China might be the international hot spot for the technology industry, the place where manufacturing has been lured, and the place where companies still feel like they want to have a significant presence as their global supply chains expand.
However, another noticeable thing is happening, too. Chinese companies are looking for their own hot spots, and many countries hard hit by the recession and witnessing slow GDP growth are prettying themselves up to have long-term investment appeal.
In recent news, for instance, Germany is trying to attract more Chinese logistics companies to Europe, seeing it as a way to bridge the countries' increasing trade activity.
Just a few weeks ago, Britain's finance minister George Osborne walked out of meetings with Chinese leaders with several investment deals under his arm, ranging from easing visa restrictions, to building on recent currency cooperation, to winning Beijing money for investment in British nuclear power plants. In a speech at Peking University, Osborne said, according to this article, “I don't want Britain to resent China's success; I want us to celebrate it. I don't want us to try to resist your economic progress; I want Britain to share in it.”
Down in southern Europe, the Catalan government won a nod a few years ago from Chinese companies wanting to invest 355.5 million euros in the region. The money is primarily earmarked to develop Barcelona's port and expand its capacity as the front door to the European market.
Of course, too, it's fairly common knowledge that large parts of sub-Saharan countries have developed close relationships with Chinese firms, particularly to build out infrastructure. No surprise there, given the match up between a country that's hungry for oil and raw materials and a continent spilling over with natural resources. The Economist estimates Africa's trade with China is worth around $200 billion a year.
And, yes, the US has also received its share of Chinese investment, too, and on a state and city level, competition is fierce for elbowing out some of this foreign money. Forbes, citing numbers from the China Investment Monitor, pegs accumulated Chinese investment in the US at $27.9 billion though 2012.
Although Chinese investment in the US and around the world grew moderately during the first half of this year, the Heritage Foundation estimates that Chinese investment could exceed $80 billion this year, and is on course to reach $100 billion by about 2016. Look at this interactive map from the Heritage Foundation to get a better idea of Chinese foreign investment is landing.
Maybe now you're wondering what all this means for the electronics supply chain? A long time ago, a journalism professor taught us aspiring reporters an important lesson, “Follow the money. It will often lead to a good story.”
Applying that rule of thumb to our corner of the world, watching how supply chains work and move offers a classic study in “following the money.” As we all know, supply chains aren't just about moving parts from point A to point B. Supply chain operations today make or break companies and countries. The amount of money that passes through them is nothing short of astounding.
So when the Chinese equivalents of Apple, Cisco, Dell, HP, IBM, Nokia, Philips, Samsung, Siemens, ST Micro, and whatever other top-tier player comes to mind follow the path already set by Western companies and put their sights on becoming significant multinational organizations, the electronics industry and its supply chain people should take notice.
While Western companies have set the pace for international growth and a global free market economy for decades, the Chinese are laying their own new footprint. Soon, too, that means the supply chain will have to follow suit and be agile enough to serve the big Chinese multi-national customer.
What are you doing to bring the Chinese to you? How is your company preparing for the coming waves of international Chinese supply chain needs?