China companies look for a global status - Shaun Rein

Shaun Rein

Pork manufacturer Shuanghui's purchase of Smithfield was the latest move of Chinese companies to enter a global economy, and they want to hedge a slower growth in their domestic markets, tells business analyst Shaun Rein AFP. 

AFP:

Shaun Rein, managing director of China Market Research Group, identified two key drivers behind the phenomenon: Chinese companies' increasing appetite to be world players, combined with the pressures of a less robust domestic economy. 

"A lot of Chinese companies have the ambition to become global brands," he said, giving Fosun as an example. "They're very aggressive, very ambitious and they want to grow fast. 

"They're looking at getting access to the American and European markets in order to shield themselves from what is definitely a slowing Chinese economy," he added... 

China turned in its weakest economic performance in 13 years in 2012, with growth sliding to 7.8 percent for the year. 

Acquisitions of foreign brands and technology can also pay important dividends domestically with Chinese consumers fed up by food, quality and safety scandals. 

Earlier this year, China was shocked by the spectacle of more than 16,000 dead pigs recovered from parts of Shanghai's main river, one of a long line of food controversies. 

"It's about bringing American pork, trusted American pork, to the Chinese consumer," Rein said of the Smithfield acquisition. "Chinese are petrified of domestic-raised pork, pigs and cattle because of quality control concerns."

More in AFP.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

+China Weekly Hangout 

 Internet companies are one of the industrial groups, looking increasingly to enter a global market. The +China Weekly Hangout discussed in November 2012 their worldwide ambitions with with +Steven Millward of +TechinAsia, and +Fons Tuinstra of the China Speakers Bureau about Baidu, Tencent, Alibaba and other Chinese internet companies exploring the world. Main conclusion: most larger companies are positioning themselves in Southeast Asia.

Coming Thursday June 6, the China Weekly Hangout will discuss the art of negotiating trade negotiations, with our in-house negotiation expert +Andrew Hupert of +China Solved as one of the guests. You can read our announcement here, or register at our event page for action.

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Shuanghui looks for upgrade in Smithfield deal - Ben Cavender

Ben Cavender

A tainted image because of a food scandal is one of the reasons China's largest pork producer Shuanghui bought America's largest meat processor Smithfield for US$4.7bn in cash. Shuanghui is trying to upgrade both management and technology, tells business analyst Ben Cavender in the Wall Street Journal. 

The Wall Street Journal:

Two years ago Mr. Wan and other Shuanghui executives scrambled to contain fallout from the presence of chemically tainted meat products. He took a prominent role in containing the scandal, apologizing before the public and describing to local media how he arranged to receive daily quarantine reports. 

That episode could present a public-relations headache amid broader questions about Chinese food safety, said Ben Cavender, a senior analyst at China Market Research Group, adding that U.S. consumers may want the combined company to demonstrate tight safety standards. But the deal could also help Shuanghui improve its own standards, he said. 

"Chinese companies are looking for management prowess and technology upgrades when they make acquisitions," Mr. Cavender said. 

The deal would give Shuanghui a much greater foreign presence. In addition to Smithfield's position in the U.S., the company sells meat in Poland, Romania and the U.K.

More in the Wall Street Journal. 

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

+China Weekly Hangout
Thousands of dead pigs, floating earlier this year in Shanghai's Huangpu river, illustrated how badly organized China's food chains are. In the China Weekly Hangout  +Richard Brubaker, +Andrew Hupert and +Chris Brown discussed food security and how the ongoing problems will lead to massive food inflation. Moderation by +Fons Tuinstra of the China Speakers Bureau.  

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