Innovation and industry consolidation, keys to business development in China

February 9, 2018

Innovation and industry consolidation, keys to business development in China
Innovation and industry consolidation, keys to business development in China

Complete report:

 At Madrid’s Hotel Ritz, InterChina presented its "China 2018: Economic and Business Perspectives” report, coordinated with our firm, in which it emphasizes that "the majority of foreign companies will strengthen their commitment to China."  This 2018 will be the final consolidation of China’s "New Normal." Against a fast changing background, foreign companies across different industries still expect to achieve high single and even double digit growth in China. New technologies and services are creating unprecedented business opportunities. In addition, reprioritization of revenue drivers, redesigning commercial and distribution channels, localization and consolidation will continue to play a major role in the year ahead.

The report highlights mergers and acquisitions as a key pathway for growth in China. It draws on a survey of 100 senior managers whose companies have been doing business there for over 20 years. They all expressed "satisfaction with the 2017 results and optimism about 2018," as emphasized by InterChina’s managing partner, Eduardo Morcillo, who presented the report.

Another conclusion is China’s self-regulating market tendency, which in the words of Morcillo “will continue with the survival of the fittest, where multinational companies will have a competitive advantage based on their cost management and incorporation of state-of-the-art technology.” There will also be greater state control over the Chinese economy and the influence of public companies on it.

Following Morcillo’s remarks, there was a discussion panel with the participation of Omar Puertas, who highlighted the initiatives being boosted by the government—mainly the "Made in China 2025" and "One Belt, One Road” projects—as "an opportunity for the foreign investor, as they represent an aligning of the country’s interests with business interests." Puertas also expects high growth in strategic sectors, in particular the automotive industry, services, tourism and technology.

The other discussion panelists were Josu Calvo, CEO at Gonvarri Steel Services; José Manuel Martínez, CEO at Cepsa Química; José Pedro Sebastián de Erice, secretary general at Técnicas Reunidas Internacional and former ambassador of Spain to China; Carlos Ventos, CEO at Lucta; and Jan Borgonjon, president of InterChina.

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