Abstract

China is championing globalization and free trade, and has 110 companies in the Fortune 500 list, including banks and insurance, real estate, energy companies, etc. In the same time, Chinese companies demonstrate increasing leadership in innovation and new technologies, across multiple consumer, services and industrial sectors, with major companies like Baidu, Tencent, Alibaba, JD.com, Lenovo, Huawei, Midea, TCL, Sany, or China General Nuclear(CGN), CRH (和諧號), Goldwind or Envision. So are Chinese industrial and commercial champions gradually dominating the global corporate world?

Not quite: most companies are large and make their way to the 500 list, while mostly positioned on the Chinese domestic market. With some very successful exceptions, such as Lenovo, Huawei, Wanda, Fosun, ChemChina, or CGN, most of these large companies are yet to be known in the world, to become influential outside of their market, to bring some of their great innovations or approaches to the rest of the world. Chinese companies direct investment into foreign economies has been for the last few years the dominant pattern of globalization, after Chinese exports have dominated the past 3 decades.

What is at stake now for these Chinese groups is to focus on areas where they have competitive advantage, successfully establish brand names, management practices, technologies abroad, and/or integrate assets and capabilities from foreign companies acquired. This will take a lot more proactive approach, beyond the quite transactional approach so far: more focused acquisitions, more integration with foreign players, either through cooperation in third party countries, or through proactive integration of technology, management, manufacturing and supply chain processes. There is a gap to fill: mindset, methodology, risk appetite, and underlying market opening and integration will be the key components in the recipe for success.