MY TWO CENT: Marika Mäkelä
You, of course, know that China is growing. Measured with purchasing power, China will occupy the driver’s seat of the world economy already this year. China’s millionaire population is now the world’s second largest. Its megacities are huge and by 2020 there will be 20 cities with over 20 million inhabitants.
The Purchasing power of this nation is immense. Urban Chinese shop online and travel around the globe. China’s e-com giant Alibaba is the biggest US IPO in history. Chinese communicate in WeChat and Weibo – social medias most of us Facebookers and Whatsappers know nothing about. China is ramping up in the value chain from sourcing and resourcing towards a global innovator and technology trendsetter harnessed with decades-long manufacturing expertise.
True alike, China’s growing economy does face big challenges in the areas of environmental sustainability, social-welfare of the lower income classes and the increasingly aging population. But even these trigger demand for new technologies.
So what’s in it for us Finns? First, visit China, if you yet haven’t. It is eye-opening and you will be surprised by what you didn’t know and what you thought you knew. Second, if you are running a growth company in Finland, keep reading further.
China puts high importance to inward but also outward foreign investments. The year 2013 was another record breaker for Chinese companies going global. The figure reached $85 billion, a great increase from $10 billion in 2005, and the growth is set to continue with a double-digit rate in 2014.
Chinese companies are looking for talent, number one technologies and flexible partners. Acquisitions have played a key role in expansion routes especially in sectors like tourism, agriculture, real estate, energy, and automobiles. In high-tech sectors Chinese corporate investors are seeking cross-border targets to fit their offering. Market expansion is one of the key drivers for growing business outside China, but the Chinese also want to increase their competitiveness in their domestic market by collaborating with foreign companies in R&D and co-branding.
Chinese investors – venture capital and private equity funds – are increasingly screening investment targets globally. If your company’s offering fits China’s market and you are able to take foreign investors in, consider this option when you contemplate strategies for Asian market entry. A local investor opens up faster and more securely, an entry lane with access to investors’ contact networks, distribution channels and legislative and human resource expertise.
Finland has a lot on its plate to offer. Air purification technologies, point-of-care products, health tech applications, gaming, elderly care technologies, energy efficiency, water treatment expertise, cloud computing and big data solutions… all are of interest to China.
Chinese investments are already rolling to Finland. R&D operations, growth capital investments and acquisitions from China are only a start. In the coming years you will witness an increasing number of Chinese companies setting up businesses in Finland and looking for local partners.
So, you are welcome to cross the bridge between China and Finland. It is optimal in length: Finland has Europe’s shortest flight connections to China.
All MY TWO CENTS: helsinkitimes.fi/columns/my-two-cents