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Akzo Nobel switches focus in China
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Vestas views subsidiary as Chinese company
Akzo Nobel switches focus in China
By Patti Waldmeir in Shanghai
Published: November 12 2010 09:57 | Last updated: November 12 2010 09:57
Chinas shift from an export-led economy to domestic consumption led-growth will make it harder for foreign businesses to compete in China, but complaints about a worsening atmosphere for foreign investment are overstated, according to Hans Wijers, chief executive of Akzo Nobel.
In an interview in Shanghai Mr Wijers said: People seem a little bit naïve about China.
It has its challenges but it is still very attractive. This market grows: markets in Europe dont grow.
The Dutch paints and chemicals company recently announced plans to double revenues on the mainland where it is the market leader from $1.5bn last year to $3bn in 2015.
Mr Wijers, in China to open a $375m production facility in Ningbo said complaints about rising labour costs in China, and government protectionism, were overdone.
In the US, we dont have a level playing field in certain markets either, its part of doing business in the world.
We get more access to Chinese markets than we get to [in] Japan.
His comments highlight the fact that foreign business in China is not unanimous in echoing high profile complaints about the investment atmosphere in China. The European Chamber of Commerce in China and several western businessmen have criticised Beijing for imposing unfair restrictions on foreign business and forcing multinationals to transfer technical know-how to Chinese companies in exchange for market access.
Companies such as Akzo Nobel are less affected by Beijings policies to favour so-called indigenous innovation than some companies in high technology and new energy.
Mr Wijers said China could become his companys top market within five years, and certainly within a decade: currently China is Akzo Nobels second-largest market after the US.
Beijings focus on fuelling domestic consumption-led growth has created challenges for companies such as Akzo Nobel, as it adjusts from serving export demand to meeting domestic demand.
Mr Wijers said Its going to be a different game.
Competing against Chinese companies would be tougher because they understand some aspects of the Chinese market better.
It becomes more and more important to understand what being local implies. We have to become more Chinese, he said,
That included using Chinese staff to fill more senior positions.
But he said competing for local staff was becoming more difficult: There is a war for talent going on and it is not just a war between foreign companies.
Chinese companies were becoming more competitive as employers.
A study published on Wednesday by Manpower, the US employment company, says foreign companies are beginning to lose their long-held advantage in recruiting local Chinese staff, as more Chinese senior managers choose domestic over foreign employers because they may pay more and offer better opportunities for advancement.
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Vestas views subsidiary as Chinese company
Ditlev Engel, Vestas chief executive, said his 3,000 staff in China could be viewed as a Chinese company, writes Christian Oliver in Seoul.
Being considered part of the family in China is crucial for the worlds top wind turbine-maker, which views the country as more than a potential market. It announced in October that it would open a research and development centre in Beijing, which Mr Engel argued could help Vestas compete in a wind business that is scrambling for patents as competitively as the pharmaceuticals industry.
He said that China invested $34.6bn in clean energy last year compared with $18.6bn in the US.