Relationship Between Diversification And Internationalization Of Chinese Companies

Abstract: With the implementation of the open policy, China has become an important competitor in the world market. The increase of exports from China to the world market has resulted in a growing number of Chinese international companies. Internationalization is important for Chinese companies in the development of global market. The Chinese government has made a decision to encourage the diversification of Chinese international companies so that they can compete for a larger share of the world market. This research was set to analyze the relationship of diversification and internationalization of Chinese companies. Through this study, the impact of diversification in the performance of Chinese companies during their global expansion was revealed. This research further identified the difference between the Chinese international companies with foreign sales and domestic Chinese companies with no foreign sales. Information obtained from this study will be helpful to policy makers and government administrators in the future reform of Chinese companies.