Japanese firms should integrate into Chinese society

Japanese multinational automaker Toyota Motor Corporation recently announced that it will change the name of its Chinese division from "Toyota China" to "China Toyota," launch joint-venture brands in China, and shift certain functions of its Japanese headquarters to China.

Although it is somewhat late, Japanese companies have finally begun localization in China, and such a process has a great impact on their development in the country.

Japanese MNCs have lagged behind their European and U.S. counterparts in localization in China for a long time, and paid more attention to localization in Europe and the United States.

For example, Toyota Motor allowed a Canadian to be the general manger of CAPTIN the Canadian subsidiary Canadian Autoparts Toyota, Inc. as early as 1998, and an American who once worked for Ford Motor Company to head another subsidiary Toyota Motor Manufacturing, Kentucky, Inc. TMMK in 2001.

These moves were aimed at localizing its North American subsidiaries, so they could integrate into the local business environment.

However, Japanese MNCs have long neglected the importance of cultivating qualified Chinese managers, and are used to sending senior Japanese executives to head their Chinese divisions.

Certain Japanese companies in China are overly worried about "Chinese risks," and unwilling to integrate into Chinese society. There is even a "village of Japanese companies in China" where Japanese businesspeople communicate with one another.

In addition to conservativeness in utilization of local talent, Japanese companies, especially major manufacturers, have seldom established technological research centers in China.

The negative attitude of Japanese enterprises toward the localization in Chinese market is greatly related with their overconfidence. However, once the market situation changes, the Japanese enterprises in China, which are ill-adapted to Chinese society in terms of qualified personnel, operating management, sales, purchase and product development, will soon become victims of the market competition.

As the first batch entering Chinese market, Japanese enterprises had made a brilliant success, but their inert thinking of resisting the localization and refusing to continue to improve themselves have led many of the top-class electrical equipment manufacturers to leave China.

Although the behavior that Japanese companies began paying attention to the localization in China may be an expedient to cope with the effect of diplomatic conflicts with China, some of them really reflected on their past practices and began to "observe the customs of the place."

Japanese companies should better integrate into Chinese society on the base of advanced, rigorous and clean-handed mode of Japanese business management.