The Competitive Advantage And Development Strategy Of French Water Companies' FDI In China Water Market:Based On The Case Study Of Veolia And Sino-French Holdings

China,with more than 20%of the world's population but a reserve of fresh water that only represent 6%of the world's total reserve,is currently facing a water shortfall and demand is predicted to exceed supply by 25%by 2030.Beside,water quality deterioration is even more serious than the water shortage.A 2013 report from the Ministry of Environmental Protection revealed that the number of major rivers that are "polluted" or "seriously polluted"exceed 30%,and more than half of the ground water in 198 cities was noted as "bad" or"extremely bad".Therefore,vast investment in the water sector or needed in order to overcome those problems but the financing requested for those projects is a burden that the government alone cannot undertake and therefore opened the sector to private investors,especially foreigner investors.Nowadays,national and foreigner water companies compete fiercely in China water supply and wastewater treatment market and two French companies,Veolia and Suez Environment(through the Sino-French holdings joint-Venture),are actually in the top position of the market respectively providing service to more than 41 million and 20 million persons.Water companies in China faces numerous difficulties as low water fee level under the cost of treatment,lack of financing,and the high cost of the investment needed.Therefore,many national water companies are making loss and have to rely on government subsidies.Our research aim to study the two leading international water companies active in China water market,Veolia and Sino-French,in order to understand where there competitive advantage lie and how there are able to use those advantages to perform better than Chinese competitors.To reach our research objective we choose a multi-case study in which we compare Veolia and Sino-French to two Chinese competitors,Beijing Enterprises and Beijing Capital Co.Based on Dunning's Eclectic Theory of International Production and the monopolistic advantage theory,our research discovered 6 competitive advantages which are corporate reputation,firm's investment in research and development,worker's training,localization of water project,and firm's vertical and horizontal integration strategy.We also discovered that French and Chinese firm strategy differ from one another on the location of the project,type of contract used,ownership,and degree of firm's diversification.Our paper not only help us understand French water competitive advantage and strategy,but also understand which aspect Chinese water firm need to improve.