–11 domestic (PRC) and international, 319 state and trade policy, 12–13 patents, 244 Taiwan, 20–1 Layard, Richard, 909 technical progress, 11–12 League of Nations, 905 tendency to concentration, 9 lean production, 48, 145, 510, 511, 514, 520–1 United Kingdom, 15 Lear (USA), 522, 524, 536 unorthodox view, 8–24 ‘learning journeys’ xxv USA (nineteenth century), 15–16 Lee, Martin, 875 the West, 14–16 Lee Byung-Chul, 52 see also advanced economies Lee Kuan Yew (b 1923), 898, 916, 927, 935 large firms (PRC) Lee Yong-keun, 517 attempts to build, 839 legal institutions (PRC), 86 competitive capability, 851 legal persons creation (China, late 1970s-), 27 ‘child’ company, 478 difficulties of building (PRC), 844–6 CNPC subsidiaries, 487 impact of PRC-USA Agreement (1999), 896 Daqing, 476 mentioned, 69, 926, 932, 933 importance of status, 488 weaknesses (PRC), 850 incorporated, 437 see also large and medium enterprises large enterprises (PRC), 852 (LMEs); national champions New CNPC, 488 large and medium enterprises (LMEs) oil sector (PRC), 495 China Textile Machinery Group, 79 Shanghai Petrochemical Corporation, 454, concentration, 71, 939(n14) 472 definition, 75, 939(n19) Shenhua Huanghua Port Company Limited, 512 preferred, 68, 76, 88, 96–7, 108, 116, 742 119, 124, 131, 139, 937(n2 to ch3), Shougang Group and subsidiaries, 684–5 938(n5) Sinopec and subsidiaries, 448–9, 487 introduction of modern corporate system, 68, legal system 96, 131, 937(n1 to ch3) PRC, 874 number, 938(n9) Russian Federation, 909 Index 1035

Legend (PRC 1984–) telecommunications, 786 advantages, 794 Libya, 178, 411 international minnow, 794 Libya National Oil Corporation, 409 leading computer-maker (PRC), 794 LIC/LIE, see low-income countries/economies national team player (second batch), 107 Liem Sioe Liong, 951(n19) non-SOE national champion (PRC), 862 Life, 898 profits (1998), 794 life expectancy (PRC), 277, 907, 914, 915 research and development engineers (1998), life sciences, 48, 244, 252, 260–6, 271, 763, 794n 767 research and development expenditure lifetime employment, 56, 321 (1998), 794 light industry, 119, 130, 131 share of PRC market (1998), 794 lighting (cars): spiralling R&D costs, 522 size, 107 lightweighting, 590–1, 595 turnover (1998), 794 Lim Goh Tong, 951(n19) Leningrad Electrical Equipment Plant, 368 limestone, 596 Leningrad Power Equipment Plant, 947(n44) Lin, Justin Yifu, 1, 4, 19 Lester, W., 5 Lin Biao (1908–71), 911 Levin, Gerald (CEO Time Warner), 781 Linatron 4 Mev linear accelerator, 379 Leyland (UK lorry company), 517, 534 Lindahl, Goran (CEO ABB), 363, 944(n14) LG Lindberg, L.N. and J.L. Campbell (1991), 154 restructuring (1998), 54 Lineng Hydropower Development Company, semiconductor manufacturing, 54 944(n16) Lhasa (Tibet), 204 ling qi dian (‘start from scratch every day’), Li, Richard, 784, 935 549, 579 Li Bozhong, 898 liquefied natural gas (LNG), 416, 490, 717 Li Donghui, 945(n24) project in Guangdong Province (announced Li Genshen, Dr (Chairman, HPEC/HPEGC, 1999), 717 1994–), 369, 371–2 projects, 490 Li Ka-shing, 351, 784, 956(n60) lishihui (‘Board of Directors’), 657 Li Moran (actor), 298–9 List, Friedrich (1789–1846), 12 Li Peng, 392 Liu, Henry (hotel manager), 313–14 Li Yizhong, 466, 469 Liu Changle, 784 Li Yongwu, 468 Liu Huaqing, General, 194, 941(n18) liabilities, 72 Liu Jie, 947[n40] Liang Weiyan, 947(n41) Liu Shaoqi, 363 lianying, ‘jointly-managed’ (companies), 367 Liu Xingli, Mr, xxv lianying qiye (supplying firms), 384 Liu Yan, Dr, xxiv Lianyungang (PRC): coal port, 720 Liuyuan Hydraulic Company, 226 Liaohe complex; managed by New CNPC Liuzhou (Guangxi Province), 686 (1998–), 470 Liuzhou Automobile Plant, 554, 555, 564, 576 Liaohe Petroleum Administration, 438 Liuzhou Diesel Plant, 562 output, sales and pre-tax profit (1996), 442 Liuzhou Steel plant, 651 Liaoning (province), 112, 115, 116, 368 Lizhu (Zhuhai), 298 ‘grasping the large’, 83 LMEs, see large and medium enterprises loss-makers, 730 LMN (UK): crude steel output (1996–7), 602 petrol stations, 470 LNG, see liquefied natural gas power equipment production, 111, 364, 365 loans provincial government, 365 aerospace (UK), 175 Liaoning Electrical Engineering Plant, 365 CNPC, 440 Liaotong Peninsula, 903 commercial, 354, 945(n19) liberalization components sector (PRC), 543 developing countries, 243, 270 foreign exchange (PRC), 392 foreign equity involvement (PRC), 351 foreign, for railway construction in PRC, 742 former Communist countries, 243, 245, 270 HPEC subsidiaries, 370 global vehicle markets, 520 to Legend, 107 India, 872–3 mentioned, 932 markets for mining products, 709 PRC, 89, 94, 95, 97, 348, 373, 392 mentioned, 2 Shanghai Petrochemical Corporation, 455 PRC, 279–82, 282–3, 297, 875 soft, 440, 866–8, 878, 884–5 steel (PRC), 385, 622–3 lobbying, 428, 463 1036 Index local content, 866, 870, 881–2 airlines, 124 local government (PRC) among top 500 PRC enterprises, 730 coal supplies, 724 Angang auxiliary units, 642 and local refineries, 485, 891 to be avoided as take-over targets (by Sanjiu), and local SMEs, 844 319 mentioned, 349 BAe 146, 211 oil refining, 450 Brazilian steel industry (pre-1994), 606 required to take over PLA enterprises (1994), British Steel Corporation, 609 276 car industry (PRC), 540 resistance to takeover of local champions, China Telecom subsidiaries, 807 847 CNPC (excluding Daqing), 439 responsible for keypoint coal mines coal sector, 713, 729–31, 749, 753 (10.1998–), 731 Cummins, 584 revenue from small local coal mines, 724–5 Daewoo, 516 taxation of diesel-engine-makers, 563 Dongfeng and Yiqi (early 1996), 576 localization (PRC), 357–8, 945(n24) ENI, 408 Lockheed, 144, 155 Five Western District Mines, 843, [891] internal systems integration, 147 foisted on CNPC, 843 purchases Martin Marietta (1995), 147 foisted on Sinopec, 843 Lockheed-Martin ‘Hierro’ iron mine (Peru), 691 competition with Boeing, 157 MD-90 project (PRC), 208–10 competitive advantage, 173–4 military enterprises (PRC), 656 considering merger with GEC USA (late military-controlled businesses (PRC), 274–5, 1998), 164 294, 311 ‘mainly defence producer’, 230 miscellaneous, 71, 88–9, 98, 106, 295, 842 market capitalization, 236 Nissan, 516 merger with Northrop-Grumman vetoed, 164 pharmaceuticals (Chinese traditional), 297 military aircraft, 152–4 Qian’an iron ore mines, 653 miscellaneous, 144, 147, 155, 160, 161, 165, Sanjiu subsidiaries, 314–15, 320, 322, 324 184, 235, 848, 956(n64) Shenhua subsidiaries, 843, [891] out of business in civil airliner production, 167 Shougang subsidiaries, 654, 682, 686–7, 692, relative size (1997), 228, 236 843, 954(n38) research and development, 143, 175, 877 steel, 114, 633 revenues, profits, employees, R&D (1997), Universal Machine Works (PRC), 656 877 Xiangfan Iron and Steel Group, 640 sales, 227, 877 Yuchai (pre-Wang Jianming), 576 size (1998), 166 Loughborough University, 302 London: BOC investment banking arm, 831 low-income countries (LIC/LIE) Long Beach, 207, 208, 209 economic growth (1980–98), 851 Long-Term Development Plan (PRC), 734 expenditure on health, 767 Loral, 147, 153 exports, 871 Lorraine-Escaut (steel-maker), 611 GNP (1998), 932 lorries internet hosts per 1,000 people (1997), 789 Daimler-Benz, 514 IT development (1997), 789 demand (PRC), 551, 552 mentioned, 47 global market share, 37 per capita energy use (1994), 341 heavy-duty, 565–6 personal computers per 1,000 people (1997), heavy-duty (PRC), 568 789 industrial structure, 518–19 public health expenditure (1900–7), 243 leading manufacturers (1995–2005), 518 stock market capitalization (1998), 932 medium-duty (PRC), 568 telecommunications development (1997), 789 miscellaneous, 102, 271, 507, 861 telephone main lines per 1,000 people output (PRC), 536, 551, 552 (1997), 789 PRC (Yiqi and Dongfeng), 534, 542 TV sets per 1,000 people (1997), 789 PRC output (1998), 559 wireless telephones per 1,000 people (1997), production and imports (PRC 1978–98), 536 789 Los Angeles, 274 low technology, 53 loss-makers lower middle-income countries Agricultural Bank of China (ABC), 830–1, health expenditure, 243, 767 958(n11) Lower Saxony Government, 504 Index 1037

LTV (US steel-maker), 641 remuneration and labour productivity (1997), Lu Yansun, Mr, xxv, 327, 947(n41) 641 Lu Yiping, 455 return on investment (1980–90), 660 Luan Mining Bureau, Shanxi (coal producer) steel production methods (1997), 597 transport costs (1997), 720 McDonalds: competitive advantage, 35 Lucas: car braking systems, 525, 535 McDonnell-Douglas, 144, 184, 860 Lucas-Varity, 525, 547 competition from Airbus, 209 joint venture in PRC, 547 grants sub-contracts in PRC, 209, 213, 216 purchased by TRW (1999), 525 improves market share in PRC (1986–93), Lucas Aerospace, 181, 239 207–8 Lucent Technologies (1996–), 773, 786 MD 80/90 series of planes, 206–10 acquisitions (1.1999–4.2000), 771, 773 merged (1967), 155 competition with Cisco and Nortel, 773 out of business in civil airliner production, fibre optic transmission trunk (PRC), 795 167 hardware revenues, 772 research and development, 142, 143 Huawei contrast, 795 rivalry with Boeing, 207, 208, 209 IT spending (1998), 773 state aid for research and development, 176 joint ventures in PRC, 795 see also aircraft (specific) little to fear from PRC competition (post- MacGregor, Sir Ian, 498, 609–10, 841 WTO accession), 863 machine building, 118 market capitalization (late 1999), 773; machine tools, 64, 198 (2000), 764, 772 machinery/equipment, 116, 119, 129, 346 profits (1998), 794 ancillary, 365, 383–4, 387, 394, 398 research and development expenditure complex, 32, 36, 845, 889 (1998), 768, 794 heavy equipment, 346 sales (1998), 773 Japan, 603 sales revenue (2000), 764 national team (PRC), 77 spun-off from AT&T (1996), 773 national team (various indicators, 1995), 78 telecommunications hardware, 771, 773 ‘ordinary’, 105 turnover (1998), 794 second batch of trial groups (1997), 86 Lufthansa (Germany), 149, 213 sectoral share of PRC national team (1991, Lukens (US steel-maker), 613, 952(n11) 1997), 84 Lukoil: output (1996), 409 special purpose, 104 Luoyang, 132, 137 McKinsey Telecoms Group, 761 Luoyang Auto Company, 542 Macmillan, Neil, 786 Luoyang Bearing Group, 105 Maeda, Katsunosuke, 56 Luoyang Chundu Group, 132 Magang, see Maanshan Iron and Steel Luoyang Floating Glass Group, 128 Company Limited Luoyang Vehicle Company magnetos (automobile component), 546 main product, output, profits, taxes (1995), Mahathir bin Mohamad, Datuk Seri Dr 562 (b 1925), 927 Luxembourg, 676 maize, 869 LVMH, 35 MaK Motors (Germany), 530 Lycos, 787 Malaysia Lycra, 265 arms deliveries (1987–98), 151 demand for pharmaceuticals (per capita), 277 energy consumption per capita, 428 m-commerce [thus], 834 ‘fundamental economic situation’, 834 Ma Fucai, 470, 476 GNP, 863 Ma Hong (head of SCDRC), 74, 75, 136 HPEC tenders (1996), 387 Ma Weijie and Ma Weigang (1998), 67 increased supply of oil (post-1973), 404 Ma Yue (head of Dongfeng), 568 mentioned, 927 Maanshan Iron and Steel Company Limited natural gas, 416 (‘Magang’), 634, 640 number of companies in Fortune 500 (1998), continuous casting, 627 47n output structure (1997), 646 pharmaceuticals market (1995), 277 principal steel products (1997), 636 Sanjiu processing factory, 300, 308 production costs, 659 tariffs on steel products (1997), 619 productivity, 659 TNCs (1999), 21 profitability, 643 MAN, 861 1038 Index management ‘if an asset can’t pay its way, we sell it’ (BP BAe, 169 Amoco), 425 ‘best practice’ (global transfer), 711 ‘if you are not 1, 2, 3 in the world, you ‘by regulations and laws’, 380 shouldn’t stay in the business’, 34, 848 coal sector, 708, 711, 713 ‘if you want to be mayor, go for components (global giants), 547 pharmaceuticals’, 279 components (PRC), 544 ‘learning by doing’ (Shougang), 663 Dongfeng, 563 ling qi dian (‘start every day from zero’), 579 corporate governance (PRC), 859, 860 ‘no mistake, no demotion’, 665 empowerment (PRC), 98–9 ‘parched by years of planning’ (World Bank hotel, 311–12 1997), 67, 68 integrated system, 89 ‘production first, life later’, 303 mentioned, 9 ren wei ben (‘people are the foundation’), oil sector, 412 579 oil sector (PRC), 448, 461, 487–9, 497 ‘resources limited, human creativity (‘poor’, 489, 492) unlimited’ (Posco), 668 pharmaceuticals (PRC), 283, 290, 303–5, ‘seek truth from facts’, 857 310, 320, 942(n30) ‘size matters greatly’ (aerospace), 231 PRC, 73, 74, 926, 876 ‘take action only when useful to do so’ (Sun remote-area factories (PRC), 275 Wu), 65 Sanjiu, 880 ‘trading market for technology’, 356, 358, Shougang, 650–1, 654, 657, 663–71 863 Soviet model, 650, 953(n29) ‘we can’t pull the sapling upward in the hope value chain, 512 they will grow’, 67, 95, 99 Wanxiang Group, 134 zheng di yi (‘strive to be number one’), 579 western pharmaceutical companies, 297 manufacturing, 11, 28, 939(n22) Yuchai, 569, 579, 885 Eastern Europe (transitional), 2 see also privatization global, 31 ‘managerial economies’, 10 Taiwan, 21 managers (Japanese), 17–18 employment (PRC 1998), 919 ‘Manchuria’, 904, 905 see also industrial concentration manganese, 956(n60) mao (one-tenth of a yuan), 669 Mannesmann (Germany), 311, 778 Mao Zedong (1893–1976), 199, 203, 275, 905 links with Wugang, 629 achievement assessed, 907–8 market capitalization (2000), 764 austerity, 442 moving into IT sector, 765 ‘Chinese people have stood up’, vii, 907 sales revenue (2000), 764 Daqing Petroleum Administration, 442 mantras disastrous impact (military technology), ‘allow plenty of water in order for fish to 187–8 grow’ (fangshui, yangyu), 222 Maoism, 376, 387, 392, 630, 643, 682, 720, 758 ‘bigger is better’, 819 Marathon Oil, 411 ‘consumer should decide’, 347 acquired by US Steel (1980s), 601 ‘crossing river while groping for stones’, 912 Marconi, 861, 862 ‘employ the able’, 311 Marion Labs, 262 ‘floating boats on water’, 324 Marion Merrell Dow (MMD), 262 ‘following guidance of market’, 493–7 market ‘get close to market’, 297 functioning of, 1 ‘global level playing field’, 14–15, 28, 46, understanding (PRC) of, 876 52, 54, 62, 158, 195, 244, 270–1, 310, market capitalization, 50 325, 328, 348, 393, 398, 417, 492–3, firms based in high-income countries (1997), 533, 536, 717, 758, 766, 784–90 47 (‘hugely uneven’, 787), 793, 804, aerospace industry, 235–6 810–11, 825–6, 831, 839, 848, 850, 856, IBM v entire PRC stock market (1.2000), 862, 876–94, 920, 925, 932 772 ‘growing through the market’, 472 Japan, 51, 56 ‘grasp large, let go small’, 69, 75, 76, 77, 83, pharmaceutical corporations, 269 87, 98, 99, 463, 638–40 Pharmacia Upjohn, 266 ‘grasp strong, let go weak’, 760 ranking of TNCs by, 46 ‘hard and arduous struggle’, 303 Sony, 56 ‘I have and you have too’, 327 Telmex, 803 Index 1039 market capitalization – continued Martin Marietta, 147 TotalFina, 415 Marubeni (Japan), 352, 810 market economy Marx, Karl (1818–83), 9, 897, 906 pharmaceuticals, 282 mass media, 781, 811, 925, 929 PRC, 197, 630, 670, 680–1, 684 global market share, 37 transition (general), 2–3 PRC, 921, 922, 924–5, 930 transition (PRC), 275, 343, 346, 369, 387 US dominance, 781 transition (Russian Federation), 909 Matra, 160 market forces, 14 Matra BAe Dynamics, 144, 164, 170, 171 coal sector (PRC), 726 Matra Marconi Space, 162 oil sector (PRC), 453 Matsushita, 19, 850 oil sector, 458 Mattel: competitive advantage, 35 PRC, 544, 582 Maxus Energy (USA), 494 Yuchai, 569, 577, 581, 582 May Fourth Movement (China 1919–), 904 market mechanism (PRC), 87, 91, 98–9 Mazda, 508, 513, 850 market reform (PRC), 67, 283 MCA-Polygram, 781 market share, 17, 71, 841 MCI, see Ministry of Chemical Industry (PRC) competitive advantage, 37 MCI [US telecommunications giant], 786 global, 49 MCIWorldCom, 777, 798 industrial concentration, 38–9 corporate culture (PRC contrast), 802 pharmaceuticals, 266–8 international comparison (12.1999), 800 market size: pharmaceuticals (PRC), 277–9 market capitalization (4.2000), 931 marketing market capitalization, revenue, profits automobiles, 511, 521, 533 (12.1999), 800 crude oil (PRC), 457–8 meat, 871, 913 delays (pharmaceutical industrial), 245–6 Media One, 782 diesel engines, 531 medical equipment economies of scale (automobile industry), non-aviation output of AVIC, 198 503 Samsung, 53 expenditure (pharmaceutical sector), 251 medical fees, 381, 949(n59) Ford-Volvo, 515 medicines General Electric (USA), 333 Chinese traditional, 125, 279, 288–9, 290–1, globalization, 512 296, 297, 300–1, 309–10, 318, 319, 325, high-volume, 14 879 HPEC, 386 development timespan, 247, 941(n1) Legend (PRC), 794 generic, 296, 299 lorries, 543 non-patented, 283, 289 marketing, 9, 11, 34, 37 out-of-patent, 244 mentioned, 856, 872 patented, 242–5, 245, 246, 268, 270, 283, Microsoft, 776 286, 288–9, 296–7, 310, 324, 325 oil sector, 420, 422, 423, 426 traditional, 243 oil products (PRC), 458 western, 288–9, 296, 306, 310–11 oil sector (PRC), 459–60, 493 medium income countries, 47 petrochemical products (PRC), 458–9 MEG requirements (Yizheng), 466 pharmaceutical sector, 251, 270–1, 286, 323 Meggitt: acquires Whittaker Corporation PRC, 841 (6.1999), 147 Sanjiu, 290, 300, 307, 314, 318, 324, 880 mei dai you (‘substituting coal for oil’) policy Shenhua, 750 (PRC), 714, 742, 748–9 steel industry, 600, 694 US government financial support, 749 tyre industry, 527 Meidi: non-SOE national champion (PRC), wholesale and retail (oil sector, PRC), 862 459–60 meiyou banfa de banfa (‘path to follow when Yuchai, 557–8 there is no other solution’), 649 marketing systems, 61 Memorandum on Market Access markets PRC-USA (1992), 623 autos and auto components, 507–9 Mer, Francis 498, 611, 841 globalization (steel industry), 621 mercantilism, 911 ‘imperfectly competitive’, 12 Mercedes-Benz Marks & Spencer, 818 abortive joint venture with Yuchai, 568 Marshall, Alfred (1842–1924), 7, 9–10 interests in India, 508 1040 Index

Mercedes-Benz – continued ABN and Rothschild, 958(n9) joint venture with South China Motor Aérospatiale and Matra (1998–9), 160, 58, 170 Corporation, 546 Aérospatiale-Matra-Dasa (:European joint venture with Yangzhou Motor (buses), Aircraft, Defence and Space Company), 541–2 59 lorries, 532 AHP and Pfizer, 268 modern technology, 583 Allied Signal and Honeywell, 146–7 self-sufficient in heavy-duty engines, 566 Amoco and BP, 55 merchant banks, 822, 958(n9); see also named AOL and Time Warner (2000), 781, 782–3 banks Asea (Sweden) and Brown Boveri Merck & Co., 247, 256, 258, 260, 263, 264, (Switzerland), 336 848 Asea and Brown Boveri (late 1980s, aborted joint venture with Sanjiu, 294, 307, :ABB), 59 310 Ashland Coal and Arch Mineral Corporation Annual Report (1998), 244 (1997), 710 best sellers (drugs), 250 Astra and Zeneca, 59, 263, 264–5, 268 buys (1993) Medco (USA), 254, 260 AT&T and TCI (6.1998), 782 market share (1994–9), 267, 268 AT&T/TCI and Media One Group (6.2000), marketing, 270 782 marketing expenditure (1998), 251 BAe and GEC-Marconi (1999), 147–8, 161, plant at Hangzhou, 283 170, 236 research and development expenditure BAe and GEC Marconi’s defence arm, 58 (1994–7), 248, 310 BP and Amoco, 60, 414–15, 460, 467, 493 revenues, profits, employees, R&D (1997), BP Amoco and Arco, 416, 493 879 British Steel and Hoogovens (:Corus, size, 266 1999), 59, 610, 889 successes and new pressures, 260 Chase Manhattan and J.P. Morgan (9.2000), Mercosur, 508 813, 822 mergers (general) China Telecom (Hong Kong) and Jiangsu aerospace, 59 Mobile Phone Company (1998), 931 auto industry, 512, 514–18 China Telecom (Hong Kong) with Fujian and components sector, 523–4, 525 Henan mobile phone companies (1999), continental Europe, 58 931 decline of ‘national champion’ concept, 533 Ciba-Geigy and Sandoz (:Novartis, 1996), European banking, 58 55, 58, 261, 268 European, 49 Citicorp and Travelers, 817 in PRC ‘tiny in international comparison’, 81 Daimler-Benz and Chrysler (1998), 55, 60, Japanese capability, 56 415, 514–15, 519, 528, 533, 534, 886 Japanese banking (1999), 56 Daimler-Chrysler (Dasa) and Casa, 161, 170 life sciences, 59 Dasa and Aérospatiale-Matra, 161, 170, 263 missed opportunities (PRC), 861 Deutsche Bank and Bankers Trust, 60 national champions (Europe), 58 Deutsche Bank and Morgan Grenfell, oil sector, 411, 412–17, 492, 497 958(n9) pharmaceuticals, 59, 246, 251, 271 Dresdner and Kleinwort Benson, 958(n9) postponed by ‘alliances’, 513 Exxon and Mobil, 55, 415, 460 power equipment, 59 Ford and Volvo, 515, 533 PRC, 79–81, 96, 97–8, 136, 137 Fuji Bank, Industrial Bank of Japan, and Dai- prospective, 60, 417, 517 Ichi Kangyo, 56 second-tier suppliers (aerospace), 146 GEC (UK) and Alcatel (France) (:Alstom), state-orchestrated, 858–9 59, 336 steel, 59 Glaxo Wellcome and SKB (2000), 251, 257, strong with strong, 80, 756 260, 262, 268, 269 strong with weak (PRC), 753–6 GM and Daewoo, 516 suggested (power generation, PRC), 397–9 Goodyear and Sumitomo (1999), 527, 528–9 transatlantic, 59–60, 165, 414, 493, 514–15, Hayes Wheels and Motor Schools, 524 778, 784, 857, 895 Hoechst and Rhône-Poulenc (:Aventis), 59, USA (1998), 81 262–4, 268, 269 mergers (specific) Huaneng Power International and Shandong ABB and GEC-Alsthom (1999), 263, 338 Huaneng Power Development Company ABB and Alstom, 59 (announced 7.2000), 931 Index 1041 mergers (specific) – continued Japan, 17–18 ING and Barings, 958(n9) means of technology acquisition, 771, 772, Krupp takeover of Hoesch, 611 773–4, 775 Krupp and Thyssen (steel interests), 599 pharmaceutical companies, 251, 252–3 Krupp-Hoesch and Thyssen (1997–8), 612 pharmaceutical sector (PRC), 286 Krupps and Thyssen, 58 PRC, 81, 97–8, 842–3 McDonnell-Douglas and Boeing, 142, 149, Sanjiu, 290, 295, 319, 324 152–2, 155, 168, 210, 216, 235 steel, 587 Meggitt and Whittaker Corporation, 147 strong PRC companies, 495–7 Morgan Stanley and Dean Witter, 817 telecommunications, 769, 777–8 Pfizer and Warner-Lambert, 259, 260, 262 UK (1919–), 15 Pharmacia Upjohn and Monsanto, 265–6, US dominance, 50–1 268 USA (1890s), 16 Renault and Nissan, 515–16, 533 Merrill Lynch (USA), 57, 815–16, 818, 824 Rio Tinto and CRA (1995), 707–8 assets managed (1999), 837 Salomon Brothers and Smith Barney, 817 diversified financial services networks, 830 Salomon Smith Barney (USA) and Schroders joint venture (online) with HSBC, 818, 822 (UK), 822, 958(n9) key indicators, 1998 (PRC comparison), 829 Sanofi and Synthelabo, 269 top five firm (all international convertibles, Seagram and Polygram (1998), 783 2000), 823 Seagram and Vivendi (2000), 784 top five firm (international equities Shenfu and Dongsheng mining companies bookrunners, 2000), 823 (PRC), 735 top five firm (M&A Advisers, 2000), 823 Shougang and Tangshan Steel, 80 Messer (industrial gases), 263 Telecom Italia and Olivetti, 58 Messerchmitt-Bolkow-Blohm, 940(n4) Total and PetroFina (= TotalFina), 415 Messier, Jean-Marie (Head of Vivendi), 784 TotalFina and Elf Aquitaine (= TotalFinaElf), Mesta Engineering Company (Pittsburgh, 416–17, 493 1888–) UBS and Warburg, 958(n9) bolt plate leveller, 674, 956(n56) Usinor and Cockerill Sambrell, 59 purchased by Shougang Corporation Usinor and Hoogovens, 263 (7.1988), 674–5 Usinor + Wendel-Sidelor + Sacilor, 611 Mesta International [Shougang Group], 647, Vodafone and Air Touch, 60 673 Vodafone and Mannesmann, 263 metal Volvo and Saab, 58, 518 cans, 38 Volvo and Scania, 534 goods (fabricated), 106 WPP/Young and Rubicam, 781 metallurgy, 77, 78, 118, 900 Yanshan and Tianjin Hangu (= Yanhua), 454 metals, primary, 11 Yawata and Fuji (= New Japan Steel, 1970), Mexico 603 energy, 340, 943(n8–9) see also EADC; industrial concentration enforcement of WTO rules, 919 mergers and acquisitions, 34, 37, 50–1, 64, 930, expanded production of oil (post-1973), 404 932 FDI inflow, 31 advisers (top five firms, 2000), 823 financial crisis (1994–5), 833 aerospace industry (USA), 152–3 Ispat, 600 automobile industry (PRC), 540 nationalization (oil sector), 409 banking sector (USA), 817, 822 number of companies in Fortune 500 (1998), biotechnology industry (1988–98), 769 47n chronology (global pharmaceutical sector, number of companies in FT 500 (1998), 1989–2000), 254–7 47n coal sector, 707, 710 number of ‘competitive edge’ companies computer industry (1988–98), 769 (1997–8), 62–3 cross-border, 815–16, 822 oil production, 355 cross-sector, 815, 816–17, 822 per capita energy use (1994), 341 financial services, 815, 816, 822, 958(n3–4) resistance to global telecommunication frenzy, 38 giants, 802, 803 global, 855 steel output (1974–96), 593 impact on number of employees, 44 Thyssen-Krupp willingness to produce in, initiated by Nanfang, 314–15 612 IT sector, 769–70 TNCs based (1999) in, 21, 23 1042 Index

Mexico – continued proven oil reserves, 404–5 top twenty steel-producing country (1991–8), Sanjiu sales offices, 300 617 share of world electricity generation wage costs (steel industry, 1997), 620 (1995–2015), 335 MHI, see Mitsubishi Heavy Industries SOEs, 410 Michelin (France), 522, 527, 528, 536, 576, steel production (1991–7), 589 886, 935 TotalFinaElf, 417 micro-electronics, 673 US strategic interest, 406 micro-vans, 199 midi-mills: ‘overlarge mini-mills’, 599 Microsoft (USA), 776, 786 MIE (middle-income economies) market capitalization (2000), 764, 772, 776 see middle-income countries overtaken by Cisco (market capitalization, MII, see Ministry of Information Industries 5.2000), 774 (PRC) profits (1999), 772 Mikoyan-Gurevich, 179 research and development, 776, 797 military sales revenue (2000), 764 enterprises, 656 software revenues, 772 intelligence, 163 ‘Venus’ system, [796–]797 strategy (Sun Wu), 241 Microsoft Office, 776 technology transfer, 190 Microsoft Windows, 776 military-industrial construction and middle-income countries (MIC) maintenance, 188 economic growth (1980–98), 851 ‘Military Industries’, head of, 656 GNP (1998), 932 Miller, J., 908 internet hosts per 1,000 people (1997), 789 Milton Friedman Foundation, 4 IT development (1997), 789 minerals, 120, 708 per capita energy use (1994), 341 mines, 904 personal computers per 1,000 people (1997), Ming Dynasty (1368–1644), 900 789 mini-mills, 604, 605, 619, 662, 889 stock market capitalization (1998), 932 consolidation of sector (USA), 600, 613 telecommunications development (1997), 789 Ispat, 614 telephone main lines per 1,000 people ‘long steel products’, 598 (1997), 789 non-unionized labour, 598, 599 TV sets per 1,000 people (1997), 789 Posco, 609 wireless telephones per 1,000 people (1997), PRC, 599, 631, 633 789 steel industry, 598–600 middle-income countries (upper) thin-slab casting, 598 energy consumption per capita, 428 Usinor, 611 Middle Ages (Europe), 898 see also steel mills Middle East mini-motors, 950(n9) arms deliveries (1987–98), 151, 152 mining, 675 920, 952(n12) economic growth (1980–98), 851 ‘capital intensive’, 708 electricity generation capacity (1990–2010), employment (PRC 1998), 919, 920 697 global market share, 37 exporter of oil to PRC (1995–7), 434, 435 national team players, 118–20 hydrocarbon exports to PRC, 407 open-cast, 708, 891 investments by CNPC, 441 PRC (national team), 79 lack of indigenous ‘competitive edge’ second batch of trial groups (1997), 86 corporations, 63 mining commodities, 709 military aircraft procurement, 174 mining companies (coal), 707 national champions (oil and petrochemicals), Ministry of Aviation Industry (PRC), 408 184[–]186, 196, 940(n5) natural gas production and reserves (1997), non-aerospace sales, 197, 940(n11) 405 ‘three-step take-off plan’, 206 (‘in tatters’, oil reserves and production (1997), 403 213) oil supplies to the UK, 407 Y-10 project, 204 oil supply, 410 Ministry of Chemical Industry/Industries (MCI, production and sales of automobiles (1998), PRC) 508 abolished (1998), 467, 468 projected demand for power equipment mentioned, 843 (1980–2010), 334 refineries transferred to New CNPC, 477, 485 Index 1043

Ministry of Chemical Industry/Industries (MCI, joint venture partner in Shenhua Railway PRC) – continued Company, 742 refineries transferred to New Sinopec, 483–4, represented on Shenhua board, 741 485 Ministry of Textiles (PRC), 452 transfer of assets to New CNPC and New Ministry of Transport (PRC), 652 Sinopec (1998), 469 Ministry of Transportation (PRC) Ministry of Coal Industry (PRC), 652, 731 represented on Shenhua board, 741 abolished (1998), 467, 468 Minmetals Development, 129–30 succeeded by the Coal Bureau, 731 missile companies, 156 Ministry of Communications (PRC), 122 missiles, 191 Ministry of Electronics (PRC), 107 AMRAAM, 158 Ministry of Electric Power (MOEP, PRC), 343, anti-aircraft, 191 347, 348, 359, 399, 801, 809 ASRAAM, 164 abolished (1998), 346 ballistic, 157, 187 function, 343 Dongfeng-31 (ICBM), 195 ‘key task’, 346 Dongfeng-41 (ICBM), 195 ‘subsequently the SP’, 346 air-to-air (PRC), 199 see also Huaneng (China Power) Power anti-radar, 192 Corporation MITI, see Japan: Ministry of International Ministry of Electricity Industry (PRC), 753 Trade and Industry Ministry of Finance (PRC), 830, 958(n10) Mitsubishi, 176, 181, 860 ‘handovers’ of profits by oil sector, 471, 474 candidate to merge with Fiat, 517 subsidies to coal industry, 731 engines more expensive than those of Yuchai, Ministry of Geology and Mineral Resources 558 (MGMR, PRC), 467, 468 interests in Thailand, 508 Ministry of Information Industries (MII, PRC), joint venture with China Aerospace 801 Automotive Industry Group (Shenyang), largest single shareholder in China Unicom, 547 802, 809 joint venture with Shenyang Construction owner of China Mobile, 802 Investment, 547 Ministry of Land and Natural Resources (PRC missed merger opportunity, 861 1998–), 467, 468 output, turnover, profit, R&D (1998), 533 Ministry of Machine Building (MMB, PRC), supplier to SHP, 362 101, 343, 364, 369, 370, 376, 540, 570, Mitsubishi Chemical, 56 572, 671, 945(n28), 951(n18), 968 Mitsubishi Electric, 55, 396, 850, 860 abolished (1998), 346 Mitsubishi Heavy Industries (MHI), 177, 379, ‘downgraded’, 346 942(n1) and HPEGC, 365, 371 ancillary equipment, 365 role, 347 global top hundred company, 850 see also ‘First Ministry of Machine joint ventures (aero-engines), 173 Building’; ‘Ministry of Machinery’ market share worldwide (power generation ‘Ministry of Machinery’ (PRC), 369, 373, 386, equipment, 1993–8), 337 391, 544, 569, 576, 656, 947(n43) one of the top four power equipment see also Ministry of Machine Building companies, 339 Ministry of Metallurgical Industry/Industries technology and marketing agreement with (MMI, PRC), 467, 622, 651, 657, 689, Westinghouse, 336 968 Mitsubishi Motors, 514–15, 850 ‘Ministry of Metallurgy’, 622 Mittal, Lakshmi, 670 see also Bureau of Metallurgical Statistics Mittelstand engineering firms (Germany), 535 Ministry of Petroleum Industry (MPI, PRC) Mlada Bolesaw (Prague): Volkswagen plant, transformed from a ministry into a holding 950(n6) company (1988), 436 MMI, see Ministry of Machine Building Ministry of Posts and Telecommunications Industries (PRC) (PRC), 797, 800–1 Mobil, 415, 710 ‘Post and Telecommunications Bureau’ mobile phones, see wireless telephones (PRC), 802 modern corporate system Ministry of Power Industry (PRC), 340, 699 PRC, 90, 96, 105, 114, 119, 131, 139, abolished (1998), 468 940(n30) Ministry of Public Health (PRC), 299 modern industrial enterprise Ministry of Railways (PRC), 801, 809 characteristic features, 14 1044 Index

MOEP, see Ministry of Electric Power (PRC) Motorola (USA) Mond, 264 acquisitions (1.1999–4.2000), 771 Monitoring Committee (Shougang), 647, 685–6 investment in PRC, 795–6 Monkey King: national team player (PRC), 106 market capitalization (2000), 764 monomers, 417, 422 sales, 764, 774 monopolies, 3, 17, 802, 956(n63) share of PRC market, 795 Monopolies and Mergers Commission (UK), wireless handsets, 774 956(n63) motorways, 444 Monroe Equipment (subsidiary of Tenneco), Motor Wheels, 525 525 MPI, see Ministry of Petroleum Industry (PRC), Monsanto, 247, 259 436 abortive merger with AHP (1998), 266 MSDW, see Morgan Stanley Dean Witter ‘life sciences’, 261 mugongsi (‘mother’ [company]), 478 merger with Pharmacia Upjohn announced multi-national corporations, see trans-national (12.1999), 257, 266 corporations mergers and acquisitions, 256–7, 265–6 Munich, 159 research and development (1994–7), 248 munitions: precision-guided, 163 Monti, Roberto, 494 Munro, R.H., see Bernstein, R. Moody-Stuart, (Sir) Mark (b 1940), 414 Murdoch, Rupert (b 1931), 784 moon landings: computer power (comparative), 523 NAFTA, see North American Free Trade Morgan Grenfell (UK), 817, 958(n9) Agreement Morgan Stanley, 815, 817 Nanchang: aircraft manufacturing, 186 merger with Dean Witter, 817 Nanchang Aircraft Company, 200 Morgan Stanley Dean Witter (MSDW, USA), Nanchong Diesel Engine Company, 564, 565 49, 62–4, 824, 916 Nanfang Aero-engine Company (Dongli), 199, assets managed (1999), 837 940(n12) BondBook, 818 Nanfang Pharmaceutical Company (1986–) competitive edge companies, 142, 173–4, advertising, 298–9 766–7, 770, 851 automation, 302–3, 304 evaluation of (hypothetical) Nippon Steel ‘bulk of workforce civilians’, 304 merger with Posco, 613 ‘core enterprise’ in Sanjiu Group, 295 evaluation of pharmaceutical industry (1998), debt-assets ratio, 303, 319 247, 269 established by Guangzhou Army Hospital interests in PRC, 835 (1986), 290 investment philosophy (aerospace), 148 employment structure, 304–6, 319 key indicators, 1998 (PRC comparison), 829 financial indicators (1987–97), 292 oil sector, 421 GMP, 301–3 rating of Posco, 605 human capital, 320 scale (Guotai J&A comparison), 826 later Sanjiu, 290, 318 survey of mining industry, 709 mergers and take-overs, 314–15 top five firm (international equities modern business organization, 322–4 bookrunners, 2000), 823 output and profits (1992–7), 301 top five firm (M&A Advisers, 2000), 823 placed under the GLD of the PLA (1992), Morgan Steel Mills Inc., 674 294, 311 Morton, 526 ‘premises governed by army regulations’, ‘most-favoured nation’ principle, 903 304 mother company (PRC), 87, 90, 99, 100, 112, product choice, 297 127, 138, 476, 849 production equipment, 303 first, second, third-tier subsidiaries, 849 profitability, 291 mother/son company system, 87, 94, 114, profits, 292, 306, 309, 319 478–9 role of CCP, 304, 942(n22) son companies, 124 sales (1992), 941(n15) motorcycles, 103, 198–9, 272, 849, 873 sales network, 300 components, 199 share in Sanjiu’s output value (1992–7), non-aviation output of AVIC, 198–9 318 PRC 197 sources of growth, 320–2 second layer enterprises (PRC), 561 specialized pharmaceutical firm, 290 WTO enforcement proceedings, 870 stomach medicine (Sanjiu Weitai), 297–8 ‘Motorman’ Robotics, 687 struggle for autonomy, 322–3 Index 1045

Nanfang Pharmaceutical Company (1986–) – USA, 895 continued see also European champions takes over GLD’s loss-making enterprises national champions (PRC), 65, 67–139, 846, (1992), 295 857, 862–3, 875, 876–8, 880, 885, 887, trademark battle, 299 895, 920, 924, 930, 937–40 VIP visitors, 294, 941(n18) appendices, 100–39 wage system, 294, 305–6 auto industry (PRC), 539 wholly-owned subsidiary of Sanjiu conclusion, 98–9 (2.1998–), 307 direct support measures, 95–8 workforce, 301, 304, 305, 320, 321 empowerment of business groups, 93–4 see also Sanjiu Enterprise Group enterprise groups, 75–6 Nanguang Group, 226 geographical location, 81–3 Nanhai Jinagnan Power Plant, 352 ‘grasp the large’, 69–72, 75, 76, 77, 83, 87, Nanhai Power Plant, 352 98, 99 Nanjing, 546, 729, 901, 905 group expansion and diversification, 79–81 Nanjing Aero Motive Machinery Group, 112 industrial policy evolution, 83–6 Nanjing Air Industry Group, 113 internal finance companies, 92–3 Nanjing Chemical Fibre Company, 117 national team, 76–83 Nanjing Chemical Group, 117, 466 national team: origins, 72–6 Nanjing Dongfeng Special-Purpose Vehicle pillar industries, 83–6, 98, 99 Works policies to build, 67–139 ‘second layer’ enterprise with Dongfeng policies promoting institutional change, 87–91 capital participation, 565 policy implementation, 91–5 Nanjing Gear preferential planning status, 91–2 diesel engine production (1998), 559 right to manage state capital, 93–4 Nanjing Special Vehicle Company, 577 scale, 76–9 Nanning (Guangxi Province), 502 State Council Directive: first (12.1991), 69, Nanning Airport, 575 87–90, 95, 98, 938(n8), 940(n27) Nanning Silk and Ramie Factory, 954(n41) State Council Directive: second (4.1997), 69, Nanya Plastics, 21 90–1, 94, 95, 98, 940(n27) Nanyue Fuel Pump Company (Hengyang), 553, stock market listings, 96, 940(n30) 576, 580 strategy and policy, 69–72 naphtha, 466 support from banking sector, 96–8 NASA, 176 technology centres, 94–5 NASDAQ: Indian listings, 787 trial business groups, 85–6, 87–91 Nasser, Jacques (CEO Ford), 512 trial business groups: chronology (1980–98), nation-state epoch: ‘not over’, 234 136–9 National Bureau of Commerce and Industry, trial business groups: list and description, 299 100–35 National Bureau of Land Resources (PRC), 741 see also ‘national team’ (PRC) national champions (global) National Coal Board (UK), 841 auto industry (Europe), 504 National Enterprise Contracting Meeting auto industry (Japan), 505 (6.1986), 136 Brazil, 858 National Enterprise Group Convention (1997), decline of concept (auto sector), 533 139 disappearance (advanced economies), 849, National Exchange Meeting, 138 853, 855, 857, 878 National Iranian Oil Company: output (1996), ‘Europe’, 58, 847, 857, 859, 894–5 409 Japan, 895 National People’s Congress (PRC) Mannesmann, 778 corruption, 874 non-SOE, 862–3 ninth (3.1998), 467 oil and petrochemicals, 407–8, 416 1999 session, 430, 702 power generation equipment, 335–6, 339 National Power (UK), 352 power generation equipment (UK failure), national security, 85, 805 943(n7) National State Capital Management Office PRC, 67–139, 876–8, 937–40 (1989–), 137 South Korea, 895 National Steel (USA), 678 steel, 587, 595, 606, 609 ‘national team’ (PRC enterprise groups), xxiv, steel industry (UK, France), 498 2, 67–139, 926, 938(n10) telecommunications sector, 787 assets, 79 1046 Index

‘national team’ (PRC enterprise groups) – Navistar, 518–19, 535, 543 continued NEC (Japan) composition, 68 global top hundred company, 850 disparities, 77, 78 investment in PRC, 796 first batch (1991), 69, 84, 85, 87, joint venture with Shougang (1990–), 673, 101–35(column 4), 138, 939(n25) 955(n55) geographical location, 81–3 mentioned, 19 group expansion and diversification, 79–81 microwave networks (PRC market), 796 holding companies, 68 reduction of workforce (1999), 56 industrial policy evolution, 83–6 Needham, Joseph (1900–95), 587, 898, 899 industrial sectors, 84 Nelson Industries, 530 loss-makers (few), 77 neo-classical economics, 2–8, 28, 679, 862, 120 largest emerging enterprise groups, 68, 929–30 69–70, 76, 83, 98, 938(n8), 940(n30) Nescafé, 311 origins, 72–6 Nestlé, 35, 311 pillar industries, 83–6 Netherlands sales, 79 bank restructuring (1980–97), 820 scale, 76–9 exports 1997 (PRC comparison), 871 second batch (1997), 69, 84, 85–6, 87, industrialization, 923 101–35(column 4), 139, 939(n25) national energy security, 441 ‘small by comparison with largest TNCs’, 79 production of plastics (1989–96), 451 various economic indicators, 78 purchase of missiles from USA, 158 workforce, 79 royalty and licensing fees (paid), 785 see also trial business groups networking equipment, 795 National Textile Council, 466 New China National Petrochemical Group nationalism, 463 (New Sinopec, 1998–), 467, 468 nationalization ability to compete on global level playing mining properties (developing countries), 707 field, 883–5 oil sector, 408–9 activities largely confined to one country, 481 South Korea, 54 ambition to create a truly integrated Nations Bank, 817 company, 473 NATO, 158, 178 assets, 471, 479 arms deliveries (1987–98), 151 bureaucratic restructuring, 858 defence spending (post-Cold War), 150 central control, 488–9 eastward expansion, 194 comparison with global giants, 479–89 NATO Europe, 156 comparison with New CNPC, 471 natural gas competition from SMEs, 844 exports from Russia to PRC, 192 economies of scale, 484–5 Exxon Mobil, 416 employment, 480, 845 fuel for electricity generation, 696, 698 ethylene capacity, 471 increasing US dependence on, 405 ethylene crackers, 485 power stations switch to, 891 financial indicators, 480 PRC, 192, 354, 429, 715, 716 financial performance, 481[–]484 price, 697, 957(n1) forced to take on loss-makers, 843 research and development (1995, 1998), 49 Fortune Global 500, 479 reserves, 421, 696–7, 707 gas production, 481 reserves (PRC), 715, 716 global competition, 491, 493, 494–5 share of PRC’s energy requirements holding company, 473 (1980–96), 354 imports of crude oil, 488 share in primary energy consumption (1996), integration of operations, 485–6 697 interests, 469 share of world primary energy consumption international flotation, 931 (1987–97), 402 national champion, 481 substitute for coal, 705 natural gas output, 471 turbines, 335, 337, 338–9 need to increase ‘deep processing’ capacity, world distribution, 404–7 487 world reserves v world population (1998), oil output, 471 406 oil production, 481 world reserves and production (1997), 403 oilfields, 471 see also liquefied natural gas (LNG) organizational structure, 487–9 Index 1047

New China National Petrochemical Group economies of scale, 484–5 (New Sinopec, 1998–) – continued employees, 480 output, 479 employment, 845 petrochemical plants, 471 ethylene capacity, 471 petrol stations, 470 ethylene crackers, 485 polyethylene (PE) capacity, 471 financial indicators, 480 polypropylene (PP) capacity, 471 financial performance, 481[–]484 primary oil processing, 471 forced to take on loss-makers, 843 product mix, 486–7 Fortune Global 500, 479 profits, 480, 484 gas production, 481 re-organized along geographical lines, 468–9 headquarters (real location), 476, 478–9 refineries, 482–4, 484–5 integration of operations, 485–6 refineries formerly under Sinopec, 482 interests, 470 refineries transferred by CNPC, 482–3 international flotation, 931 refineries transferred by MCI, 483–4 international joint ventures, 488 research and development, 487 IPO, 474 research institutions, 488 listed portion (2000) re-named ‘PetroChina’, reserves, 479[–]481 489 restructuring, 931 national champion, 481 restructuring through administrative means, natural gas output, 471 499–500 need to increase ‘deep processing’ capacity, restructuring (1999) for flotation in HKSAR, 487 471–4, 479, 488–9 nineteen enterprises transferred by New revenues, profits, employees, R&D (1998), 884 Sinopec (1998), 469 sales, 471, 479 oil output, 471 sales companies, 471 oil production, 481 size, 479 oilfields, 471 statistics, 469 organizational structure, 487–9 ‘still essentially government organ’, 498 output, 479 structure, 469 petrochemical plants, 471 subsidiaries, 469 petrol stations, 470 synthetic resin capacity, 471 polyethylene (PE) capacity, 471 ten listed subsidiaries, 472 polypropylene (PP) capacity, 471 transfer of assets by Ministry of Chemical primary oil processing, 471 Industry (1998), 469 product mix, 486–7 transferred 19 enterprises to New CNPC profitability, 474 (1998), 469 profits, 480, 484 turnover, 480 re-organized along geographical lines, 468–9 twelve enterprises transferred by New CNPC refineries, 477–8, 484–5 (1998), 469 research and development, 487 wholesale and retail of petroleum products, reserves, 479[–]481 486 restructuring, 931 WTO rules, 867 restructuring through administrative means, see also China National Petrochemical 499–500 Corporation (Sinopec 1983–98); restructuring (1999) for flotation in HKSAR, Shanghai Petrochemical Corporation 471, 474, 476, 479, 488–9 New China National Petroleum Corporation revenues, profits, employees, R&D (1998), Group (New CNPC, 1998–), 467, 468, 884 470, 931 sales, 479, 471 ability to compete on global level playing sales companies, 471 field, 883–5 size, 479 activities largely confined to one country, 481 ‘still essentially government organ’, 498 assets, 470, 471, 479 structure prior to flotation, 475 bureaucratic restructuring, 858 struggle with Daqing, 474, 476 central control, 488–9 synthetic resin capacity, 471 comparison with global giants, 479–89 transfer of assets by Ministry of Chemical comparison with New Sinopec, 471 Industry (1998), 469 competition from SMEs, 844 transferred 12 enterprises to New Sinopec dangers of exposure to global competition (1998), 469 (post-PRC WTO entry), 491, 493, 494–5 turnover, 480 1048 Index

New China National Petroleum Corporation Nippon Oil: global top hundred company, 850 Group (New CNPC, 1998–) – continued Nippon Steel, see New Japan Steel wholesale and retail of petroleum products, Nishiyama Yataro, 679 486 Nissan Motors, 55, 176, 506, 858, 860 WTO rules (implementation by PRC), 867 dealers, 58 see also China National Petroleum domestic market share, 505 Corporation (CNPC 1988–98) factory closures, 57–8 New Japan Steel (Nippon Steel, 1970–), 19, foreign assets, sales, employment (1997), 509 176, 601, 602–4, 611, 640, 848, 951(n4) global top hundred company, 850 creation (1970), 603 interests in Thailand, 508 crude steel output (1996–7), 602 ‘national disgrace/betrayal’, 57, 516 deepening partnership with Posco (8.2000–), near-bankruptcy, 532 928 restructuring (1999), 516 diversification, 604, 673, 678 share of foreign production (1989–94), 510 employees (1995), 888 suppliers, 516 global top hundred company, 850 take-over by Renault, 57, 515–16, 533 goal, 670 workforce, 58 joint venture (1997–) with Usiminas (Brazil), zaibatsu (1937), 54 608 NKK (Japan) joint ventures in Thailand (early 1990s), 608 crude steel output (1996–7), 602 management (Shougang comparison), 671 employees (1995), 888 plants, 952(n13) global top hundred company, 850 remuneration and labour productivity (1995), investment in an integrated mill with 641 National Steel, 608 revenues, profits (1998), 888 mentioned, 603 sales (1997), 888 reduction of workforce (1999), 56 share-swap with Posco (1999), 613 remuneration and labour productivity (1995), workforce halved (1985–95), 607 641 New Mexico: coal, 710 research and development, 595–6, 618 New Seekers (1971), 27 revenues, profits, R&D (1998), 888 ‘New Thinking’, 908 Nobel, 264 ‘New Trade Theory’ (1980s), 13 Nobel Prize winners: General Electric (USA) New US Steel, 678 research division, 329, 396 New York, 123, 289 Nobuyuki Idei (Sony president), 783 New York stock market Nokia (Finland), 764, 772, 774–5, 786, 795 China Yuchai International (CYI), 571n, 574, Nolan, Peter, 937 576–7, 951(n21) non-core business, 8, 34, 39, 61 Dongfeng prospectus, 567–8, 951(n15) Aventis, 263 Yuchai listing, 549, 553, 573–4, 574–6, 582 China Telecom, 807 Yuchai prospectus, 576–7, 582 Daqing, 445 New Zealand, 582 Goodyear, 528 Newly-Industrializing Countries (NICs), 19, oil sector, 425, 427 911 non-ferrous metals, 77, 120 news companies, 781 non-price competition, 11 News Corporation, 784, 787, 806 non-tariff barriers (NTBs), 28–9, 328, 396, 874 Nigeria, 355, 411 auto industry (Japan), 505 Nigerian National Petroleum Corporation, 409 power generation (PRC), 881–2 Nikkei 300, 54 steel, 618, 623, 889 Nikko Securities, 57 Taiwan, 19 Ningbo (PRC), 640 WTO rules (implementation by PRC), 865 Baogang joint venture, 629 Nordic countries, 58 China Unicom joint venture activity, 810 NORINCO, see China North Industries thermal coal price (7.1997), 729 Corporation Ningbo Medical Materials Company, 300 Nortel Networks (Canada), 774, 786 ningjuli jituan (‘cohesive groups’), 76 acquisitions (1.1999–4.2000), 771, 774 Ninguo, 950(n9) advanced Internet transmission equipment, Ningxia: petrol stations, 470 774 Ningxia Autonomous Region, 656 competition with Cisco and Lucent, 773, 774 Ningxia Electric Power Company, 110 fibre optic transmission trunk (PRC), 795 Nippon Life, 828 hardware revenues, 772 Index 1049

Nortel Networks (Canada) – continued investment funds (preferential treatment), 126 market capitalization (2000), 764 national team player (first batch), 126 research and development expenditure, 768, Northrop-Grumman, 147, 152–4, 956(n64) 774 dwarfed, 146 sales revenue (2000), 764 relative size (1997), 228 North Africa, 151, 434, 851 sales, 227 North America size (1998), 166 automobile market (project growth, ‘sub-contractor for the two giants’, 152 1995–2001), 507 takeover target, 164, 165 coal as source of primary energy, 705 Northwest Airlines (USA), 149 ‘competitive edge’ companies (1997–8), 50 Northwest China Electricity Bureau, 345, 747 electricity generation capacity (1990–2010), Norway, 158, 408, 426, 499, 821 697 Norway: State Direct Financial Interest, 408 FT 500 (market capitalization, 1999), 50 Notable World Figures and their Achievements, Fortune Global 500 (1997–8), 49, 50 290 Nissan, 515 Novartis (1996–), 58, 261–2 output per worker (coal), 751 best sellers (drugs), 250 research and development expenditure formed by merger of Ciba-Geigy and Sandoz (1997), 48 (1996), 255, 261, 268 steel production (1991–7), 589 joint ventures in PRC, 282 North American Free Trade Agreement market capitalization, 269 (NAFTA) market share, 267 lorry sales (1995, 2005), 509 research and development expenditure, 248, production and sales of automobiles (1998), 261, 263 508 revenues, profits, employees, R&D (1997), projected demand for power equipment 879 (1980–2010), 334 sales, 263 share of world electricity generation share prices, 262 (1995–2015), 335 workforce, 261–2 steel consumption per capita, 594 NTT North China Pharmaceutical group, 938(n5) CCF partner of China Unicom, 810 North China Plain, 738 international comparison (12.1999), 800 North China Power Generating Group, 359, 361 market capitalization, revenue, profits national team player (second largest), 110 (12.1999), 800 SPC subsidiary, 344, 359 mentioned, 787 North Korea, 178 partially-privatized, 802 North Sea vestige of state ownership, 803 natural gas (UK), 698 NTT Mobile, 800 new source of oil (post-1973), 404 nuclear energy, 85, 380, 396, 715 Norwegian oil interests, 408 barriers to use, 406 TotalFina, 415 fuel for electricity generation, 696, 698 UK sector, 416 Guangdong No 2 nuclear power plant, 391 Northeast Asia, 193 industrial concentration, 339 coal supplies, 717–18 national champions, 336, 943(n6) Northeast China (regional electricity grid), 345 power plant capacity (1980–2010), 335 Northeast China Electrical Equipment PRC, 204, 351, 354, 357–8 Company, 365 problem of waste disposal, 715 floated on the HK stock market, 365 reduction of greenhouse gas emissions, 704 Northeast China Transformer Group, 398, safety fears, 402, 704–5 945(n30) share in primary energy consumption (1996), Northeast Electric Transmission and 402, 697 Transformation Equipment Group nuclear war, 846 national team player (first batch), 112 nuclear weapons, 187, 195 Northeast Power Equipment Company, 394 Nucor (USA), 599–600, 602, 620, 889 Northeast Power Equipment Group (Dongbei Number One Automobile Group, see Yiqi Group), 111 Number Two Auto, see Dongfeng Automobile Northern Electrical Industries, 331 Company Northern Engineering (UK), 943(n7) numerical-control systems, 379, 948(n56), Northern Pharmaceutical Group (PRC) 949(n58) grooming for Fortune 500 entry, 126 nutrition, 261 1050 Index

NYC, 950(n9) large integrated sites, 421–2 Nye, J., and W.A. Owens (1996), cited, 761 oil and gas reserves, 421 nylon, 265; catch-up possibilities, 64 organizational structure, 423–5 product mix, 423 Occar, 157 refineries, 421 Occidental, 729 size, 417–21 Oceania, 33, 508, 595 super-majors, 417–21, 492, 494 OECD countries, 29, 193, 242 top 15 (by output, 1996), 409 coal consumption rate, 945(n26) see also named individual companies primary energy efficiency, 355 oil and petrochemicals (global), 401–500, 861, steel output (1974–96), 593 929 see also advanced economies alternative energy sources, 426–7 Office of Experimental Areas for Agricultural battle for change, 462–4 Reform (PRC), 316 capital control and asset reorganization, oil, 848, 854, 859, 860 425–6 asset reorganization, 425–6 centrality of oil and gas in primary energy demand, 402 supplies, 402–4 electricity generation (fuel type, 1990–2010), centrality of oil and gas in global political 696 economy, 401–7 exploration, 252 centralized procurement, 422–3 exports from Russia to PRC, 192 conclusion, 491–500 fuel for electricity generation (1996), 698 creation of super giants, 407–28 global market share, 37 ‘disintegration’ of world oil and power plant capacity (1980–2010), 335 petrochemical industry, 407–10 power stations switch to, 891 economies of scale, 421 PRC and global output (1980–98), 341 geographical distribution of world oil and price, 697, 957(n1) gas, 404–7 price trend (1970s-), 404 global brand, 427–8 privatization (general), 32 global setting, 401–28 production (PRC 1978–94), 355 growth of primary energy consumption, production by region (1987–97), 405 401–2 research and development expenditure (1995, human resources, 427 1998), 49 integration of operations, 421–2 reserves, 421, 696–7, 707 internal management systems, 412 share in primary energy consumption (1996), major oil and gas deals (1997–9), 413 697 mergers, 411, 412–17 share of world primary energy consumption modern IT, 411–12 (1987–97), 402 oil industry restructuring (1980s, 1990s), substitute for coal, 705 410–12 supply, 404 organization structure, 423–5 transportation problems (PRC), 438–9 PRC, 428–500 world distribution, 404–7 product mix, 423 world production (1997), 403 reduced reliance on internally-generated world reserves (1997), 403 crude oil, 410–11 world reserves v world population (1998), revolution in oil and gas (global), 407–28 406 share of world energy consumption oil companies, 44 (1980–95), 428 alternative energy source, 426–7 technical progress in exploration and capital control and asset reorganization, development, 411 425–6 oil and petrochemicals (PRC), 428–500, 714, centralized procurement, 422–3 863, 921 competitive capability, 417–21 building strong firms through administrative diversification (temporary) into coal, 707 means, 497–500 economies of scale, 421 carbon dioxide emissions, 430 ethylene crackers, 421 China National Offshore Oil Corporation global brand, 427–8 (CNOOC), 489–90 human resources, 427 choices facing policy makers, 493–500 integrated, 413 CNPC, 436–41, 474 integration of refining and marketing, 422 comparison with global giants, 479–81 integration of operations, 421–2 competitive capability (1997–8), 884 Index 1051 oil and petrochemicals (PRC) – continued subordinate enterprises, 452–7 conclusion, 491–500 supply and demand (oil and gas), 428–35 corporate structure, 460–1 upstream, 436–45 Daqing, 441–5, 474–9 use in steel industry (PRC), 953(n31) decisive shift in government policy, 497 weaknesses (oil sector), 492–3 direction of PRC government policy, 500 WTO rules (implementation by PRC), 867, Donglian experiment, 466–7 884 downstream, 445–52 oil price economies of scale, 484–5 collapse (1997–8) and sharp rise (1999), 459 financial performance, 481–4 future uncertainty, 749 flexibility for future restructuring, 499–500 long decline (1980s-), 410, 412, 748 flotations, 453, 461, 465, 883 PRC, 448, 453, 457–8, 748 ‘following the guidance of the market’, rise (1992–4) and fall (1994–7), 459 493–7 shocks (1970s), 401, 402, 405, 410, 706, 707, gas reserves, 429, 479[–]481, 706 748, 814 global level playing field, 492–3, 883–5 oil products holding company experiment, 464–6 ‘in-plan high price’ (PRC), 458 increased supply of oil (post-1973), 404 ‘in-plan low price’ (PRC), 458 industrial structure, 461–2 oil refining, 421, 422 institutional change, 436–62, 462–89 Caltex, 417 integration of operations, 485–6 New CNPC (1998–), 470 international competition and restructuring, PRC, 444 491 Sinopec, 446–7, 449–50 international trade, 433–5 South Korea, 22 joint ventures, 883 Taiwan, 20 marketing and distribution, 457–60 TotalFinaElf, 417 merger and acquisition, 495–7 oil seals, 950(n9) missed merger opportunities, 862 oil tanker fleets, 486 national energy security, 441 oligopoly, 4, 11, 15–16, 17 natural gas reserves, 407, 491 auto industry (Japan), 505, 510 obstacles to domestic mergers (PRC), 883 coal sector, 713 oil exploration, 436, 440, 706 commercial seeds (1998), 768 oil imports, 433–5 computers (1998), 768 oil production, 434, 436 diesel engines (PRC), 567 oil reserves, 407, 429, 438–9, 479[–]481, EU, 234 491, 492, 706, 715, 716 form of warfare, 670 oilfields, 437–9 global, 40–2, 61, 62, 857, 860, 875, 929–30 operational methods, 410 iron ore sector, 713 organizational structure, 487–9 IT, 767–70 partially reformed structure, 436–62 Japan, 17, 60, 176, 236, 463 (problems, 460–2) job of investment banker, 27 population, 406, 407 ‘normal path’, 13, 61 primary energy, 402, 428–9 oil sector (PRC), 468 privatization, 410, 493–5 pesticides (1998), 768 product mix, 486–7 pharmaceutical industry, 245 production of ethylene (1989–96), 451 pharmaceuticals (1998), 768 production of plastics (1989–96), 451 power equipment business, 338, 395 production of synthetic fibre (1989–96), 451 promotion (PRC), 86 reforms of 1998, 462–89 South Korea, 22, 176, 236, 463 regional rivalries, 496 sub-categories of markets, 40–2, 61 restructuring, 467–71, 493, 883 telecommunications (1998), 768 revolution in oil and gas, 428–90 Triad group of countries, 60 Shanghai Petrochemical Corporation, 454–7 USA, 35, 60, 154, 232 share of PRC’s energy requirements veterinary medicines (1998), 768 (1980–96), 354–5 Western Europe, 60 Sinopec, 445–52, 464–6, 472–4 see also industrial concentration structure of primary energy use, 429–33 Olivetti, 786 struggle to centralize power, 497–8 Omnicom, 781 struggle between Daqing and CNPC Oneworld (airline alliance), 149 headquarters, 474–9 online trading, 834 1052 Index

OPEC, 415 paraxylene, 416 open hearth furnace, 596, 597, 628, 953(n21) ‘Pareto optimal’ solution, 3 energy inefficient, 953(n21) Paris, 212 steel production method (1997), 597 Paris Air Show (6.1999), 182 opium, 902–3 Park Chung Hee, President, 21–2 oppression, vii, 907 Parson, Sir Charles, 943(n7) Oracle (USA), 764, 772, 776, 786 Parsons engineering, 943(n7) Orange (telecommunications company), 786 passenger transport: PRC (1978–97), 432 Ordos Plateau (PRC), 734, 890 patents organ transplants, 246 absence, 844 Ortel, 773 dominance of high-income countries, 785 outsourcing, 7–8, 51, 61, 145, 159, 918 IBM, 772–3 aerospace, 144 pharmaceuticals, 879, 880 components, 333–4, 520–1 royalty and licensing fees, 785 globalization (automobile industry), 511, TRIPs Agreement (1994), 785 950(n3) WTO enforcement proceedings, 870 IBM, 772 Peabody (USA), 709, 710, 735–6 IT companies, 775 ‘Peace Programme’, 190 IT systems, 146 Peirson, Jean, 155 lessons learnt by US and Europe, 51 Pemex, 409 pharmaceutical sector, 246 Peng, Li (b 1928), 212 power equipment, 337 Peninsular and Oriental Steam Navigation service contracts, 332 Company (P&O): joint venture with software, 787–8 Shougang, 687 ‘Toyotist’, 48 Pennsylvania Railroad, 937(n2 to ch1) Yiqi bucks trend (1995), 561 Penrose, Edith, 10–11 Yuchai, 580 pension funds, 180, 381, 918, 949(n60, 62) see also ‘external firm’; sub-contracting pensions, 271, 315, 321, 367, 383, 922 Overseas Chinese, 291, 300–1, 310, 573, 880 Pentagon (USA), 144, 147, 150, 152–3, 154, Owens, W.A., see Nye, J. 155, 157, 162, 165 ownership reform, xxiii promotion of mergers, [682], 956(n64) oxides of nitrogen (NOx), 700 People’s Armed Police (PAP, PRC), 273, 276–7 People’s Bank of China (PBC), 833, 836 Paccar, 861 People’s Insurance Company of China (PICC), acquisitions, 535 826, 828, 830, 958(n10) leading lorry-maker, 517 People’s Liberation Army (PLA), 188, 192, origins, 517 194, 201, 951(n22) output, sales, profits, employees (1998), 542 commercial activities v military goals, 274–7 price of lorry (average), 534 commercialization, 271–7, 941(n3–6, 9) Pacific (PRC insurance company), 828 direct ownership of defence firms, 941(n4) Pacific Century Cyberworks (PCCW), 784, 806, fraud, 276 935 galvanizing tradition, 667 packaging, 34, 42, 43, 311, 318 involvement in smuggling, 275 Paine Webber, 822 military enterprises converted to civilian Pakistan, 378, 388, 619, 900, 943(n8) production, 272 Paloma Partners (USA), 306 military modernization ‘undermined’, 276 Panda Group (national team player), 108 ‘most powerful institution in PRC’, 241–2, Pangang, see Panzhihua Iron and Steel Group 277 Panzihua Iron and Steel Group (‘Pangang new businesses, 272[–]4 jituan’) owner of Sanjiu Group (until 1998), 241–2 continuous casting, 627 pilots, 191 national team player (first batch), 114 professionalization programme, 276 output structure (1997), 646 reform proposals re commercial activities principal steel products (1997), 637 (1998), 242, 324–5 production methods (1997), 597 ‘rich legacy of motivational skills’, 680 productivity, 659 smuggling, 874 remuneration and productivity (1997), 641 ‘technological backwardness’, 194, 195 return on investment (1980–90), 660 Tibet, 312 top ten steel producer (PRC 1997), 634 ‘transition to civilian ownership’, 277 paper, 53, 56 see also Sanjiu Index 1053

People’s Republic of China (PRC, 1949–) infrastructure investment, 643 ability to compete globally, 839, 840 institutions, 87, 98–9 administration, 923 ‘insurance density’, 832 agrees to join WTO (1999), 4–5, 25 international relations, 2 air force, 189–90 internet hosts per 1,000 people (1997), 789 air traffic, 202 ‘inward-looking’, 24 anti-US sentiment, 924 large SOEs, 853 arms deliveries (1987–98), 151, 152 legal system, 298, 834 ‘ASEAN plus three’ forum, 927–8 ‘macroeconomic adjustment capabilities’, 88 aspiring global champions, 849 maritime claims, 196 automobile and vehicle components industry mass media market, 781 (PRC), 536–85 mentioned, 145 aviation industry, 184–240 military-industrial complex, 272, 273 business groups, 76 military technology, 187–8 central administration (1998 reforms), 346–7 ministries, 847 changes in ideology, 328 models for economic development city government (PRC), 69, 70, 938(n11) (post-Mao), 24 co-operation agreements (PRC), 73 national champions, 67–139 coal, 619, 713–60, 957–8 national defence industries, 231 collective enterprises, 73 naval forces, 192 communications, 926 net importer of oil, 706, 714 comparative advantage, 6 ‘new left wing’, 875 demand for pharmaceuticals (per capita), 277 non-mainstream economic theory, 8 destabilizing forces, 811 non-signatory to World Telecoms Agreement, drive to diversify, 846–50 786 economic growth, xxiii, 339, 340, 428, 536, nuclear capability, 195 623–4, 649, 713, 851, 907, 912, 913, number of companies in Fortune 500 (1998), 915–16, 953(n27) 47n electronics (impact on trade balance), 86 offshore oil reserves, 883 elevation in status of business leaders, 92 120 largest emerging enterprise groups, 68, energy, 339–42, 348, 354, 428, 715, 716, 69–70, 83, 98, 938(n8), 940(n30) 943(n9) onshore oil reserves, 883 enterprise law (1994), 138 ‘outstanding economic progress’ (1978–95), EU/US access to markets, 813–14 67 experiments in enterprise reform, 68 ‘over-manning’, 846–7, 853, 892, 893–4 export markets, 848–9 passenger airliner fleet (1985–96), 202 fifth largest oil producer in world (1994), 355 People’s Republic of China (PRC 1949–) fifth-largest trading partner of USA, 871 per capita energy use (1994), 341 fiscal difficulties, 649 personal computers per 1,000 people (1997), forecasts, 871–2, 914 789 ‘foreign medicines’ (market share), 283 pharmaceutical companies, 284–5, 286 foreign trade rights, 874 pharmaceuticals, 270, 277–89, 289–320 ‘fundamental economic situation’, 834 police corruption, 874 geographical distribution of aviation industry, policy debates (1980s–), xxiii-xxiv, 4, 6, 25, 187 937(ch1,n1) ground forces, 192 political considerations affecting commercial ‘hardliners’ and ‘reformers’, 875 decisions, 212, 218 high transaction costs, 847 political stability considerations, 872, 875 holding companies, 847 poorer regions, 86, 113 human capital, 762 potential consequences of a financial crisis imperfect markets, 847 (post-WTO entry), 834 import-substitution industries, 623 poverty, 196, 803–4, 852 importance of electronics to trade balance, power equipment needs, 342–3 106 power generation equipment, 327–8, 339–99 industrial policy, 4, 24–5, 27–8, 65, 74, primary energy efficiency, 355 186–7, 241, 840, 853, 854, 856–7, priority given to economic modernization, 857–64, 864–76, 932–3 196 inflation, 650, 953(n28) prosecution of prosecutors (corruption cases), influence of mainstream neo-classical ideas, 874 25 rapid industrialization, 699 1054 Index

People’s Republic of China (PRC, 1949–) – world ranking (selected products, 1949–98), continued 913 reform process, 841, 843, 850, 851 (‘failure’, world’s largest economy, prediction (by 852, 857), 852–6, 857 2020), 914 regional and departmental barriers, 88, 92 WTO entry, 898, 916–25, 925–33, 958(n3) regions, 74 PepsiCo, 35, 863 restructuring, 813 Peregrine (HK-based investment bank), 545 role of imports (military technology), 190–5 perestroika, 908 ‘second largest economy’ (PPP), 850, 913–14 perfect competition, 3–4, 13, 19, 149, 232, 670, sense of vulnerability (defence), 193, 194–5 857 ‘seventh largest economy’ (1998), 850 Perkins Diesel Engine (UK), 530, 547–8 share of world exports (1980–97), 871 personal computers, 106–7, 108, 272, 769 ‘six unifications’ policy, 89, 137 global (per 1,000 people, 1997), 789 state equity holdings, 932 Microsoft, 776 steel, 587–8, 593, 594, 615, 616, 619, non-SOE national champions (PRC), 862 622–94, 889, 952–7 penetration (developing countries), 788 stock market capitalization (1998), 932 PRC, 790, 794, 796 structure of output (1995), 700 Pertamina (Indonesia): output (1996), 409 ‘technologically backward’, 95, 194, 195 Peru, 646, 690 telecommunications development (1997), 789 copper and nickel, 691 telecommunications (effect of WTO exports of iron ore to PRC, 640 accession), 777 investments by CNPC, 441 telecommunication statistics, 798 purchase of ‘Hierro’ iron mine by Shougang telephone main lines (1997), 789 (11.1992), 675, 691 television sets per 1,000 people (1997), 789 Shougang Hierro (Peru) SA, 647, 672n theory of the firm (lessons from Posco), 605 pesticides, 265, 456 trade surplus with USA, 872, 893 Peterbilt (lorry company), 518 urbanization, 852 Petrobas (Brazil), 409, 494, 861 US ‘threat’, 194 Petrobas de Venezuela (PDVSA), 409, 418 wages, 313, 942(n27) petrochemicals, 355, 368, 458–9, 848, 854, 859, weakening of planning system, 328 860 wireless telephones, 778, 789 BP Amoco, 414 workers ‘nominally the masters’, 665 Donglian, 466–7 working-age population, 893–4 Exxon, 415 see also China (pre-1949); global business global ‘disintegration’, 407–10 revolution (PRC response); individual global market share, 37 sectors of economy global oligopoly, 41 People’s Republic of China (PRC, 1949–): Huizhou, 454, 490 long-term view, 897–33, 958 imports (into PRC), 452 centralized political system, 907 ‘one of least protected sectors’ (PRC), 453 China in 1949, 906–7 PRC, 433, 436, 444, 446, 448, 449, 450–2, ‘conventional’ structural adjustment, 919–23 453, 485, 487, 715 ‘distinctively Chinese’ development strategy, privatization (general), 32 915 restructuring, 80 employment structure (1998), 919 Samsung, 53 energy intensity (1998), 914, 958(n2) Sinopec, 449, 450–2 opening up and advancing (Deng era), South Korea, 54 910–16 TotalFinaElf, 417 output of key commodities (1998), 913 PetroChina (2000–), 80, 931 past, 898–916 IPO (disappointing yield, 4.2000), 884 political destabilization fears, 919 listed portion of New CNPC, 489 prospects: ‘optimistic’ view, 916–19 super-group, 80 resuming role as ‘core of world economy’, ‘wake-up call for PRC’, 489 899, 901–2, 918 PetroFina (Belgium), 415, 493 Russian disaster (avoided by PRC), 908–10, petrol, 458, 485, 848, 883 915 petrol stations, 44, 416, 422, 444, 459, 486, shock of defeat, 916–25 494 spiritual pollution countered, 911 petroleum, 265 stands up (Mao), 907–8 petroleum refining, 11 technology gap, 908 Petronas (Malaysia), 410 Index 1055

Peugeot ability to compete on global level playing collaboration with Fiat, 513 field, 878–81 diesel engines, 513 basic data (1996), 280–1, 284–5, 287–8 foreign assets, sales, employment (1997), 509 competitive capability (1997), 879 Guangzhou joint venture (1993–7), 537 conclusion, 320–6 interests in India, 508 distribution, 299–300 joint venture with Guangzhou Auto (1985–), industrial structure, 283–9 539 liberalization, 279–82 output, turnover, profit, R&D (1998), 533 market size, 277–9 partnership with Ford, 513 missed merger opportunities, 861 suppliers, 519 national team, 77, 78, 125–6 Pfizer, 247, 259, 848 non-SOE national champions, 862 best sellers (drugs), 250, 269 production (1980–96), 279 takeover of Warner-Lambert (2000), 259, Sanjiu Group, 289–320 260, 262 sectoral share of national team (1991–7), 84 R&D, 259 traditional (Chinese), 242, 282, 288–9 Pfizer/Warner-Lambert (2000–), 257, 258–60 WTO rules (implementation by PRC), 868 pharmaceutical companies see also Sanjiu Enterprise Group global oligopoly, 245 Pharmacia and Upjohn, 246, 249, 257, 266 global top twenty by R&D expenditure Pharmacia Upjohn/Monsanto, 265–6 (1994–7), 248–9 pharmacies (PRC), 300 manufacturing procedures, 301 Philadelphia, 269 PRC, 283[–]286, 287 Philip Morris: competitive advantage, 35 profit margins (1998), 245 Philippines research and development necessary, 247 demand for pharmaceuticals (per capita), 277 response to change, 252–66 difficulty of framing industrial policy, 60 restructuring, 252 export market for HPEC, 388 traditional, 243–4, 253–60 HPEC tenders (1996), 387 see also Sanjiu Enterprise Group pharmaceuticals market (1995), 277 pharmaceuticals (global), 241–326, 848, 861, tariffs on steel products (1997), 619 863 WTO enforcement proceedings, 870 assets, 80 Phillips Petroleum Corporation (USA), 454, barriers to entry, 63–4, 270–1 455, 472 brand and marketing, 251 Phoenix (Chinese-language TV station), 784 commercialization of the PLA, 271–7 pig iron, 603, 626 conclusion, 320–6 Pilkington Automotive Division, 525 consolidation, 80 pillar industries, 83–6, 98, 99, 241, 316, 318, consumer goods, 86 320, 520, 537, 540, 545 consumption (selected countries), 278 Ping An (PRC insurance company), 828 de-mergers and mergers, 252–3 Pingdangshan Mining Company, 720 demand, 242–5, 277, 283 pingpang touzi (‘investment salad’), 347 drivers of change, 242–71 Pingshuo (coalfield, PRC), 718 global changes, 242–71 Pingshuo Coal Company (Shanxi), 718, 720, global market share, 37 736, 737 global oligopoly, 40 Antaibao mine, 729 liberalization (international), 282–3 Pioneer (components-manufacturer), 522 life sciences, 260–6 Pioneer Hi-Bred (Iowa), 265 market share (global), 266–8 pioneering provinces (PRC), 69 PRC, 277–320 pipelines: oil, 441 profits, 283 Pirelli, 522, 527, 529, 860 research and development, 49, 245–51 Pirelli Optical systems (IT company), 773 stock market pressure, 251–2 Pittsburgh (USA), 609 Sweden, 59 Piyanping (skin ointment), 298 traditional pharmaceutical companies, pizhun (‘ratification’), 947(n43) 253–60 PLA, see People’s Liberation Army transatlantic corporations, 338 PLA: General Logistics Department (GLD), TRIPs Agreement (1994), 785 272, 273, 276, 306, 311, 314, 318 US dominance, 269 creams off Sanjiu’s profits, 294, 296, 322, Western, 288–9 323 pharmaceuticals (PRC), 277–320 new meeting hall in Beijing, 295, 322 1056 Index

PLA: General Logistics Department (GLD) – polyethylene, 262, 416, 417, 423, 455, 470 continued polymers, 265, 417, 422, 487 occupancy rights (Hebei province), 315–16 polypropylene, 417, 423, 470 owner of Nanfang/Sanjiu Group (1986–), polystyrene, 417 242, 290–1, 294, 321–3 Polytechnologies, 941(n7) runs Guangzhou Army Hospital, 291 Pondimin (anti-obesity drug), 250 sets up 35 enterprises in Shenzhen (by 1992), population, 47, 851 294, 311, 319, 324 Asia-Pacific (including South Asia), 406–7 PLA: General Staff Department (GSD), 272, China (early C19), 901 273, 274, 276 China (Taiping Rebellion), 903 planned economy, see command economy PRC, 438, 703, 798, 851, 893–4 Plant Breeding International Cambridge Ltd, porcelain, 130, 900 265 pork, 871 plants, 73, 74, 76, 91, 95, 98, 109, 126, 187 ports, 119 Liaoning, 111 Portugal, 513, 821 micro-vans, 199 Posco (South Korea, 1968–), 176, 599, 600, nuclear power, 85 611, 640, 842, 854, 858, 887 pharmaceuticals, 283, 941(n10) ‘big family’, 669 pharmaceutical (PRC), 279, 283, 307 capacity, 604 problems of definition, 939(n15) catch-up (steel industry), 604–5, 621 Shenzhen, 291 crude steel output (1996–7), 602 size, 3 debt-control, 604–5 Wuhan, 102 deepening partnership with New Japan Steel plastics (8.2000–), 928 alternative to steel, 590, 591, 595 employees (1994), 888 bottles, 39, 43, 416 eschews diversification, 692 mentioned, 252 four plants in PRC, 609 packaging, 455 goal, 670 PRC, 433, 450, 451, 452, 472, 487 Japanese reparations, 604 Shanghai Petrochemical Corporation, 472 joint venture with US Steel, 601 Sinopec, 450, 452 key slogan, 668 Taiwan, 20 management (Shougang comparison), 671 world production (1989–96), 451 military discipline, 669 Plato, 935 mini-mills, 609 Poland, 909, 917 ‘most successful steel company’, 604, 605, coal output (1980–95), 699 692 coal-sector employment, 706, 707 overseas operations (1990s), 609 deaths in coal-mining accidents (1994), 725 privatization process, 605 labour productivity (coal-mining, 1996), remuneration and labour productivity (1994), 711 641 output per worker (coal), 751 revenues, profits (1998), 888 wages (coal industry), 752 role model for Shougang, 668, 669 pollution, 127, 590, 653, 689–90, 691 share-swap with Nippon Steel (1999), 613 acid rain, 700, 701 state-owned, 604, 605, 952(n9) Beijing, 748 subsidiary in Pittsburgh (USA), 609 coal-burning, 699–702 tight discipline and high remuneration, control (PRC), 546, 740 955(n50) government action required, 700–1 workforce reduced (1992–7), 605 household use of coal (PRC), 748 postal services, 32 minimization, 338 pottery, 130 oil refineries (PRC), 485 poultry, 870 power stations (PRC), 355, 881 poverty PRC, 429–31, 460, 845 absolute (PRC 1978–96), 914, 915 small oil refineries (PRC), 485 income deciles, 915 SMEs (PRC), 844 output per capita (PRC), 913, 915 steel industry, 593, 598, 628, 629, 631 PRC, 196 urban air (PRC), 748 Russian Federation, 910 see also environment power equipment (global), 327–99, 848, 860, polycrystalline silicon, 426 942–9 polyester, 452, 466 barriers to entry (1998), 63–4 Index 1057 power equipment (global) – continued WTO accession, 882 biggest single market (PRC), 342–3 power equipment companies conclusion, 392–9 Asea and Brown Boveri merger (late 1980s), demand, 334–5 59 financing PRC’s power industry, 348–54 concentration, 335–9 gas-fired, 337, 339 economies of scale and scope, 328–34 global market share, 37 financial strength, 331–2 global oligopoly, 42 flotation, 349 Harbin Power Equipment Company, 328, job losses, 337, 338 363–92 low-cost supply base, 333–4 hydro, 356–7, 394 market share worldwide (power generation industrial concentration, 335–9 equipment, 1993–8), 337 main features of industry worldwide, 328–39 PRC, 349 marketing, 942(n1) service capability, 332–3 multinational giants as suppliers (PRC), source of profits, 333 358–63 power generation power equipment markets, 354–8 nation team players (PRC), 109–10 PRC, 327–8, 339–99 PRC, 871 ‘quintessential capital good’, 327 PRC (national team), 76, 81 size of leading firms (late 1990s), 330 privatization (general), 32 technical progress, 329–31 South Korea, 54 power equipment (PRC), 327–8, 339–99, 848, power generation equipment, see power 921 equipment Build-Operate-Transfer (BOT), 352–3 power stations, 43, 109, 119, 126, 328, 329, command economy era, 3 849, 860, 881 commercial loans, 354 BOT (‘Build-Operate-Transfer’), 331, 352–3 competitive capability (1998), 882 coal supplies (PRC), 723 equity participation, 350–2 coal-driven, 339, 350, 380 export credit, 353–4 coal-fired (PRC), 714, 716 exports (by HPEC), 387 construction and finance (PRC), 345 Fifteen Year Programme for Technical conversion to coal-fired (PRC), 740 Transfer (1981–96), 376–7 cost of construction, 349, 944(n15) finance, 348–54 developing countries, 891 500 MW Francis-type power generator sets, East Asia, 891 948(n57) energy savings (potential) (PRC), 716 flotation, 349 environmentally-friendly, 705 Harbin Power Equipment Company, 328, ‘Europe’, 891 363–92, 948(n57) fossil-fuels, 339 hydro power, 356–7 fuel type, 335 imports, 347 gas-fired, 337, 339 integrated coal gasification combined cycle global market, 334 systems, 948–9(n57) hydro, 390 involvement of multinational corporations, large, modern (PRC), 714 358–63 low-emission coal (PRC), 734 local finance, 350 market for Shenhua, 746–8 markets, 354–8, 863 oil-fired, 350, 740 national team, 76, 111–12 pit-head (PRC), 715, 747, 753 new investment institutions, 349–50 pollution control, 700 nuclear power, 357–8, 380 PRC, 192, 713, 714–15, 740, 890 power generation and distribution, 343–6 security of supply ‘crucial’, 757 price (PRC), 385–6 Shenhua Project, 735, 738, 743n role of multinational giants, 358–63 Shougang, 672 price determination, 345 size (PRC), 714–15 rate of return, 349, 944(n14) small-scale (PRC), 724 regulation, 343–8 steam, 390 state procurement, 860 tax (possible) on emissions (PRC), 714–15 steam/gas combined cycle, 380 thermal efficiency, 329 sub-contracting, 347 thermal, 350, 380, 386 technology transfer, 347 USA, 891 thermal power stations, 354–6, 380, 394 Prague, 950(n6) 1058 Index

Pratt and Whitney, 142, 172, 178, 180, 204, 205 former Communist countries, 32 alliance with Siemens (1990) 330, 942(n2) not essential for growth, 682 Chinese sub-contractor (CEC), 217 oil and petrochemicals (global), 407–8, 413, PRC, see People’s Republic of China 436, 492 precision machinery (Samsung), 53 oil sector (PRC), 496 precision tools (AVIC), 198 Peru, 691 preferential planning (PRC), 70, 74–5, 89, power plants (advanced economies), 331 91–2, 120 PRC, 69, 96, 496, 920, 921 phased out, 92 Rolls-Royce (1989), 173, 331 single-track, 98–9 Russian Federation, 909 PREVI, 180 steel industry, 587, 600, 605, 606, 609 price deflator, 940(n11) telecommunications, 779 price mechanism, 7 Volkswagen, 504 price reform, xxiii Procter and Gamble, 34, 35 Russian Federation (1992–), 909 procurement, 45, 863, 395–6 price regime aerospace (USA), 170, 231–2, 235 ‘in-plan high price’ (PRC), 458 auto industry, 523, 533, 535 ‘in-plan low price’ (PRC), 458 components, 398 international (oil), 458 defence equipment, 156–8, 240 liberalization, 457, 458, 459 diesel engines, 531 New Policy (1994), 457–8 GATT talks (Uruguay Round), 395 oil sector (PRC), 457, 462 global, 39, 851, 856 petrochemical products (PRC), 458–9 global giants, 845–6 State Low Price (crude oil, PRC), 457 government contracts, 860 State High Price (crude oil, PRC), 457 internet network (Ford, GM, Daimler- prices, 3, 7, 13, 44, 64 Chrysler), 856 attained by suppliers, 42 military (PRC), 276 competition, 11, 62 military aircraft, 150, 154, 174, 196–7, 201 controls, 604, 874 oil sector, 414, 422–3 cutting, 61 on-line networks, 45 market-determined, 1, 5 USSR/Russian Federation, 178 PRC (domestic), 435 weapons (PRC), 188, 196–7, 216, 217, 232 primary commodity, 709 product development, 43, 600 stabilization (Japan), 17 product mix, 423, 436, 484, 487, 684, 841 primary energy production centrality of oil and gas, 402–4 costs, 9, 10 consumption (1996), 697 flows, 14 demand (PRC), 428–9 inter-enterprise agreements (PRC), 73 global consumption, 401–2 processes, 11 use (PRC), 429–33 ‘social value’, 13 primary metals, 14 Third Technological Revolution, 763 Prince (car components manufacturer), 523 productivity, 11, 17, 72, 92, 127, 338 Principles of Economics (Marshall 1920), 7 Proex (Brazil), 181–2, 878 print machinery, 38 profitability, 64 printing and packaging, 311 profits Prior, Charles (Westinghouse), 357 automobile sector (PRC), 442, 539 private consumption (PRC index, 1980–97), CNPC, 439 914 Daqing, 439–40 private sector miscellaneous, 61, 189 PRC (Deng era), 912 Mobil (downstream), 415 Taiwan and South Korea, 19 New CNPC (1998–), 468 privatization, 3, 498, 707, 840–1, 849, 917 New Sinopec (1998–), 468 advanced economies, 892 oil sector, 419, 410, 480 aerospace, 163, 180 oil sector (PRC), 442, 459, 495 airlines (Europe), 149 patent medicines, 244 Brazil, 180, 688 pharmaceuticals (PRC), 279 driver of big business revolution, 32 PRC, 73, 77, 92, 94, 98, 136, 938(n10) electricity generation, 336, 397, 697 retained (PRC), 348 Embraer, 181–2 right to retain, 437, 495 ‘Europe’, 920 Sinopec, 446, 449, 465 Index 1059 property, 107, 121, 124, 130 Prybyla, Jan, 912 property management, 8 PTA technology (BP Amoco), 423 property rights, 137, 215, 274, 283, 290, 495 PTA (Yizheng), 466 insecure (developing countries), 757 Publicis (advertising sector), 781 Shenhua, 890 public transport: privatization (general), 32 PRC, 72, 87, 88, 849 pulp and paper: global market share, 37 prostitution, 33, 275 purchasing power parity (PPP), 850, 913–15, protectionism 957(n2) Adam Smith’s critique, 5 Putin, Vladimir, 910 anti-Chinese (‘Europe’, USA), 218 PX (Paraxylene) technology (BP Amoco), 423 auto components (PRC), 885 Pyropower Corporation, 378 auto industry (South Korea), 505 auto industry (general), 533, 534 Qantas, 149 calls for, EU and USA (steel, 1998), 607 Qatar: natural gas, 416 declining level (steel, 1990s), 607 Qian Long, Emperor (r 1736–96), 901–2 declining in oil sector (PRC), 458 ignorance of proverb ‘pride comes before dismantling (PRC post-WTO accession), fall’, 902 864–9 Qian’an xian (Hebei Province) East Asia (telecommunications), 779 projected deep water port, 676 essential for ‘green shoots’ (PRC), 862–3 Shougang iron ore mine (1960–), 653, 672n, French auto industry, 504 675, 687 Germany, 396 qiansanfei (severance payment), 315 IT sector (PRC), 791, 794 (undermined, 792) Qilu (Shandong Province), 643 Italian auto industry, 504 plan (aborted) to build steel plant, 651–2, Japan, 17, 18 653, 662, 670, 671, 675, 679, 686–7, Japanese auto industry, 505 842, 888 local (PRC), 874 Qilu Iron and Steel, 671 lorry industry (PRC), 535, 554 Qilu Petrochemical Corporation, 469, 472 mentioned, 4, 14, 15, 52 Qin Xiao, Mr, xxvi Mexico (telecommunications), 779, 802–3 Qing Dynasty (1644–1911), 125, 900, 903, 904 non-SOE national champions (PRC), 862–3 Qingan Aerospace Equipment Corporation, 200 oil sector (PRC), 883 Qingdao (PRC) power equipment (PRC), 347–8 China Unicom joint venture activity, 810 power generation (PRC), 881–2 coal port, 720 PRC, 4, 70, 463, 813, 911 thermal coal price (7.1997), 729 PRC car industry, 537–8 Qinghai Electric Power Company, 110 PRC (telecommunications), 803 Qinghuangdao (PRC), 720, 723, 739, 740 ‘regional aid’ (Europe), 533 Qingling Auto Group Corporation South Korea, 19, 22, 52–3 diesel engine production (1998), 559 South Korea (steel), 604, 858 output of light trucks (1998), 554 steel industry (developing countries), 605 Qinhuangdao Tractor Component Plant, 655 steel industry (general), 618 Qinshan (Zhejiang Province) nuclear plant steel industry (USA), 601, 951(n5) (1994–), 357, 945(n21) Taiwan, 19, 20 Atomic Energy of Canada, 945(n21) telecommunications sector, 787 GE (Canada), 357 UK, 15, 873 Qiqihar, 948(n56) USA, 15, 601, 952(n6) Qiqihar Heavy Engineering, 948(n53) voluntary export restraints, 601 qiye jituan (enterprise groups), 364 wireless telecommunications (PRC), 796 Qtera (optical networking firm), 774 see also anti-dumping; World Trade quality control Organization pharmaceutical sector, 286, 298, 303, 310, protest movements: anti-GM seeds, 266 323 provinces power equipment, 337 distribution of China’s preferred large-scale see also GMP enterprises and groups (1997), 82 Quanta Company (Taiwan), 21 PRC, 80 Quanta Fund (Soros), 834 R&D (PRC), 94 quanzi zigongsi (wholly-owned subsidiaries), teams of business groups, 70 563 provincial government (PRC), 69, 70, 349, Quek Leng Chan, 573, 951(n19) 938(n11) quotas, 865–6, 867 1060 Index radar, 148, 192, 193, 523 Shenfu Dongsheng Coalfield, 734 Rafale fighter, 158–9 Yuchai, 582 rail transport (PRC, 1978–97), 432 see also ‘Third Front’ movement; Yuchai railway stations, 126 Diesel Engine Company railways, 13–14, 119, 124, 653, 904, 937(n2 to Ren Wanding, 875 ch1) ren wei ben (‘people are the foundation’), 579 Baotou-Datong-Beijing, 739 Renault, 840, 841, 854, 920 Beijing-Kowloon, 738 breakdown of alliance with Volvo, 513 boom (USA), 601 ‘controlling stake in Nissan Motors’, 57 coal transport (PRC), 723, 726, 738–40, 750, foreign assets, sales, employment (1997), 509 752 44% state-owned, 516 Datong-Qinghuangdao, 739 interests in Eastern Europe (post-1989), 508 ‘fees’, 723, 758, 957(n4) interests in Mercosur, 508 freight traffic (PRC), 738–9 interests in Turkey, 508 funding, 742, 743 merger with Nissan (3.1999), 515 iron ore transport (Australia), 708, 739–40 nationalization, 504, 859 high-speed trains, 206 privatization, 504, 892 map, 732–3 suppliers, 519 network of power stations (PRC), 747 Renault-Nissan PRC network, 738 comparative size (global, 1998), 561 rolling stock (South Korea), 54 output (PRC comparison), 538 ‘salaried professional managers’, 14 output, turnover, profit, R&D (1998), 533 Shenfu Dongsheng Coalfield, 734, 738–40 sales, profits, employees, R&D (1998), 561 Shenmu-Baotou, 738, 739, 741–2 renewable energy Shenmu-Shuozhou-Huanghua, 733, 738–9, power plant capacity (1980–2010), 335 741–2, 743n, 747, 890 renmin wei ben (‘the people are the base’), 668, subsidies (PRC), 739 681 Ramangkura, Dr Virabongsa, 927 renyuan taotaizhi (selection and competition) Ramquist, Dr Lars, 935 system, 295 ‘Rape of Nanjing’, 905 Repsol (Spain), 408, 840, 861, 920 rate of return, 349, 353, 944(n14) hostile takeover of YPF (1999), 408, 413, 494 Raytheon, 147, 160, 171, 235, 956(n64) privatization ‘mainly defence producer’, 230 privatization, 408, 493, 494, 892 market capitalization (1999), 236 transformation (SOE national champion into relative size (1997), 228 privatized TNC), 859 size (1998), 166 Repsol-YPF (Spain-Argentina 1999–), 854 Reagan, Ronald (b 1911): downfall of USSR, world’s eighth largest oil group, 494 793 research and development real estate, 53, 127, 311, 315, 316, 317, 688, ABB-Alstom, 338 921 aerospace, 141, 142, 146, 148, 165, 173, 175 Redmond, Sumner (CEO Viacom), 781 automobiles, 503, 507, 510, 511, 512, 514, redundancies, 313, 315, 321 521, 533, 539 Redux (anti-obesity drug), 250 CNPC subsidiaries, 487 reform process (PRC), xxiii, 841, 843, 850, 851 competitive advantage, 34–6, 37 external problems, 855–6 components (car industry), 522, 524, 535–6 ‘failure’, 852 Continental Europe’s share, 48, 60 internal problems, 852–5 contracted out, 43 local autonomy, 853 costs (pharmaceutical companies), 245–51 refrigerators (PRC) 197 cross-industry comparison, 618 Regional Airlines (French airline), 182 Daimler-Chrysler, 518 regional groups (PRC): national team players, defence sector (USA, NATO Europe, EU), 120–1 156, 192 Reliance (India), 861 ‘determines competitive advantage’, 13 remote areas (PRC), 187, 196, 224, 227, 656, diesel engines, 530, 531–2 758, 846 expenditure (1997), 47 coal mines, 731 financial services, 818 military factories, 275, 309 GE (USA), 393 offshore oil reserves, 481, 489, 490 high value-added sub-sectors, 64 oil reserves (PRC), 883 HPEC and subsidiaries, 371, 378, 380, 393, onshore oil reserves, 438–9, 481 396, 948(n50), 949(n64) Index 1061 research and development – continued respiratory medicines, 268 independent capability (PRC power restaurants: quick-service, 44 equipment), 363 restructuring investment, 62 Airbus, 168–71 India (pharmaceuticals), 245 AVIC, 229 Japan, 19, 24, 48, 56, 60 Boeing, 168 leading pharmaceutical corporations, 248–9 cement sector, 128 Legend (PRC), 107 chemical industry (PRC), 118 ‘life sciences’, 261 defence (EU, USA), 192 lorries (PRC), 535, 543 ‘European’ aerospace industry, 229, 230 mentioned, 4, 8, 10, 11, 39, 42, 61, 840 international, 81 military (PRC), 195–6 pharmaceutical sector, 252 minimum economy of scale (auto industry), PRC, 68, 80, 136 503 PRC (post-WTO), 925 mining sector, 712 role of stock market (PRC), 96 minuscule success rate (pharmaceuticals), retail price index (PRC), 648, 650, 953(n26, 28) 245 retail sector, 44, 132, 459–60, 511, 864, 869, need for enforceable patent legislation, 244 919, 921, 923 not needed by SMEs, 844 Reuter, 781 oil, 420, 423 Reyrolle Parsons (1968–77), 943(n7) pharmaceuticals, 243, 258, 266, 267, 269, Rhodia, 263 270–1, 286, 310, 318, 319, 325, 880 Rhône-Poulenc, 59, 263, 861 power equipment, 329, 331, 398 ‘life sciences’, 261 PRC, 94–5, 108, 134, 188, 535, 539, 543, merges with Hoechst to form Aventis 842 (1998–9), 256 risky investment, 331 merges with Rorer (USA 1990), 254 Russian Federation, 178 missed merger opportunity, 861 Shanghai Petrochemical Corporation, 456–7 research and development expenditure share of developing countries in, 62 (1994–7), 248 Shougang, 659, 661, 681, 687, 694 takes over Rhône-Poulenc Rorer (USA Sinopec, 465 1997), 255 Sinopec subsidiaries, 487 Rhône-Poulenc Rorer (USA 1990–7), 263 spiralling costs (auto industry), 522 takes over Fisons Pharmaceuticals steel industry, 595–6, 600, 618, 694, 951(n4) (UK 1995), 255 Taiwan, 20 rice, 869 top 300 companies, 48, 49 ride control systems, 525 tyre industry, 526–8, 529 Riegle-Neal Act (USA 1994), 814–15 USA, 14 Rio Tinto, 707, 891, 935 Western firms, 674 coal output, 710 WTO rules (implementation by PRC), 867, ‘dwarfed’ by Shenhua Group, 735–6 868 merger with ‘CRA’ (1995), 707–8 research and development expenditure moves into the USA (1993), 710 auto industry, 770 profits (coal division, 1997), 711–12 concentrated in ten countries (1993), 785 role model for Shenhua, 735 global leaders, 855–6 specialist mining company, 707–8 IT sector, 763, 770, 785, 794 Riva (Italy), 602, 602n key to success in IT sector, 767–8, 769, 775 Rizhao (PRC): coal port, 720 lack of PRC representation among top 300 Rizhao Plant (power generation), 944(n17) companies (1999), 851, 854 road transport (PRC, 1978–97), 432 life science companies, 763 Robbing China (Cun Fu, 1998), 926 Microsoft, 776, 797 Robert Bosch, 535 ‘minuscule’ (Indian IT sector), 788 anti-lock braking systems equipment, pharmaceutical sector, 770 950(n4) ranking of TNCs by, 46 car braking systems, 525, 535 by sector (1995–8), 766 fuel injection components (Wuxi joint software and IT services, 775 venture), 546 telecommunications, 770 globalization, 521 research institutes (PRC), 196 joint ventures (PRC), 546 research and technology centres (PRC), 70 multinational supplier firm, 57 resource allocation, 39, 96, 99 research and development, 535 1062 Index

Robert Bosch – continued arms sales, 150–2, 191–2 revenues, profits, employees, R&D (1998), collapse of social fabric, 910 886 cooperation with PRC (aerospace), 233 spark plugs plant in Nanjing, 546 deaths in coal-mining accidents (1993), 725 turnover, profit, R&D (1998), 522 disintegration, 910 world’s joint-largest component-maker financial crisis (1997–8), 833 (1999), 520 ‘former USSR’, 219, 237–8, 337, 357, Robert Fleming (UK merchant bank), 822 945(n23) Robertson, D.H., 1 GDP (1990–8), 910 robotics, 246 liberalization, 909 Roche, 248, 250, 269 mentioned, 165 rocket vehicles (PRC), 203 non-signatory to World Telecoms Agreement, rockets (PRC), 940(n5) 786 Rockwell, 105, 205, 239 number of companies in Fortune 500 (1998), Rockwell-Collins, 179, 180, 181 47n Rockwell International, 143, 175 oil fields, 416 rolling mills, 368 oil producer, 413 Rolls-Royce, 164, 177–8, 190, 239, 840, political turmoil, 413 854, 920 privatization, 909 aero-engines, 172–3 ‘psychological crisis’, 910 Chinese sub-contractor (CEC), 217 reform programme, 908–10 50MW industrial Trent engine, 942(n1) Sanjiu sales offices, 300 foreign ownership, 163 second-hand machine tools, 379 limitations, 398 state aid (aerospace), 237–8 outsourcing (IT systems), 146 top ten steel-producing country (1991–8), possible merger with GEC-Alsthom (1998 616 speculation), 943(n3) ‘truly in Third World’, 910 privatization, 163, 331, 859, 892 Russian Federation: Council for Foreign and relative size (1997), 228 Defence Policy, 839 research and development, 142, 143, 175 RVI (Renault): leading lorry-maker, 518 sales, 227 RWE (Germany), 710, 891 sells steam turbine business, 330, 331, 337, 338, 943(n7) Saab, 59, 157, 160, 162, 205 size (1998), 166 Sabena (Belgium), 149 state aid, 174 SAC, see Shenyang Aircraft Corporation supplier to Embraer, 181 safety suppliers, 144–5 oil sector, 427 Trent aircraft engine, 331 SMEs (PRC), 844 vulnerable to take-over, 172 SAIL (India) Westinghouse alliance, 330–1, 942(n1) crude steel output (1996–7), 602 Romania, 379, 745, 870, 948(n54–55) salaries (PRC), 92 Roosevelt, President, 905 sales Rorer (USA), 263 global 500, 95 Rothschild: alliance with ABN, 958(n9) national team (various indicators, 1995), 78 Roussel Uclaf (France), 262 New Sinopec, 479 Rover (UK), 513, 533 New CNPC, 479 Royal Air Force (RAF), 157, 158, 159 oil sector (PRC), 459–60 Royal Dutch/Shell (Netherlands-UK), 409, PRC, 70, 77, 98, 938(n10) 418–20, 884 ranking of TNCs by, 46 see also Shell sales tax, 574 Royal Navy, 158 Salinas de Gortari, President Carlos (b 1948), rubber seals and parts, 950(n9) 802 Rubicam, 781 Salomon Brothers, 817 Rugby Group, 262 Salomon Smith Barney (USA), 817 Ruhrkohle, 732 interests in PRC, 835 Rui Huaichuan, Ms, 958(n7) takeover of Schroders (UK), 822, 958(n9) rule of law, 875 top five firm (all international convertibles, Rural Development Group, xxiv 2000), 823 Russian Federation (1991–) top five firm (international equities aerospace, 178–80, 237–8 bookrunners, 2000), 823 Index 1063 saloon cars, 507, 536, 537, 538, 551, 556 options, 879 salt, 433, 900–1 organizational structure (1997), 317 Samsung, 23, 52, 53–4, 176 originally known as ‘Nanfang’ (1986–92), sanatorium, 291 290 sanctions: UN on Iraq, 441 output and profits (1992–7), 301 Sandoz (Switzerland), 261 PRC’s ‘largest pharmaceutical firm’, 289 Sanlian Service Company (HPEC), 381 principal businesses (mid-1990s), 308 Sangyong (South Korea), 23 product choice, 297–8 Sanjiang Air Industry Group, 113 profits, 293, 294–5, 296, 306, 307, 309, 311, Sanjiu Automobile Company, 316 315, 318–19, 324, 325, 879 Sanjiu Enterprise Group (1992–), 241, 272, prospects, 325–6 274, 283, 289–320, 841, 859, real estate, 315 941(n11–14), 942(n19) reform (1998), 296, 942(n19) ability to compete on global level playing relationship with PLA, 290–6 field, 878–81 revenues, profits, employees, R&D (1997), advertising, 289, 298–9, 941(n12–13) 879 agencies, 301 role of CCP, 304, 942(n22) agricultural technology, 315–16 sales force, 310 ‘apparent puzzle’ (reason for growth), 290, sales network, 318, 320 941(n14) ‘Second Enterprise Establishment’ policy, aspirations, 289 309 biotechnology, 307 selling methods, 299–301 business structure, 314, 318–20 SOE, 290 Chinese medicines, 296–309 subsidiaries, 318 competition within pharmaceuticals, 296–7 Three Gorges Dam, 315 competition from TVEs, 844 trade-mark battle, 299 competition within Western medicines, traditional Chinese medicines, 309–10, 310–11 879–80 comprises ‘Nanfang’ and GLD’s loss-making vehicles, 316 enterprises, 295 workforce, 318, 321 conglomerate, 290 see also Nanfang Pharmaceutical Plant construction, 315 Sanjiu Enterprise Group: Decision Management core business, 296–309, 318–20 Committee, 316, 317 debt-assets ratio, 303 Sanjiu Enterprise Group: Strategic Decision diversification, 242, 290, 309–18, 880 ‘Think-tank’ Committee, 316, 317 ‘diversified conglomerate’, 125 Sanjiu Pharmaceutical Company (1993–), ‘East Asian diversified conglomerate’, 324 306–7 employee stock-holding scheme, 320 ‘Sanjiu spirit’, 304 employment structure, 304–6 Sanjiu Trading Company, 300, 942(n22) expansion of pharmaceutical business, 306–0 Sanjiu Weitai (Sanjiu stomach medicine), 289, financial indicators (1992–98), 293 297–8, 309–10, 879 ‘getting close to market’, 297–301 marketed in USA (1994–), 301 good example of ‘Modern Enterprise ‘most valuable indigenous brand name’, 299, System’, 294 319 group structure (mid-1990s), 308, 316–18 packaging, 303 hotel chain, 311–14 trademark battle, 299 human capital, 324 Sanofi, 269 joint ventures, 294, 306–7, 311 Santai Manufacturing (company), 956(n60) management, 294, 295–6, 303–4 SAP, 786 marketing system, 290, 300, 307 Sara Lee: competitive advantage, 35 meaning of ‘Sanjiu’, 295 satellite navigation, 523 mergers and acquisitions, 290, 295, 307–9, satellites (PRC), 203 311–14 Saudi Arabia: arms purchases, 193 modernization, 301–3 Saudi Aramco, 403, 404, 408, 409, 413–14 Nanfang ‘core enterprise’ (1992–), 295, savings, 18, 348, 912, 932 314–15 SBC, 800 national team player (second batch), 125 SBC/Ameritech, 777 ‘new entrant’, 241–2 Scandinavian Airlines System, 149 non-core businesses, 309–18, 846 Scania, 861 operational autonomy, 294 Scharmann, 379 1064 Index

Scherer, F.M., 503 German concessions, 904 Schering-Plough, 249, 250, 283, 310 ‘grasping the large’, 83 schizophrenia, 261 investments by Daqing, 445 Schmitz, C.J., 14 Japanese demands (1915), 904 schools, 126 nuclear power (planned), 357 Schroders, 958(n9) oilfield, 437 Schwab, Dr Klaus, 917, 935 new power generation plant (commissioned Schweitzer, Louis, 504, 841 1996), 351 science, 9 power generation, 350, 944(n17) scientific research centres (PRC), 120 power plant capacity, 350 scooters, 873 power station construction (CEPA letters of Scottish Aviation Corporation, 498 intent), 353 SDH microwave networks, 796 provincial electricity grid, 345 SDIC, see China State Development and provincial government, 118 Investment Corporation Shandong Haiyanghua Group Seagram (Canada), 783 also known as Haihua Group, 118 Searle (Monsanto), 266 national team player (second batch), 118 seatbelts, 525 Shandong Huaneng Power Development seats (cars), 521, 523, 535 Company Limited (SHP 1994–2000), 344, Seattle, 168, 846 350, 931, 944(n12) ‘Second Enterprise Establishment’ (erci coal consumption rate, 945(n26) chuangye) policy, 309 Dezhou plant, 944(n13, 17) Second Heavy Machinery Group (PRC), 104 five power plants (1996), 362 Second Industrial Revolution, 11, 56, 849, 452 floated on Wall Street (1994), 349, 350, securities business (USA), 817, 819 359 productivity gap (PRC v global leaders), 831 imported equipment, 362 Securities Law (PRC 1998), 830, 834, 835 main shareholders, 350 security systems (vehicles), 526 Jining Plant, 944(n17) segments (business), 267 Rizhao Plant, 944(n17) semi-conductors, 15, 53, 54, 769 subsidiary of Huaneng Power Corporation, Seraing Works (Belgium), 662 350 service sector taken over by Huaneng Power International developing countries, 29 (2000), 96 industrialized countries, 29 Weihai Plant, 944(n17) PRC, 724 Shandong International Power Development services, 769 Company, 349 competitive advantage, 769 Shandong International Trust and Investment globalization, 855 Corporation (Shandong ITIC), 350 IT, 765 Shandong Mouping Engine Group Company, servicing 562 components, 512, 535, 536 Shandong Power Company diesel engines, 529, 530, 531 shareholder in Shandong Huaneng Power lorries, 542 Development Company Limited, 350 power generation equipment, 332–3, 337, SOE, 350 394 Shandong Price Bureau, 944(n12) Yuchai, 552, 557, 558–9 Shandong Rizhao Power Station, 362, 945(n27) SETC, see State Economic and Trade Shandong Xinhua, 282 Commission Shanghai, 80, 115, 123, 224, 226 SGEG, see Shanghai General Electronics Group advertising by Yuchai, 557 Shaanxi, 107, 687 automobile industry, 464 coal-mining region, 723 biscuit and chocolate manufacturing, 315 coal production and consumption (1996), 719 cable television, 781 depth of coal mines, 737 CCP uprising (1927), 905 problem of outward transport of coal, 739 Citigroup office, 835 see also Shenfu Dongsheng Coalfield coal production and consumption (1996), Shaanxi Aircraft Corporation, 200, 230 719, 720 Shandong coal prices (1994–7), 728 coal production and consumption (1996), 719 foreign investment in telecommunications geographical location of national team (post-WTO accession), 791–2 members, 82, 83 foreign military presence (1927), 905 Index 1065

Shanghai – continued Shanghai Baoshan Iron and Steel Group ([new] geographical location of national team Baogang 1998–) members, 82, 83 ability to compete on global level playing ‘grasping the large’, 83 field, 889 mentioned, 894 ambitions, 639–40, 670 migration of entrepreneurs to Hong Kong assets, 639 (1949–), 23 considering a HKSAR stock market listing, mine-mouth coal price (6.1994), 728 640 municipal government, 117, 454, 456, 670, diversification, 639–40, 846 801 downsizing, 952–3(n18) pharmaceuticals, 282–3, 307, 941(n10) merger activity expected, 639 Pudong area, 134 port construction, 640 research and development, 134 state-of-the-art, 692 retailing, 132 see also Baoshan Iron and Steel Corporation sea-going ships (C18), 901 Shanghai Cable, 808 steel, 464 Shanghai Chemical Industrial Group, 117 stock market, 282, 836 Shanghai Construction Group, 126 thermal coal price (7.1997), 729 Shanghai Diesel Joint Stock Company, 562 Y-10 programme (civil aviation), 204 Shanghai Electric Power Company, 110 Shanghai Aero Industry Group, 112 Shanghai Electric Power Group, 111 Shanghai Agricultural, industrial and Shanghai Electrical Company/Corporation Commercial Group, 135 (SEC), 389–90, 356–7, 371, 376–7, 387, Shanghai Aircraft Manufacturing Corporation 398, 881, 882 (SAMC), 207, 210, 219, 940(n13) joint ventures, 389 Shanghai Aircraft Manufacturing Factory, manufacturer of power equipment, 346 204–5 output (mid/late 1990s), 390 Shanghai Automobile Company, 210 technical ownership by local authority, 370 Shanghai Automobile Industrial Corporation unit production capability, 376–7 (SAIC) Westinghouse technology transfer, 389–90 ability to compete on global level playing Shanghai General Electronics Group (SGEG), field, 885–7 109 Chinese name, 103 national team player, 109 comparative size (global, 1998), 560 Shanghai Heavy Machinery Plant, 662 comparison with global giants, 886 Shanghai Hualian Group, 132 components (automobile), 546 Shanghai Huchang Iron, 635 joint venture with Volkswagen (1985–), 524, Shanghai Jincheng Group, 199 534, 537, 538, 540–1, 544, 546, 567, Shanghai Jinjiang Acrylic Fibre Plant, 456 886, 950(n7) Shanghai Meishan (Group), 115, 639 member of the national team, 103 Shanghai Metallurgical Holdings (Group), 115, mentioned, 950(n9) 639 minuscule (in international comparison), 534, Shanghai No 1 Iron and Steel, 634 538 Shanghai Pacific Chemical Group, 118 ‘most successful auto manufacturer’, 103 Shanghai Petrochemical Corporation Limited, output of cars (1995), 515 444, 448, 457, 469, 497, 841, 842, 855, revenues, profits, employees, R&D (1998), 883 887 case study, 454–7 sales, 103 constraints, 473 sales, profits, employees, R&D (1998), 561 corporate ambitions, 472, 495, 496, 497–8 sales, profits, employees, output (1998), ethylene, 454–5 556 floated (HK 1993), 449, 453, 455 second layer enterprises, 560 growing autonomy, 454–7 SOE, 538 growth strategy, 456–7 workforce, 103 human resources, 472 Shanghai Automobile Corporation Group, 442, joint ventures, 454, 455 454, 496 listed subsidiary of (New) Sinopec, 472 local champion, 454 local champion, 454, 456 profits, 442 merger activity, 843 Shanghai Automotive Works mergers and acquisitions, 455–6, 473 joint venture with GM (1997–), 540 missed merger opportunity, 862 Shanghai Aviation Research Institute, 208 new role (mid-1990s), 464 1066 Index

Shanghai Petrochemical Corporation Limited – advanced economies, 62, 924, 929 continued chance to express opinion, 848 (New) Sinopec subsidiary, 454, 473 enterprise group (PRC), 75 operational autonomy, 454–5 institutional, 8 ownership change, 455, 473 oil sector, 414, 426, 428 planned joint venture with BP, 472 preference for large aerospace firms, 148 price fluctuations, 459 railways, 13–14 profits, 446, 454, 455, 473 Shell, 426 research and development, 456–7 state (PRC), 96 size, 454 US, 924 SOE, 501 shares subsidiary of New Sinopec (1998–), 469 A-shares, 472, 685 wage policy, 473 B-share, 835 Shanghai Pharmaceutical Administration, 117 H-shares, 282, 295, 453, 471, 472, 473, 479, Shanghai Pharmaceutical Group, 118 835, 883 Shanghai Power Bureau, 362 pharmaceutical sector, 282, 300 Shanghai Pudong Iron and Steel Shatalin 500 Day Programme (1990), 909 stainless steel JV with Krupp-Thyssen, 630 Shell Oil (USA), 411 technological modernization, 630 The “Shell” Transport and Trading Company top twenty steel producer (PRC 1997), 635 plc (UK) Shanghai Research Institute for Combustion acquisitions, 411 Engines, 552 assets, 79 ‘Shanghai Internal Combustion Engine basic statistics, 418–20 Research Institute’, 578 chemical engineers, 941(n2) Shanghai Rubber Tyre Company, 528 chemical operations, 422, 426 Shanghai Science and Technology Investment comparison with New CNPC and New Corporation, 809 Sinopec, 479 Shanghai Shenjia Ferro-Alloys (company), environmental protection, 428 956(n60) 50,000 petrol stations, 422 Shanghai Telecom (part of China Telecom), 808 fuel-cell technology, 427 Shanghai Tianyuan Group, 117–18 joint venture with CNOOC at Huizhou, 454, Shanghai Tyre and Rubber Group, 118 490 Shanghai United Electric Corporation, 389 LNG project (Shenzhen), 717 Shanghai Xinhua Automobile Works, 564 mentioned, 414, 848, 935 Shanghai Xinhua Control Technology Group not state-owned (1996), 410 Company, 946(n37) number of employees (1992–7), 937(n1 to Shangrao Passenger Car Works, 564 ch2) Shantou Chaoyuan Power Plant, 352 oil and gas production, 481 Shantou Chenghai Power Plant, 352 oil reserves, 415 Shantou Tuopu Power Plant, 352 one of the three largest TNCs, 79 Shanxi (province), 116, 578, 715, 950(n9) petrochemical plants (planned), 454 China Unicom joint venture activity, 810 profits, 420, 484 coal mining, 118, 717, 719, 723, 737, 739, renewables, 426 752 research and development, 423 coke supplies for Shougang, 653 revenues (1992–7), 937(n1 to ch2) iron and steel, 116 rivalry of BP Amoco, 416 local government, 742 root and branch reform, 424 Shenhua Railway Company, 742 sale of coal-mining interests (USA), 710 Shanxi Power Company, 110 sales, 79 Shapiro, Bob, 265, 266 ‘vast global empire’, 424 share workforce, 79 issues (PRC), 97 Shenfu (Inner Mongolia Autonomous Region), options, 651 741 prices (aerospace sector), 235 Shenfu Dongsheng Coalfield, 750, 753, 757 prices (pharmaceutical sector), 252 high-quality coal, 734, 735, 737–8, 740, 748 values, 37, 64 location (Inner Mongolia/Shaanxi), 741 shareholder pressure (oil sector), 492 map, 732–3 shareholder value, 58, 264, 496 mine depths (1996), 736, 736n shareholders output, 734, 736, 736n ‘activism’ (oil sector), 414 remote, 734 Index 1067

Shenfu Dongsheng Coalfield – continued wholly state-owned, 741 reserves, 735, 736, 736n, 741 workforce (flexible), 749 ‘still in its infancy’, 752 see also Shenhua Project see also Shenhua Project Shenhua Huanghua Port Company Limited, 742 Shenfu mining company (PRC), 735 Shenhua Project (1985–), 119–20, 731, 732–3, Sheng Huaren (President, Sinopec), 454 734–60, 841, 859, 958(n7) Shengang Liming Aero-engine Corporation, capital construction investment (1985–97), 200 743 Shengli oilfield (Shandong), 437–8 coal chemistry, 748–9 Shengli Petroleum Administration, 437–8, 442 competition, 735, 749–51 Shenhua Group Company competitive advantage, 756–8 ability to compete on global level playing conclusions, 756–60 field, 890–2 costs, 735, 737 activities, 85 debts, 743[–]745, 750 advantages of concentration of activity, 752, depth, 736–7 757 diversification, 735 Baogang comparison, 749 domestic market, 746–8 benefits from stricter environmental rules, employment, 735, 745 748 exports, 735, 748, 750, 751–3 board of directors, 741 facilities (1998), 744 building a reputation, 752–3 finance, 739, 742–6 coal supplies to Beijing, 748 Huo Ji Tu Mine, 743, 744 competition from TVEs, 844, 891 imported mining equipment, 743, 751 conclusions, 756–60 industrial and domestic use of coal, 748 Da Liu Ta mine, 744 (possible flotation, 746) investment, 734, 735, 741, 743 diversification, 119–20 Japanese loans, 743 electricity generation, 747 management, 735 employment, 749, 751, 755, 920 map, 732–3 established to run Shenhua Project, 741 marketing, 750 exports, 748, 752–3 markets, 746–53 goal, 713 mines, 741, 743 holding company, 742 origins, 734–5, 740–1 international flotation plan, 735, 746 output, reserves, mine depths (1996), 736 joint venture partner in Shenhua Railway pithead cost of coal, 723, 751 Company, 742, [747] port facilities, 740, 741–2, 743, 750 loans, 742, 745 power stations, 735, 747–8 main communication links, 732 problems, 758–9 merger with ‘Five Western District Mines’, profits, 743 749, 753–6, 759 property rights, 740–2 merger of Shenfu and Dongsheng mining prospects, 743, 750–1, 756–60 companies, 735 quality, 737–8, 748 ‘millstone around neck’, 759, 843, 891 railways, 738–40, 741–2, 743, 747, 750 national team player (first batch), 119–20, reserves, 735–8, 741 741 sales revenue (1997), 743 nine mines, 741, 744 scale, 734 output, 749, 920 size, 735–6 output per worker, 749, 751 sources of investment funds (1985–97), 744 overall structure, 741 strategic choices, 743[–]745, 749, 759–60 position of strength (multinational joint strategic role in PRC economic development, venture negotiations), 750–1 734–5 productivity, 751 transport, 738–40 profitability, 745, 755 transport costs, 720, 751 profits, 741, 743 Shenhua Railway Company prospects, 756–60 Shuozhou-Huanghua line, 742 proximity to international markets, 752 shenhui (‘society’), 475 reserves, 735–8, 741 Shenlong Automobile Limited restructuring (8.1998), 745, 753–6 Dongfeng-Citroën joint venture, 565 source of funds, 744–5 Shenyang, 111, 115 vertical integration (speculation), 747–8 aircraft manufacturing, 186 wages, 751–2 China Unicom joint venture activity, 810 1068 Index

Shenyang – continued Shiyan Axle and Hub Works (Dongfeng), 564 ‘Cradle of China’s jet fighter industry’, 199 shiye gongsi Dongbei plant, 283, 941(n10) ‘business development companies’, 472 Shenyang Aircraft Corporation (SAC), 208, ‘service companies’, 381, 949(n59) 219, 877 shock absorbers, 524 assigned to ‘AVIC 1’ (no date, c.1999), 230 ‘shock therapy’, 70 bus-producer, 199 shoes, 274 statistics, 200 Shorts (Northern Ireland), 181 sub-contracting work, 209, 210 Shougang: Commission for Managing the Shenyang Construction Investment, 547 Livelihood of Employees, 668 Shenyang Electrical Cable Plant, 364, 365 Shougang Concord International, 643 Shenyang High Voltage Switch Plant, 364, 365 Shougang Construction Corporation, 647, 672 Shenyang Insulation Materials Plant, 364 Shougang Electronics Corporation, 647, 673 Shenyang Low Voltage Switch Plant, 365 Shougang Corporation Shenyang Medical University, 319 ‘core company’ of Shougang Group, 685 Shenyang Transformer Plant (SYT), 112, 364, member of Shougang Group, 635n 365 productivity, 635n Shenyin Wanguo (PRC investment bank), 829 renamed ‘Beijing Shougang (Group) Shenzhen (Guangdong Province), 137, 224, 275 Company Limited’ (1995), 685 Chinese traditional medicines (proposed top ten steel producer (PRC 1997), 634, 635n Sanjiu factory), 319 Shougang Group, 80, 116, 136, 464, 496, 588, Citigroup office, 835 635n, 638, 643–94, 841, 842, 855, 859, integration with Hong Kong, 942(n26) 953–7 labour market, 302 ability to compete on global level playing LNG project (announced 1999), 717 field, 887–90 pharmaceutical sector, 283 affiliates, 645 real estate, 315 ambitions, 676, 679, 690 site of Nanfang plant, 291 assets, 690, 691, 957(n68) stock market, 214, 282, 295, 836 autonomy within constraints, 650, 651–8, thermal coal price (7.1997), 729 682 wage levels, 306, 314, 942(n25–26, 30) Beijing authorities, 622, 644n, 683–4 see also Nanfang; Sanjiu Beijing origins, 643 Shenzhen: Cyber City, xxvi ‘big family’, 669, 688 Shenzhen: Great White Shark Fin Restaurant, bolt plate leveller, 674, 956(n56) 315 bonuses, 650, 657, 658, 665–6, 666n, Shenzhen: Nanhuan Motorway Project, 315 954(n41), 955(n49) Shenzhen: Sanjiu Skyscraper, 315 cadres, 665, 667, 686 Shenzhen City Government, 294, 307, 321, CCP and, 670 941(n16) civilian heavy machinery enterprises, 655–6 Shenzhen FIYTA Group, 226 coal supplies, 652, 687 Shenzhen Kaiye’er Service Company, 946(n37) coke supplies, 652–3, 689–90, 953(n32) Shenzhen Nanguang Industrial Trading competition from TVEs, 844 Company, 226 computerization, 661, 673, 689 Shenzhen SEZ, 290, 302, 321, 351 conclusions, 678–83 Shenzhen Special Economic Zone Development considering a HKSAR stock market listing, Group (10.1981–), 86, 120–1 640 Shenzhen Tianma, 226 construction capacity, 672–3 Sherman Act (USA 1890), 16 construction enterprises, 655 Shijiazhuang: Huabei plant, 283, 941(n10) continuous casting, 627, 645 Shijiazhuang Beer Factory (Hebei province), contract system (1979–1995), 643–83, 693, 314–15, 318, 322 850, 953–6 shipbuilding, 952(n12) controls on expansion, 651–2 Japan, 56, 603 corporate structure (1998), 647 PRC, 97 cost-cutting, 660, 955(n45) Samsung, 53 debt, 654, 656, 684, 691 South Korea, 54, 604 design capability, 674–5 Taiwan, 20 development funds, 657 shipping, 116, 121, 124, 129, 675–6, 956(n58) different interpretation, 953(n19) ships (South Korea), 53 diversification, 645, 651, 655–6, 677–8, shipyards, 156 679–80, 682, 691–2, 694, 956(n59) Index 1069

Shougang Group – continued output (steel), 644, 653–4, 655, 694, diversification, 847 954(n36) downsizing, controls on, 657, 688, 692, 694 output structure, 646, 655 electricity supplies, 652 over-manning, 640, 684 electronic control capability, 673 overseas businesses, 646, 672n, 674, 676–7, employment, 672, 694, 888 684, 690–1 energy efficiency, 638 oxygen converters, 645, 953(n21) export capability, 676–7 physical restraints, 651, 694 first piece of metallurgical equipment plants, 645 exported by PRC to a developed country pollution, 653, 689–90 (1993), 956(n56) post-contract system, 683–92, 956–7 flotation plans, 693 power stations, 652 foreign trade, 650, 676–7 principal steel products (1997), 636 full mobilization, 667–8 product mix, 684, 689 further development in overseas business, product prices, 653, 954(n35–6) 690–1 product quality, 638, 657–8, 955(n45) gaining autonomy, 646[–]648 production costs, 659 good luck: ‘industrial flea market’, 661–3 production targets, 665, 955(n49) growth, 644–6, 657, 678–9, 680, 681, productivity, 659 953(n24) profit distribution (1978–92), 649 growth begets growth, 658–9 profitability, 638, 684 housing, 651, 668–9, 688, 955(n52) profit retention, 646–50, 657, 659 identity (state factory or modern profits (1978–97), 644 corporation?), 681–2 profits, 649, 655, 659, 661, 663, 692, 888, imports, 661 955(n45) industrial entrepreneurship, 678 prospects, 693–4 input and output co-ordination, 652–4 rear services, 668–9 institutional first-movers, 680–1 reassessment of strategy, 684 integrated development of IT, 687–8 relationship between steel and non-steel integrated diversification, 679–80 production, 691–2 interests in Hong Kong, 676, 691, 956(n60) remuneration and productivity (1997), 641 investment, 648, 650, 657, 659–60, 692, research and development, 659, 661, 674, 955(n47) 681, 687, 694 iron ore, 646, 653, 672n, 675, 953(n33) restructuring, 684, 689–90, 691 joint ventures, 644, 645, 650, 651, 673, 676, revenue, 690, 888 677, 687, 690, 955(n54) sales, 650, 659, 690, 888, 955(n45), 956(n61) kindergartens, 669 second-hand equipment, 662–3, 956(n58) loss-makers, 686–7, 843 selected statistics (1978–97), 644 machine-building capability, 671–2 shipping capability, 675–6, 687, 956(n58) main products, 844 ‘Shougang first, China second, imports third’, main site (Beijing), 644, 651 661 management, 650–1, 657, 663–71, 684–6 since contract system (1995–), 683–92, 693 marketing, 653–4, 689, 953–4(n34–6) ‘6:2:2’ system, 648, 657, 668 medical services, 669, 955(n53) slogans, 663, 668 merger, diversification, transnationalization, Soviet aid, 644 671–8 state co-ordination, 651–8 mergers, 654–8, 682–3, 694, 956(n65), steel enterprises, 654–5 957(n70) Steel Mill No. 1 (1965–), 660 military approach to management, 661, Steel Mill No. 2, 660, 689 669–71, 679 Steel Mill No. 3, 689 military enterprises, 656, 954(n40) steel production facilities (1993), 645 military-style organization, 663–71 steel production methods, 597, 645 mining capability, 675 strategic control, 657–8 missed merger opportunity, 862 strategic re-assessment, 684 modernization, 654, 658–63, 664, 670, 679, strict discipline, 664–7, 955(n49–50) 682, 684–6 subsidiaries, 684, 685 ‘museum of metallurgical history’, 659, subsidies, 658 955(n46) summaries, 658, 677–8 organizational capabilities, 680 ‘super enterprise’ (1992–), 650 output (iron), 655 targets, 667 1070 Index

Shougang Group – continued alliance with Pratt and Whitney, 330, 942(n2) taxation, 648, 659, 683–4, 956–7(n66) CCF partner of China Unicom, 810 technological renovation, 659–61, 663–4, cooperation with ‘HEC’, [377–]378 684, 689–90 cost-cutting (1990s), 337, 338 tertiary sector, 668, 684, 688–9 ‘four main plants’, 338 training, 667–8 globalization, 335, 943(n5) turnover tax, 644n government procurement, 396 unified command system, 664 investment, 332 wage grades (1986), 666 involvement in Three Gorges Project, 356, wage growth, 658 945(n20) wage structure, 657, 658, 954–5(n43) joint ventures in PRC (1997), 390 wages, 644, 648, 649, 665–7, 686, 955(n50) market capitalization (2000), 764 welfare, 657, 668–9, 954(n41), 955(n51) market share worldwide (power generation Wire Rod Plant, 660 equipment, 1993–8), 337 wire rods, 658, 659, 663 mentioned, 336, 848 workforce, 639, 644 moving into IT sector, 765 world rank (1996), 638 one of the top three, 339 see also Zhou Guanwu plants (PRC), 338 Shougang Heavy Machinery Corporation, 647, R&D expenditure, 329 656, 671–2, 686–7 revenues, profits, employees, R&D (1998), Shougang High Technology Development 882 Office, 687 sales revenue (2000), 764 Shougang Holdings (Hong Kong), 647, 690 servicing, 394 Shougang NEC, 673, 687, 955(n55) ‘sixty years of quality production’, 955(n46) Shougang Party Committee, 657 size (late 1990s), 330 Shougang Real Estates Stock Holding source of profits, 333 Company, 688 steam turbine manufacture, 943(n7) Shougang Service Company, 688 supplies five coal-fired plants (PRC), 362 Shougang Shipping and Ship Construction Siemens Plessey, 147 Company (1990–), 676, 956(n59) Siemens Power Ventures (1994–), 362 Shougang Southeast Asia Holdings (Singapore, Silicon Valley (USA), 789 1995–), 676 silk, 15, 901 Shougang Special Steel Corporation, 647, 690, Singapore 692 arms deliveries (1987–98), 151 shougou (outright purchase), 314 ‘conforms to principle of comparative Showa depression (1930s), 602 advantage’, 4–5 SHP, see Shandong Huaneng Power consortium involved in power generation Shuicheng Iron and Steel Group, 954–5(n43) projects (PRC), 352 Shunde (Pearl River Delta), 298 degree of state intervention, 19, 23 Sibavia (airline), 179 ethylene crackers, 421 Sicartsa complex (Mexico), 614 foreign investment, 23 Sichuan, 104 genetic engineering, 306, 307 coal production and consumption (1996), 719 internet, 780 Chinese traditional medicines (proposed mentioned, 145 Sanjiu factory), 319 number of companies in FT 500 (1998), 47n petrol stations, 470 state expenditure on education, health, pharmaceuticals, 307 housing, 19 provincial electricity grid, 345 state-run enterprises, 23 salt wells, 433 TNCs based (1999) in, 21, 23 Ya’an Pharmaceutical Plant, 308, 309 see also Hong Leong Holdings Sichuan Changhong Electric, 272 Singapore Airlines, 23, 677, 956(n61) Sichuan complex Singapore Technologies, 212, 810 managed by New CNPC (1998–), 470 Singapore Telecom, 23, 804, 810, 861 Sichuan Ertan power station, 948(n57) Singapore University, 307 Sichuan Vehicle Plant, 542 Sino-Soviet split (1960–), 186, 187, 442, 846 Siemens (Germany) Sinochem, see China National Chemicals abortive joint venture with Dongfang, 390 Import and Export Corporation acquisition of Westinghouse’s non-nuclear Sinochem International (1998–), 129 business (1997), 337–8, 390, 398, Sinopec, see China National Petrochemical 943(n5–6), 949(n68) Corporation Index 1071

Sirocco (Egyptian leasing company), 179 global market share of leading companies, 39 SISTEL, 180 non-SOE national champions (PRC), 862 Sithe, 352 plastic bottles, 39 ‘six unifications’ policy (PRC, 1991–), 89, 94, suppliers, 39 137 Softbank Corporation, 780 SK (South Korean oil company) software (IT) basic statistics (1997), 418 competitive advantage, 769 name changed from Sunkyong from 1 developing countries, 797 January 1998, 418n IBM, 772 restructuring (1998), 54 Indian success, 787 SKB, see SmithKline Beecham mentioned, 107, 108, 115, 765, 769, 775–90, Skylark brand (mini-vans and engines), 197 797 Slim, Carlos, 802 research and development, 49, 766 small and medium-sized enterprises (SME), ‘sphere of influence’, 775 2–6, 13, 28 solar energy, 426 comparative advantage, 4–6 Solarex (USA), 426 competitors for PRC large SOEs, 852 Solaris operating system, 776 employment (PRC), 893 Solutia: spun-off from Monsanto (1997–), 265 exports from PRC to USA, 893 Sonatrach: output (1996), 409 Four Little Tigers, 19 Songhuajiang (micro-van brand, PRC), 199 neo-classical theory, 3–4 Sony (Japan), 18, 176, 783 PRC, 67, 88–9, 916, 918, 922, 923 Columbia Pictures, 783 research and development, 43 global top hundred company, 850 SMEs, 844–5, 852 market capitalization, 56, 764 suppliers, 62 Memory Stick, 783 Taiwan, 20–1 moving into IT sector, 765 transitional economies, 2–3 PlayStation, 783 see also TVEs sales revenue (2000), 764 small business groups (PRC), 76 Vaieo computer, 783 smart cards, 776 Sony Music, 781 SME, see small and medium-sized enterprises South Africa Smil, V., 701–2, 957(n2), 958(n2) coal, 699, 706, 751 Smith, Adam (1723–90), 1, 5, 873 exports of iron ore to PRC, 640 Smith Barney immigration (pre-World War I), 32–3 merger with Salomon Brothers, 817 labour productivity (coal-mining, 1996), 711 SmithKline Beecham (SKB, 1989–2000), 247, mining sector, 921 250, 253, 254, 256, 257, 257n, 259, 297 Sanjiu sales offices, 300 best sellers (drugs), 250 top twenty steel-producing country (1991–8), joint ventures in PRC, 282 617 market capitalization, 269 unemployment, 921 merges (2000) with Glaxo Wellcome (UK), South America 257 electricity generation capacity (1990–2010), research and development expenditure 697 (1994–7), 249 exporter of oil to PRC (1997), 434 smuggling lorry sales (1995, 2005), 509 oil/petrochemical products (PRC), 458, 459 natural gas production and reserves (1997), PRC, 275, 277, 321, 874 405 vehicles (into PRC), 537 oil production (1987–97), 405 SNECMA, 142, 143, 172, 180 production and sales of automobiles (1998), social 508 benefits (Posco), 605 Renault, 515 dislocation (feared, PRC oil sector), 495 Shougang expansion, 690 stability (PRC), 72 steel consumption per capita, 595 welfare, 229 steel production (1991–7), 589 Société Générale (France), 945(n19) Volkswagen-Ford joint venture, 513 Socrates, 935 South Asia SOE, see state-owned enterprises economic growth (1980–98), 851 soft drinks, 297, 615, 855 tariffs, 28 aluminium suppliers, 39 South China (regional electricity grid), 345 competitive advantage, 36 South China Motor Corporation, 546 1072 Index

South China Sea, 193, 416, 435, 706 domestic markets, 849, 852–3 South Korea, see Korea, Republic of downsizing, 845, 853 Southeast Asia employment (PRC 1998), 919 ABB manufacturing operations, 333 first, second, third tier subsidiaries, 873–4 automobile industry, 508 floated on international stock markets, 842 ethylene crackers, 421 forestry, 134 financial crisis (1997–8), 833 HPEGC, 366 Hopewell Holdings (HK) infrastructure impact of WTO accession, 875–6 business, 351 investment difficulties, 848 oil reserves, 435 large, 71, 97 Sanjiu sales network, 300 ‘large family’, 853 Shougang’s interests, 676, 690 loss-making, 71, 80 steel production, 609 major changes, 850 Southern Company (Atlanta, USA), 351 merger activity, 683, 843 Soviet Union, see USSR need for further reform (end 1990s), 916 soya beans, 265, 871 oil companies, 407–10 SP/SPC, see State Power Corporation of China operating costs, 845 SPC, see Shanghai Petrochemical Company; performance, 845 State Power Corporation of China pharmaceuticals (PRC), 279, 283 Spain power equipment makers (PRC), 346 bank restructuring (1980–97), 821 power generation companies (PRC), 350 BP-Solarex manufacturing facilities, 426 PRC, 69, 71, 73, 81, 98, 117, 350, 489, defence spending, 157 501–2, 650, 681, 813, 841, 842, 853, Eurofighter, 158–9 873, 892, 912, 920, 923, 937–8(n2, n5), investment by Usinor, 611 939(n14) IT companies (2000), 764 profits (1997), 77 joins Airbus project (1971), 166 reform, xxiv, 501 oil and petrochemicals, 408 restructuring, 845, 857–8, 892–4 steel output (1974–96), 593 Shougang, 643, 663, 681 top twenty steel-producing country (1991–8), small, 69, 71 617 ‘social entities’, 846–7, 853 spare parts, 150, 316 transition to modern corporations, 681–2 special vehicles, 102 wages, 853 sports entertainment: Samsung, 53 weakness in competing on world markets, Spratly Islands, 193, 194, 435 848–9, 850–1 Spring Festival (PRC), 665 workforce (1995), 77 Sprint, 786, 810 working capital, 97 SSB, see State Statistical Bureau (PRC) WTO rules (implementation by PRC), 866 Stacey, Mike, 147 State Administration of Building Materials Stalinism, 643 (PRC), 128 Stallkamp, Tom (Chrysler), 511 ‘State Bureau of Building Materials Standard Chartered Bank, 946(n31) Industry’, 120 Standard Oil of Ohio (Sohio), 411 State Administration of Machine-Building Stanford University, 917 Industry (PRC), 346 Star Alliance (airlines 10.1999–), 149 State Bureau of Metallurgical Industry (SBMI), Star TV, 784 622, 627, 952(n14) starter motors, 950(n9) State Bureau of Petroleum and Chemical starters (automobile component), 546 Industry (SBPCI), PRC state-owned enterprises (SOE) established in 1998, 467, 468 banks, 96 State Capital Management Office/Bureau barriers to mergers and acquisitions, 847, (PRC), 89, 93, 94 853–4, 859 State Coal Industry Bureau (PRC), 726 bureaucratic apparatus, 854–5, 859 State Construction Bank (PRC), 742, 892 ‘business groups’, 854 State Council (PRC), 68, 73, 74, 76, 120, 122, coal (PRC), 891 127, 133, 136, 137, 273, 276, 651–2, 841, commanding heights, 854 935 constraints on organic growth, 848 appoints chairman of Shenhua, 734 Daqing Petroleum Administration, 441–5 AVIC ‘directly responsible’ to, 186 debt-assets ratio (Shenzhen), 942(n23) AVIC restructuring (1999), 229–30 diversification, 854 civil aviation, 203, 223 Index 1073

State Council (PRC) – continued Japan, 16–17 creation of Donglian (1997), 466 large firms, 14–24 direct support measures, 95, 97 mentioned, xxiii, 2, 6 directives, 69–70, 87, 95, 938(n8), 940(n27) military aircraft purchases (USA, ‘Europe’), feasibility of Shenhua Project, 740–1 150 first directive (12.1991), 69, 87–90, 95, 740, needed in power generation equipment 741, 938(n8), 940(n27) industry (PRC), 328 governmental reform (1998), 467–8 power equipment, 329 ‘highest decision-making body’, 68 PRC, 68, 69–70, 81, 873, 938(n5) orders Shenhua to merge with ‘Five Western research and development, 35–6, 175–6, 237 District Mines’, 753 Rolls-Royce, 174–5 petrochemical industry (1.1997), 464–5 Russian Federation (aerospace), 237–8 power equipment industry, 376, 391 South Korea, 52–3 research and development, 94–5 support for indigenous corporations, 37 second directive (4.1997), 69, 90–1, 94, 95, technological upgrading, 863 940(n27) United Kingdom, 15, 873 and Shougang, 647, 650, 657, 685 USA (C19), 15–16 and Sinopec, 445, 448 Y-10 project (PRC), 204–5 supervision of Sinopec, 445 State Pharmaceutical Administration (PRC), State Council Development Research Centre 286, 299, 320, 325 (SCDRC, PRC), 74, 75, 136, 958(n3) State Planning Commission (PRC), 74, 75, 92, State Council Economic and Trade Office 137, 138, 364, 370, 449, 457, 471, 564, (PRC), 138 651, 735 State Defence Industries Commission role, 92 (COSTIND, PRC), 231 State Power Corporation of China (‘SP’ or State Development Bank (PRC), 392, 440, 742, ‘SPC’, 1997–), 109, 343–5, 359, 399, 745, 944(n11) 944(n10) State Development and Planning Commission, functions, 343 467, 471, 622, 952(n14) ‘holding company’, 345 State Direct Financial Interest (SDFI, Norway), ‘key task’, 346 499 structure, 344 State Economic and Trade Commission (SETC, subsidiaries, 344, 359 PRC), 68, 71, 108, 120, 124, 137, 139, State Price Control Bureau (PRC), 347, 385 345, 346, 392, 467, 468, 471, 939(n12) State Securities Regulation Commission State Goods and Materials Department (PRC), (SCRC, PRC), 833 133 ‘State Securities Commission’, 365 State Holding Company (Yuchai Group State Statistical Bureau (SSB, PRC), 939(n19), Company, 7.1992–), 572, 573, 575n, 941(n6) 579–80, 951(n20) Statoil (Norway), 408, 499 CYI Limited ownership structure, 574 steam State Industrial and Commercial Bureau (PRC), engines, 391 938(n6) power plant capacity (1980–2010), 335 state intervention turbines, 337, 338, 374, 377, 943(n7) aerospace, 152–3, 154–5, 170, 173, 175–6, steel (global), 587–694, 952–7 237, 233 appliances, 592 Airbus, 166–7 automobiles, 590–1 BAe, 174–5 barriers to entry, 63, 64, 618–22 Bombardier and Embraer, 181–2 booming market, 618 Brazil, 180 catch-up possibilities, 64 capitalist countries, 4 central importance, 588 direct preferential support measures (PRC), changes in demand, 588[–]590 68, 937(n2 to ch3), 938(n5) changes in distribution (1974–96), 593 East Asia, 52 competition from other products, 590–600 ‘Four Little Tigers’, 19–24 consolidation, 608–17 HPEC, 391 construction, 591 importance, 14 containers, 591–2 India, 873 cycles, 588[–]590 industrial restructuring (Europe), 498–9 demand, 588–92 industrial structure (auto industry), 504–6 downsizing, 595, 605–7 Italy, 58 employment, 595, 605–7 1074 Index steel (global) – continued consumption of selected steel products environmental considerations, 593 (1996–2005), 624 European consolidation, 609–13 continuous casting, 627, 628, 629–30 Far East consolidation, 613 contract system, 588 global steel corporation (Ispat), 613–15 customers, 623 globalization, 608–17 debt, 642 growth rate, 590 demand, 623–4, 658–9 high carbon, 64 domestic liberalization, 622–3 high quality, 863, 889 downsizing, 640–2 high value-added, 38 dumping, 952(n14) industrial concentration, 615–17 electric arc furnaces, 628 institutions, 595, 600–17 employment, 631, 632, 640–2 international trade, 607–8 energy consumption, 629 Japan, 56, 176 energy savings (potential), 716 laser welding, 591 environmental regulation, 622 mini-mills, 598–600 exports (1957–97), 626 miscellaneous, 3, 45, 384, 452, 523, 848, first batch of trial business groups (PRC), 854, 859, 861, 929 109 on-line procurement networks, 45 fixed assets, 632, 633 PRC, 587–8, 615, 622–94, 887–90, 921, forecasts, 624, 625 952–7 fuel, 652, 953(n31) privatization, 32, 595, 605–7 giants, 464 process technology, 596[–]598 grasp the large, let go of the small, 638–40 product change, 595–600 high value-added products, 624, 626–7, 628, production (1991–7), 589 629, 639, 689, 690, 694 production (changes in global distribution), imports, 625–6, 629, 642, 643 590, 592–5 industrial concentration, 630–40 production methods (1997), 597 international capital, 640 productivity, 591, 606 international comparison (size of enterprise), prospects, 595 638 protectionism, 595 investment, 625, 628, 630, 952(n15) real value, 590, 951(n1) joint ventures, 640 regulation, 595 keypoint enterprises, 631, 632, 633–8, 658, remuneration and productivity (1994–7), 641 665 research and development (1995, 1998), 49 large number of very small plants, 630–3 scrap, 598, 599, 619 local plants, 631, 632, 633, 637 segmentation of market, 889 machine-building, 671–2 South Korea, 53, 176 major products (1980–97), 631 special, 621–2 mergers and acquisitions, 622 (possibilities, stainless, 64, 596, 612, 623, 624, 630 694, 862) substitutes, 587, 595, 605 mini-mills, 599, 631, 633 supply, 592–600 modernization, 628–9 tailored blanks, 591 national team (PRC), 77, 939(n21) Taiwan, 20 number of enterprises (1991), 632 technical progress, 587, 590, 595 ‘non-system’ plants, 632, 633, 637 top twenty companies (1996–7), 602 open-hearth furnaces, 628 transport costs, 618 output (1980–97), 630, 632 US consolidation, 613 output growth, 625–6 steel industry (PRC), 587–8, 615, 622–94, ‘overmanned’, 640 887–90, 921, 952–7 pollution, 628, 629 ability to compete on global level playing Posco plants (four), 609 field, 887–90 price of iron, steel, rolled bar (1980–93), 655 administrative control, 622 prices, 622, 655, 952(n14) ambitions, 588, 638–9, 670 product mix, 623, 636–7 Anshan Iron and Steel (Angang), 622, product quality and structure, 626–7, 636–7 629–30 productivity, 631, 638 Baoshan Iron and Steel (Baogang), 622, 628 profitability, 622, 638, 642–3, 952(n14) capacity (1980–97), 631 profits, 631, 632, 633, 638, 639, 643, consolidation (PRC), 80 952(n15) consumption (1980–97), 630 prospects, 588 Index 1075 steel industry (PRC) – continued PRC steel companies (HK 1993–), 640 protection, 622, 623 Sanjiu (aborted), 295 raw materials, 652, 953(n31) Sichuan Changhong Electric, 272 remuneration and productivity (1997), 641 XAC International, 214 return on investment (1980–90), 660 stock markets sales, 630, 633 absent (PRC 1970s), 436 second batch of trial groups (PRC 1997), 86 capitalization: various countries (1998), 932 selected statistics (1980–97), 630–1 dominance of firms based in advanced self-sufficiency ratio (1957–97), 626 economies (1997), 46, 47 self-sufficiency (steel products, 1996), 627 flotation (PRC SOEs), 854 Shanghai Pudong Iron and Steel, 630 foreign listings for PRC corporations, 852, Shougang, 622, 643–94, 953–7 860 silicon steel sheets, 629 Hong Kong, 24 small-scale plants, 630–3, 638, 658 importance for raising funds, 320 smuggling, 643, 952(n14) Japan, 55–6 Soviet aid, 628 not essential for growth, 682 state and market, 622–3 pharmaceutical companies, 251–2, 260 ‘still an infant industry’, 623 potential effect of a crash in the USA, 60 supply, 625–42 PRC, 96, 97–8, 836, 940(n29–30) technology, 628–30 preferential listings (PRC), 69 top twenty producers (1997), 634–5 pressure (pharmaceutical sector), 251–2, value-added (1980–97), 630 260 wages (Shougang, 1986), 666 rise in value, 414 wholly owned foreign enterprises, 640 shift to East Asia, 65 world ranking (PRC 1949–98), 913 systematic introduction of listings (PRC), 70 world’s largest steel-making country (1996–), uncertainties (USA 2000), 928 625 Western, 36–7 WTO rules (implementation by PRC), 868 stock prices, 922 Wuhan Iron and Steel (Wugang), 622, 629, stomach medicine (Sanjiu), 289, 941(n12) 640 Stonecipher, Harry, 150 steel machinery, 847 storage tanks (oil), 486 steel mills, 598–9, 619–21, 849 strategic industries, 13 British Steel, 600 oil and petrochemicals, 407, 463, 495 coal supplies (PRC), 723 steel, 605 computer technology, 599 ‘strategic trade theory’, 12 lower productivity, 659 strikes (Japan), 18 lower wage costs (developing countries), 620 sub-contracting pulverized coal injection (PCI), 599 aero-engine joint ventures, 216–17 reduction of workforce, 599 aerospace, 177, 206–10, 213–21, 237, 877, Shougang, 691–2, 645, 953(n23) 878 see also mini-mills aircraft industry survival (PRC), 220–1 steel prices, 385, 949(n64) by Boeing, 207 Steinfeld, E., 953(n24) European aerospace companies to US giants, Steyer trucks and engines, 566 163–4 Stigler, George, 13, 14 fragmented, internally-competitive market Stock Exchange (UK), 814 (PRC), 218–19 stock market listings growth, 213–14 AVIC subsidiaries, 226 international competition, 219 China Poly Investments Holdings, 274 mechanism for developing independent Continental Mariner (shipping company), manufacturing capability (PRC), 219–20 274, 941(n8) power equipment, 882 domestic, 349 PRC, 206–10, 237, 849, 877, 878, 918 Harbin Power Equipment Company (1994), significance, 217–21 366 size of contracts, 217–18 HK, 274, 282, 295, 941(n8) undertaken in PRC (aerospace), 197 international, [88], 349, 366, 940(n29) way forward for PRC aerospace?, 230 pharmaceutical companies (Shenzhen, XAC, 214–16 Shanghai, HK), 282 see also ‘external firm’; outsourcing PRC, 88, 90, 95, 96, 101–35(column 6) Sub-Council of the Chemical Industry (PRC), PRC power companies, 349 468 1076 Index sub-systems third tier, 39, 57, 511, 535, 536, 855, 923, aero-engines, 173 950(n12) components suppliers, 511 Toyota, 510 joint ventures (PRC aviation industry), US companies, to Japan (1999), 57 213–21) see also cascade effect mentioned, 397 supply military, 193 aerospace industry (global), 142–7 role of developing countries, 184 oil and gas (PRC), 428–35 submarines, 192 Samsung, 53 subsidiaries, 122, 132 sources of, 11 subsidies (PRC), 869, 891–2, 893 supply chain Sudan: investments by CNPC, 441 aerospace, 144–7 sugar, 53, 86, 131 supply demand suitcases: PRC exports, 871 ‘simple concepts’, 12 Sukhoi, 178 Supreme Court (USA), 814 sulphur dioxide, 430, 700–2 surface-to-air missiles (SAM), 192 Sumitomo (Japan), 527, 528–9, 602, 810, 860 surveying, 126 Sumitomo Metal, 850 suspension (cars): spiralling R&D costs, 521 Sumitomo Rubber, 57 Sutherland, Dylan, xxv Sun Microsystems (USA), 764, 775, 776 Suzhou, 283, 391, 810 Sun Wu, 65, 241, 898 Suzuki: ranks sixteenth (world car-makers), 534 Sun Yuan BVI, 573, 575 Sweden Sunkyong Group (South Korea), 23 air force, 157 see also SK (South Korean oil company) bank restructuring (1980–97), 821 sunzi (‘grandchildren’) companies, 221–6 defence spending, 157 super giants (oil sector) division to Ford, 515, 533 alternative energy sources, 426–7 force of globalization (sale of Volvo’s auto asset reorganization, 425–6 industrial concentration (auto industry), capital control, 425 507 centralized procurement, 422–3 industrialization, 923 economies of scale, 421 IT companies (2000), 764 global brand, 427–8 pharmaceutical corporations, 249 human resources, 427 welding machines (exports to PRC), integration of operations, 421–2 948(n52) organizational structure, 423–5 Swissair, 149, 182, 787 product mix, 423 Switzerland, 262 size, 417–21 bank restructuring (1980–97), 821 supermarkets, 132 industrialization, 923 suppliers, 37–8, 39, 42–3, 61, 147, 855, 856 pharmaceutical corporations, 248 aerospace, 511 syndicated credit arrangements ‘aligned’, 37, 512 top five firms (2000), 824 bargaining power, 521, 950(n5) synergies, 373, 415, 456 to Bombardier, 181 diesel engines, 531 to BP, 423 Rio Tinto and ‘CRA’ (1995–), 707–8 concentration pressures, 37–8, 39 Shougang, 678 Daimler-Chrysler, 514 tyres, 529 to Embraer, 181 Syngenta (agribusiness), 262 first tier, 38, 39, 42–3, 45, 57, 61–2, 145, Synthelabo, 269 511, 512, 519, 521, 535, 536, 855, 920, synthetic detergents (PRC, 1980–97), 433 923 synthetic fibres, 252, 450, 451, 452, 487 Japan, 57 synthetic resin, 470 multinational, 57 synthetic rubber, 452, 487 Nissan, 516 Syria, 178 pharmaceuticals (PRC), 279 system costs, 61 PRC, 845 system integration, 37–8, 42–3 pressure exerted by automobile giants, 583 aero-engines, 170 prices, 42 Bombardier, 181 second tier, [38], 39, 57, 62, 146, 496, 511, competitive advantage, 44 512, 535, 536, 855, 923, 950(n12) Embraer, 181 sub-system (aerospace), 143, 146 System Reform Commission (PRC), 365 Index 1077

System Reform Institute, xxiv tariffs, 28–9 systems capability, 785 Brazil (steel sector), 606 systems control, 107 China (C19), 902 systems integration, 693, 769, 918, 919, 933 coal imports (PRC), 728 systems integrators, 146, 172, 236 diesel engines (PRC), 537 SYT, see Shenyang Transformer Plant imports of motor vehicles (Japan), 505 IT sector (PRC), 794 Taigang, see Taiyuan Iron and Steel Group petrochemical sector (PRC), 453, 458 Taiping Rebellion (1856–1864), 903 power equipment (PRC), 348 Taiwan PRC, 70 arms deliveries (1987–98), 151, 152 steel industry (South Korea), 604 arms purchases, 193 tariffs, 28–9 big business, 21 USA (steel sector), 601, 951(n5) catch-up, 20–1, 621 on vehicles, 520, 536–7 coal imports from PRC (1997), 718 WTO rules (implementation by PRC), 865, comparative advantage, 6 867, 868–9 ‘conforms to principle of comparative see also protectionism; taxation advantage’, 4–5 Tarim Basin (Xinjiang), 438–9, 441 degree of state intervention, 19, 20 Tarim (Talimu) complex, 470 demand for pharmaceuticals (per capita), 277 Tarim Petroleum Exploration and Development environmentally-friendly advanced power Headquarters, 438–9 stations, 705 Tata Iron and Steel (TISCO, India), 600 exports, 20 tax benefits (Taiwan), 20 heavy industry, 19, 20 tax exemptions (PRC), 540 industrial structure, 6 taxation internet, 780, 805 customs duties (PRC), 275 iron ore costs (1997), 619 income tax, 367, 569, 571, 573 IT sector, 770 international differences narrowed, 814 mentioned, 903 losses through smuggling (PRC), 275 number of companies in Fortune 500 (1998), national team (various indicators, 1995), 78 47n PRC, 70, 77, 88, 98, 138 number of companies in FT 500 (1998), 47n value-added tax, 367, 574, 731 privatisation, 20 taxi renting, 311 production of plastics (1989–96), 451 Taylorist monitoring, not used, 667 production of synthetic fibre (1989–96), 451 TCI (US cable television company), 782 proposed joint venture with BAe TCL (PRC hardware firm), 794 (abandoned), 211 technical progress, 11–12, 61, 62, 64 protectionism, 19, 20 ‘most essential characteristic of economic remuneration and labour productivity (steel growth’, 11 industry, 1996), 641 pace (steel industry), 618 small firms, 20–1 technological revolutions steel output (1974–96), 593, 594 first (8000–2500BC), 763 tariffs on steel products (1997), 619 second (‘Middle Ages’ to late C20), 763, 810 technological upgrading, 863 third (information technology age, late top twenty steel-producing country (1991–8), C20–), 761–811 617 technological upgrading wage costs (steel industry, 1997), 620 PRC, 863 Taiwan Semi-Conductor, 21 USA, 863 Taiyuan Iron and Steel Group (Taigang jituan), technology, 129 116, 635, 660, 694 combined cycle, 329, 335, 356, 380, Takeda (Japanese pharmaceutical company), 950(n57) 310 metallurgical, 510 Takeda, Mr (President of New Japan Steel), 604 oil sector, 421, 448 takeovers, 72–3, 79–80, 96, 848 PRC, 448, 876 see also mergers revolutionary change, xxiv Tangguh (natural gas field, Indonesia), 416 technology centres, 88, 91, 94–5, 131 Tangshan, 131 PRC (1997–), 88, 94–5 Tangshan Ceramics Group, 131 technology projects (PRC), 89 Tangshan Iron and Steel Group, 635, 694 technology transfer tanks, 156, 518, 951(n22) hydro power, 356 1078 Index technology transfer – continued Telefónica, 798, 800, 803, 840, 892, 931 imported (power equipment), 355 telephones to Japanese auto industry (1950s), 505 main lines per 1,000 people (global 1997), nuclear power, 358 789 power equipment, 328, 347, 350, 369, 377–8, PRC, 808 380, 882 see also wireless telephones to PRC, 207–8, 559, 852, 863 television, 107–8, 109 US keenness to avoid, 792 advertising of prescription drugs (USA), 251 Westinghouse, 389–90 colour, 272 WTO rules (implementation by PRC), 866, internet access, 796–7 882 PRC, 796 Telecom Italia, 786, 800, 810, 854 set-top boxes, 796–7 telecommunications (global) sets per 1,000 people (global 1997), 789 barriers to entry (1998), 63 sets: PRC’s world ranking (1949–98), 913 competitive advantage, 769 Telmex, 779, 802–3 consolidation (USA 1996–), 777–8 Telstra, 800 development (1997), 789 Tenneco Automotive, 524, 525, 535, 547 East Asia, 779 Tesco, 818 ‘international language’ (English), 788 Tesco Finance, 819 internet, 776 Texaco (USA) markets, 779 basic statistics (1997), 418 mentioned 272, 769, 854, 855, 861, 863, 929 comparison with New CNPC and New mergers and acquisitions (1988–98), 769 Sinopec, 479 privatization (general), 32 employees, 480 protectionism, 779 financial indicators, 480 Samsung, 53 oil and gas production, 481 services, 776–9 possible merger with Chevron, 417, 420 state-run enterprises in Singapore, 23 profits, 480 Sweden, 59 turnover, 480 Vodafone-Mannesmann, 778 Texas Instruments, 147 wireless telephones, 776 textile dyes, 262 see also Third Technological Revolution textile machinery, 197, 198 telecommunications (PRC), 797–800 textiles, 15, 118, 130 bureaucratic struggle, 800–1 China (pre-1949), 900–1 China Telecom (HKSAR), 798–9 national team players, 113–114 China Unicom (1993–), 799–800 PRC, 926 encirclement, 803–6 sectoral share of PRC national team (1991, EU-PRC agreement (5.2000), 791 1997), 84 growth (1997–9), 798 Taiwan, 20 joint ventures, 806–10 woollens, 53 leading firms (1999–2000), 798, 800 WTO enforcement proceedings, 870 mentioned, 825, 871, 921, 924 Textron, 231 missed merger opportunities, 862 Thai Airways, 149 problems, 800–10 Thailand, 927 progress, 797–8 arms deliveries (1987–98), 151 nature of firm, 801–3 automobile exports to PRC (WTO rules), seaborne telecommunications monitoring 887 capability (PRC), 204 automobile industry, 508 World Telecoms Agreement, 786–7 energy consumption per capita, 428 WTO rules (implementation by PRC), 868 ethylene crackers, 421 Telecommunications Act (USA 1996), 777 ‘fundamental economic situation’, 834 telecommunications companies GM matches entire GNP of, 534 globalization, 761–2 natural gas, 416 market capitalization, 777 pharmaceuticals market (1995), 277 mergers and acquisitions, 777–8 Posco plant, 609 privatization, 776 potential car exports to PRC, 872 profit margins (1998), 245 tariffs on steel products (1997), 619 USA, 761 Thainox (Thailand), 611 telecommunications equipment, 54, 771, 773 thalidomide, 250 telecommunications services, 49 Theatre Missile Defence System, 194 Index 1079

Theory of the Growth of the Firm (Penrose ‘relaxed’, 939(n23) 1959), 10 ‘three sisters’ (oil giants), 417 thermal plants, 945(n26) Thurow, C., 669 thermal power, 118, 354–5, 358, 374 Thyssen, 612 thermal power station equipment, 363 merger with Krupp-Hoesch (1997–8), 612 ‘Third Front’ movement (PRC), 187, 197, 275, profits (1997), 957(n69) 376, 656, 843, 846, 951(n22) remuneration and labour productivity (1995), Third Industrial Revolution, 12 641 Third Technological Revolution, 33, 761–811 Thyssen-Krupp (Germany), 889 advanced economy oligopoly, 767–70 crude steel output (1996–7), 602, 602n barriers to entry, 762, 769 emerging European ‘steel oligopoly’, 609 battle for Chinese market, 790–811 industrial concentration, 611–12 ‘brain’ activities, 762, 765, 766, 770 joint ventures, 612, 630 broadband and convergence, 782–4 joint venture in Shanghai, 612 central position of knowledge-intensive overseas operations, 612 industries, 763–70 research and development, 595–6, 618 competitive capability (developing-country stainless steel, 612, 615 firms), 787–90 Tian Yushi, 946(n40) competitive-edge companies (IT 2000), 767 Tiananmen Square, 190 conclusion, 810–11 demonstration (1989), 910 global level playing field, 766, 784–90 massacre (1989), 911, 916 global market share (top ten companies in Tianjin, 80, 282–3, 391, 464, 546, 729, 810 knowledge-intensive industries, 1998), automobile component manufacture, 546 768 automobile industry, 464 information and telecommunications China Unicom joint venture activity, 810 development (selected indicators, 1997), Denso plant, 546 789 pharmaceuticals, 282–3 information technology, 763–7 power equipment company in, 391 internet, 779–80 thermal coal price (7.1997), 729 IT companies (2000), 764–5 Tianjin Auto Industrial Corporation IT hardware, 770–5 Chinese name, 103 life sciences, 767 joint venture with Daihatsu (1988–), 539–40, media, 781 546, 950(n7) mergers and acquisitions (1998–9), 769 joint venture with Toyota, 546 obstacles for firms based in developing petrol engine capability, 567 countries, 763–90 sales, profits, employees, output (1998), PRC, 790–811 556 research and development (1995–8), 766 saloon car production (1998), 540 software and IT services, 775–90 second layer enterprises, 560 telecoms services, 776–9 Tianjin Bohai, 117 US consolidation (telecommunications, Tianjin Engine Works, 547 1996–), 776–7 Tianjin Hangu Petrochemical Plant, 454 US dominance (2000), 767, 770, 771–2, 775 Tianjin Petrochemical Company/Corporation, ‘Third Way’, 908 454, 469 Third World: pharmaceutical companies, 310 Tianjin SmithKline Beecham, 283 Thompson CSF, 165 tiaojie shui (adjustment tax, PRC), 648 Thomson Marconi Sonar, 162 Tibet, 312, 345 Three Gorges Dam: Shenhua comparison, 734 TIM, 800 Three Gorges Finance Company, 350, 944(n16) Time Warner (USA), 787 Three Gorges Project (1995–), 343, 353–4, ‘global leader’, 781 356–7, 368, 371, 375, 378, 380, 392, 882 market capitalization (2000), 764 foreign suppliers, 356, 945(n20) merger with AOL (2000), 781, 782 funding, 944(n11) recorded music, 781 HEC, 368 sales revenue (2000), 764 ‘largest hydroelectric scheme in world’, 356 Ting Pek Khiing, 951(n19) Three Mile Island (1979), 402 tingxing linzhi (‘keeping the post but receiving ‘three no changes’ policy (san bu bian), 137 no wages’), 382 defined, 94 tinplate, 591 ‘held back enterprise reorganization’ (PRC), titanium dioxide, 265 939(n16) TNC, see trans-national corporations 1080 Index

Toaster, John, 426 implementation by PRC, 866, 868 tobacco smuggling (PRC), 874 Indian caution, 868 Tongrentang Group (1992–), 125 Trade-Related Investment Measures (TRIMs), tongwang, tongzhi, tongjia 865 ‘unified network, unified quality, unified trade barriers, see protectionism price’ (electricity, PRC), 345 trade companies (PRC), 70, 81, 940(n28) tongzhi (‘notice’), 947(n43) trade groups Toshiba, 176, 794, 850 first batch of trial groups (1991), 86 Total (France) second batch of trial groups (1997), 86 LNG project (Shenzhen), 717 national team players, 129–30 merger with PetroFina (1998), 413, 415 trade performance requirements TotalFina (Franco-Belgian), 415 WTO rules (implementation by PRC), 866 basic statistics, 418 trade policy, 12 merger with Elf Aquitaine (1998–9), 416–17 trade rights (PRC), 90–1 TotalFinaElf, 416–17, 420, 499 trade secrets: TRIPs Agreement (1994), 785 comparison with New CNPC and New trade unions, 512 Sinopec, 479 absence (mini-mills), 598, 599 oil and gas production, 481 ‘Europe’, 706 rivals BP Amoco/Arco, 417 monitoring of service systems (PRC), Toulouse, 167, 846 955(n51) tourism, 121, 124, 127, 311, 316–17, 640 resist trans-national mergers, 512 township and village enterprises (TVEs), 6, 222 trademark law (PRC 1982), 942(n21) coal-mining, [720–]721, 722, 723, 724, 726, trademarks 727, 736, 745, 759 Sanjiu, 314, 319 competitors for larger corporations, 844–5 TRIPs Agreement (1994), 785 demand for electricity, 746 trans-national corporations employment (in mines), 724 Asia-Pacific region, 24 lower-priced coal, 746–7, 753 development planning, 44, 45 national team players, 133–4, 139 established in Singapore, 23 second batch of trial groups (1997), 85–6, 91 evolution, 1–2 sectoral share of PRC national team (1991, Four Little Tigers (1999), 21 1997), 84 Japanese, 18 small oil refineries, 485 managers, 62 source of revenue to local governments, 724 mining sector, 750, 755 Toyota, 19, 103, 176, 505, 506, 858 number of employees, 44 comparative size (global, 1998), 561 operational autonomy, 45 comparison with Shanghai Auto, 886 overseas assets, 44 domestic market share, 505 power equipment, 328, 358–63, 384 foreign assets, sales, employment (1997), 509 South Korean, 23 global top hundred company, 850 three largest (Ford, GE, Shell), 79 interests in Mercosur, Turkey, 508 vertical integration, 44–5 joint venture with Tianjin Auto, 546 transgenic crops: TRIPs Agreement (1994), 785 ‘lean production’, 510, 520 ‘transition orthodoxy’, 2 output (PRC comparison), 538 transplanted organs, 261, 267 output, turnover, profit, R&D (1998), 533 transport and transportation research and development, 510 barriers to entry (1998), 64 sales, profits, employees, R&D (1998), 561 costs, 9, 846, 883 share of foreign production (1989–94), 510 employment (PRC 1998), 919 ‘Toyotism’, 512 equipment, 11, 14, 64, 871 toys (PRC exports), 871 national team, 78, 121–4 TRACER land system, 163–4 PRC, 84, 348, 431, 432, 538, 871 Tracor, 146 sectoral share of PRC national team (1991, trade, 121, 124, 311 1997), 84 ‘increase in PRC imports rather than PRC state-run enterprises in Singapore, 23 exports’, 871 travel agents, 43 WTO rules (PRC implementation), 871–2 travel and tourism, 869 Trade-Related Intellectual Property Rights Travelers (‘a big insurer’), 817 (TRIPs) Agreement (1994), 244, 245, 270, Travellers (corporation), 57 785–6 Treaty of Bogues (1843), 903 control of technology transfer, 785 Treaty of Nanjing (1842), 902–3 Index 1081

Treaty of Shimonoseki (1895), 903 trucks, see lorries Treaty of Tianjin (1858), 903 trust, 42 Treaty of Versailles (1919), 904 TRW (USA), 166, 522, 526, 536 treaty ports, 902–3, 906 Tu-Ha Basin, 438 trial business groups (PRC), 68, 85–6, 87–91, Tung Wing Iron and Steel Limited (HK), 676 137, 854, 897–8, 937–8(n1–3, 5), 939 tuoluosi (‘trusts’), 363 (n18, 21) Tupolev, 144, 178, 179 applicants (mid-1998), 938(n6) turbine blade construction, 329 assets, 101–35(column 3), 939(n20–1) turbine disks (LM2500), 214 attempt to build (PRC), 69 turbine technology, 942(n1) car industry, 540, 563 turbines, 328–9, 380, 391 chronology (1980–98), 136–9 gas turbines, 331 city-level, 75, 83, 93, 938(n11) hydro, 378 conclusion, 98–9 nuclear power steam, 380 decision-making autonomy (1986–), 91–2 size, 329 definition, 75–6 Three Gorges Project, 945(n20) ‘developmental’ stage (chuangjian jieduan), turbocharge technology, 530 80, 137 Turkey, 506 direct support measures, 95–8 Ford matches entire GNP of, 534 first policy document (12.1987), 73–4, 137, liberalization (1990s), 508 939(n17) purchase of missiles from USA, 158 first (1991) or second (1997) batch, steel output (1974–96), 593 101–35(column 4) top twenty steel-producing country (1991–8), geographical distribution (1997), 82 617 gestation period, 73 Tutor Pharmaceutical (USA), 306 international competition, 897 TVEs see township and village enterprises list and description, 100–35 TWA, 213 lower-level, 70, 75, 83, 938(n11) Twenty-First Century Forum (Beijing, 6.2000), ‘majority based around industrial 917, 926–7, 935, 958(n3) enterprises’, 939(n22) Twenty-One Demands (1915), 904 membership of Association for the Promotion tyres, 57, 64, 456, 521, 526–9, 535, 860 of China’s Business Groups (4.1994–), 938(n7) UBS, 815, 817, 822, 958(n9) mergers, 938(n6) UCH Plant (Pakistan), 387 miscellaneous, 938(n9–10) Udell, H., see Berger, A. names, 101–35 (column 1) UK, see United Kingdom need for, 71–2 UK: Department of Trade and Industry, xxvi number of enterprises within group, 79, UK: Foreign and Commonwealth Office, xxvi 101–35 (column 5) UK: Ministry of Defence, 160 120 of largest (PRC), 68, 69, 70, 83, 96, Ukraine, 616 938(n6), 940(n30) ulcers, 250, 267–8 policies promoting institutional change, unemployment 87–91 (implementation, 91–5) ‘Europe’, 706 profits (1997), 77 PRC, 920–1 provincial, 70, 75, 83, 93, 94, 938(n11) South Africa, 920–1 sales, 77, 101–35(column 2), 939(n21) see also downsizing stock exchange listings, 96, 101–35 (column Unilever, 34, 35, 264, 265 6) Union Bay Sportswear (Sanjiu), 289 taxes paid (1997), 77 Union Carbide, 455 ‘203 registered at national level’, 938(n6) Union of Soviet Socialist Republics (USSR, truck sector, 560 1922–91), 24, 165, 371 workforce (1995), 77 aerospace, 144, 175, 178–80, 190 see also global business revolution; national aid to PRC, 95, 360, 375, 628, 644, 753, team 947(n44) trial cities, 68 approach to industrial reform, 3 trial enterprise groups, see trial business groups arms sales (1987–98), 151, 152, 178–9 TRIMs, see Trade-Related Investment Measures catch-up (steel), 594 Trinidad and Tobago: Ispat, 600 collapse, xxiii, 190, 910 TRIPs, see Trade-Related Intellectual Property ‘disaster’, 908–9 Rights disintegration, 909 1082 Index

Union of Soviet Socialist Republics (USSR, absorbs lessons of East Asian model, 48 1922–91) – continued aerospace, 152–6, 233, 878 downfall, 793 agriculture, 5, 871–2 economic effects of WW2, 37 anti-trust legislation, 15, 16 industrial reform policies, 2 armed forces (integration), 162 lack of indigenous ‘competitive edge’ arms trade, 151, 152, 157–8, 193 corporations, 63 automobiles, 506, 510–11, 538 large plants, 3 banking, 815, 817, 820 large-scale plants ‘core of industry’, 853 BP-Solarex manufacturing facilities, 426 lessons for PRC (aerospace), 237–8 ‘bull’ market (equities), 48, 51 nuclear accident (1986), 402 carbon dioxide emissions, 430, 702 oil production (1987–97), 405 civil airliners, 154–6 power generation plant (supplied to PRC), coal, 698–9, 706, 707, 709–10, 718, 725 360, 375, 947(n44) competition among small firms, 3 steel, 587, 588 competitiveness, 48 see also ‘Former Soviet Union’; Russian concentration of manufacturing output Federation (1909–63), 14 unionization, 520–1 defence, 141, 150, 156, 157, 162, 192 Uniroyal Goodrich (USA), 528 demand for pharmaceuticals (per capita), 277 United Airlines (USA), 149 demand for energy (relative to PRC), 341 United Kingdom (UK) dependence on Chinese and Indian ‘brains’, aircraft manufacturers (1950s), 166 929 banking, 817, 821 domestic manufacturing output produced by Big Bang (1986), 814 foreign-owned firms (1986–95), 31 ‘catch-up’ process, 15 ‘dominant military power’ in Asia, 195 coal, 698–9, 706, 707, 710, 711, 725, 733–4, domination of IT sector, 48, 770, 771–2, 775, 751, 752, 921 790, 793, 810–11 corruption (C18), 873 economic model for rest of world, 27 defence spending, 157 economic uncertainties, 928–9 demand for pharmaceuticals (per capita), 277 electricity generation (fuel type, 1996), 698 economies of scale needed (defence energy intensity (1998), 914 equipment), 158 energy reserves (1997), 716 enmity with Germany abandoned, 233 enforcement of WTO rules, 919 Eurofighter, 158–9 enmity with Japan abandoned, 233 ‘first industrial nation’, 15 enterprise groups, 897 Fortune Global 500 (1997), 50 environmental regulation, 699, 701, 709 globally-successful firms, 51 ethylene crackers, 421 home of free trade (1840s), 15 exporter of oil to PRC (1995–7), 434 industrial concentration, 14, 506 exports 1997 (PRC comparison), 871 ‘insurance density’, 832 FDI inflow, 31 iron ore costs (1997), 619 fear of exclusion from East Asia, 927 Industrial Revolution, 15 global super-power, 2 IT companies (2000), 764 globally-successful firms, 51 joins Airbus project (1979), 166 GNP (1998), 932 market share of leading firms (1919–45), 15 government funding of aerospace industry, mentioned, 676, 952(n6) 141 national energy security, 441 government procurement, 15–16 number of auto manufacturers (1920), 506 independent diesel engine makers, 559 oil and gas reserves, 416 industrial concentration, 37, 506, 710, 815 oil and petrochemicals, 407 industrialisation, 15 pharmaceutical corporations, 248–9 influence of policy debates in PRC, 25 power industry, 733–4 information technology, 762, 764–5, 789, 928 primary energy consumption, 401, 696, 697 ‘insurance density’, 832 protectionism, 5 interest rates, 814 royalty and licensing fees (paid), 785 internet, 789, 805 state intervention, 15, 858 Japan, 57, 233, 510–11, 950(n2) steel, 593, 594, 606, 617, 620, 641 labour productivity (coal-mining, 1996), 711 wages, 620, 752 leadership of global business revolution, United Security Company, 640 46–51 United States of America lessons for PRC (aerospace), 231–2 Index 1083

United States of America – continued trade deficit with PRC, 872 market access (PRC IT sector), 790 trade policy, 13 market leader (aerospace), 237–8 wages (coal industry), 752 mentioned, 922, 930 world’s largest defence market, 163 ‘merger frenzy’, 38 United States of America: steel industry military aircraft, 152–4, 174 alternatives to steel (construction industry), ‘most important market’ (pharmaceuticals), 591 269 appliances, 592 multinational corporations, 27 automobiles (use of steel, 1976–88), 590 national energy security, 441 BOF method, 596 national security, 895 continuous casting, 596 natural gas production and reserves (1997), costs per ton of steel, 620–1 405 electric furnace, 596 nuclear accident (1979), 402 fragmentation, 598 number of auto manufacturers (1920), 506 ‘free riding on free trade’ with the UK, 601, oil, 405, 406, 435 952(n6) oligopoly, 4, 11, 15–16, 35 imports (steel), 607 open society, 761 industrial concentration (steel), 605 output per worker (coal), 706 iron ore costs (1997), 619 personal computers per 1,000 people (1997), Ispat, 600 789 Japanese investment (1980s), 608 petrol stations, 414 labour cost per ton of coal, 620 pharmaceutical corporations, 248–9 mentioned, 588, 676 potential effect of anti-pollution measures on midi-mills, 599 electricity prices, 703 mini-mills, 598–600 power (through leadership of IT revolution), output (1933–40), 623 761 output (1974–96), 593 PRC entry into the WTO, xxiii ‘plummeting profits’ (steel, 1998), 607 PRC inter-action with, 2 pollution (coke ovens), 593 PRC rivalry for title of world’s largest production, 594 economy (1998–2020), 914 production methods (1997), 597 primary energy, 401–2, 696, 697 productivity (coal), 620 production of automobiles (1998), 508 remuneration and productivity (1996), 641 production of ethylene (1989–96), 451, 452 rise, 600 production of plastics (1989–96), 451, 452 Thyssen-Krupp willingness to produce in, production of synthetic fibre (1989–96), 612 451 top ten steel-producing country (1991–8), protectionism, 15 616 railways (C19), 13, 937(n2 to ch1) use of plastics (alternative to steel), 591 relative size of US and EU aerospace wage costs (1997), 620 companies (1998), 166 United Technologies, 239 ‘relatively open’ to PRC exports, 871 research and development, 142, 143 reliance on hydrocarbon imports, 405 size (1998), 166 research and development, 14, 35–6, 48, 95 top five global aerospace company, 146 royalty and licensing fees (received), 785 Universal Machine Works (UMW), 656, 672 Sanjiu sales offices, 300 incorporated into Shougang Heavy Section 201 (anti-dumping), 868 Machinery Corporation, 672 separation of sectors (financial services), 816, taken over by Shougang (3.1992), 656 830 Universal Music Group (1998–), 783 sources of prosperity, 13 Universal Silencer (company), 530 space-based surveillance, 761 Universal Studies, 783 state aid for research and development universities (PRC), 94, 120 (aerospace), 175–6 Unlogo Company (Italy), 303 state protection (car industry), 533 unmanned aerial vehicles (UAVs), 157 stock market, 48, 51, 414, 932, 935 Upjohn (USA), 255, 301 structure of output (1993), 700 upper-middle-income countries technological superiority to EU (aerospace), expenditure on health, 767 162–3 GNP (global top ten IT companies telecommunications, 761, 789 compared), 765 television sets per 1,000 people (1997), 789 public health expenditure (1900–7), 243 1084 Index upstream capability, 460, 461–2, 464, 471, 485, acquisition of ITT’s Electrical Systems 495, 609, 883 (1998), 525 uranium, 715 air conditioners, 524, 535 urban areas: economic reform (PRC), 73 ‘500 patents’ (1997), 521 urbanization, 901 globalization, 521 urea, 450, 490 joint ventures (PRC), 546 US Air Force, 154, 155, 157 multinational supplier firm, 57 US-China Trade Council, 327 research and development, 535 US Hydro-Carbon Corporation, 749 ‘3,000 research scientists’, 521 US Navy, 195 turnover, profit, R&D (1998), 522 US Steel (1900–nd), 601–2, 613, 614, 670, value chain, 42, 43, 45, 48, 171–2, 847, 856 681–2 automobile industry, 511, 512 challenge from Japan, 601 extending beyond car manufacture, 512 diversification, 601 global IT, 787 joint ventures, 601 information technology, 779 management (Shougang contrast), 671 oil sector (PRC), 484 output (1969), 951(n7) VAM, see Vodafone AirTouch Mannesmann purchase of Marathon, 411 Varig (airline), 149 saved from bankruptcy, 601 vehicle see also USX components, 519, 536 US Trade Representative, 779 engines, 529, 536 USA: Defence Department, 153–4 refitting, 539 USA: Environmental Protection Agency (EPA), repair, 512 585n, 701 vehicles, 274 USA: Federal Aviation Authority (FAA), 204, environmentally-friendly, 510 205, 207 institutional structure (PRC), 538–42 USA: Federal Reserve, 817, 819, 833–4 research and development, 596 USA: Food and Drugs Administration (FDA), Sanjiu, 316 250, 301, 310, 319, 879 second layer enterprises (PRC), 560 USDA, 872 Venezuela Usiminas (Brazil), 600, 608 ethylene crackers, 421 Usinor Steel Company (France), 498, 610–11, GNP no more than Ford’s global 840, 841, 848, 854, 889, 920 procurement (1998), 534 crude steel output (1996–7), 602 investments by CNPC, 441 emerging European ‘steel oligopoly’, 609 number of companies in Fortune 500 (1998), employees (1995), 888 47n international investment and growth, 611 oil, 355, 416, 421 national champion, 611, 859 receptive to foreign investment (oil sector), privatization (1995), 611, 859, 892 413 product of state-orchestrated mergers, 858 Venus (Microsoft ‘set-on-box’ technology, profits (1997), 957(n69) 1999–), 797 research and development, 595–6, 618, 694 vertical integration, 14, 44, 147 restructuring, 611 CNPC, 843 revenues, profits, R&D (1998), 888 Daqing Petroleum Administration, 444 sales (1997), 888 keiretsu,57 stainless steel, 615 Nissan, 516 takes over Cockerill-Sambrell (1998), 611 oil sector (PRC), 471 Usinor-Sacilor, 641, 952(n10) PRC, 72, 847 USSR, see Union of Soviet Socialist Republics Shenhua Project, 747–8 USX (nd-) Sichuan Changhong Electric, 272 crude steel output (1996–7), 602 Sinopec, 843 diversification into oil, 678 steel industry, 600, 956(n59) ‘previously US Steel’, 673 vehicle-makers (PRC), 544–5 remuneration and labour productivity (1995), vertical integration 641 Yiqi, 561 utilities, 85, 336 Viacom (USA), 781, 787, 806 vicious circle Russian Federation, 910 vaccines, 268 Shougang, 888 Valeo, 519, 535 tendency to diversify (PRC), 849 Index 1085

Vickers (UK), 181, 227, 228 transformation (SOE national champion into video, 782, 783, 784, 808 privatized TNC), 859 video conferencing, 106 Volvo, 59, 860, 861 video links, 332 aero-engines, 173 Vietnam, 178, 387, 388, 506, 609, 619 auto business acquired by Ford (1999), 515, vinyl acetate, 422 518 Virgin, 818 breakdown of alliance with Renault, 513 Virgin Mary, 409 buses, 201, 229 Virgin Money, 819 concentrates on lorries, 515, 518 virtuous circles joint ventures in PRC, 201–2, 540–1, 566 aerospace, 148–9, 162, 239 merger with Saab, 518 IT firms (USA), 788 merger with Scania, 534 Shougang, 663 saloon vehicle branch purchased by Ford, Visteon, 57, 520, 886 264 see also Ford Motor Company self-sufficient in heavy-duty engines, 566 vitamins, 282, 283 suppliers, 519 catch-up possibilities, 64 taken over by larger firm, 533 multivitamins, 282 Volvo-Scania, 518, 532, 583 Vitamin C, 64, 296, 942(n20) VW, see Volkswagen Vivazzi (6.2000–), 784 Vivendi (France), 784 Wacker (chemicals), 263 merger with Seagram (6.2000), 784 wages, 223 Vivendi/Seagram, 783–4 coal sector, 711 Vnukovo (airline), 179 components, 520–1 Vodafone: merger with AirTouch (USA), 778 Guangxi, 580 Vodafone AirTouch (UK) Posco, 605 market capitalization (2000), 764 PRC, 306, 313, 942(n25–7) merger with Mannesmann (Germany), 778 TVEs, 891 sales revenue (2000), 764 Yuchai, 579 Vodafone AirTouch Mannesmann (VAM Wal-Mart, 226, 479 2000–), 784, 786 Waldrich Coburg (German company), 948(n53) corporate culture (PRC contrast), 802 Waldrich Siegen (Germany), 948(n53) CTHK comparison, 804 Walker Manufacturing (subsidiary of Tenneco), international comparison (12.1999), 800 524 market capitalization, revenue, profits Walters, J.P., 411 (12.1999), 800 Wang Cunna, 946(n40) statistics, 778 Wang Jianming (CEO Yuchai), 548–9, 551, 553, ‘wireless data platform’, 778 567, 575, 576–7, 582, 583, 841, 859 Voest-Alpine furnaces, 662 ‘Big Yuchai’ plan, 576–7 voice mail, 791 biography, 575–6 Voicestream (USA), 803 cited, 501 Voith, 356, 945(n20) ‘dynamic’, 501–2, 568, 585 Volkswagen (VW), 854, 920 explicit goal, 558 commercial aluminium car (Audi 80), 590–1 labour relations, 578–9 comparative size (global, 1998), 561 lobbying efforts, 568 entirely state-owned (until 1960), 504 relations with Dongfeng and Yiqi, 557–8, 568 foreign assets, sales, employment (1997), 509 rise and fall, 501–2 German national champion (1937–), 504 ‘risk-taking entrepreneur type’, 585 interests in Mercosur, 508 Wang Jun, 274 interests in Eastern Europe (post-1989), 508 Wang Lixiong, 935 joint ventures, 101, 513, 534, 546, 886 Wang Wenxiang, 946(n40) Octava saloon car, 950(n6) Wang Xiaoqiang, Dr, xxiv-xxv, 935, 937 output (PRC comparison), 538 Wang Xuejia, xxiv-xxv output, turnover, profit, R&D (1998), 533 Wang Zhen, 274 overtaken by Daimler-Chrysler, 514 Wang Zuxun, General, 194 partially state-owned (1990), 504 Wanjie Group: national team player, 133 plant at Mlada Bolesaw, 950(n6) Wanli (coal-mine), 753–4, 755 privatization, 892 Wanxiang Group, 134 research and development, 510 Warburg (UK), 817; taken over by UBS, sales, profits, employees, R&D (1998), 561 958(n9) 1086 Index warfare, 142, 762 marketing in India, 942(n1) Warner-Lambert, 247, 250, 257, 258–9, 260 sale of non-nuclear business to Siemens washing machines, 198, 272 (1997), 337–8, 390, 398, 943(n5–6), ‘Washington Consensus’, 2–3, 4 949(n68) watchmaking (Samsung), 53 servicing, 394 water heaters, 108 size (late 1990s), 330 water transport (PRC, 1978–97), 432 steam turbine manufacture, 943(n7) Watson Pharmaceuticals, 262 technology and marketing agreement with Waxicun Power Station (Hebei Province), 367 MHI, 336 Wealth of Nations (Smith, 1776), 873 technology transfer (nuclear) to PRC, 358 websites, 774, 780, 790 technology transfer to SEC, 389–90 Wei Maohe, 726 Weston, John (CEO, BAe), xxvi, 165, 236 Weifang Diesel Plant, 562 wheat, 869, 871, 872 Weihai Plant (power generation), 944(n17) wheels, 522, 525, 950(n9) weituoren, ‘[right to sign] contracts’, 684–5 Whirlpool: little to fear from PRC competition Welch, Jack (CEO GE), 392 (post-WTO accession), 863 welding, 329, 379, 380, 948(n52) ‘white goods’, 849 welfare White House, 153 PRC, 914, 915, 921 Whittaker Corporation, 147 Yuchai, 579–80 wholesale sector, 919, 923 Wendt, Gary (CEO, GE Capital), 332 Wilkinson, Bill, 704 West: share of world manufacturing output wind power, 697 (1750–1998), 900 windscreens, 522 West Africa, 415, 434 wine, 316, 869 Western Europe Wings (airline alliance), 149 arms sales (1987–98), 151, 152 Wipro (India), 23, 788 automobile market (projected growth, wireless telephones, 776, 777, 795–6, 931 1995–2001), 507 European lead (threatened by USA), 777 challenged by East Asia, 507 hardware, 795–6 economic effects of WW2, 37 internet communication, 776, 778 electricity generation capacity (1990–2010), penetration (developing countries), 788 697 per 1,000 people (global 1997), 789 exporter of oil to PRC (1995–7), 434 PRC, 790, 798, 799–800, 807, 922 lorry sales (1995, 2005), 509 third generation, 774, 778, 782, 796, 801, production and sales of automobiles (1998), 807–8 508 wood (as energy source), 426 projected demand for power equipment Woodard, Ron, 155 (1980–2010), 334 world share of world electricity generation automobile market (projected growth, (1995–2015), 335 1995–2001), 507 steel production (1991–7), 589 coal consumption (1986–96), 698 see also advanced economies; European coal output (1980–95), 699 Union coal reserves, 718 Western Star (Canadian lorry-maker), 535 distribution of steel production, 592–5 Westfälische Drahtindustrie (Germany), 615 economy, xxiii, 5 Westinghouse, 336, 860 electricity generation (fuel type, 1990–2010), alliance with Rolls-Royce, 330–1, 942(n1) 696 ancillary equipment, 365 electricity generation capacity (1990–2010), co-operation with HPEC, 377, 397 697 dealings with HPEC, 372 energy demand, 695–6 involvement in PRC power equipment energy reserves (1997), 716 industry, 358, 945(n25) lorry sales (1995, 2005), 509 joint tenders with HPEC, 387 manufacturing output (1750–1998), 900 joint venture in Shanghai, 358, 375 natural gas production and reserves (1997), limits, 398 405 links with Wugang, 629 number of ‘competitive edge’ companies losses (power equipment branch, 1995–6), (1997–8), 50 337 oil production (1987–97), 405 market share worldwide (power generation political economy (twenty-first century), xxiii equipment, 1993–8), 337 primary energy consumption (1986–96), 696 Index 1087 world – continued power equipment tariffs, 348 primary energy consumption (1987–97), 402 restrictions on protectionism, 507 primary energy consumption (1996), 697 retail sector (PRC), 460 production and sales of automobiles (1998), rules, 930 508 telecommunications (challenge facing PRC), regional differences in economic growth 777–8, 801–2 (1980–98), 851 telecommunications (Mexico), 779 steel (long-term changes in regional terms agreed for China’s entry (11.1999), 28 distribution, 1974–96), 593 threat to PRC oil corporations, 489, 491, 494, steel industry, 587–622 494–5, 496 steel output (1974–96), 593 uncertain future, 928–9 steel production (1991–7), 589 USA’s ‘best tool for opening PRC market’, steel production (1991–8), 616–17 401 steel production methods (1997), 597 see also TRIPs; World Telecoms Agreement top ten automobile companies (1998), 533 World Trade Organization (PRC accession), 69, World Bank, 2, 4, 909, 913 70, 72, 101, 104, 112, 125, 327, 537–8, advice to South Korea (ignored), 604 856, 863–4, 916–33 Chinese economy (1997), 67 alternative outcome, 925–33 energy efficiency (PRC), 715 Asian crisis (response), 926–8 interpretation of PRC economic success central role for East Asian people in US high (1970s-), 3 technology, 929 PRC infrastructure requirements, 871 ‘dancing with wolves’, 762, 793 World Coal Institute, 698 deep-seated Chinese ambitions, 925–6 WorldCom, 786 fears for PRC competitiveness, 862–3 World Economic Forum, 917, 935 five-year adjustment period (for PRC), 864–5 World Health Organization, 748 high-quality, ambitious Chinese large World Telecoms Agreement (2.1997), 761, 779, enterprise managers, 926 785, 786–7 impact on PRC industrial policy, 864–76 PRC accession, 792 increased East Asian co-operation, 926–8 Russia non-signatory, 786 intellectual framework, 898 ‘triumph for American way’, 761, 786 intense competition produces opportunities, world trade 929 liberalization, 28–9 ‘internet opium’, 924–5 rise of East Asia, 507 IT and adjustment process, 921–23 steel crisis (1998–9), 607–8 painful adjustment, 919–21 warning of general trade war (1.1999), 608 potential impact on international relations, World Trade Organization (WTO), xxiii, 29, 896, 924 244: application of rules (implications for PRC observance of rules (scenario), 923, 925 PRC), 790–2, 793, 794, 796, 806, PRC’s ability to compete, 876–92 [808–]809, 811 pressure on PRC to apply rules, 919 application of rules (Mexican resistance), 803 prospects, 933 Bombardier and Embraer, 181–2, 878 renewed East Asian business confidence, 929 challenges faced by PRC on entry (autos and role model of global oligopoly, 929–33 auto components sector), 501, 517, 543 socio-political consequences, 923–5 China agrees to join (1999), 4–5, 25 shocks, 925 competition issues, 491 uncertainties over US economy, 928–9 conditions for PRC entry, 813 US debates, 762, 785 developing country resistance, 928–9 US economic imperialism, 924 environmental conditions, 431 World Trade Organization (PRC-US impending PRC entry, 497 Agreement, 11.1999), xxvi, 790–3, 813, implications for PRC (financial services), 825, 835, 840, 864–70, 930 825, 831–7 automobiles, 887 implications for PRC (political stability), 825 coal, 891–2 international economic relations, 784–5 contracts (commercial criteria), 878, 882, 891 internet sector, 781, 784 distribution networks (PRC), 866, 890 investment issues, 491 enforcement (PRC), 870 local content regulations, 395, 949(n66) farm products, 871 lower tariffs (PRC steel industry), 623 foreign investment (PRC), 865, 872–3 negotiations with PRC, 800 foreign production facilities (in PRC), 890 pharmaceuticals, 325 general measures (agreed by PRC), 865–6 1088 Index

World Trade Organization (PRC-US product quality, 638 Agreement, 11.1999) – continued productivity, 659 impact on trade and investment (PRC), 870–3 profitability, 638, 643 intellectual property rights (PRC), 866 remuneration and labour productivity (1997), joint ventures, 878, 881, 884, 887, 890, 891 641 local content (PRC), 866 reports directly to SBMI, 622 monitoring, 870, 895 return on investment (1980–90), 660 non-economic objectives, 873–6, 917 rumours (1998) of merger with Baogang, 640 non-tariff barriers (PRC), 865–6 sales (1997), 888 opposition within PRC, 895 social responsibilities, 642 patents, 881 steel production methods (1997), 597 potential political repercussions, 895–6 technological modernization, 629 PRC trade surplus with USA put at risk, 872 top ten steel producer (PRC 1997), 634 PRC (non-economic objectives), 873–5 wages, 658 ‘priority of US business interests’, 894 wujing (Army Police), 291, 941(n16) procurement, 884 Wuxi (engine-maker) quotas (PRC), 865–6 capacity, 561 raw materials, 884–5 competitive advantage, 565 right to export to PRC, 866, 872, 887 competitor to Yuchai, 552 soft loans, 884–5, 891–2 diesel engine fuel injection components speed of implementation (PRC), 869–70 (Bosch joint venture), 546 steel, 889 output, 561 strict PRC observation (scenario), 923 6110 series (engine), 561 sub-contracting work, 878 Yiqi takes full control (1995), 561 subsidies, 891–2 Wuxi Pharmaceutical Company, 300 support for SOEs (PRC), 866 tariffs (PRC), 865 XAC, see Xian Aircraft Company/Corporation technology transfer (PRC), 866, 878, 884, XAC Aluminium Company, 201–2, 214, 217, 887, 890 226 trade performance requirements (PRC), 866 XAC International, 214, 226 USA (non-economic objectives), 875–6 Xenical (anti-obesity drug), 250 USA ‘principal beneficiary’, 871 xi wu ju (Five Western District) mines, 749, World War I, 904 753–6 World War II, 518 Xiamen China-Japan, 905 CATIC subsidiary, 224 economic effects, 37 mine-mouth coal price (6.1994), 728 Japan Steel, 603 thermal coal price (7.1997), 729 Volkswagen, 504 Xiamen Jinlong United Automotive Industry woven products, 130 Ltd (HK), 565 WPP/Young, 781 xian (county) level WTO, see World Trade Organization pharmaceutical distribution (PRC), 299 Wu, Gordon, 351 Xian Wu Bangguo, 71, 81, 897–8, 937–8(n4) aircraft manufacturing, 186, 662 Wu Chengming, 898 pharmaceuticals, 282 Wu Qing, xxv Xian: Holiday Inn, 313 Wu Yixin, 455, 473, 495, 841 Xian Aero-Engine Company/Corporation, 190, Wu Zhao, Mr, 272 200 Wuda (coal-mine), 753–4 Xian Aircraft Company/Corporation (XAC) Wugang, see Wuhan Iron and Steel Group AE-100, 212, 860 Wuhan, 360, 564, 642 assigned to ‘AVIC 1’ (no date, c.1999), 230 Wuhan Iron and Steel Group (Wugang) bus-producer, 199 debt, 684 competition with CAC, 215, [218–]219 energy efficiency, 638 competitors (two types), 844–5 mentioned, 384 disappointed aspirations, 215, 216 mergers, 640 joint venture with McDonnell-Douglas, missed merger opportunity, 862 208–10 national team player (first batch), 114 joint venture with Volvo (bus production, No 3 Steel Plant, 629 1994–), 541–2 output structure (1997), 646 miscellaneous, 190, 846, 877 principal steel products (1997), 636 national team player (first batch), 199[–]201 Index 1089

Xian Aircraft Company/Corporation (XAC) – Ya’an Sanjiu Pharmaceutical Co. Ltd, 309 continued Yahoo! (USA), 764, 780, 787, 806 non-aviation production, 201, 229 Yamaichi Securities, 57 statistics, 200 Yamamoto, Mr (of Fuji Bank), 56 sub-contracting work (1980–), 214–16, Yancheng (Shanxi Province), 715 217–18 Yang Ying (Jenny), xxiv-xxv subsidiary of AVIC, 199 Yangchen (PRC): Kia joint venture, 506 Yun-7 turbo-prop plane, 205–6 Yangcheng Power Plant, 349, 944(n15) see also aircraft Yangquan Mining Bureau (Shanxi), 720, 737 Xian Aircraft Group, 112 Yangtze River, 901 Xian Jannsen, 283 hydroelectric plants, 357 Xian Power Generation Machinery see also Three Gorges Project Manufacturing Group, 111 Yangwei chongji (medicine), 310 Xian Volvo Bus Company, 201–2, 217–18 Yangzhou Motor xiang (township), 727 joint venture with Mercedes (buses), 541 Xiangfan engine plant (Dongfeng Group), 564, purchases of engines from Yuchai (1995), 566 555 Xiangfan Iron and Steel Group, 640 Yangzhou Passenger Car Works xiao er quan (‘small and complete’), 371, 464 ‘second layer’ enterprise with Dongfeng Xiaofeng Technology and Equipment capital participation, 564 Corporation, 273, 276 Yangzi Petrochemical Company/Corporation xiaoping (‘little bottles’), 911 (Nanjing), 117, 466, 469 Xie, Andy, 916 joint venture with BASF, 454 Xifei, 861, 845 listed subsidiary (‘A-share’) of (New) Xinfei (Henan), 573 Sinopec, 472 Xinjiang (province) Yanhua Corporation electricity grid, 345 floated (HK 1997), 453 geographical location of national team listed subsidiary of (New) Sinopec, 472 members, 82, 83 result of Yanshan merger with Tianjin Hangu oil pipeline from Kazakhstan (‘shelved’), 441 (1997), 454 oil reserves, 883 Yankuang Group (1996–), 119 oilfields, 438 Yanshan Oil (Beijing), 444, 446, 464, 862 regional development, 121 merger with Tianjin Hangu Petrochemical Xinjiang Automobile Works (Dongfeng), 564, 565 Plant (1997), 454 Xinjiang complex: managed by New CNPC see also Yanhua Corporation (1998–), 470 Yantai, 547, 810 Xinjiang Construction Group, 75, 86 Yantian (port), 315 Xinjiang Electric Power Company, 110 Yanzhou (Shandong): mining, 119 Xinjiang Petroleum Administration (XJPA), Yanzhou Coal Company, Shandong, 720, 736, 438, 442 737 Xinjiang Production and Construction Corps Yanzhou Diesel Engine, 560 (1954–), 121 Yanzhou Group: workforce, 79 Xinjiang Textiles Group, 86, 113 Yarville National Bancorp (Hamilton, NJ), 819 Xinwen Mining Bureau, Shandong (coal Yawata Steel (post-war), 603 producer), 720 merger with Fuji (1970), 603 Xinyu Far East Ferro Manganese (company), see also New Japan Steel 956(n60) Yawata Steelworks (1896–1934), 602–3 Xishan Mining Bureau, Shanxi (coal producer) Ye Qing, 734–5, 749, 841, 859, 958(n7) average mining depth, 737 Yellow Peril (Wang Lixiong), 935 output, reserves, mine depths (1996), 736 Yellow River, 747 quality of coal, 737 Yeltsin, Boris (b 1931), 909 transport costs (1997), 720 Yeung, Dr Godfrey, xxv XJPA, see Xinjiang Petroleum Administration Yi He Tuan (‘Group of Righteous and Xu Damao, 946(n40) Harmonious Fists’), 904 Xu Dixin, 898 yibashou (company head), 315 Xuzhou Construction Machinery Group, 105 Yichang Three Gorges Project Duoneng Xuzhou Mining Bureau, Jiangsu, 720 Company, 944(n16) Yiqi (First Automobile Works), 438, 444, 464, 496 Ya’an Pharmaceutical Plant (Sichuan), 308, 309 ability to compete on global level playing acquired by Sanjiu (1995), 309 field, 885–7 1090 Index

Yiqi (First Automobile Works) – continued Yizheng Group, 97, 117 comparative size (global, 1998), 561 YKK, 861, 862 customer preference for Yuchai engines, 557 Yonekura, Seiichiro, 678 Dalian (engine-maker), 552 Young, R., see Berger, A. demand for diesel engines, 557 YPF (Argentina), 408, 409, 413, 494, 860, 861 deteriorating relations with Yuchai, 557–8 links with Petrobas (Brazil), 494 diesel engine production (1998), 559 missed merger opportunity, 862 diesel engine capability, 567 national champion, 494 ‘diversified output structure’, 560 privatized in 1993, 408, 409, 494 and Dongfeng, 567 see also Repsol engine guarantees, 558 Yuan Qihong (HPEC Company Secretary), 372, favoured enterprise (by PRC state), 560 946(n40) ‘Fordist’ path, 561 Yuan Shikai, 904 ‘group’ structure, 560 Yuchai in-house production (diesel engines), 582 ‘China Yuchai International’ (CYI), 571n influence with central government, 568 ‘Guangxi Machinery Company’, 571n joint venture with VW, 539, 540, 547 ‘Guangxi Yuchai Machinery Company largest automobile plant (PRC), 560 Limited’, 549 leading lorry-maker (PRC), 518, 534, 541, ‘Yuchai Diesel Engine Company’, 501 542, 553, 561 ‘Yulin Diesel Engine Company’, 571n local champion, 566 Yuchai Diesel Engine Company (Yulin City, losses (1996), 576 Guangxi Province), 501, 543, 548–85, middle-level player (global lorry output), 542 841, 845, 859 minuscule (in international comparison), 534, ability to compete on global level playing 538 field, 885–7 missed merger opportunity, 861 accounting procedures, 573 No 1 Automobile Plant, 560–3 Big Yuchai, 569, 576–7, 951(n22) output of light trucks (1998), 554 business strategy, 566, 568–69 output (truck), sales, profits, employees capacity, 548–49 (1998), 542 collapse, 550, 580–3 petrol engine capability, 567 comparative size, 584 ‘potential market’ for Yuchai, 561 competitors, 558–68 relationship with suppliers, 561, 950(n12) conclusion, 581–5 relationship with Chaoyang Diesel, 565 consolidated profit and loss account revenues, profits, employees, R&D (1998), (1991–5), 549 887 customers, 553–8 sales, profits, employees, output (1998), 556 development of a heavy-duty truck engine, sales, profits, employees, R&D (1998), 561 553 saloon car production, 541, 560 diesel engine production (1998), 559 second layer enterprises, 560 directors, 574 strained relations with Yuchai, 568, 577 downsizing, 580 takes full ownership of Dalian and Wuxi employees, 550 Diesel Plants (1995), 561 engine castings, 951(n22) vertical integration, 561 ethos, 577–8 Wuxi (engine-maker), 552 expansion plans, 568 and Yuchai, 568, 577 foreign flotation, 571 alternative usage: ‘FAW’; ‘Number One foundry (needed), 576, 581, 951(n22) Auto[mobile Group]’; ‘Yiqi Auto global giants (in comparison, 1998), 584 Corporation’ ‘greater caution’ advisable, 566 Yiqi Group (First Automobile Works Group), growth (1975–98), 550 80, 97, 138 growth, 548–50 Dalian Diesel Plant, 561 guarantees, 557–8 description, 101 heavy-duty trucks, 565–6 name in Chinese, 101 and Hong Leong Holdings (HLA), 568, sales, 77 572–5, 585 workforce, 77 housing, 579 Wuxi Diesel Plant, 561 improving quality of fuel pump injection, Yizheng: listed subsidiary of (New) Sinopec, 553 472 independence of provincial government Yizheng Chemical Fibre Company, 117, 466 control, 571 Index 1091

Yuchai Diesel Engine Company (Yulin City, Wang Jianming, 568, 575–6 Guangxi Province) – continued welfare benefits, 579–80 institutional change, 569–77 and Yiqi, 568 international comparison, 583, 584 Yuchai International Holdings Company joint stock company (5.1993–), 573–4 Limited joint venture route, 568, 572, 577, 582 CYI Limited ownership structure, 574 labour organization, 577–80 Yuchai Machinery Company Limited, 573, market growth and structure, 551–3 951(n20) market-oriented firm to Sino-foreign joint CYI Limited ownership structure, 574 venture, 571–3 partly state-owned, 573 marketing, 557–8 Yuchai Revolutionary Committee, 575 markets, 551–8 ‘Yuchai spirit’, 577–8 merger activity, 842–3, 848 Yuejin, 103 missed merger opportunity, 861 Yuejin Auto Group Corporation, 554, 559 New York listing, 548, 552, 573–4, 574–7, Yuejin Group Company, 562 951(n21) Yuejin Group Nanjing Shandong Engine Plant, ominous developments (mid-1990s), 565 562 output of medium-duty diesel engines Yugoslavia, 150, 435, 909 (1988–91), 571 bombing of PRC embassy (Belgrade), 194, output, sales, profits, employees (1975–98), 895 550 war, 162–3, 194 overseas partners, 572 Yulin City (Guangxi Province), 502, 571, 578 peak year (1995), 549 ‘essentially a huge, poor village’, 502 product choice and development, 552–3 labour force ‘poor quality’, 577 production line, 548, 553, 567, 571, 578, ‘rough, backward’, 577 585, 950(n11) see also Yuchai Diesel Engine Company profit handover/retention, 569, 570, Yulin City Asset Management Bureau, 573 951(n18) Yulin Diesel profits, 549, 550, 552, 556, 567, 569, 575, later Yuchai, 571, 575n 951(n18) restructured (7.1992), 575n recruitment, 578 machinery business transferred to Guangxi relationship with Dongfeng, 554–9, 566–7, Yuchai Machinery Business, 575n 568, 576 transferred to State Holding Company remuneration, 579 (except machinery business), 575n research and development, 567 Yunnan revenues, profits, employees, R&D (1998), geographical location of national team 886 members, 82, 83 rise and fall, 548–50, 581–5 FAW (Yiqi), 101 sales (1995), 555 Yunnan Automobile Works (Dongfeng), 563, sales, profits (1970–93), 570 564 sales, profits, employees, R&D (1998), 584 Yunnan Engine Plant second-hand equipment, 885 main product, output, profits, taxes (1995), service network, 552, 567 562 shareholders, 573 Yunnan Internal Combustion 6105 engine, 550, 552, 553, 558, 562, 567, diesel engine production (1998), 559 569, 572, 585 6108 engine, 552–3, 569, 572 zaibatsu, 16–17, 54 6112 engine, 549, 553, 571, 573, 581 Zeneca, 249, 264 specialist engine-maker, 546 Zhang Aiping, General, 941(n18) strained relations with Erqi and Yiqi, 568 Zhang Jin, Ms, xxv supplier relationships, 580–1 Zhang Qi, 939(n24). technology gap, 583 Zhang Wuchang: cited, 501 traditional SOE to market-oriented firm, Zhang Xinchuan, Professor, xxv 569–71 Zhang Yichen, 947(n41) training, 578–9 Zhang Zhen, General, 941(n18) ‘trial LME, not part of trial business groups’, Zhang Zhuoyuan, 947(n41) 938(n3) Zhao Wangqi, 294 upgrading the 6105 engine, 552, 572, 585, Zhao Xinxian, Professor, 841, 859, 879 950(n10) advertising strategy, 298 wage costs, 567 CEO Sanjiu, 289–90, 310–12, 316, 941(n9) 1092 Index

Zhao Xinxian, Professor – continued Zhongshui Group, 135 General Manager, Nanfang, 294, 296, 303, Zhongyang maoyi kaifa gongsi (Central Trade 305 Development Company, Taiwan), 387 ‘leading researcher’ at Guangzhou Army Zhongyuan Petrochemical, 469 Hospital, 291, 322 Zhou Beifang, 643, 646, 953(n20) options, 296–7 Zhou Enlai, Premier (1898–1975), 203, 905 Party Secretary of Nanfang, 304 Zhou Guanwu, 588, 646, 650–1, 652, 663–4, ‘powerful motivator’, 304 676, 678–9, 680, 682, 684–5, 841, 842, Sanjiu’s ‘legal person’, 294 859, 888, 953(n30) wages, 306 anti-Japanese guerrilla leader, 669 Zhapu: sea-going ships (C18), 901 monthly earnings, 666n Zhejiang (province) retirement (2.1995), 643, 657, 953(n42) China Unicom joint venture activity, 810 strategy, 670 coal, 719, 720 see also Shougang Dongfang boiler plant, 390 Zhou Keyu, 941(n18) nuclear plant at Qinshan, 357 Zhou Yinong, 473 nuclear power (planned), 357 Zhou Zouming, 365 Tongrentang Group, 125 Zhoulu xian (Hebei province), 315, 942(n29) wireless telecommunications, 799 Zhoushan islands (near Shanghai), 640 Zhejiang Acrylic Fibre Plant, 456 Zhu Guiming, 859 Zhejiang Electric Power Company, 110 Zhu Rongji, 71, 430, 702, 839, 935 Zhejiang Goods and Materials Group, 132 Zhu Yuli (head of AVIC), 212, 230, 841 Zhejiang Juhua Group, 118 zhua da, fang xiao (‘gasping the large and zheng di yi (‘strive to be number one’), 579 letting go the small’), 639 Zheng Xiaoyu, 286 Zhuang Gu Guan Jie (pills), 303 Zhengda (Thai investment firm), 310 Zhufeng Hotel (Chengdu), 312–13 Zhengzhou Bus Company, 577 zhugan yewu (‘core business’), 476 Zhenhai Refinery Zhuhai Power Plant, 352 listed subsidiary of (New) Sinopec, 449, 472 Zhunge’er (coal-mine), 753–5 Zhenjiang Shipbuilding Plant, 655 Heidaigou No 1, 753–5 Zhenjiang Shipping company, 676 Heidaigou No 2, 753–5 zhongdian (‘focal’ LMEs), 937–8(n4) Haerwusu, 753–5 Zhongguo (‘Chinese nation’), 368 Zigong area (Sichuan), 433 Zhongguoren (‘Chinese people’), 368 Zimbabwe, 690, 710 Zhonglian Automotive Electronics Company ziyuanfei (natural resource fees), 653 (Shanghai), 545