Next Step in China-US Relations?

NEW YORK, Sept. 26, 2014 /PRNewswire/ -- Is the mammoth IPO of e-commerce giant Alibaba just the tip of the iceberg as Chinese companies push beyond their country's borders? Why is New York the favourite destination for Chinese property buyers who've already snatched up billions of dollars of real estate worldwide? How did Chinese firms do $14 billion worth of deals in the U.S. last year? These were some of the issues discussed today during the CEIBS & Chengwei America Forum 2014, organised by the China Europe International Business School (CEIBS) and Chengwei Capital.

The event brought together scholars and business executives from China and the U.S. for a look at the macro strategies for bi-lateral cooperation and new opportunities for partnership between enterprises from both countries. The day-long forum was part of CEIBS' year-long 20^th anniversary celebrations.

New York was the ideal city for the event. There are 7,000 companies owned by Chinese-born entrepreneurs in NYC, the largest number in the world in terms of entrepreneurial activity. More than 150,000 Chinese work in NYC, the most among U.S. cities; another 743,000 Chinese visit each year, and a lot of them are usually on business trips. There is a strong relationship between China and NYC, said President and CEO of Partnership for New York City Kathryn Wilde, and "much of it has been fuelled by partnership with CEIBS alumni."

Today's forum was an opportunity for many of those alumni to share their stories of what it's really like for Chinese companies to do business in the U.S. Vantone Group President Feng Lun spoke of the freedom that the US market provides for his successful real estate development company, but stressed that he has had to adjust his lifestyle and his mind-set in order to compete successfully abroad. "It's not about the world changing; we are changing to adapt to the world," he said.

In fact change was one of the major points made throughout the day's discussions. Respected U.S. economist and China expert Professor Stephen Roach noted that if the U.S. takes advantage of the structural transformation of the Chinese economy, it would be a win-win opportunity for both sides. "If we stay stuck in our old ways, it will not," he warned.

Meanwhile, Senior Advisor at Citi, William R. Rhodes, who spoke about the importance of the Sino-American relationship and the need to have China properly represented at the World Bank and IMF, highlighted the need for China to move ahead with planned reforms. "What happens in China happens to the world… As China grows so the world grows," he said. "It used to be the U.S. as the major locomotive of the world, that's no longer the case. Now it's the U.S. and China, twin locomotives of the world going forward. So there needs to be a mature relationship between both countries."  He added, "The most important relationship in the world – politically and strategically, as well as economically – is U.S. and China. This will continue to be the case well into the future." This is why events like today's, which bring together academics and members of the business community, are so vitally important.

During the forum, to meet the needs of Chinese companies looking for advice on how to go global, there were three case studies from CEIBS Centre for Globalisation of Chinese Companies, presented by Professor Ding Yuan. He noted that this year, for the first time ever, FDI from China would be more than RMB 100 billion; this is a trend that's expected to continue for the next 15 years. Prof. Ding presented research from the Centre that shows that, unlike companies from other countries, Chinese firms mainly go abroad to gain access to much needed resources which will help them compete even more effectively at home. Chinese companies, he pointed out, can gain global respect simply by conquering their domestic market.

Foreign companies' need to grasp the peculiarities of the Chinese market in order to succeed in the country was one of the issues also stressed throughout the day. Participants juxtaposed global giant Google's failure to succeed in China with Chinese company Alibaba's recent success in using the New York Stock Exchange as the springboard for its expansion plans. One of the points hammered home was the importance of producing items specific to the China market instead of trying to re-educate Chinese consumers in the use of goods made for western audiences.

McKinsey & Company Director Peter Walker made the point that there is a general lack of understanding about China, in general, and a lot of misinformation in the U.S. media about the country's "realities". One of the myths debunked today was about the status of China's innovation skills. IBM VP for Strategy & Enterprise Initiatives, Joel Cawley told the audience that the company's investments in innovation in China generates about 100 global patents per year. These are mainly in areas such as energy, weather forecasting, renewable energy, etc. "We often have this image of the Chinese as not being innovative. Nothing could be further from the truth in my industry," he said.

Throughout the day, the discussions revolved around China-U.S. cooperation from the perspectives of strategy, the Internet, real estate and the new energy sector. The event attracted about 300 participants.

About China Europe International Business School

The China Europe International Business School (CEIBS) offers a unique combination of "China Depth, Global Breadth" - taking advantage of its position as a leading business school in Asia to train responsible leaders. CEIBS' vision is to become the most respected international business school by linking East and West in teaching, research, and business practice and by promoting China's social and economic development through high-impact knowledge creation and dissemination. The school's origins as a joint venture between the European Commission and the Chinese government have allowed CEIBS to develop a unique positioning in offering truly world-class business management education with proven China expertise. After 20 years of phenomenal growth, CEIBS' impressive 13,500 plus alumni base includes 2,000+ CEOs and top-level decision makers.

SOURCE China Europe International Business School