Carlos López-Gómez’s Post

I am very excited to return to Columbia Business School this Saturday to attend the annual China Summit and moderate a panel on cross-border commerce. In recent years, Chinese companies have ventured beyond their domestic market to establish a presence in the United States. This trend, known as "going global," 出海 is fueled by China's rapid economic growth and the strategic ambition of its corporations to tap into new markets, access advanced technologies, and gain a competitive edge on the international stage. Chinese firms, ranging from tech giants to manufacturing powerhouses, are making their mark across various sectors in the U.S., including technology, real estate, entertainment, and consumer goods. This expansion is driven by the desire to diversify revenue streams and the need to acquire global talent and innovation capabilities. Moreover, Chinese companies' entry into the U.S. market has been met with opportunities and challenges. On one hand, it represents a significant opportunity for cross-cultural collaboration, investment, and job creation. On the other hand, it has sparked debates on national security, intellectual property rights, and competition laws, leading to heightened scrutiny from regulatory bodies. Despite these challenges, the trend of Chinese companies going global in the U.S. will continue. Please say hi if you will be at the event. You can still purchase a ticket here: https://lnkd.in/e3RzmR7W

The impact of the Belt and Road Initiative on the Chinese retail market   In 2019, during our internal communication, we predicted the emerging tide of anti-globalization, driven by the rise of developing countries aggressively capturing a larger share of the middle and high-end manufacturing and service industries. The depletion of per capita resources in developed countries further ignited international conflicts, giving rise to the resurgence of right-wing forces. Looking back at history, it is evident that regional countries have often formed alliances to secure more resources and influence, avoiding the economic reality of being reduced to providers of cheap resources. As a result, regional alliances are likely to emerge as the predominant political form in the future world.   The proposal of the self-initiated Belt and Road Initiative stems from the practical need for China, as a major manufacturing nation, to secure overseas consumer markets and ensure the stability of raw material acquisition. It also serves as a crucial national strategy to enhance China's influence in the Eurasian region. I believe this strategy will have several significant impacts on the development of overseas brands in the Chinese market: 1. Supply Chain: The Belt and Road Initiative, through railway transportation, saves significant time costs and indirectly impacts capital costs, thereby gaining stronger competitiveness. 2. Policy: Chinese customs and other relevant departments will respond to the national strategy by providing convenience for goods from countries along the Belt and Road. 3. Traffic: In the Chinese consumer goods market, products from Japanese and Korean brands have gained significant market share due to their good quality and affordable prices. Similarly, brands from countries like the United States have also performed well in the Chinese market. However, with the changing international situation, online traffic is bound to be controlled and directed towards Chinese manufacturing and non-conflicting countries. The sharp decline in market share of Korean brands and the gradual decline of Japanese brands in the Chinese market are the best evidence of this reality. However, this is a significant advantage for brands along the Belt and Road Initiative. The sharp decline in market share of Korean brands and the gradual decline of Japanese brands in the Chinese market are the best evidence of this reality. However, this is a significant advantage for brands along the Belt and Road Initiative.   #China #brand #theBeltandRoadInitiative

Thursday, November 30, 2023, marks a momentous occasion for the supply chain industry as YCH Group's Executive Chairman, Dr. Robert Yap, had the privilege of witnessing the official launch of the Supply Chain Management & Finance Joint Lab in Singapore. This collaborative effort, in partnership with the Zhejiang University International Business School (ZIBS)浙江大学国际联合商学院 and the National University of Singapore, represents a significant stride in redefining the supply chain landscape in the region. Bringing together the combined expertise of two world-class institutions, the joint laboratory is strategically positioned to address challenges in supply chain operations management, financial technology, and big data analysis. The timing of this initiative is impeccable, with ASEAN having risen to overtake the EU as China's top trading partner despite the global repercussions of the COVID-19 pandemic. This underscores the resilience and significance of the ASEAN market in the post-pandemic era. This achievement is reinforced by YCH Group’s commitment to enhancing trade connectivity along China’s Belt and Road Initiative routes and providing innovative supply chain solutions to Chinese companies looking to expand their presence in the ASEAN market. In attendance were Professor Alvin Shen, Executive Director of ZIBS Singapore Center; Professor 贲圣林 Ben Shenglin, Dean of ZIBS; Professor Chung Piaw Teo, Professor and Provost's Chair Director, Institute of Operations Research and Analytics, National University of Singapore; and Dr. Robert Yap, Executive Chairman of YCH Group. #YCHGroup #ASEANSupplyChain #Innovation #Collaboration #IndustryLeadership 🌐✨

 According to the Hurun China 500 Most Valuable Private Companies 2022, compared to three years ago, the healthcare industry is more robust, energy and semiconductor industries are rising faster, real estate dropped from first to 10th place, and retail and media and entertainment dropped from sixth and seventh to outside the top 10; in terms of cities, Ningbo, Wuxi and Dongguan are rising faster, while Chengdu, Nanjing, Hefei and Shaoxing are declining more. Beijing overtook Shanghai to re-emerge as the city with the most Fortune 500 companies, with 60, Shanghai with 55, and Shenzhen stayed third with 42. 12 companies newly entered the top 100, led by cross-border e-commerce platform Xiyin, which doubled its value to 280 billion yuan, up 86 places to 21st place; followed by medical imaging equipment company Union Medical, which quadrupled its value to 161 billion, up 442 spots to No. 55. Stay tuned for the Hurun China 500 Most Valuable Private Companies 2024.

If you missed our event in Shanghai on Unleashing Innovation where we convened industry leaders from Yili, Oatly, Google, Albemarle, PwC Strategy& and The Economist Corporate Network., representing Chinese private companies, established MNCs and new kids on the block, CKGSB professors Bingsheng Teng and Tao Zhigang and more than 100 business professionals to share their insightful analysis and exploration of China’s dynamic landscape in the realm of digital innovation and market expansion, watch the replay via the link below and check how business speakers are devising their #digitization and #businessgrowth strategy. https://lnkd.in/gUC9aRWA #china #expansion #economy #digitalization

iMpact Founder and CEO Chris Pereira 彭家荣 is quoted in this insightful Nikkei Asia article on the changing landscape of Chinese businesses expanding internationally. At CES 2024 earlier this month, over one quarter of all exhibiting companies were from China. As Chris explains, "What is actually happening is Chinese brands and companies are learning how to localize in overseas markets, from branding to team building. The most important trend that we are seeing is China's industrial base is upgrading to a level that is competitive with Western brands and products. So the main thing is, it's not Western companies going to China to procure products, it's Chinese companies making the product and they're managing the brand and selling the product overseas by cutting out the middleman." But there are significant challenges to maintain this momentum: "Fair treatment, geopolitical tensions, true localization and cross-cultural management, and marketing strategies in a different market are all the big challenges for Chinese companies operating overseas, particularly in the U.S." https://lnkd.in/e7j_kTzZ

I spent two great days at #2024 Dalian Summer World Economic Forum! I am delighted to have had very constructive exchanges with opinion leaders from government and various business sectors. In the current era of increasing regional protectionism, nationalism, and isolationism, such dialogue has immeasurable value. I appreciate the remarks made by Chinese Premier Qiang Li that importance should be given to deepened dialogue and cooperation in technology, open access to market and industrial supply chains, and healthy development in the frame of globalization. In this context, of course possible tariffs imposed by the European Union on vehicle exports from #China were also an important topic of this event. My impression from my many conversations with Chinese representatives from politics and business: the Chinese want a stable relationship with #Europe. And they are open to finding a solution to the tariff issue at the negotiating table. My suggestion: Let's not hide behind tariffs. Let's motivate localization! Anyone who wants to sell cars on a large scale in Europe should also produce there. For Europe, this means new direct investment, new jobs and, as a result, more prosperity. At the same time, Chinese OEMs will help to strengthen the supplier structure for smart electric vehicles in Europe in the long term. This will also benefit the European manufacturers. I am convinced that the acceptance of Chinese brands will increase if they get involved in society. The best example for the Chinese of how this can be achieved is in their own country. Volkswagen Group! We too have localized on a large scale in the past decades. By this we have made a significant contribution to prosperity and the development of a strong #automotive industry in China. Anyway it is a good sign that the European Commission reaches out to Chinese authorities to possibly find a solution at the negotiation table. We need to find a different way to safeguard fair competition in Europe without unduly restricting free trade. I am excited about the outcome of these talks.

The Other Side of Yesterday's Summit: All About Face In Japanese society, it's all about avoiding shame, but in China, it's all about avoiding blame.  Appearances matter, and the legacy of a failed summit full of animosity on overseas soil would lead to finger pointing for an economy that has been underperforming expectations and experiencing slowing export growth. Mutual interests dovetailed to create an event that would look positive and constructive. Domestically, Chinese citizens presume international summits like yesterday's to be flawlessly crafted, but they look deeply for any signs that would signal any improvement in their wealth prospects. With over 70-75% of all market activity driven by retail investors, we can look at China's Shanghai and Shenzhen markets to see what everyday citizens think. Overseas investors massively scaled into China last December and January on great expectations for a reopening, but mainland retail never participated. Look again, and we will see. So far, Shanghai and Shenzhen last night closed down 0.7% and 1.2%, respectively, as housing prices fell the most in eight years and as Alibaba cancelled its cloud spin-off, citing export restrictions. Given two key elections coming up in 2024, the trajectory for a challenging outlook has not changed. 

In this week's #WhatIfWednesday from my colleague Alan Iny and BCG's Uncertainty Advantage team, they explore the potential effects if China imposed a strict "Buy Chinese" policy for technological products – significantly impacting not only tech giants like Apple but other major foreign companies and the entire supply chain. Explore their thinking in the full post from Alan!

Peter Zeihan’s masterwork “The End of the World is Just the Beginning” continues his streak as a master prognosticator of future trends (if you haven’t read it, do yourself a favor and check it out). The staggering capital display of $108 billion in factory construction spending (more than any other sector) last year demonstrates Zeihan is right on the money. There are so many opportunities in this “reshoring” process. Wise leaders and higher education institutions will find the opportunities for training, upskilling, reskilling, technical training, AI skills training, etc. There’s going to be a huge need for skilled workers at various levels for these factories, and they’re going up fast all over the country! We should see an American job creation phenomenon for years! #aiineducation #lssc #peterzeihan #zeihanongeopolitics