In North America and Europe, average people never imagine that one day most of them could be working for Chinese companies in their own countries. They had better be prepared.
In North America and Europe, average people can feel China’s influence in their daily life when they purchase goods imported from China. However, they never imagine that one day most of them could be working for Chinese companies in their own countries.
They had better be prepared. With the projection that Chinese investment in US companies could reach $2 trillion (1.5 trillion euros) in the coming decade, Bloomberg Businessweek magazine recently assembled a panel of experts to explain Sino-American cultural differences and Confucian principles that could get an uninformed American office worker into trouble. The magazine then published a report titled “How to Impress Your Chinese Boss”.
How influential is China’s foreign direct investment in the global economy? Let’s look at the numbers. China’s annual foreign direct investment reached $60 billion in 2010, which made it one of the world’s top 10 investors. In 2011, China’s total global FDI saw a growth of over 14 percent.
By the end of this year, there were 18,000 Chinese firms in 177 countries with a total foreign direct investment of $365 billion and assets totaling $2 trillion. However, Chinese FDI also shows a unique pattern. State-owned firms account for more than 70 percent of the total, and most of the investments are in natural resource projects, largely in low-income countries.
There is some evidence that Chinese FDI has a great impact in these nations.
Among them, Asia and sub-Saharan Africa are the major destinations for roughly 95 percent of the total Chinese FDI. Sub-Saharan nations accounted for 60-70 percent of these investments.
The Chinese private sector’s impact in sub-Saharan nations is slowly gaining importance. A recent survey shows that among the 800 Chinese companies operating in Africa, nearly 85 percent are privately owned and mostly small and medium-sized enterprises. These private firms also play an important role in the local economy.
China’s large State-owned companies generally focus on resources and construction projects, while private ones tend to concentrate on manufacturing and service industries. For construction projects, Chinese State-owned companies prefer to bring in their own workers and rely little on the local labor market.
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Making the right moves …