by Xinhua Writer Cheng Yunjie
BEIJING, April 17 (Xinhua) -- When Microsoft and Sony cautiously examined the Chinese video game market, where software piracy was believed to be rampant, a Shanghai company saw an opportunity.
It created an alternative piracy-proof video-gaming application that allowed thousands of people to enjoy "live" role-playing games simultaneously.
The innovation brought the inventor, Shanda Entertainment, 337.8 million U.S. dollars in net operating income last year, a rise of 49.1 percent from 2006.
Shanda was chosen by the Boston Consulting Group (BCG) as one of the 50 most impressive companies from emerging economies whose market strategies merit careful study by multinationals.
The bulk of the BCG 50 are from 10 emerging economies, and China has the largest number, 15. India ranked second with 11.
All of the companies are privately-owned, entrepreneurial and primarily focused on domestic markets. Despite having no legal monopoly, each has held the first or second market position in th epast few years.
"The high number of Chinese companies on the list weakens the idea that they are only good at mass-producing cheap goods," said BCG Beijing-based senior partner David Michael, co-author of "The BCG 50 Local Dynamos."
Companies from emerging economies are redefining the rules for local competition in their home markets, putting the expansion plans of many global industry leaders at risk, the report released here on Tuesday said
CHINA'S CHANGING APPEAL
Thirty years into its opening-up and economic reform drive, China is taking its development model to the next level by putting more emphasis on workers' rights, the environment and energy conservation.
These measures, set against the backdrop of global inflation featuring surging oil and food prices, have pushed costs up for "Made-in-China" items and drawn mixed responses from foreign investors.
"I don't think many multinationals have left China," said Michael. He said that, based on his study, China is still extremely competitive among emerging economies. Those who left had performed badly in China, he said.
He said he doubted withdrawal would solve the problem of rising costs, since inflation was a challenge around the globe.
Mei Xinyu, a trade and foreign investment expert with the Research Institute of the Ministry of Commerce, dismissed concerns about massive outflow of foreign investments and the closure of small and mid-sized exported-oriented enterprises.
"Our adjustment plans aim for industrial restructuring and upgrading. We will see labor pains and new births," he said.
Statistics from the Ministry of Commerce showed a 25.26-percentdrop in the number of new foreign-funded enterprises in the first quarter. But the actual use of foreign direct investment (FDI) surged 61.26 percent to 27.41 billion U.S. dollars.
Hao Hongmei, associate research fellow with the Research Institute of the Ministry of Commerce, took the contrast between the number of new firms and the use of FDI as a signal that foreign investors were shifting from labor-intensive production to high value-added, high-tech industries.
