Conclusion: How Can Chinese Companies Be Truly Great?

Abstract

What make great Chinese companies? Eight aspects, some at the macroeconomic and institutional levels and some at firm level, are indispensable for corporate China to re-align its incentives and adapt its strategies so that it can move in the direction of becoming truly great: transforming the growth model, redefining the role of government, interest rate liberalization, allowing private capital to enter finance, reforming production factor markets, being in the right place, focusing on ROIC, and promoting innovation. Although the eight aspects are not mutually exclusive, they collectively provide an enabling formula. The success of the influential companies that emerged in the four entrepreneurial waves during China’s reform era highlights how these eight elements can translate into higher ROIC.