Grassroots Development
In 2005, the Carlyle Group, an American-based global asset management firm, announced plans to acquire Xugong Group Construction Machinery Co., Ltd., a leader in China’s engineering machinery industry. Insiders believed the financial giant would seek easy profit by restructuring, dismantling and repackaging the company in a way that would harm the whole industry. Xiang Wenbo, president of Sany Heavy Industry Co., Ltd., objected loudly, posting dozens of articles on his blog about the harm the purchase would cause. Over a million people read these comments and this precipitated widespread discussion about the fate of domestic industries at the hands of multinational financial conglomerates.
As a result, Carlyle Group changed its plans: instead of buying 85 percent of the stock rights they would only purchase 50 percent. This was later changed to 45 percent. Three years later, the acquisition was aborted entirely. Xiang Wenbo said he was happy with the result, and reaffirms that he doesn’t support foreign speculative capital moving in on Chinese companies.
In 2009, Sany invested 100 million Euros to build a factory in Germany, setting a record for Chinese companies’ investing in Europe. In 2010, Sany invested US $200 million to build a manufacturing base in Brazil. In these instances, Sany Group stuck to the model for growth of investing to build its own factories and research centers abroad, rather than merging with or purchasing local companies outright.
Xiang Wenbo explains, “For a company’s internationalization, merging or restructuring can work well. But for Sany Group, we choose not to expand and develop in these ways. We want to keep our core. We integrate our company’s development with the local environment to ensure we have local and national interests at heart as well as our own.”
In October 2011, Georgia State Governor Nathan Deal visited China, during which he signed a cooperation agreement with Hunan Province, where Sany headquarters are located. In return, Liang Wengen declared that his company would set aside an investment of US $25 million in Georgia to build a product R&D center. He promised Sany would take on more local employees and continue to make contributions to the local economy.
Liang said that a lack of understanding between the two sides had historically hampered Chinese companies investing in the U.S. Further efforts to promote understanding are needed.
As Chinese, we must confront the fact that some Chinese products still lag behind the American competition. But we must also compel our American friends and customers to ignore the slander and try out Chinese products.
Back at Sany, Liang comments, “Quality is the answer: higher quality products will change people’s mind about ‘Made in China’.” |