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Blueprint for a new world trade order

By Zheng Xin | China Daily | Updated: 2018-01-15 08:20
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Japanese automobile giant Toyota is a latecomer to the China market, having entered it in 2000, compared to Germany's Volkswagen and US-based General Motors that entered China through local joint ventures in the 1980s and 1990s.

Early entry into the Chinese market, the world's largest producer and consumer in various fields, later proved to be a solid foundation for future development for VW and GM.

Their good performance in China in recent years suggests it may be a wise idea for foreign companies to enter and team up with Chinese companies as early as possible, to grab as much market share as possible, both in China and markets elsewhere, particularly in the wake of launch of the Belt and Road Initiative.

Many MNCs, including Rio Tinto, BHP, Honey-well, GE and Siemens, have expressed their interest in contributing to the success of the initiative. They said they are willing to take advantage of their technologies and global footprint, team up with Chinese companies, and expand further in B&R markets, in fields like power, oil and gas, chemicals, minerals and building materials.

Such a strategy would likely offer them better connectivity in the long term. For, these emerging markets will be further developed. Their improved infrastructure might give access to new markets and ultimately drive global economic growth.

In other words, MNCs that team up with Chinese companies might see their profits surge compared with latecomers.

A caveat here would be in order though. Joint exploration abroad is not risk-free.

In addition to the ever-fierce competition at the global level, Chinese companies exploring business in B&R countries and regions are facing various challenges, including geopolitical risks, financing, conflicts of culture and religion.

B&R-related infrastructure projects require cooperation across regions, companies and industries, considering their increasing complexity. Various projects in different fields are just as challenging, and their future is shrouded in uncertainty.

Hence, it is imperative for companies to not only adapt themselves to local environment and abide by local customs, traditions, laws and regulations, but make joint efforts with partners across regions and companies to achieve success.

Lothar Herrmann, CEO, Siemens Greater China, said companies focus on being local-minded, fast and geared for long-term partnerships.

"Being local" means this: respecting and abiding by local customs, traditions, laws and regulations; doing business in a compliant and legal way; taking quick and decisive action; timely deployment of resources; and thorough execution.

"Long-term partnership" means that companies need to see themselves not just as suppliers but as co-explorers of a new development path who will share success and challenges.

The B&R Initiative offers a blueprint for a new world trade order, and it's high time potential partners realize this and get on board.

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