Thirty years ago, there was such nationalist angst in the United States over Japanese buyouts of American companies that Hollywood even made a movie about it. In Ron Howard’s 1986 comedy Gung Ho, the fictional Assan Motors Corporation swoops in to buy an idled auto plant in a desperate Pennsylvania company town. The film was a comedy and of course ended with cooperation prevailing and the plant being saved. There is an obvious parallel with the situation today with the US agonizing over Chinese investments in a remarkably similar way to how it worried about Japanese takeovers in the 1980s.
Huawei is one of only a few Chinese companies that has become truly global, deriving more revenue abroad than at home. Long a telecom equipment provider, Huawei shifted its focus to consumer devices and took only five years to become the second most profitable Android smartphone maker and the third largest in terms of production. How did the company manage to do that, given that the smartphone industry is highly competitive? And smartphones are only the highest-profile part of the sprawling telecom giant. With over 170,000 employees across the globe, what is the company’s management system like and what could we learn from Huawei’s model?
On the morning of June 24, 2016, China woke up to witness an unexpected drama unfolding half a world away. The previous day, millions of UK citizens had voted on whether the UK should remain in the European Union, and all opinion polls, betting and market expectations pointed firmly towards ‘Remain.’ But as the early results came in, the startling prospect of Brexit became a reality. Some people think “Brexit has indeed diminished Beijing’s hopes of treating the UK as a strong advocate for China in the EU”, and there are another voices like “The Chinese… have other ways to penetrate the EU market, for example [through] Greece,” and in a sense they are both right. How will China and the UK’s “Golden Relationship” play out in the Post-Brexit era?
Global trade used to be hailed with no doubt. But today, the international mood for globalization has to a great extent shifted. The deeply-held views on free trade and open access for all, which are at the heart of the globalization trend of recent decades, have been joined by ever-more insistent drum beats of dissent. From Europe and North America particularly, but from other places as well, there are calls for a rollback, for trade restrictions, for sanctions and barriers. There are those in the West who believe that to protect jobs and industries, it is necessary to replace “globalization” with “de-globalization.”
After several decades when most Western governments inclined toward freer and more global trade, the mood seems to be changing. In the US, the presidential candidates have agreed on little but the need to keep a closer eye on trade agreements. In the United Kingdom, the new Prime minister, Theresa May, seems determined to fulfill the British public’s wish to leave the European Union, despite the fact that the pound sterling sank recently to a 168-year low. Skepticism over trade deals seems likely to remain a stubborn presence in most of the mature economies, so what should Chinese companies do to react?
Although the quality of ‘made in China’ products has not been fully recognized in foreign markets, ‘made in China’ apps have made their way in the Google and Apple app stores. Chinese tech firms, under intense domestic market competition, are seeking new ways out of China. India, Brazil and Russia—emerging economies with young smartphones users—have become their new battleground. More mature firms have also begun to try to compete in developed markets in the US and Europe, where there is better infrastructure and users are willing to pay for premium services. But in these developed markets, Chinese tech firms face more challenges.
For the past three decades, the general political consensus in the mature Western economies has been that trade liberalization is a good thing: most economists credit rising levels of global trade and cross-border investment with lifting nearly a billion people out of poverty in the developing world and reducing prices for consumers almost everywhere. Yet despite those successes, a growing segment of the public in the mature economies sees the impact of liberal trade policies quite differently— the revisionist view sees free trade as a major cause of the declining prosperity in the mature economies. Why has an anti-globalization consensus developed?
Three months after the Brexit vote, although some people are still in shock and refuse to take the result, most people have cooled and sat down to think about the opportunities it will bring and what to do next. In the interview with CKGSB Knowledge, Mark Pinner, Managing Director and Partner at Interel China, who has also worked for the British Conservative Party, analyses the changes it is bringing to UK-China relations from political and economic angle. Although we’ve known the referendum result, there will be prolonged period of uncertainty: are we going to have a ‘soft Brexit’ or a hard one?
Chinese consumers have changed faster than consumers in probably any other market. Increasing exposure to international media and social media is changing the expectations of Chinese consumers. On top of that, the broad economic slowdown and brand saturation in China has ratcheted up competition to new levels as the days of easy money disappear. For both multinationals and Chinese companies, the changing market dynamics present challenges they have never seen before. In this interview, Torben Pheiffer, Managing Director of SapientNitro, China, explains how companies need to adapt their branding strategies.
Xiaomi, once the most popular smartphone vendor in China, is showing signs of decline. Back in the day, Xiaomi broke the mold by offering a feature-rich phone at an impossibly low price point. Its unique marketing strategy and business model helped it to break online sales records. But soon others started copying Xiaomi’s strategy and the novelty wore off. The company has been slow to innovate. For phone buyers, Xiaomi ended up being a low-end phone: once they had enough money, they would upgrade to an Apple or Samsung. Today Xiaomi is quickly diversifying from phones to rice cookers and drones. But is that enough to come back to relevance?