Abstract
Over the past two decades, many Chinese companies have successfully expanded into overseas markets and consequently become known as “emerging dragons.” However, we still don’t know how they achieved success. In this chapter, we examine 35 overseas Chinese companies, consisting of 25 firms selected from 80 Harvard Business Review Cases related to the overseas expansion of Chinese companies, and 10 firms listed on the Shanghai and Shenzhen Stock Exchange Markets. To ensure the validity of our analysis, we only selected the private business and excluded the state-owned companies from our database. Our analysis reveals five strategic patterns: market dominators, export clusters, technology innovators, culture carriers, and overseas financial investment and supply chain integrators. Following the Political, Economic, Social, Technology (PEST) framework, we discuss how “emerging dragons” in each of the five strategic patterns capitalize on opportunities and avoid threats in uncertain foreign environments.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
References
Abrami, R., Kirby W. C., & McFarlan, F. W. (March 2014). Why China can’t innovate (pp. 107–111). Harvard Business Review.
Agarwal, J., & Wu, T. (2004). China’s entry to WTO: Global marketing issues, impact, and implications for China. International Marketing Review, 21(3), 279–300.
Alba, J., Park, D., &Wang, P. (February 2009). Corporate governance and merger and acquisition (M&a) FDI: Firm-level evidence from Japanese FDI into the US. Journal of Multinational Financial Management, 19 (1): 1–11.
Alon, I., Anderson, J., Munim, Z., & Ho, A. (2018). A Review of the internationalization of Chinese enterprises. Asia Pacific Journal of Management Enterprises, 35, 573–605. https://doi.org/10.1007/s10490-018-9597-5
Andersson, M., Solitander, A., & Ekman, P. (2013). Cluster branding and marketing. A handbook on cluster brand management. Retrieved from https://futureplaceleadership.com/wp-content/uploads/2018/09/ClusterBrandManagement_Handbook_Tendensor.pdf
Automotive News. (2020). Fuyao investing $46M to expand U.S. factory. Retrieved from https://www.autonews.com/suppliers/fuyao-investing-46m-expand-us-factory.
Baker McKenzie. (2018). Rising Tension: Assessing China’s FDI Drop in Europe and North America. Retrieved from https://www.bakermckenzie.com/-/media/files/insight/publications/2018/04/rising_tension_china_fdi.pdf?la=en
Baker McKenzie. (2019). The age of hyper-complexity. Asia Pacific Business and Legal Macrotrends. Retrieved from https://www.bakermckenzie.com/-/media/files/insight/publications/2019/04/bm_hypercomplexity.pdf
Bhaumik, S., Driffield, N., & Zhou, Y. (2015). Country specific advantage, firm specific advantage and multinationality—Sources of competitive advantage in emerging markets: Evidence from the electronics industry in China. International Business Review, 25(1), 165–176.
Bianchi, C. (2014). Internationalisation of emerging market firms: An exploratory study of Chilean companies. International Journal of Emerging Markets, 9(1), 54–78.
Black, J. S., & Morrison, A. J. (2019). Can China avoid a growth crisis? Harvard Business Review, The September–October Issue:1–11.
Boddewyn, J. J., & Brewer, T. L. (1994). International-business political behavior: New theoretical directions. The Academy of Management Review, 19(1), 119–143.
BrandZ™. (2019). Top 100 most valuable brands in 2019. Retrieved from www.brandz.com.
Cheaa.com. (2018). Retrieved from http://icebox.cheaa.com/2018/0105/525826.shtml
Chen, J., Pun, H., Sun, Y. X., & Lin, X. R. (March 27 2018). Focus brand management: Jiangzhong Hou Gu (mushroom) biscuits. Harvard Business Review
Child, J., & Rodrigues, S. B. (2005). The internationalization of Chinese firms: A case for theoretical extension? Management & Organization Review, 1, 381–410. https://doi.org/10.1111/j.1740-8784.2005.0020a.x
China Daily. (2004). Aokang, Geox Team Up for Niche in Int’l Market. Retrieved from http://www.chinadaily.com.cn/english/doc/2004-10/18/content_383303.htm
China Daily. (2017). Overseas Chinese can Help Build Belt, Road. Retrieved from http://www.chinadaily.com.cn/china/2017-06/13/content_29719481.htm
China Daily. (2018). bKash, Ant Financial Join Hands to Promote Financial Inclusion for Unbanked Bangladeshis. Retrieved from https://global.chinadaily.com.cn/a/201804/27/WS5ae2b79fadcf651aec7.html
China Daily. (2019). Yangtze River Delta leads in advanced manufacturing. Retrieved from http://www.chinadaily.com.cn/a/201909/18/WS5d81a268a310cf3e3556c25a.html
ChinaPower. (n.d.). How dominant are Chinese companies globally? Retrieved from https://chinapower.csis.org/chinese-companies-global-500/
CompuMark™. (2018). Retrieved from http://www.compumark.com/wp-content/uploads/dlm_uploads/2018/05/chinese-brands-go-global.pdf
Delgado, M., Porter, M., & Stern, S. (2016). Defining clusters of related industries. Journal of Economic Geography, 16(1), 1–38.
Dharmananda, S. (2016). Yunnan Paiyao uses for injury and surgery; gastro-intestinal, respiratory, and urogenital disorders. Retrieved from http://www.itmonline.org/articles/yunnan_paiyao/yunnan_paiyao.htm
Du, Y. P., Wu, M., & Chang R. O. (September 15 2016). Jiaduobao: transferring brand associations from Wang Laoji. Harvard Business Review
Dunning, J. H. (1988). The eclectic paradigm of international production: A restatement and some possible extensions. Journal of International Business Studies, 19, 1–31. https://doi.org/10.1057/palgrave.jibs.8490372
Dunning, J. H. (2006). Towards a new paradigm of development: Implications for the determinants of international business activity. Transnational Corporations, 15(1), 173–227.
Elango, B., & Pattnaik, C. (2007). Building capabilities for international operations through networks: A study of Indian firms. Journal of International Business Studies, 38, 541–555.
Fannin, R. (2008). Silicon dragon: How China is winning the tech race. McGraw-Hill Education.
Feng, C. (2018). U.S. approval offers shot in the arm to China’s traditional medicine. Retrieved from https://www.caixinglobal.com/2018-01-26/us-approval-offers-shot-in-the-arm-to-chinas-traditional-medicine-101203577.html
Forbes. (2017). Most innovative growth companies. Retrieved from https://www.forbes.com/growth-companies/list/.
Fortune Global 500. (n.d.). Retrieved from http://www.fortunechina.com/fortune500/index.htm
Fosun Annual Report. (2018). Retrieved from https://ir.fosun.com/corporate-reports/.
GII. (2019). Global innovation index 2019. Retrieved from https://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2019/cn.pdf
GizBot Bureau. (2016). Retrieved from https://www.gizbot.com/miscellaneous/news/xiaomi-foxconn-to-set-up-two-more-units-in-india-034306.html
Godart, F., Dubois, D., Henry, B., & Ding, I. (March 29 2017). Shang Xia: Selling high-quality goods “Proudly Made in China”. Harvard Business Review.
Gree Website. (2018). Gree CAC wins the Bid for Beijing New Airport. Retrieved from http://global.gree.com/ywb/presscenter/companynews/20180627/detail-18230.shtml
Gree Website. (n.d.) Company profile. Retrieved from http://global.gree.com/ywb/aboutgree/companyintroduction/companyprofile/index.shtml
Guan, Z. J., Xu, Y., Jiang, H., & Jiang, G. G. (2018). International competitiveness of Chinese textile and clothing industry—A diamond model approach. Journal of Chinese Economic and Foreign Trade Studies, 12(1), 2–19. https://doi.org/10.1108/JCEFTS-01-2018-0003
Guillén, M., & Garcıa-Canal, E. (2009). The American model of the multinational firm and the new multinationals from emerging economies. Academy of Management Perspectives, 23(2), 23–35.
Haier Website (n.d.). Ourbrands. Retrieved from https://www.haier.com/global/haier-ecosystem/.
Herd, T., Saksena A. K., & Steger, T. W. (2005). Delivering merger synergy: A supply chain perspective on achieving high performance. Accenture. Retrieved from https://imaa-institute.org/docs/m&a/accenture_03_Delivering_Merger_Synergy-A_Supply_Chain_Perspective_on_Achieving_High_Performance.pdf
Hertenstein, P., Sutherland, D., & Anderson, J. (2017). Internationalization within networks: Exploring the relationship between inward and outward FDI in China’s auto components industry. Asia Pacific Journal of Management, Springer, 34(1), 69–96.
Ho, J. K. K. (2014). Formulation of a systemic PEST analysis for strategic analysis. European Academic Research, 2(5), 6478–6492.
Hoskisson, R., Eden, L., Lau, C., & Wright, M. (2000). Strategy in emerging economies. Academy of Management Journal, 43, 249–267. https://doi.org/10.2307/1556394
Huang, D., & Jarinto, K. (2015). Entry mode decision factors contemplated by Chinese consulting firms. International Business Research, 8(5). https://doi.org/10.5539/ibr.v8n5p252
Interbrand. (2000). Retrieved from https://www.interbrand.com/best-brands/best-global-brands/2000/ranking/
Interbrand. (2014). Retrieved from https://www.interbrand.com/best-global-brands/huawei/
Investopedia. (2020). The impact of China devaluing the Yuan in 2015. Retrieved from https://www.investopedia.com/trading/chinese-devaluation-yuan/
Johanson, J., & Vahlne, J. E. (1977). The internationalization process of the firm—A model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8(1), 23–32.
Kabadayi, S., & Lerman, D. (2011). Made in China but sold at FAO Schwarz: Country-of-origin effect and trusting beliefs. International Marketing Review, 28(1). https://doi.org/10.1108/02651331111107125
Kumar, N. & Steenkamp, J.B. (18 June 2013a). Brand breakout: How emerging brands will go global. Palgrave Macmillan, 2013th ed.
Kumar, N., & Steenkamp, J. B. (2013b). Diaspora marketing. Harvard business Review. October 2013 issue.
Lee, C. (2017). Tencent, Baidu, Alibaba take part in China unicom’s mixed-ownership reform. Retrieved from https://www.zdnet.com/article/tencent-baidu-alibaba-take-part-in-china-unicoms-mixed-ownership-reform/
Lee, C. (2019). The who’s who of the exodus from China. https://www.eetasia.com/the-whos-who-of-the-exodusfrom-china/
Liao, R. (2020). Jack Ma’s Fintech Giant tops 1.3 billion users globally. Retrieved from https://techcrunch.com/2020/07/14/ant-alibaba-1-3-billion-users/
Liu, X. L., & Cheng, P. (2011). Is China’s indigenous innovation strategy compatible with globalization? Policy studies (61). Honolulu: East-West Center.
Luo, R., Hansen, M. T., Ibarra, H., & Peyer, U. (July 2012). Top 50 ranking of China’s business leaders exposes common myths. Harvard Business Review. Retrieved from https://hbr.org/2012/07/top-50-ranking-of-chinas-busin.
Mathews, J. A. (2017). Dragon multinationals powered by linkage, leverage and learning: A review and development. Asia Pacific Journal of Management, 34(4), 769–775. https://doi.org/10.1007/s10490-017-9543-y
McFarlan, F. W., Jiao, J. & Fang, Y. 2012. Zhejiang Semir Garment Co., Ltd. In SAGE Business Cases. 2020. doi: https://doi.org/10.4135/9781473962507.
MIT Technology Review. (2017). Retrieved from https://www.technologyreview.com/lists-tr50/what-are-the-50-smartest-companies/
MOFCOM, China. (n.d.). Retrieved from http://english.mofcom.gov.cn/statistic/charts.shtml
Music Trades. (2017). Retrieved from https://rollinsonpianos.co.za/images/publications/Pearlriver2017.pdf
Park, M., & Yim, B. (March 15 2007). Shanghai tang: The first global Chinese luxury brand? Harvard business Review.
Peng, M., Ahlstrom, D., Carraher, S., & Shi, W. (2017). History and the debate over intellectual property. Management and Organization Review, 13(1), 15–38. https://doi.org/10.1017/mor.2016.53
Phelps, E.. (2018). Innovation in the times of quality growth. Retrieved from http://www.chinadaily.com.cn/a/201803/23/WS5ab4348ca3105cdcf6513ae0.html
PianoBuyer. (n.d.). Pearl River. Retrieved from https://www.pianobuyer.com/brand/pearl-river/
Porter, M. (1990). The competitive advantage of nations. Harvard Business Review, 68, 73–93.
Porter, M. (2004). Competitive strategy techniques for analyzing industries and competitors. Free Press.
PwC. (2019). PwC M&A 2018 Review and 2019 Outlook. Retrieved from https://www.pwccn.com/en/deals/publications/ma-2018-review-and-2019-outlook.pdf
Ramamurti, R. (2009). What have we learned about emerging-market MNEs? In R. Ramamurti & J. Singh (Eds.), Emerging multinationals in emerging markets (pp. 399–426). Cambridge University Press. https://doi.org/10.1017/CBO9780511576485.013
Ramamurti, R., & Williamson, P. (2019). Rivalry between emerging-market MNEs and developed-country MNEs: Capability holes and the race to the future. Business Horizons, 62(2), 157–169.
Ross, D. F. (2015). Distribution planning and control—Managing in the era of supply chain management. Springer.
Shanghai Daily. (2015). Bright Food Eyes over 70% in Israeli Firm. Retrieved from http://www.china.org.cn/business/2015-02/27/content_34901956.htm
Singh, P. (2019). China creates a unicorn almost every 4 days, but still lags behind US. Retrieved from https://www.entrepreneur.com/article/331367
Stevens, C. E., Xie, E., & Peng, M. W. (2015). Toward a legitimacy-based view of political risk: The case of Google and yahoo in China. Strategic Management Journal, 37(5), 945–963.
Stewart, E. 2007. China has a history of selling dangerous products to U.S. consumers. Retrieved from https://www.thestreet.com/opinion/china-has-a-history-of-selling-dangerous-products-to-us-consumers-13063992
Sun, L. (2017). Tong Ren Tang: Envoy of traditional Chinese medicine. Retrieved from http://www.chinatoday.com.cn/english/economy/2017-05/05/content_740125.htm.2017-May-5
Sunway Annual Report. (2019). Retrieved from http://static.cninfo.com.cn/finalpage/2020-04-17/1207515389.PDF
Tasly Website. (n.d.). Global recognition. Retrieved from http://www.taslyint.com/list-61-1.html; Tasly Worldwide. https://en.tasly.com/list-153-1.html
Timmer, M. P., Los, B., Stehrer, R., & Gaaitzen, J. (2013). Fragmentation, incomes and jobs: An analysis of European competitiveness (October 2013). Economic Policy, 28(76), 613–661. https://doi.org/10.1111/1468-0327.12018
Tong Ren Tang Website. (n.d.) Global network. Retrieved from https://cm.tongrentang.com/en/article/371.html
Tran, G., Strutton, H., & Taylor, D. (2013). Fighting dragons with dragons: Approaches for negotiating with Chinese partners. Business Horizons., 56, 561–572.
Tu, H. B. (2011). Cluster marketing models and strategies: The implications thereof in the Chinese high-tech industry. International Journal of China Marketing, 1(2).
Turkina, E., Assche, A. V., & Kali, R. (2016). Structure and evolution of global cluster networks: Evidence from the aerospace industry. Journal of Economic Geography, 16(6), 1211–1234. https://doi.org/10.1093/jeg/lbw020
UNCTAD, UN. (n.d.). World investment report. Retrieved from https://worldinvestmentreport.unctad.org/
Wagner, C. (2020). Deducing a state-of-the-art presentation of the eclectic paradigm from four decades of development: A systematic literature Review. Management Review Quarterly, 70, 51–96. https://doi.org/10.1007/s11301-019-00160-x
Wallace, N. (2010). Chinese take 51% Synlait stake. Retrieved from https://www.odt.co.nz/business/chinese-take-51-synlait-stake
World Intellectual Property Organization (WIPO). (2018). World intellectual property indicators 2018. Retrieved from https://www.wipo.int/publications/en/details.jsp?id=4369.
World Intellectual Property Organization (WIPO). (2019). Global innovation index 2019. Retrieved from https://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2019.pdf
World Intellectual Property Organization (WIPO). (2020). China becomes top filer of international patents in 2019 amid robust growth for WIPO’s IP services, treaties and finances. Retrieved from https://www.wipo.int/pressroom/en/articles/2020/article_0005.html
Xie, J. (2020). China prepares for return of US-listed companies. Retrieved from https://www.globaltimes.cn/content/1189459.shtml
Xing, X. J. (2018). Chinese investors eye Kazakh Market as TCM becomes increasingly popular in central Asia. Retrieved from https://www.globaltimes.cn/content/1120227.shtml.
Xinhua News. (2010). China launches industry alliance to promote TCM. Retrieved from http://www.china.org.cn/business/2010-08/08/content_20660994.htm
Xinhua News. (2014). China’s bright food acquires majority stake in Salov. Retrieved from http://www.china.org.cn/business/2014-10/07/content_33701083.htm
Xinhua News. (2019). China’s transition to consumer economy makes it more investable: Senior investors. Retrieved from http://www.xinhuanet.com/english/2019-06/23/c_138165197.htm
Xu, H., Wan, Y. Q., & Pei, D. G. (2008). A study on risk perception and risk identification in the internationalization process of Chinese hi-tech enterprises—A case study of Huawei Technologies. Frontiers of Business Research in China., 2, 458–481. https://doi.org/10.1007/s11782-008-0027-2
Yiwugo.com. (n.d.). Retrieved from https://en.yiwugo.com/buyer_entrance.html.
Zeng, M., & Williamson, P. (2003). The hidden dragons. Harvard Business Review, 81, 92–99. Retrieved from https://www.researchgate.net/publication/9070705_The_Hidden_Dragons
Zeng, M., & Williamson, P. (2007). Dragons at your door: How Chinese cost innovation is disrupting global competition. Harvard Business Review Press.
Zhang, S. H., & Zhang, Y. F. (2019). EU FDI screening and its impact on Chinese investments. Retrieved from https://www.dentons.com/en/global-content/publications/2019/february/4/-/media/
Zhou, K., & Loo, G. (June 13 2011). Herborist: A Chinese personal care brand goes abroad. Harvard Business Review
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2022 Springer Nature Switzerland AG
About this chapter
Cite this chapter
Su, M., Shi, L.H., Zhao, M., (Frank) Tan, K. (2022). Emerging Dragons: How Do Chinese Companies Expand Overseas?. In: Wu, T., Bu, N. (eds) International Business in the New Asia-Pacific. Advances in Theory and Practice of Emerging Markets. Springer, Cham. https://doi.org/10.1007/978-3-030-87621-0_8
Download citation
DOI: https://doi.org/10.1007/978-3-030-87621-0_8
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-87620-3
Online ISBN: 978-3-030-87621-0
eBook Packages: Business and ManagementBusiness and Management (R0)