China is the top destination for international investment opportunities, and Asia Pacific is the top region for growth, according to a survey released on Oct 20.
Thirty percent of US corporate executives picked China as having the strongest international investment opportunities, according to the International Economic Development Council, which conducted the survey.
As much as foreign multinationals continue to expand in the Chinese market, Chinese companies have strengthened their own global reach, which mostly has been through foreign direct investment.
Rhodium Group, a New York-based consultancy that tracks China’s overseas investment, said that momentum for Chinese investment in America remains strong, with Chinese firms having spent $2.1 billion in the US in the second quarter. More than $10 billion worth of deals — in greenfield investments particularly — are pending, according to Rhodium.
Early comers, such as Chinese multinational Lenovo, the world’s leading PC maker, are striving to go global.
“We consider Lenovo a global company – our team is global and the way we operate is completely global,” Zhou Qingtong, Lenovo’s vice-president and chief strategy officer, said at a business forum in New York recently.
“Lenovo has gone through a challenging ‘going global’ journey,” said Zhou.
Lenovo started in a concrete-block guard shack in Beijing in 1984. It acquired IBM’s personal computer business in 2005, including the ThinkPad laptop and tablet lines. That acquisition has helped the company make its name, especially overseas, and it has grown fast in the past 10 years.
The company’s co-headquarters is in Raleigh, North Carolina, and it has an executive committee with seven different nationalities, including CEO Yang Yuanqing.
Lenovo’s executives call it a global company with Chinese roots. For the second time, Lenovo was named to Fortune magazine’s list of “World’s Most Admired Companies”.
Zhou said the brand has enjoyed recognition on the commercial side in the US but needs to strengthen its consumer recognition.
China Gorman, CEO of Great Place to Work, a global human resources consulting and research firm, said it’s vital for any foreign firms investing in the US to establish a suitable corporate culture to make their local growth sustainable.
“It’s important for the companies — Chinese or any other foreign firms — to create a corporate culture that will attract the right kind of talent for the company to thrive and exceed the expectations for the global growth,” Gorman said.
Despite the challenges, Gorman said these companies — when opening in the US or any other overseas markets — will have “a unique opportunity to create a culture to propel the business forward”.
Shau Zhang, a Boston-based tax partner with Ernst & Young, one of the world’s Big Four auditing firms, headquartered in London, echoes this view.
While Zhang’s Chinese client base is increasing as Chinese investment in the US rises, she said it takes time for the Chinese to become “a local corporate citizen” to compete with local peers.
“To reduce the gap between Chinese firms and well-established Western brands, the Chinese should spend more time with local communities and be more involved in community service,” she said.
“That’s the way for them to become truly local,” said Zhang.