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China Opening Doors for Investments Overseas

Besides being a global superpower country, China has proven that business ventures on their region is just as important as investing overseas. From closing its market from the early year, it has now become one of the top countries that invests in the global market. According to Forbes, Chinese buyers invested a total of $33 billion in commercial and residential properties at the end of 2016. Majority of the investments were on the following countries: United States, Hong Kong, Malaysia and Australia. This is a strong indication that there is much potential and growth for companies and businesses that are seeking for investors.

Just this July 2017, Fujian Province in China has showed much interest in having more investments in the Philippines. China is eyeing on the mining and agriculture sectors as these are two of the major resources components in the Philippines. Given the cultural background that both countries share in common, which is the fact that a lot of Filipino-Chinese reside in the Philippines, this creates a mutual bond. In addition to this, the close proximity between the two countries serves advantageous in this matter. The Chinese local officials have seen the the rise of Fujian natives business tycoons like Henry Sy and Lucio Tan who holds a huge portion of the corporations in the Philippines. The current of president of the Philippines, President Rodrigo Duterte, has shown great efforts in creating stronger ties with the China. He’s been having several business trips to China to discuss and eventually close investment deals. While there are still no concrete actions, five Chinese firms have already submitted their letters of intent to invest.

Besides the Philippines, the United States is where China places majority of its overseas investment totalling a value of $109.5 billion between the years from 2000 to 2016. The top sectors that have received the most Chinese investments are the following: real estate and hospitality, information technology, energy and entertainment. However, despite the big digits mentioned earlier, China is also facing some challenges when it comes to overseas investments especially in the US and European Union (EU) countries. One of the major struggles is adapting the Western culture when it comes to expanding overseas. Although such way of thinking and decision making is slowly being introduced to China by foreign countries, Chinese companies are still lacking the experience of Western-style management. This pertains to localization, repatriation and expatriation which all falls to the human resource management aspect. China would very much prefer sending their own local managers abroad to manage their headquarters overseas. This then sparks the challenge to train these managers extensively before sending them abroad. This, in turn, would cost more time and money. Moreover, some of the local employees that are being sent abroad also has several risks involving safety and security. Just like the news regarding the Rape of Nanking, some employees may be hesitant to reside in a new foreign place with the fear of being harmed and unprotected.

Apart from training the employees for both management and possible risks, another challenge would be the language barrier. A great number of Chinese people, even in this day and age, struggle in speaking English fluently. This can be a hindrance when communicating with fellow employees and colleagues. Thus, it limits productivity and efficiency levels vastly. In order to diversify business ventures in other parts of the world, it is a must for Chinese natives to be trained properly.

Come to think of it, having too much money could lead to both opportunities and challenges. As much as we want the positive to outweigh the negative effects, at the end of the day, it requires the nation’s effort in solving the problems that come with it.

About Lisa Gonzales

LisaGonzales@bb-international.com'

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