Enterprise China

Chapter 3STRATEGIC PILLAR II: DOMINATING DOMESTICALLY

The second pillar in China's competitive strategy is to dominate domestically. Although we commented on this in Chapter 1, in this chapter we dive deeper. In doing so, we address three key questions. First, what does dominating domestically look like? Second, why is it necessary? Third, how does Enterprise China plan to achieve it? As with the first pillar, we do not have to guess or speculate in finding the answers to these questions. Enterprise China has provided clear guidance.

WHAT DOES DOMINATE DOMESTICALLY LOOK LIKE?

The phrase “dominate domestically” could mean any number of things. It could mean that indigenous Chinese companies needed to be either No. 1 or No. 2 in every industry. It could mean that indigenous Chinese firms must have the best technology or must have unique technology that foreign firms would have to buy in order to compete in China. While it could mean these things or more, Enterprise China has operationalized it quite simply: market share.

To dominate, indigenous Chinese firms need to control a high share of the domestic Chinese market. It is that simple. But what is the threshold at which domination is achieved? For the targeted sectors, MIC 2025 in general articulates that the targeted market share is roughly 70%. However, in some segments, this number is higher. For example, in the case of electric vehicles and energy equipment, MIC 2025 envisions indigenous Chinese companies capturing 80% ...