Dos and don'ts for Chinese companies investing in the United States: Lessons from Huawei and Haier
✍ Scribed by Friedrich Wu; Lim Siok Hoon; Zhang Yuzhu
- Publisher
- John Wiley and Sons
- Year
- 2011
- Tongue
- English
- Weight
- 309 KB
- Volume
- 53
- Category
- Article
- ISSN
- 1096-4762
No coin nor oath required. For personal study only.
✦ Synopsis
Abstract
The implementation of the Chinese government's “Go Global” policy in 2000 has led to an unprecedented surge in Chinese outward foreign direct investment (OFDI). While Asia remains a favorite destination, the 2008–09 global financial crisis has presented opportunities for Chinese companies interested in cross‐border mergers and acquisitions in the United States. Chinese companies are keen on the United States because of access to the world's largest market and technology. However, Chinese companies have had to deal with difficulties ranging from regulatory hurdles and cultural differences. Given that the majority of OFDI is still carried out by state‐owned enterprises (SOEs), the primary obstacle for Chinese investors at the federal level is the Committee of Foreign Investment to the United States. This has proven to be an insurmountable obstacle so far for Chinese telecom company Huawei. However, the US investment environment is not all gloom and doom for Chinese companies. There are success stories too like Haier, which has managed to overcome cultural differences. This article aims to do a comparative study of Huawei and Haier and highlight the lessons the companies offer for Chinese companies interested in investing in the United States. © 2011 Wiley Periodicals, Inc.