The ASEAN-China free trade area: exploring the internationalisation pattern of Chinese SME's

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2013

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Rammal, H.G.
Zalan, T.
Zhu, Y.
Wang, Y.

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Since liberalizing its economy three decades ago, China has experienced rapid growth and is now the second largest economy in the world. China's membership of the World Trade Organization (WTO) and other bilateral and multilateral trade agreements has provided opportunities for Chinese SMEs to internationalise. Extant literature suggests that an increasing number of SMEs view the world as one market and enter markets globally. This is particularly the case for early internationalising firms (also known as born globals). We argue that SMEs from developing and transitional economies tend to internationalise regionally, and the growing number of regional agreements assist firms to explore market opportunities closer to home. To investigate this issue, we analyzed the ASEAN-China Free Trade Area agreement, and conducted interviews with government officials, business leaders, industry experts and researchers in the Chinese cities of Beijing and Nanning. Our findings suggest that Chinese SMEs internationalise in nearby markets, and the Chinese government plays a pivotal role in determining which firms enter the international marketplace and the appropriate location for entry.

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Copyright 2012 Australian Centre for Asian Business, University of South Australia

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