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The China blueprints China is taking over the world. Kirsten Levermore learns how – and why
Global Expansion: The Chinese Way Katherine Xin, Yuan Ding, Weiru Chen, Klaus Meyer & Gao Wang Published by LID bit.ly/ globalexpansionbook
Between 2000 and 2007, China’s outward foreign direct investment (FDI) rose 17-fold. During the global financial crisis, China’s FDI grew at an annual rate of 45%. In Global Expansion: The Chinese Way, leading Chinese globalization experts from the China Europe International Business School (CEIBS), Katherine Xin, Yuan Ding, Weiru Chen, Klaus Meyer and Gao Wang, discuss the rise of China in the world economy, the merger and acquisition (M&A) strategies defining Chinese expansion, and some of the risks and rewards that have been found in two decades of aggressive globalization. Proposing a three-stage model for globalization, the authors draw on a wealth of experience and research to examine the M&A and integration strategies that have built the second-largest economy on Earth.
Acquire. Integrate. Apply
The primary purpose of Chinese companies’ quick work across borders is to strengthen domestic business and China, the authors write. Noting how different this is from the West’s often less ostensibly patriotic function, Global Expansion hypothesizes that it is down to a different view of competition: “…while most Western companies seek to exploit competitive advantages, achieve market growth and strive for synergies in global markets, Chinese enterprises aim to compensate for their competitive weaknesses and enhance their competitive advantages in the Chinese market.” And with the support of the Chinese government with the Belt and Road initiative
and the Third Plenary Session of the 11th Central Committee of December 1978, the partnership between government, companies and the home country keeps such purpose at the forefront.
Not a handbook, but a module
Such is one of many takeaways from Global Expansion. It is worth noting, however, that the book is not a handbook to ‘investing like a Chinese
THE BLUEPRINT Global Expansion proposes a three-stage model for globalization by Chinese companies:
1 Dialogue Q3 2018
Obtain resources and capabilities globally to offset competitive disadvantages
2
Integrate and apply newly acquired knowledge and resources to the local market
3
Expand to other overseas markets once a position of leadership in China has been gained