Call it a tale of two companies: Last year, China National Offshore Oil Corp. (CNOOC) was forced to drop an $18.5 billion bid for the U.S.-based Unocal Group. A few months earlier, Lenovo Group Ltd. purchased IBM’s personal computer business for $1.25 billion, instantly transforming the Chinese company into the third-largest computer manufacturer in the world.
These examples demonstrate the evolution of China as an economic superpower and the thorny problems of that ascent. Companies like Lenovo show how corporate China is rising from its traditional manufacturing base to produce companies with global brand names and to play an active role in company mergers and acquisitions worldwide.
In the nearly two decades I’ve lived and worked in China, there has been a sea change in the mindset of corporations scrambling to the country and an explosion of privately owned domestic companies. Gone is the “frontier mentality” of tapping into China simply as a huge source of cheap labor – although that still remains a draw to many foreign investors, looking to shave costs to stay competitive in developed markets. The skyrocketing growth of Chinese buying power has transformed the country into one of the most important markets in the world for many multinational companies: For many corporations,
the China market is crucial for long-term survival.
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