Multinationals should focus on enhancing competitiveness, not politics
Published: Jul 01, 2021 09:08 PM
The 2021 SNEC International Photovoltaic Power Generation and Smart Energy Conference & Exhibition attracts a great number of visitors on Thursday in Shanghai. Photo: Zhang Dan/GT

The 2021 SNEC International Photovoltaic Power Generation and Smart Energy Conference & Exhibition attracts a great number of visitors on Thursday in Shanghai. Photo: Zhang Dan/GT

The boss of French drone maker Parrot reportedly said that his company could be blacklisted by China, just like Chinese drone producer DJI being blacklisted by the US. Without mentioning the exact reasons, Henri Seydoux, co-founder and CEO of Parrot, told the US-based CNBC that it is a thing that "may happen".

"It's very difficult to sell drones in China," and it's not easy to sell software either, Seydoux said on a call earlier this month, CNBC reported. 

Regardless of whether he brought it up himself or said it after being asked by reporters, it is not a wise choice for any international firm or institution to jump into political topics.

The remarks, on one hand, could be a promotion move for it intending to expand market share in the US after the leading player DJI from China being viciously blacklisted by Washington last December under a groundless security accusation.

On the other hand, though China has been improving its business environment for global players, Chinese domestic companies have been growing rapidly with some started to lead the development of industries in the world, such as the drone sector. Foreign firms in Chinese and global markets are facing escalating competitions from Chinese rivals.

For years, DJI has been the only one international giant, accounting for over 70 percent of the global market share. Even in the US market, DJI recorded a market share of nearly 77 percent, while Parrot only had 2.2 percent, Bloomberg reported in March 2020, citing data from Drone Industry Insights.

During a product promotion campaign last year, Parrot even took clear aim at DJI and even DJI's origin Chinese market, saying in its promotional materials that "Don't trust Chinese drones," and "Do you trust DJI drones", according to a report published by Russia Today.

Alongside the US' move of cracking down on Chinese firms in order to contain the development of China, it is possible that some global players would try to take the chance to take over some market share from strong Chinese rivals.

In fact, no matter in which industry, it is core competitiveness which wins a company its success, instead of any speculative schemes. And no matter how the industrial environment changes, a company needs to respect local market and launch fair competition; otherwise, it will backfire eventually.

Against the backdrop of intensifying wrestling between China and the US, it is true that companies may see more complex business environment. However, what's also increasingly clear is the significance of the potential Chinese market for multinationals to recover and grow during the post-COVID era. 

Data from a recent UN report showed foreign direct investment (FDI) to developed economies fell by 58 percent in 2020, while in China, FDI growth picked up with a 6-percent gain to $149 billion, reflecting the country's success in containing the pandemic and its rapid GDP growth recovery.

China has been committed to expand its opening-up and to improve its business environment for both domestic and foreign firms. The era of foreign players enjoying super-national treatment has passed; and to compete with stronger Chinese firms and growing number of foreign players in the Chinese market, it's more crucial than before for all firms to enhance their core competitiveness so as to win a promising and sustainable future.

The author is a senior tech industry analyst based in Beijing.