Source: CCTV.com

06-10-2008 14:42

Lenovo, Haier, ZTE, we've seen how these large companies are flexing their muscles overseas trying to make their names known across the world.

Setting up overseas operations and acquiring major foreign assets have only just begun and are symbolic of China's rapid economic rise and global ambitions.

But it's not just large, listed Chinese companies that are pursuing these dreams. For the past year, we've witnessed more and more small, private companies moving offshore, propelled by the same dream.

Brett Ho, CEO of Kingdee Int'l Software Group Co. said "Going global is not really a priviledge for big companies. Big companies mean they have bigger revenue, but that doesn't mean they have stronger capabilities. A lot of small companies I have seen in my past career with a very specific nitch capability. Some times it's easier for them to go global with their very nitch capability. Any companies can go global, if the strategy is right, and you have the capability."

For those small companies, branding might not be exactly what they are searching for at overseas market, as they often times do not even enjoy brand recognition at home. So, what are they expecting to achieve overseas?

Brett Ho said "I think its more of market penetration and revenue. Before any company go global I will always ask them one question: have you saturated your local market? If you have, you go global. Or your nitch market is very very small. When you're done with your nitch market locally, then you have to go global to find a similar market to extend your capability. "

Besides both large and smaller Chinese firms seeking opportunities overseas, the investment trend, is also shifting. Chinese firms' are gradually shifting their focus from manufacturing to the service sector, especially the financial sector.

We've seen quite a number of successful cases during the past year. Last November, Ping An Insurance, the country’s number two life insurer, paid over 2.7 billion US dollars for a 4.2 percent stake in Fortis, a Dutch-Belgian financial services firm. Four months later, it paid another 3.4 billion US dollars for half of Fortis' investment management business.

Some others making headlines include the country's biggest lender, the Industrial and Commercial Bank of China. It became the single largest shareholder of Africa's biggest lender, South Africa's Standard Bank, after paying 5.4 billion US dollar for a 20 percent stake last October. In the same month, its smaller peer Minsheng Bank also bought around 10 percent of San Francisco based UCBH Holdings, marking the first investment by a Chinese mainland commercial bank in a US lender. And China Development Bank bought into Barclays.

With accumulated experience and increasing confidence, Chinese firms are also moving from familiar markets to more challenging ones. For a long time, Asia has been the top investment destination for the majority of Chinese firms. Its geographic proximity to China, and familiar cultural values made it a natural choice. Apart from Asia, Africa,the Middle East and Latin America have also been fairly popular investment destinations, as these regions are generally perceived as friendly to China.