But it would take more than nimble footwork to be a match for some of the multinational giants.

Procter & Gamble, the US consumer goods company, which has its China headquarters in Guangzhou, has been in the mainland since 1988, and has an entrenched market position in many product areas.

There are many other companies whose products and brands are staples for China's growing and increasingly affluent consumer society.

Eric Schmidt, founder and president of China Entrepreneurs, a leading network group, says there are few Chinese companies that can match the brand strength of the consumer goods giants.

"If you look at the number of dollars Procter & Gamble alone spends on product design and development, it is pretty hard for Chinese companies to compete," he said.

"You have got other companies too like McDonald's and KFC that have perfected their marketing techniques and can just multiply them across the Chinese market. Chinese companies don't have that long history or money to spend on marketing."

Mike Bastin, a researcher at Nottingham University's School of Contemporary Chinese Studies, said Chinese companies realize the value of brands and if they are incapable of developing their own they will go out and acquire those of others.

"Chinese companies will increasingly choose growth by acquisition of foreign brands which poses a constant threat to foreign brands operating in China," he said.

A recent trend has been for Chinese private equity companies to target investments at sectors where foreign companies have enjoyed almost monopolistic positions.

The China market itself is likely to become even more competitive this year with the economy expected to slow down.

More and more companies - both Chinese and foreign - will be scrapping it out for what will probably be reduced action.

"Chinese companies will face similar competitive pressures to foreign companies," says Hendrischke at Sydney University.

"In China itself there are huge personnel constraints, increasing labor costs and a lack of middle management which affects everyone. Foreign multinationals still have greater global reach, however, and the Chinese can only catch up slowly on this by their own foreign investment."

andrewmoody@chinadaily.com.cn