The ‘Theory of the Firm’ consists of several aspects such as behaviour, structure, and relationship of companies in a market (Tsui, 2006). The Chinese firms which are capable of producing rare minerals or military arms have been utilising this technique very efficiently. The existence of a Chinese firm in the world market, decentralisation policies of the firms, size of the firms, and the internal equations are responsible for a flourishing Chinese export market.
USA has to be extremely vigilant in order to compete which the growth of Chinese companies at a rate of 12% per year (China Manufacturing – Facts, n.d.). The manufacturing industries and the mineral corporations are producing goods in a non-market environment which increases the efficiency. The price market system basically hinders the cost effectiveness of a firm so the ‘theory of the firm’ states that the decisions regarding the labour hiring and payments must be done on a long term basis (Tsui, 2006).
The different aspects of ‘theory of the firm’ such as transaction cost theory, behavioural theory, managerial theory are playing an important role in the world market dynamics (Chow, 2007). The Chinese firms have been implementing the cost effective theories to ultimately reduce the overall operational costs of the firm and thus the production of the Chinese companies is challenging the world powers such as USA and European countries. The power of a firm should lie on the shoulders of the management much more than the shareholders, and that is exactly what the ‘theory of the firm states’. China is a socialist country and so the nationalisation of the production area has been attained through tough measures. This not only enhanced the production of the country but made it the 4th largest producer of goods (China Manufacturing – Facts, n.d.).
“企业理论包括如行为，结构几个方面，以及在市场伙伴关系（翠，2006）。这是能够产生的稀有矿物或军事武器已经利用这种技术很有效的中国公司。世界市场对中国企业的存在，企业的权力下放政策，公司的规模，与内部方程是一个繁荣的中国的出口市场。
美国是非常警惕，为了竞争，中国企业以每年12%的速度增长（中国制造的事实，n.d.）。制造业和矿业公司在非市场环境，提高效率生产商品。价格的市场体系基本阻碍了公司的成本效益，所以公司指出，对于劳动雇佣和支付必须在长期的基础上所做的决策理论（翠，2006）。
不同方面的公司如交易费用理论，理论，行为理论，管理理论在世界市场动态的一个重要的角色（议员，2007）。中国企业已经实施成本的有效理论，最终降低了公司的整体运营成本，使中国公司生产的具有挑战性的世界大国如美国和欧洲国家。一个企业的权力应该取决于管理比股东的肩膀上，而这正是“企业理论”。中国是一个社会主义国家，所以对生产区域化已通过强硬措施达到。这不仅提高了该国生产了第四品最大的生产国（中国制造的事实，n.d.）。
