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China Inc.: Incoming

The Go Global policy for big Chinese corporates continues to have an impact [1].

The Economist carries full-page ads for Lenovo and Huawei…and the Harvard Business Review has a new article on “Emerging Giants: Building World Class Companies in Developing Countries”. While not focusing exclusively on China, The Review highlights the following Chinese companies (but the notes are mine):

The article notes that while strategy is important for these firms, execution and governance are critical to success. The latter is a real challenge in China but, as reported recently [2], some progress is being made. (More challenges are reported here: “Go Global Goes Pear-Shaped Again [3]”).

As these companies, and others [4], grow (inside and outside China) they will be seeking help from international service providers (who are doing their bit to balance trade deficits!). Among them is McCann, the advertising firm, which has made an interesting strategic move. According to the FT:

Who knows, perhaps they read the Review?! The question for them (and Hewitt and McKinsey…and many smaller consultants) is whether Chinese corporates are ready to pay for premium, international services. They are when raising money on the capital markets (they have to – and they get a quick return), but anecdotal evidence suggests that a lot of services have been provided at a discount, as loss-leaders. That said, the use of professional services by Chinese companies seems to be a growing trend (as noted in an earlier post on lobbying [5]).

In any event, more Chinese companies will be wanting more share of your wallet – soon. If you have a service company, they might also be putting some money into it.

See news sources: