China Herald: United States

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Monday, March 16, 2020

The West squandered time on the coronavirus bought by China - Ian Johnson

Ian Johnson

The West could have known about the dangers of the corona virus when China started to fight it. But the West preferred to watch on, in stead of jumping into action, writes Beijing-based journalist Ian Johnson in an opinion piece in the New York Times.

Ian Johnson:

The attitude toward the coronavirus outbreak in the United States and much of Europe has been bizarrely reactive, if not outright passive — or that the governments in those regions have let pass their best chance to contain the virus’s spread. Having seen a kind of initial denial play out already in China, I feel a sense of déjà vu. But while China had to contend with a nasty, sudden surprise, governments in the West have been on notice for weeks.

It’s as if China’s experience hadn’t given Western countries a warning of the perils of inaction. Instead, many governments seem to have imitated some of the worst measures China put in place, while often turning a blind eye to the best of them, or its successes.

Outsiders seem to want to view China’s experiences as uniquely its own. I imagine there are many reasons for this, including the comforting idea that China is far away and an epidemic over there surely couldn’t really spread so far and so fast over here. More than anything, though, I think that outsiders, especially in the West, fixate on China’s authoritarian political system, and that makes them discount the possible value and relevance of its decisions to them.

More in the New York Times.

Ian Johnson 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.

Are you looking for more experts on managing your China risk? Do check out this list.

Preparing the life after the corona crisis

President Xi Jinping visits Wuhan

China and South Korea might be starting to resume their economies, the rest of the world is getting further into lock-down mode. After Italy, the rest of Europe and the United States are only at the beginning of the corona virus pandemic. And for sure nobody in those countries is in de mood to prepare for a life after the current crisis.

At the China Speakers Bureau, we do start to look ahead, also as more events are cancelled and international flights still seem in a unstoppable free fall. But one thing is sure: even when timing is unclear, this crisis will be disappearing in the months to come, even when experts already predict a second wave of patients after the summer. In our line of business the average lead time between inquiries for speaker' assignments and execution is on average three months, and we do not want to start for resumption of our business until the pandemic has officially stopped.

Most of our speakers have been silent on the corona crisis, as it is still unfolding, and making sense for the future international trade relations has been hard. But when business is resuming, more than ever a solid advice seems to be needed.

This week we will start to publish against stories from our speakers, so you can have an idea in what direction their thoughts are going, and where they might fit into your future plans. We remain at our posts, and look forward to exchanging thoughts. Do get in touch here.

Friday, September 18, 2015

China, US BIT agreement win-win for both - Sara Hsu

Sara Hsu

When President Xi Jinping visits Washington next week, there is a fair chance the long-awaited bilateral investment treaty (BIT) between China and the US might get finalized. A win-win for both countries, writes financial analyst Sara Hsu in the Diplomat.

Sara Hsu:

China’s sectors most closed to foreign direct investment include agriculture, fishing, transportation, media, telecommunications, and financial services. Opening some Chinese sectors would remove a major hurdle for American businesses. The BIT may also address merger proposals by foreign firms in China, which have incurred significant conditionality in proceeding with merger events, and competition policy, in order to ensure a more level playing field between Chinese and U.S. firms in China.

China’s perception of the investment process in the U.S. is that much of it is subject to the opaque approval process of the Committee on Foreign Investment in the U.S. Justification for the imposition of barriers to Chinese investment in the U.S. have been made on the grounds of national security. A BIT would hopefully provide more transparency in the investment process and reduce hurdles to investment.

The U.S.-China BIT represents two trends – one in the international arena toward increasing global trade and investment ties, and one in China of expanding outbound investment under its “Go Out” policy. Global trade and investment ties that are new or under negotiation include the Trans Pacific Partnership, the Asian Infrastructure Investment Bank, the BRICS or New Development Bank, the Australia-China Free Trade Agreement, and the Regional Comprehensive Economic Partnership, among others. As part of China’s “Go Out” policy started in 1999, Chinese investment abroad has expanded in recent years to outbound direct investment.

BITs are generally conducive to increasing direct investment abroad, since they protect firms going abroad against expropriation by a foreign government. Caveats may exist for developing countries that would otherwise benefit from the protection of nascent industries or more equal compensation for land expropriation between domestic and foreign firms. As China has more industries closed to foreign investment and is continuing to develop, the country has potentially more to lose from signing the treaty.

Still, if a balanced BIT can be concluded, both nations stand to gain. The U.S. would encounter more profit opportunities in China, while China would further its agenda to “Go Out” and promote maturation of its economy. Many analysts have anticipated that the treaty would be concluded this month; we will watch for signs of this during Xi’s Washington visit next week.

More in the Diplomat.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers´ request form.

Are you interested in more stories by Sara Hsu? Check out this list.

Wednesday, August 05, 2015

My problems with Obama´s Nairobi speech - Howard French

Howard French

Author Howard French, of China's Second Continent: How a Million Migrants Are Building a New Empire in Africa explains in Foreign Policy what President Obama did not mention in his Nairobi speech. Obama did not really get the fast development of Africa, and has ignored the continent.

Howard French:

The continent has famously seen a huge boom in the presence of Chinese people and business interests — both trade and investment — in the last decade or so. Less well-publicized, but just as real, many African countries are drawing interest from a wide variety of other foreign governments and business people, including nontraditional partners like Turkey, Vietnam, Russia, Malaysia, and Brazil. During this same period, the American presence on the continent has flagged, and numbers measuring U.S. economic engagement have stagnated. Obama himself spent less than 24 hours in sub-Saharan Africa during his first term, and put off what will likely be regarded as his most important visit to the continent until late in his second term.By contrast, China’s top leaders - either its president or prime minister — have been visiting Africa on a near-annual basis.

The relative newcomers to the African economic scene are drawn by a sense of great opportunity. For starters, economic growth in Africa as a region is roughly on par with Asia’s, and perhaps even a tad faster. The continent’s population is booming in ways that suggest even greater strengthening of these trends ahead. Over the next few decades, for example, no other part of the world will have as many people of prime working age.

Already, no other part of the world is urbanizing faster. Contrary to widespread perception, Africa’s recent economic growth is increasingly driven by services and, to a lesser but still important degree, by manufacturing. This translates into less dependence on the traditional pillar of natural resources, which have a poor record of driving development and generating widely shared wealth.

By sticking so closely to an old-fashioned script, Obama squandered a unique chance to explain the changing realities of the continent to the American public. Over the short term this probably entails less American investment, which is, to be sure, a loss for Africa. It also means that fewer American business people will think of Africa as a place for trade and investment, which represents a continued loss of markets for the U.S. economy.

More in Foreign Policy.

Howard French 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.

Are you looking for more experts on China´s outbound investments at the China Speakers Bureau? Do check this list.

Tuesday, June 30, 2015

US inspection of listed China firms "little and too late" - Paul Gillis

Paul Gills

Under new US rules the Public Company Accounting Oversight Board (PCAOB), the main U.S. audit regulator will start this year to inspect Chinese firms listed at US stock markets in China, Reuters reports. Accounting professor Paul Gillis is not impressed.

Reuters:

The PCAOB has been seeking access to China for audit inspections for years, following a rash of botched audits that led to massive losses for investors in Chinese shares in the United States. China had balked at granting access for audit inspectors, citing sovereignty concerns. Under U.S. law, auditors that check the books of U.S.-listed companies must be registered with the PCAOB and open to inspections.

"They've gotten very little here, but they're making progress," said Paul Gillis, an accounting professor at Peking University in Beijing.

"The whole issue is becoming less relevant as these companies flee the U.S. markets to return to China, and that's really the best for all parties," he said.

Chinese companies have been pulling out of the United States and returning home, where share prices had surged before a recent pullback. In the media and internet sectors alone, 17 U.S.-listed Chinese companies have said this year they will go private, spurred by a chance to re-list on Chinese exchanges, according to a report on Monday from Mizuho Securities.

More in Reuters.

Paul Gillis 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.

Are you interested in more stories by Paul Gillis? Do check out this list.

Thursday, June 18, 2015

Lesson #1 from Alibaba: Be visible - Joel Backaler

Joel Backaler

Jack Ma of Alibaba made a recent splash by his visit to the US, and more Chinese companies want to follow in his footsteps. Joel Backaler, author of China Goes West: Everything You Need to Know About Chinese Companies Going Global explains in Forbes the rules to be learned from Alibaba.

Joel Backaler:

Jack Ma, chairman of Chinese e-commerce giant Alibaba, recently returned to the city where his firm made history last year with its record-breaking $25 billion IPO. First in New York and then in Chicago, Ma emphasized the importance of ‘cross-border e-commerce’. This relatively new form of e-commerce enables Chinese consumers to purchase products directly from the US and other international markets via Alibaba’s TMall Global online platform. This booming industry is expected to grow from $40 billion in 2014 to as large as $240 billion by 2020. There’s a huge market up for grabs, and competition is intensifying – NASDAQ-listed JD.com recently launched its similar JD Worldwide, while other ‘pure cross-border’ companies like Shanghai-based Ymatou.com are quickly gaining ground.

Ma’s high-profile US visit had two goals. First, it enabled him to promote cross-border e-commerce and explain how American businesses can capitalize on the emerging phenomenon to sell their products to Chinese consumers. Second, it provided him a platform to address mounting concerns about counterfeit products being sold on Alibaba’s sites. Ma’s fluent English and ability to navigate complex and sensitive topics are key assets that have enabled him to connect with Western audiences. However, there are three more important lessons that Chinese CEOs who wish to ‘go global’ can learn from Jack Ma and Alibaba.

Lesson #1: Be Visible

Chinese companies, especially in traditional business-to-business sectors, have often built success through a relentless focus on short-term sales. Given the size of the Chinese market and rapid pace of economic growth, their firms often grew without extensive focus on activities like marketing, branding and public relations. Yet these three capabilities are critical for Chinese firms expanding overseas in order to proactively build and manage their international reputations.

Alibaba’s successful example demonstrates how important it is for Chinese CEOs to personally invest in spending time with overseas governments, trade associations and media to shape perceptions, rather than appearing only during times of crisis. During Alibaba’s high-profile IPO roadshow, Jack Ma traveled to 10 different cities around the world serving as the face of Alibaba. He accepted interviews and guest spots with nearly every major international business media outlet. His firm produced high-quality videos, articles, and a wide variety of online and offline content positioning the firm as a global company with a track record that is comparable to other more established multinational firms.

More lessons in Forbes.

Joel Backaler 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.

Are you interested in more experts on China´s outbound investment? Do check out this list.

Thursday, March 05, 2015

US, UK top destinations for study – Rupert Hoogewerf

Rupert Hoogewerf

Both the US and the UK retain their top positions as a destination for study, reveals the Hurun Chinese Luxury Consumer Survey. They are followed by Australia and Canada. Surprising newcomer is New Zealand at not five, Hurun founder Rupert Hoogewerf tells in the PieNews.

The PieNews:

The top five destinations for undergraduate and postgraduate study were the US, the UK, Australia, Canada and New Zealand, the survey by luxury publishing and events group Hurun Report shows.

This is the first year New Zealand has entered the top five, overtaking Switzerland. “New Zealand breaking into the ‘Big 5’ shows how far it has come to building a global education programme, attracting many of China’s most successful families to send their children to study there,” commented Rupert Hoogewerf, the Hurun Report’s founder, chairman and chief researcher.

“New Zealand’s all-round education system is able to compete at the very highest levels in the world.”

Survey respondents also nominated their favourite study abroad education agencies, with BE Education voted the best high-end overseas study brand.

Shinyway was voted China’s best education agency for consumers heading to the US, while Haiyi was dubbed the best education agency for Switzerland.

Hoogewerf noted that 80% of wealthy families in China now intend to send their children overseas. The average age for millionaires to send their children abroad for study is 16, while the average for billionaires is 18.

Now in its 11th year, the report is based on a survey of 376 Mainland Chinese ‘millionaires’, each worth RMB10m (US$1.6m) and with an average wealth of $6.8 million.

More in the PieNews.

Rupert Hoogewerf 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.

Finding a study destination is often a first step, followed by purchasing real estate and other investments, by wealthy Chinese. Are you interested in more experts on China´s outbound investments at the China Speakers Bureau? Do check our latest list.

Tuesday, November 25, 2014

80% of China´s rich plan to send their kids abroad - Rupert Hoogewerf

Rupert Hoogewerf

The story China´s rich send their kids abroad is not new, but their numbers are growing and the ages of the kids are dropping, found the latest Hurun report. And says Hurun founder Rupert Hoogerwerf, they go to more different countries, he tells at Yibada.com.

Yibada:

The report, according to Xinhua, found that some 80 percent of the country's rich people have plans to send their children abroad, the highest ratio in the world.

Also, the report found that these rich people are most likely to send their children to the U.S. and the U.K., while other countries like Australia, Canada, Switzerland, New Zealand, Singapore, France and Germany attract most of the rest.

Finally, the report said that the latest average age of the millionaires' children is 16 years old when they were sent abroad.

The publisher of the monthly magazine, Rupert Hoogewerf, also known as Hurun, observed that 10 years ago, Chinese rich people could only send their children to Canada and Australia because there were a large number of Chinese people already living there. Now, because the Chinese rich people have a much broader social network, he said "they can find trusted people anywhere in the world and can rest assured sending children to any country."

Hurun's the "Chinese Luxury Consumer Survey 2014" came from a poll of 400 Chinese parents who each had at least 10 million yuan ($1.6 million) in disposable income, according to China Daily.

For undergraduate study, completing it in the U.S. tops the list among China's richest parents, with the U.K. second and Australia third. For a university degree, U.K. is their first choice and the U.S. as second for their children.

Hoogewerf told China Daily: "We have been keeping a keen eye on overseas education as it indicates a trend in emigration. It is common practice for the rich to send their children overseas as a first step before they move to the country themselves when the children finish their education."

Also, education has long been considered a high priority in China. On average, the country's high-net-worth individuals spend 170,000 yuan (about $27,000), to educate each of their children. This was the third-highest area of their spending, after travel and luxury goods, according to IB Times.

More at Yibada

Rupert Hoogewerf 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.

Are you interested in more experts on luxury goods at the China Speakers Bureau? Do check out our latest list.

Tuesday, October 14, 2014

China´s dangerous maritime endeavors - Howard French

+Howard French

China has been aggressively been expanding its maritime power of the past two years. While it is now surprise it takes on that other maritime powerhouse, the US, but - writes journalist Howard French in a comprehensive analysis in the Atlantic - there is enough to worry. For example how it deals with Vietnam.

Howard French:

China’s main frontline opponents in the South China Sea are Vietnam and the Philippines. Analysts in both countries strongly fear that Beijing will seek to make an example of at least one of them, following the venerable Chinese adage that one kills a chicken to scare the monkeys. The question would seem to be which neighbor will serve as the sacrificial chicken; which country China will bully and humiliate as an object lesson to other neighbors that resistance is futile and decisive help from the Americans is unlikely to come.

Today, Vietnam is the only country in the region that seeks to impose serious limits on China’s maritime ambitions but does not have a defense agreement with the United States, making it an attractive target. On the other hand, even if it is scarcely more than one-30th of China’s size, Vietnam has a redoubtable martial culture, as the United States learned in the 1960s. The Chinese, too, should be familiar with the disposition toward resistance: Vietnam repelled a Chinese invasion of the country’s northern borderlands in 1979, leaving as many as 20,000 Chinese soldiers dead. Yet this incident has long since been censored out of China’s national consciousness. And just as they did at the beginning of that assiduously forgotten war, outlets of the Chinese state media have spoken recently of the need to give Vietnam “a lesson it deserves,” or to make it pay “an unaffordable price.”

Although the two countries are nominal ideological allies, their relationship through the centuries has involved many waves of invasion and subjugation, deeply coloring the attitudes of each toward the other. “Invasion is in their blood, and resistance is in our blood” is how a Vietnamese political analyst summed up the countries’ two millennia of bitterly shared history for The New York Times in May.

No one among the score of diplomats and officials I met in Vietnam has any illusion of prevailing in a symmetrical clash with China, naval or otherwise. But Vietnam has at times found unconventional means to overcome bigger and more heavily armed adversaries. This history of defying the odds has fired a mood of self-confidence in Hanoi that sometimes smacks of arrogance.

“We are a very small country, but every time China has wanted to use force against Vietnam, we have stopped them,” a prominent Vietnamese military analyst told me in Kuala Lumpur early this year. We met in a formal reception room in his country’s embassy, furnished with a springy couch, a noisy air conditioner, and fading revolutionary art. High on the wall, in pride of place, hung a portrait of a smiling Ho Chi Minh. “In the Malvinas conflict, Argentina fired only three Exocet missiles; one of them sunk a British ship,” he said. “If the Chinese come with Liaoning, we will defeat them.”

Hanoi recently took delivery of two silent Russian-built, Kilo-class submarines—four more are on the way—and the military analyst unambiguously explained such an expensive purchase for a country with a per capita GDP of only about $1,900: his country needs to be able to sink Chinese ships in order to raise the cost of Chinese aggression to unacceptable levels. “Little by little we are loosening the noose” that China has put around his country’s neck, he told me.

Vietnam has to weigh its response to Chinese provocation with great care, given the two countries’ increasing economic integration. In 2012, at a particularly tense moment with Manila, China suspended imports of bananas from the Philippines, causing huge quantities of the crop to rot on docks. And as soon as tensions rose once the oil rig had been towed into Vietnamese waters, trade between the two countries declined sharply, with Chinese state media warning of possible long-term economic consequences.

To the Vietnamese, the oil-rig incident did not reach a threshold that warranted war. Multiple Vietnamese officials told me that a Chinese bid to seize disputed islands from Vietnam (as it did in 1974 and 1988) probably would. The oil rig’s deployment fomented gigantic protests in Vietnam, where large public demonstrations are rare. On the first day, May 11, hundreds of people turned out peacefully in Hanoi, carrying banners with slogans like “Protect the nation.” Over the next several days, large crowds converged on several industrial parks, attacking Chinese businesses. Vietnamese analysts said that the unrest, in which numerous protesters died, carried a sharp warning that the state’s legitimacy might crumble if it failed to strike back after any new Chinese island grab.

Many Western analysts view China’s approach in the Pacific as a sort of calibrated incrementalism, whereby a Chinese presence and de facto Chinese rights in disputed areas are built up gradually, in a series of provocations that are individually small enough to make forceful resistance politically difficult, but that collectively establish precedents and, over time, norms. The Chinese, in fact, have a name for this approach: the cabbage strategy. An area is slowly surrounded by individual “leaves”—a fishing boat here, a coast-guard vessel there—until it’s wrapped in layers, like a cabbage. (“Salami slicing” is another metaphor for the approach.)

Surely the Chinese would be satisfied if Vietnam simply accepted their slow expansion of maritime rights and territory. But the tempo and tenor of China’s recent actions suggest that Beijing might now also be happy with a contest of strength against Hanoi, especially if Vietnam were perceived as the country that struck first. This, ultimately, is how China’s positioning of its oil rig, backed by an armada, should be understood: it would help legitimize Chinese claims if Vietnam did nothing, and would offer an opportunity to loudly squash the bug in some limited battle—and perhaps to impose crippling economic sanctions—if Hanoi lashed out.

Indeed, given Beijing’s great advantage of force, some Vietnamese officials have recently warned that although military action by their side is emotionally attractive, and perhaps even inevitable, it may do nothing more than spring a Chinese trap. If the question of standing up to China becomes too tightly bound with regime survival, all that might be accomplished is public failure and, ironically, regime change in Vietnam.

Much more in the Atlantic.

Howard French 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.

Are you interested in more stories by Howard French: do check our regularly updated list.

Monday, September 01, 2014

China challenges US surveillance practices - Wendell Minnick

Wendell Minnick

When a Chinese J-11 fighter challenged a US Navy P-8 Poseidon on Aug. 19 near Hainan Island, it triggered off a debate on the way the US performs its surveillance strategy, writes defense analyst Wendell Minnick in Defense News.

Wendell Minnick:

US analysts indicate that what China really objects to is America’s place in Asia. Put in these terms, China’s demand that the US cease close-in surveillance operations poses a stark choice: Pursue a cordial and more equal relationship with China vs. maintaining America’s dominant position in Asia. What China is telegraphing to the United States is that it cannot have it both ways. This gets to the heart of American primacy and its role in the world.

“Chinese leaders are seeking to expand their influence over their periphery by building up, establishing new terms of reference for what is allowed and normal, tranquilizing neighbors into accepting growing Chinese hegemony, and supplanting US power,” said Patrick Cronin, senior director of the Asia-Pacific Security Program, Center for a New American Security...

US spy boats and aircraft have long been a source of intrigue and crisis in American military history and many have resulted in embarrassment or the deaths of US military personnel. North Korea’s capture of the USS Pueblo in 1968, the Israeli attack on the USS Liberty in 1967, the Soviet shootdown of a CIA U-2 spy plane flown by Gary Powers in 1960, and the 2001 Hainan Island incident involving a US Navy EP-3 aircraft and a Chinese J-8 fighter, all serve as notice of the dangers of snooping too close.

More in Defense News.

Wendell Minnick 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.

Are you interested in more stories by Wendell Minnick. Check out our list here.

Monday, July 21, 2014

The Boeing hacking charges - Wendell Minnick

Wendell Minnick

The FBI accused three Chinese citizens, including Su Bin (Stephen Su), owner of Lode-Technology, last month of hacking into US military projects. Defense analyst Wendell Minnick had a look at the FBI-document detailing the accusations for Defense News.

Wendell Minnick:

Details of other aircraft and US companies are sketchy. Su is alleged to have obtained F-35 test plans and “blueprints” that would “allow us [China] to catch up rapidly with US levels ... [and] stand easily on the giant’s shoulders,” according to Su’s emails.

A former US government counterintelligence analyst on China said the case is a “close parallel” to other cases involving Chinese businessmen “taking government information to ensure long-term success of [their] business.” He also said that Canada and Hong Kong were still popular technical transfer shipment points for Chinese industrial and military espionage.

According to the complaint, one of Su’s emails states that his team “secured the authority to control the website of the ... missile developed jointly by India and Russia and that they would ‘await the opportunity to conduct internal penetration.’ ”

Su also allegedly focused on military technology in Taiwan and files held by various Chinese “democracy” groups and the “Tibetan Independence Movement.” On Taiwan, the intelligence collected was focused on military maneuvers, military construction, warfare operation plans, strategic targets and espionage activities. According to one of the several emails, “we still have control on American companies like [identifying US companies] and etc. and the focus is mainly on those American enterprises which belong to the top 50 arms companies in the world.”

One attachment listed 32 US military projects and another listed 80 engineers and program personnel working on a “military development project.” Another lists the names and email addresses for four people at a “European company that develops military navigation, guidance and control systems.”

Cyber intrusions into Boeing and other companies were sophisticated. According to one of Su’s emails, they had control of an unidentified defense company’s file transfer protocol server. Jump servers, also known as “hop points,” were set up in France, Japan, Hong Kong, Singapore, South Korea and the US. According to emails, these were set up to avoid “diplomatic and legal” difficulties for China.

More in Defense News.

Wendell Minnick 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.

Are you interested in earlier stories by Wendell Minnick? Do have a look at this regularly updated list.

Thursday, May 08, 2014

Rejoice: China investments are bigger than those from the US - Joel Backaler

Joel Backaler

For the first time, Chinese investments in the US were larger than US investments in China, announced the US Chamber of Commerce in April. About time, writes China consulent Joel Backaler in TealeafNation. "Americans worry that China is buying up the world. But there’s another, better way for U.S. authorities, businesses, and citizens to approach the influx: Embrace it."

Joel Backaler:

First, Chinese firms bring a great deal of cash to the table. Chinese global outward investment reached $85 billion in 2013, $14 billion of which ended up in the United States. A potent example illustrating the positive side of Chinese investment can be found in Michigan-based automotive steering firm Nexteer. During the global financial crisis, Nexteer CEO Robert Remenar targeted Chinese investors for his faltering firm. In 2010, he found a new owner in Chinese company AVIC Automotive, a state-owned firm, which bought Nexteer for $465 million. Under the new ownership, Nexteer’s CEO retained his entire management team and his decision-making authority, and was able to revitalize the company in a few short years. In December 2013, Nexteer’s president and global chief operating officer, Laurent Bresson, told local media that the firm was in “extremely rapid growth mode.” In the two years following the deal, Nexteer invested more than $220 million in its Saginaw, Michigan operations, where the firm remains headquartered today.

In addition to pumping capital into cash-strapped U.S. firms, Chinese companies can also fuel job growth and add valuable tax dollars at the state and federal levels. In November 2000, Danish shipping giant Maersk Line ended its service to the Port of Boston, jeopardizing 10,000 local jobs. By April 2001, port director Mike Leone traveled to Beijing to meet with the management team of the China Ocean Shipping (COSCO). His negotiations proved successful in March 2002 when COSCO filled the void left by Maersk and opened direct service from China to Boston, not only saving those 10,000 jobs, but also creating additional ones through a $250 million investment into an expanded container handling facility.

Chinese auto parts firm Wanxiang America has also saved thousands of jobs for the U.S. economy. By January 2013, the firm saved more than 3,000 U.S. positions through multiple acquisitions of foundering U.S. companies. Headquartered in Elgin, Illinois, Wanxiang America has become a $2.5 billion corporation since its founder, Pin Ni, started the U.S. subsidiary out of his home in 1994.

More in TealeafNation.

Joel Backaler 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.

Earlier this week Joel Backaler published his book China Goes West: Everything You Need to Know About Chinese Companies Going Global. Are you a media representative and do you want to talk to one of our speakers? Drop us a line.

Wednesday, May 07, 2014

Reasons why Chinese companies go global - Joel Backaler

+Joel Backaler

Five reasons lists China consultant Joel Backaler in Forbes for Chinese companies to go global. Enough reason to pay attention. After 2013, 2014 promised to be another record year for Chinese companies to enter the worldwide market place.

Joel Backaler:

2013 was another record year for Chinese companies going global. Chinese outward investment reached $85 billion in 2013 – a dramatic increase from $10 billion in 2005. But what happens when China goes West? Specifically, what are the potential benefits and risks of Chinese companies’ expansion into advanced economies like the United States?

An increasing amount of China’s global investment is already going into the US – the size of $14 billion in Chinese investment last year. Chinese firms from a variety of industries including energy, manufacturing, and consumer goods are all finding new markets in advanced economies. It’s time to take a closer look at the five key reasons why Chinese companies go global:...
#4 Acquire Established Brands Chinese firms also go West to increase their competitiveness by gaining access to globally recognized brands. First, and most importantly, international brands benefit Chinese companies by helping to bridge the “trust gap”. Consumers overseas might wonder: “I have never heard of this Chinese firm, so how can I trust that its products are of good quality or that it will fulfill its obligations as a business partner? Building a brand from scratch can take decades, millions of dollars and savvy public relations. Given their relative youth, many Chinese firms lack the decades of international experience necessary to build globally recognized brands on their own. The next best alternative to follow the path of Pearl River Piano, Bright Food and Wanda and buy another firm’s long-term established brand in the same industry.

More reasons in Forbes.

Joel Backaler 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.

Are you a media representative and do you want to talk to one of our speakers? Do drop us a line.

Joel Backaler is one of a group of speakers at the China Speakers Bureau focusing on China´s outbound investments.

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