China Looks Abroad for Business Growth

Author: Evan Pennisi

Published:

Alongside China’s growing assertiveness in foreign policy, businesses in China are also being more aggressive in their international business practices. Chinese businesses are increasingly using international acquisitions to expand their presence overseas in various countries such as Canada and the United States. Chinese firms have already acquired an American manufacturer of high-tech batteries and a major aircraft leasing business this past month. Overseas acquisitions by Chinese companies are expected to continue to increase as firms pursue companies in Canada including Nexen, a major Canadian energy company. Chinese acquisitions are changing the landscape of international business and may also be an indicator of China’s goal to be the world’s strongest economy.

Many acquisition deals will be completed this winter by Chinese firms, but the real surge is likely to happen next summer. This is very surprising as Chinese international acquisitions are already up 28 percent from a year ago. What is even more interesting is that Chinese companies are expanding their range of acquisition targets to include major industrial manufacturers and consumer brand companies. At the same time, these Chinese companies are also maintaining their interest and ownership in natural resource and financial service firms. Overall, the presence of Chinese business in the international business marketplace is continuing to expand and signifies China’s growing influence in the global economy.

Many will view this news as an indicator of China’s desire to expand its global prominence. A recent report by the National Intelligence Council even suggested that by the year 2030, China will have the largest economy in the world—surpassing that of the United States. However, this news does not necessarily mean we should argue about which country is better off. Rather, this marks the need for discussion about increased collaboration among businesses and countries. Collaboratively addressing economic problems and sustainability issues can lead to a better future for all and broader global co-operation. Chinese acquisitions and growth overseas provide a platform for this collaboration as merged businesses must learn to work together to provide value for society as a whole.