5 - Chinese multinationals: Emerging through new global gateways

Summary

Chinese companies have begun to ‘go global’. High-profile examples include: Lenovo's $1.75 billion takeover of IBM's personal computer business in 2004; Huawei, which has implemented its telecommunications network equipment solutions in over a hundred countries, maintains a network of twelve R&D centres around the world, and in 2007 acquired 3Com in partnership with Bain Capital; and appliance maker Haier, whose brand ranked 86th in the top 500 most influential global brands (World Brand Lab, 2006). Less widely recognized, however, is the fact that scores of other, little-known Chinese companies have begun to carve out significant, sometimes even dominant, global market shares in numerous industries as diverse as port machinery, medical equipment, and pianos (Zeng and Williamson, 2007, p. 19).

In analysing this recent emergence of Chinese multinationals, this chapter begins by outlining how leading companies from China have parlayed their CSAs into the FSAs (Rugman, 1981) that equip them to successfully compete in the global market. We then compare and contrast the strategies Chinese companies have used to leverage these FSAs globally with the typology introduced by Ramamurti and Singh to describe the emergence of multinationals from India. The remainder of the chapter focuses on how these strategies are allowing Chinese firms to harness the new ‘gateways to entry’ (Verdin and Williamson, 1994) that the globalization of the world economy is opening up, to build new multinationals with surprising speed.