Upload
abhishek-patel
View
89
Download
0
Embed Size (px)
Citation preview
China’s Investments AbroadOpportunities and Challenges.
12th November 2014
Presented by: Abhishek PatelBusiness Administration UG Year 3
Introduction
As China's economic growth continues, both the total volume and types of Chinese investments abroad have grown rapidly. This includes portfolio investments made by the Chinese sovereign wealth funds, SOEs, and private companies in energy, natural resource, agriculture, manufacturing, and real estate.
China’s Global Reach
(Heritage.org)
China’s Investments: USA
(Heritage.org)
China’s Investments: France
(Heritage.org)
Reasons for China’s Global Reach
A clear agreement on the business driven motives of Chinese investments..‘Getting up the value chain’
• Access to markets • Technology know-how acquisition and R&D capability
development• Skilled labour • Develop capabilities to compete better at home
Reasons for China’s Global Reach
Challenges faced by China Abroad
China’s Financial system
With regard to Hong Kong, it is considered that “one
country, two systems” it is unlikely to change because the
mainland understands the benefit of Hong Kong, while the
West trusts the Hong Kong financial and legal system.
Challenges faced by China Abroad
China’s legal system
West still has concerns about the Chinese legal
system. Concerns about lack of transparency,
closed procurement and hidden subsidies.
Other Challenges faced by China Abroad
• Chinese fears non-transparent national barriers and security
concerns. • Countries wants China to offer:
• Market access to their firms in China in return for comprehensive investment protection
• Lack of skills and experience (post-establishment)
Taking an example of Germany, the division of labor – high-tech in
Germany, low-tech in China – chosen in some cases, makes transfer
of know-how and technology difficult.
Challenges faced by China in the EU
Welcoming Chinese Investment in the countries : Opportunities
• Direct benefits, e.g., employment, tax• Indirect benefits, e.g., access to Chinese market• For example, Taking the current low level of
investments in the EU as a positive sign for further growth.
• Growing Chinese investment in developed economies could open up new opportunities for private investment in China’s domestic market.
Most Critical issue while Investing in China
Reasons for China’s Global Reach
“We are still students trying to learn global management. Our overseas workforce is sometimes qualified to be our
teachers in this area. It is very difficult for ‘students’ to manage ‘teachers’ as we go
global.” – Tong Hai Bin, Shanghai Machine Tools
What they say:In terms of the relationship with the Chinese government,
Alibaba founder Jack Ma’s famous words resonate, “Fall in love with them, understand them, but don’t marry them.”
Thank You