Business / View

Chinese going outbound is win-win

By Han Fang ( Updated: 2015-06-30 17:36

A new wave of privately-owned, high technology based Chinese companies is rapidly expanding internationally using their innovation as a key advantage, experts said.


They were discussing this trend at the China and the World Forum in London on June 25, hosted by Caijng Magazine, and aimed at exploring China's position and strategy in the new global economic environment.


Wang Dongming, Chairman of CITIC Securities Co., said that the biggest outcome of China's structural economic shift is an emergence of digital-based small and medium sized companies, which are highly innovative and have attracted a large amount of venture capital.


Wang spoke highly of Huawei and Xiaomi, which are two highly innovative Chinese companies in the telecommunications sector. With 100 million units of sale, Xiaomi has expanded its business to India and South East Asia.


Wang said, despite of the slowing growth rate of the Chinese economy, many Chinese companies are gaining growth by expanding overseas. He said this trend is coherent with China's goal to produce quality and sustainable economic development rather than fast growth.


Another example of successful Chinese company is the industrial machinery maker Sany, which acquired the German firm Putzmeister in 2012.


Jiang Xiangyang, vice president of Sany, said it is necessary for many companies to go global otherwise their growth will become limited by the size of the Chinese market.


"By going outbound, we can get access to new markets, new knowledge, sophisticated skills in project management, and build strong international management teams, all of which will help to improve our domestic operation, " Jiang said.


"It will be hugely beneficial for us. But to achieve this, we need motivation to go outbound." he added.


Like Sany, many other Chinese firms have expanded internationally through mergers and acquisitions. Sunshine Kaidi New Energy Group Co., Ltd., has made two acquisition of American companies.


Chen Yilong, Chairman of Kaidi, said that the acquisition has helped the company to shorten its research and development time, reduce its costs, integrate its resources and develop new technology to expand into new market, which create win-win partnerships for both sides.


Wang said that China cannot develop without the world because China has become a country with capital input instead of output since 2014 and now its capital outflow is over $100 billion. The relationship between China and the UK, even with the whole world, will be much closer in 10 or 20 years time due to these bilateral investments.

Hot Topics

Editor's Picks