Enhance The Development Of Strategic Choice And Competition

When he inspected the township and village enterprises in Su Nan region (i.e. South Jiangshu Province of China) on April 21,1999, President Jiang Zheming restated that developing the township enterprise was an important strategy and long-term policy of China. The township enterprise has played a unique role in the rural industrialization, modernization and urbanization of China. Chinese rural modernization has quite a long way to go; Chinese rural urbanization has just started its steps; The huge amount of surplus labors that are released from Chinese agriculture, which is nowadays undertaking strategic adjustment, needs to be eagerly absorbed . The new century entrusts the township enterprise with greater historical mission, and the township enterprise is bound to have a greater development. Su Nan is one of the most developed regions in China. Su Nan's countryside is the birthplace of "Su Nan Pattern ". Researching the problems of Su Nan township industry and getting something of a rule is very significant not only to Su Nan township industry itself but to those in other regions also. The township and village industry enterprises in Su Nan region, which headed the list of the township and village industry enterprises in the whole country from 1970s till early 1990s,have come into a difficult position since middle 1990s:decreasing growth speed, heavy loss incurred in much more enterprises, and poor economic effect, etc. These problems reflected that the competitiveness of the rural enterprises in Su Nan region is getting weaker than before. The author thinks that the traditional development strategy carried out by the rural enterprises is a main cause for the weaker competitiveness besides other ones. This thesis centers on the question of"how to make suitable development strategy in order to promote the competitiveness of the rural enterprises in Su Nan region"and probes into the relationship between strategy and competitiveness , the traditional strategy and its effect on the competitiveness , and the new strategy in early 21st century . Chapter one is the introduction to this thesis, which deals mainly with the former researcher's work about the development strategy of the Township and village industry. In chapter 2, the author retrospects the theories of economic development strategy first. Then the notion of the development strategy of township and village industry is defined, and its research frame is also provided. In chapter 3, the notion of competitiveness is defined. The author thinks that the industry competitiveness could be divided into three parts, i.e. industry or product competitiveness, technology competitiveness and system or institution competitiveness. In this chapter, the source of competitiveness is specially probed. Besides Marx's contribution to it, other scholars had a series of very reasonable ideas. Among them, Hecksher and Ohlin considered that the international Competitiveness came from the natural endowment of a country or a region; Michael E. Porter thought that it lay in the advantages of some strategic links on the "value chain "; C. K. Prahalad and Gary Hamel had the idea that it resulted from the enterprise's core competitiveness, i.e. "accumulated knowledge in an organization ". By studying the development of the macro and micro economy in China and abroad , the author discovers and demonstrates that the strength of an economic system's competitiveness was closely related with the development strategy carried out by it . Further the author infers that the development strategy is also a source of the system's competitiveness. Then, using the production function model, the author analyses the internal relationship between the strength of competitiveness and the choice of development strategy . The analysis theoretically proves that the development strategy has direct effect on TFP(Total Factor Productivity), which further influences the growth pattern and competitiveness of an economic system. So the development strategy is an important source of the competitiveness. The abovedemonstration may make some contributions to the theories of economic growth, development strategy and competition, and supply powerful theoretic foundation for attaching importance to making development strategy for stronger competence. In Chapter 4, the traditional development strategy of township and village industry in Su Nan and its effects on the competitiveness are explored. Based on the studying the reality, the author summarizes the traditional strategy as the "extending strategy relied on extensive production capability". The implement of this strategy resulted in unreasonable industry structure, high speed of economic growth but poor economic effect. Then , the author analyses the historical economic and political background under which the traditional strategy was formed . In this Chapter, a great deal of statistical data are used to prove the objective existence of the traditional strategy. From the author's research , the reader can see that it is the traditional strategy which directly influenced the competitiveness of township-village industry and, thus resulted in the former incredible growth speed and later serious problems of it. In chapter 5, the new development strategy is studied under the background of economic globalization and WTO entry. The conclusion is that the township and village industry should carry out "the extending strategy relied on intensive competitiveness"in the early new century. The article clearly states the new strategy's guiding thought, targets , focus and measures, etc. Furthermore , the author thinks that the new strategy should be cooperated with by three secondary ones. They are the strategy of optimizing industry structure , the strategy of technological advancement and the strategy of system or institution innovation. Chapter 6 deals with the first secondary strategy, i.e. the strategy of optimizing industry structure. the author considers that intensive growth and competence increase are always linked with the optimization and upgrade of industry structure.By the positive research into the rural enterprises in Su Nan, the author discloses that the traditional industry accounts for 80% of total industry, while the proportion of newly–developing technology-intensive industry, such as industry of chemistry, medicine, electronic and communication equipment, is very low although they have slightly increased in the past years. The research concludes that considering its level of industrialization and fund conditions, the industry structure of the rural enterprises in Su Nan is quite unreasonable. This dissertation has analysed the present background of adjustment of industry structure and the good and bad influence on the rural industry by the access of WTO. Based on these, the goal and countermeasures of the strategy of optimizing industry structure are determined . In chapter 7,the author studies the present status of some factors which reflects the level of technology advancement of the rural industry of Su Nan ,such as equipment, the technical activities, the contribution from technology advancement, enterprise management and the way of getting technique. The problems and restricted factors which have disturbed the technology advancement are also analyzed in detail. The research makes it clear that the restricted factors are: scant funds for technical input, shortage of technicians ,unsuitable system or institution and mechanism of technology advancement, as yet unformed entrepreneur stratum and imperfect social technical service system, etc. According to the above, the author puts forward the guiding thought of the strategy of technology advancement, strategy goals and some corresponding countermeasures. In addition, the author suggests that building and perfecting the mechanism of technology advancement should be taken as the important content of establishment of the modern enterprise system, including the decision-making mechanism, the impetus mechanism and encouraging mechanism for technique innovation, etc. In chapter 8, the deficiencies of Su Nan Pattern is analyzed. It is these deficiencies that have resulted in the decline of institution competence of the ruralenterprise. So it is indispensable for the whole enterprises to go on with institution innovation. First, nonpublic ownership economy should be vigorously developed in order to strengthen the competence of the whole rural enterprises; Second, modern enterprise system should be energetically established to promote the competence of the micro subjects; Third , the innovation of the system for managing the collective assets should be pushed on to maintain and increase value of the collective assets. This chapter lays stress on the research into the institution innovation of the existing "Big and profitable"and "Big but at a loss"enterprises which have not yet finished transforming their property right system, existing stock-cooperative enterprises and family ones. Furthermore ,the new system for managing the collective assets is deeply explored with a series of practicable countermeasures.