Chinese companies acquire new identity abroad
Published: Oct 31, 2018 04:08 PM

Illustration: Liu Rui/GT

I met Victor Cortese in the power distribution room of a construction site in Panama. A Venezuelan, he has worked there as an electrical engineer for more than a year.

We visited the new Panama convention center that is under construction on a hot and humid October morning. China Construction America, a subsidiary of China State Construction Engineering Corp. Ltd. (CSCEC), is one of the two contracting companies for the project; the other is a local one.

The project is managed by an international team. Among the 57 managerial staff, seven are Chinese, while others are from Mexico, Venezuela, Colombia, the US, Britain and so on.

The convention center, the largest in the Latin American and Caribbean region, has also been co-designed by an American company and a local firm.

Feelings of closeness and familiarity overwhelmed us when we saw "China Construction" written in Chinese at the site. A State-owned company and a leading one in the Chinese construction industry, CSCEC has built many landmark buildings across China.

During a chat, Cortese told us he doesn't care which country China Construction America belongs to, the only thing that concerns him is whether the job matches his profession. China Construction America is nothing more than one of the many foreign companies he has worked for. 

Obviously, with its expanding overseas footprint over the past 30 years, the identity of China Construction America has changed. It has evolved into a US company that is not really different from any large multinational in the world.

People assumed that China Construction America as a subsidiary of a Chinese company must enjoy such advantages as cheap labor and cheaper materials. But the fact is: It is not much different from other foreign or local companies operating in Panama's construction sector.

All materials used in the convention center project are internationally purchased, and those bought from China only make up about 10 percent. The high-voltage power distribution cabinet that Cortese was commissioning is manufactured by Schneider Electric in Germany. Workers at the site were all employed by the Panamanian contracting company, and none of them was Chinese.

China Construction America has applied similar practices to projects contracted in the US. Its development relies on its participation in local competition. For instance, 98 percent of its employees are locals.   

A few days ago, I took part in a seminar on Chinese enterprises' "going out" and "going in (integrating into local culture)," in Central China's Hubei Province. The difference between "out" and "in" means transformation, that is, how a Chinese enterprise can transform into an international one.

From this perspective, Chinese media's perception of these enterprises is outdated. When we cover them, we simply view them as Chinese enterprises.

Of course, there are many Chinese elements in their experience, technology and management. But the first step to their success is that these Chinese companies must be sufficiently globalized while not shunning local flavor.

The development of Chinese companies, like China's rise, is a process that they gradually integrate with international standards, dovetail into the globalization process and transform themselves into a member of the global community.

However, not all Chinese enterprises that are going global have realized the transformation. While it has taken 30 years for China Construction America to do so, many Chinese companies have just started. 

Only by realizing the transformation well, can Chinese enterprises bring their experience accumulated in the 40 years of China's reform and opening-up into full play. The impact of Chinese enterprises going global can also be gradually buffered through such integration and interaction.

The author is a senior editor with People's Daily, and currently a senior fellow with the Chongyang Institute for Financial Studies at Renmin University of China. dinggang@globaltimes.com.cn. Follow him on Twitter @dinggangchina