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Chinese multinationals

Underestimated giants

by D+C / E+Z

In brief

Byd sells electric buses to public-transport systems in the USA.

Byd sells electric buses to public-transport systems in the USA.

Corporations from the People’s Republic have a stronger impact on world markets than most people in Europe and North America are aware of. Here is a short list of some of these new multinationals.

Lenovo is China’s biggest producer of personal computers – and one of the world’s biggest. It is also the largest vendor of smartphones in mainland China. Other Lenovo products include tablet computers, storage devices, servers, accessories and smart TV systems. The company was founded in 1984 in Beijing. The original name Legend was changed to Lenovo in 2003 when international expansion began. The corporation grew fast through mergers and acquisitions. In 2005, Lenovo bought IBM’s personal computer business; in 2011, it acquired control of the German electronics company Medion; and in 2014, it purchased Motorola Mobility from Google. Today, Lenovo sells its products in more than 160 countries worldwide. Its headquarters are in Beijing and Morrisville in the US-state of North Carolina.

Haier made its name as a maker of refrigerators, air conditioners, micro-wave ovens and other household appliances. In this sector, it’s global market share of about 10 % is larger than that of any competitor. The company also sells consumer goods such as TV sets or mobile phones. It has been using the name Haier since 1993. The company emerged from the joint venture of Qingdao Refrigerators with the Germany corporation Liebherr. “Haier” is actually the transcription of how the second syllable of Liebherr is pronounced in Chinese. German technological input was useful, but the brand’s growth was driven by Chinese managers, designers and engineers who focused on affordable appliances.

Chery is a state-owned car manufacturer that was started in 1997. In 2012, the company made some 590,000 passenger cars, minivans and SUVs. It runs production lines in other Asian countries as well as the Middle East, North Africa, Latin America and eastern Europe. In China, Chery has recently begun to produce Jaguar and Land Rover cars in a joint venture with the Indian Tata conglomerate that owns the British brands.

Byd Auto is another interesting Chinese car maker. It is the subsidiary of Byd Company, which specialises in rechargeable batteries. Accordingly, Byd Auto is strong in hybrid technology and electric cars. Byd stands for the English motto “Build your dreams”. The corporation is listed on the Hong Kong stock exchange. Warren Buffett, the billionaire investor from the USA holds a 10 % stake. Byd is involved in a joint venture with Daimler, the corporation that owns the Mercedes brand. The joint venture builds luxury electric cars called Denza.

Alibaba is an e-business enterprise that was founded by Jack Ma, a former English teacher, in Hangzhou in 1999. Initially, it hosted an internet platform that facilitated small companies’ access to international markets. This business-to-business portal is still operational, but it only accounts for about eight percent of Alibaba’s revenues. The lion’s share of more than 80 % is generated by the retail platforms Taobao and Tmall. Taobao resembles Ebay and allows ordinary people to sell whatever they want to sell. Tmall is a distribution channel for international brands and follows the Amazon model. Alibaba also runs money-transfer service similar to Paypal. It is called Alipay. Alibaba is listed on the New York Stock exchange and sold shares worth $ 25 billion when it first introduced the shares in 2014. Yahoo and Softbank are major shareholders.

Tencent is a private-sector enterprise that specialises in internet, media, e-commerce and related businesses. Its instant messaging service QQ IM had almost 700 million subscribers in 2010 and thus serves one of the world’s largest social-media communities. Tencent also produces digital games and distributes music for international labels such as Sony and Warner Bros.

Wanda is a real estate giant and was established in Dalian in north-eastern China in 1988. It is engaged in the sectors of tourism, e-commerce and department stores. There are 125 Wanda Plazas all over China. They include a shopping mall, streets with shops and offices and apartments. Wanda owns 81 hotels, 68 of which are in the five-star category, as well as 99 department stores. Some 6,600 movie theatres make Wanda the world’s largest cinema operator. Wanda Cinemas, AMC Entertainment and the Hoyts Group belong to Wanda. Wanda managers are planning further expansion. CEO Wang Jianlin says Wanda should become a world-famous brand like Google, IBM or Walmart.

Huawei is a giant in telecommunications equipment. Thanks to its hand-held devices, consumers are increasingly becoming aware of the company all over the world. It also builds telecommunications networks, supplies the necessary components and provides technological advice. Huawei has research-and-development labs in China as well as in North America, western Europe, Russia and India. Huawei was started by a former army engineer in 1987 as a private company. Its shareholding structure is opaque, however, and western media have several times accused Huawei of spying. The management denies those allegations.

(D+C/E+Z)

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