The current global financial crisis and economic downturn mean great opportunities for both Chinese companies and foreign companies. Chinese companies should take the opportunity to go international --- toward the financial sector and in the property market particularly. Foreign companies should take the opportunity to tap the rural market in China.
Mr. Xu Changdong, executive vice president of the Western Returned Scholars Association Entrepreneur Alliance, said that there are great potential of cooperation between Chinese and US companies in various sectors as the threshold is lower in the economic difficult times. The two economies of China and the US are so complementary to each other that it can make the interdependence even more evident in the current financial crisis and economic downturn.
There are a lot of discussions about whether it is the right time for Chinese investment in the eye of the storm --- the US. There is much concern about the market uncertainties and the competence of Chinese companies. But Xu insisted that it be the good chance that Chinese companies should not afford to lose. "When you think you are well-prepared, the chance will be gone," he said.
"Whether there is a financial crisis or not, enterprises should always be very prudent and careful when making overseas investment because there are so many uncertainties in a different cultural, economic and systematic environment," he said, adding that Chinese companies must learn to rely on local employees and integrate the culture of the host country into the enterprises.
The Alliance will host a forum in Beijing on Dec. 19 about Chinese companies "going international" strategy. The focus of the forum will be on financial risk control for Chinese companies tapping the international market.
Even for the financial and property sectors in the western markets which are the root of the crisis, Xu believes that is where the best chances are. He thinks that Chinese investors should enter those sectors "without hesitation" right now as the global financial system is going through a restructuring.
"China can learn a lot of lessons paid by others every time when there is international financial turbulence," Xu noted. The lesson is, according to Xu, is that China should promote its own financial system by drawing on the good experience of the western system without copying it or repeating the bad practice of the western system.
For foreign investors, there are good chances in China. China has announced a four trillion yuan economic stimulus package. Local governments are investing even more. The package is focused on the rural infrastructure construction. Xu believes that means a market with great potential for foreign investment.
"The rural consumption, from electric applicant to housing, is a huge emerging market," Xu said, "Smart foreign investors will take the chance."
Xu is very confident that the US economy will recover in one or two years and China's economy will also enjoy a good time again after a difficult time next year.
By People's Daily Online
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