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China FDI-outflow will accelerate - the next decade is a tipping point for China and the World

Business and government leaders met at the sixth Horasis Global China Business Meeting in Luxembourg, 21-23 November 2010. The focus was on economic recovery and the consensus view is that Asia and the emerging nations will lead the recovery. As this happens, Chinese corporations will move beyond their low cost foundation; they aspire to become global leaders.

The Global China Business Meeting brought a large number of Chinese CEO’s together with leaders from around the world. The objective was to discuss the evolving role and aspirations of China in the global economy. This China Summit, the 6th of its series, was co-hosted by Luxembourg for Business, an entity under the Grand Duchy’s Ministry of Commerce and the China Federation of Industrial Economics.

Major conclusions:
China is focused on corporate globalization.

China has become an influential international investor and, as a result, a new generation of entrepreneurs is emerging. The consensus: Chinese firms will need to develop a long term international strategy that moves beyond cost competitiveness and domination of the domestic market. International firms operate in a more complex environment in which participants have less control and more uncertainty than what was faced domestically. Compared to achieving success in their domestic market, global Chinese firms will have to adopt to a more complex operating environment that presents critical uncertainties. Compliance with international best practices, the projection of cultural values embedded in the societies they operate in and globally valuable HR-practices will require sophisticated global management experience.

Expansion into Europe and North America are near-term objectives for Chinese corporations.

China, and Chinese firms, are seeing Europe as more than simply customers for low cost manufacturing. They will be making investments in these locations to establish value added services and, increasingly, to enter industries based on intellectual property. The acceleration in the emergence of Chinese Multinationals will have significant, competitive implications for global firms, but there are also potential opportunities for collaboration. Global Arena believes that China and “The West” will have to learn from each other – and the process may well prove to be difficult and complicated. Events like the Horasis Global China Business meeting foster communication thereby providing a foundation that can make future relationships more productive.

Global Arena

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