Chinese seeking foreign brands is good

Shaun Rein

TEXT OF STORY

Kai Ryssdal: The Chinese aren't only interested in buying up parts of parts of American car companies, as in that bid for Opel. Just this weekend we learned a group of Chinese investors has signed on to buy 15 percent of basketball's Cleveland Cavaliers, home to MVP LeBron James and dreams of an NBA championship. Commentator Shaun Rein says China's new business strategy of going after foreign brands is a good thing.


Shaun Rein: Every day there are new rumors of Chinese companies' acquisition plans, like Chinese automakers Chery's possibly bailing out Detroit by buying the troubled Volvo and Saab brands from Ford and GM.

Sound familiar? It should. The Japanese did the same thing in the 80s when they purchased American icons such as Pebble Beach and Rockefeller Center, inspiring fear that everyone would soon be working for the land of rising sun.

China's purchasing power is raising similar concerns, but the similarities end there.

The Chinese approach is very different from Japan's. Why? Because the Chinese have very different goals.

While the Japanese were quick to install glass ceilings for foreign managers in their companies and capture assets on the cheap, the Chinese are making acquisitions specifically to get management experience and expertise. They want strategic access to natural resources. And they need to acquire valuable brands and marketing know-how, since China does not yet have truly global brands like Japan's Sony and Toyota.

For instance, when Chinese computer-maker Lenovo acquired IBM's ThinkPad line they installed an American CEO and gave American engineers prominent positions in the combined company. Chinese companies want to learn from the companies they acquire, unlike the Japanese who believe their management systems are far superior to America's.

The U.S. should view China, with its $2 trillion in foreign reserves and appetite for T-bills, more as a lifeline than a potential enemy superpower. As the most influential participants in global institutions like the U.N. and G20, China and America are the lynchpins for worldwide economic recovery. Injecting Chinese capital into American industry is part of the solution, not the problem.

RYSSDAL: Shaun Rein is managing director of the China Market Research Group.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...