Multinationals build new Chinese models

26 March 2013

HONG KONG: Multinational companies continue to regard China as a top investment priority, with many firms now developing a separate strategy for the country, a poll of CEOs has found.

PricewaterhouseCoopers conducted a survey of 227 chief executive officers from a cross-section of multinational companies as part of research for its report: Choosing China: Insights from multinationals on the investment environment.

When asked which three key markets they would invest in, 56% replied China and 52% Brazil. India followed on 35%, then the US on 34%. Mexico was fifth on 26%, just ahead of Turkey on 25%.

Alan Mulally, CEO of Ford Motor Company, emphasised the significance of China which is set to become the largest auto market in the world.

He said it was important to Ford's future that it was present in such a market and noted: "We are bringing 15 new vehicles to China by 2015. We are doubling retail and production capacity here."

Mulally added: "In doing all this, we also are providing good jobs and careers, and becoming a key part of the communities in which we operate."

Sir Martin Sorrell, CEO of advertising group WPP, also expressed his "distinct admiration for the Chinese model".

"I think if you learn to operate in the Chinese system, and try and change it from within, then you can make progress," he said. "The Chinese do listen. They have a great strength of listening, and they do learn, which is a big strength and one that we have forgotten in the West."

Sorrell also identified WPP's challenge as developing a local presence "in a much more potent form". Because WPP in China is run by nationals, not expatriates, the company is already well regarded there.


But Sorrell added, "we have some plans for developing WPP in a different form in China, more locally based, and I think that in the fullness of time, I'm sure we'll have an even stronger position."

Most CEOs felt improving government transparency and anti-corruption activities would do more to improve the investment environment than anything else.

Data sourced from PwC; additional content by Warc staff