Global enterprises create shared value in and with China, and are relevant for the success of Chinese companies going global
BEIJING, December 21, 2015 – Global enterprises will continue to have major opportunities in the coming decades of China’s development—if they can successfully calibrate their global strategies based on an understanding of the evolving spectrum of opportunities and challenges facing China under the New Normal—predicts a new report released today, Global Enterprises in China. The report is a collaboration between the leading Chinese think-tank, the Chinese Academy of International Trade and Economic Cooperation (CAITEC) of the Ministry of Commerce, and Burson-Marsteller, a leading global strategic communications and public relations firm. The report examines the evolving role of global enterprises from the beginning of China’s reform and opening in the late 1970s with a focus on key industries such as manufacturing, energy and construction.
These critical industries and others—including information and communications technology industries—have formed the foundation of China’s economic take-off and sustained the country’s export-oriented economy. The report predicts global enterprises in these industries will continue to play a critical role in China’s next phase of development in line with government initiatives such as Made in China 2025 and others fostering sustainable urbanization, green energy and innovation. By viewing the experience of global enterprises through a “developmental prism,” the report illuminates different “impact areas” where global enterprises have played a positive role in addressing the unique economic, social, technological or environmental challenges facing China, and uses the case study of Caterpillar as an example. The company provided support including information regarding its 40 years of development and operations in China, case studies and firsthand perspectives.
The report also illuminates key factors that have led to the success of global enterprises in China, and explores the relevance for the growing number of Chinese companies that are now going global.
The report highlights eight impact areas where global enterprises have contributed to China’s development:
- Direct economic benefits
- World-leading manufacturing systems
- Contributing to development of an innovation-based economy
- Developing local partnerships and the industry value chain
- Introduction of innovative concepts
- Strong corporate citizenship
- Talent development
- Environmental performance
The report also examines the future impact areas where global enterprises can play a positive role in promoting China’s urbanization and infrastructure development, economic restructuring, environmental improvements, innovation, and global trade relations as China builds an innovation and service-based economy in the ‘New Normal’ of moderated growth.
“We have been working with multinational companies in China for over 30 years now,” said Daisy King, president of Burson-Marsteller China. “This has allowed us to observe firsthand how many have successfully evolved into truly global firms, in part by adapting to China’s rapidly evolving business context and development agenda. We see clear parallels for the approaches that Chinese companies need to take when they go global. In essence it is about being relevant and adding value at a local level—within the context of globally integrated strategy.”
The report puts forward five key considerations for success as Chinese companies go global and seek to navigate effectively across a global landscape that is growing in complexity:
- Understand and align with local stakeholders
- Innovate and integrate globally
- Adopt a long-term view of building intangible assets
- Adopt a global perspective
- Develop strong culture and human resource systems
“Going global is not simply a matter of investing in projects overseas or in setting up foreign operations,” said Dr. Xu Yingming of CAITEC. “The experience of Caterpillar elaborated in this report illustrates some of the key capabilities needed to be a successful global enterprise. As Chinese firms look to enter the global market, global enterprises can serve as important role models and partners.”
The report looks at how global enterprises from China will increasingly collaborate with global enterprises from other markets on the global stage. It considers for example the opportunities to collaborate in line with the Chinese government’s Belt and Road initiative across Asia to Europe and beyond. It also considers the potential for global innovation partnerships as China becomes even more integrated with the global economy and innovation system.
About The Chinese Academy of International Trade and Economic Cooperation of the Ministry of Commerce
The Chinese Academy of International Trade and Economic Cooperation (CAITEC) is an inter-disciplinary and multifunctional social science research institution and a consultative body directly under the Ministry of Commerce (MOFCOM) of China. It undertakes research, information consultancy, publishing, education and training.
Burson-Marsteller, established in 1953, is a leading global public relations and communications firm. It provides clients with strategic thinking and program execution across a full range of public relations, public affairs, reputation and crisis management, advertising and digital strategies. The firm’s seamless worldwide network consists of 73 offices and 85 affiliate offices, together operating in 110 countries across six continents. Burson-Marsteller is a part of Young & Rubicam Group, a subsidiary of WPP (NASDAQ: WPPGY), the world’s leader in communications services. For more information, please visit www.burson-marsteller.com
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