Will Chinese Buy Top U.S. Tech Providers?
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A McKinsey & Co. director raises the possibility of a leading Chinese company acquiring an iconic U.S. technology firm or two in 2009. |
Here's what Gordon Orr, a director in management consultancy's Shanghai office, wrote in a McKinsey Quarterly article entitled Seven Ways China Might Surprise Us in 2009:
A major deal could be worth 10 or 100 times Lenovo's $1.35 billion purchase of IBM's PC division. If the U.S. government blocked the sale, the acquisition's failure could herald an era of renewed corporate nationalism in China, just as its companies were becoming more global. You could expect an aggressive increase in domestic R&D spending as the country focused on homegrown technology, as well as a chillier climate for multinationals with research operations in China.
A successful deal, by contrast, could create a truly global company, unlike anything seen before, with a multinational culture superseding any sense of national origins.
What are the other six possible surprises from China next year?
• China announces that by 2020, half of the cars in the country will be electric. It invests tens of billions of dollars in R&D toward achieving that goal.
• The Chinese government buys a 50-year lease on an entire geographic region of Mexico, enabling Chinese companies to build factories there to supply the North American market more easily.
• A major office block collapses in Chaoyang, Beijing's central business district.
• A restructuring of China's telecommunications industry turns into a complete consolidation.
• The English Premier League football association buys its Chinese counterpart, the Chinese Super League.
• Warming cross-strait relationships lead to a merger between the mainland's Industrial and Commercial Bank of China and Taiwan's Chinatrust Commercial Bank.
How likely will any of these seven come to fruition? No much, Orr says, adding:
But any one of them could, and each might make us see China and its future in a new light.
Interested in the intersection of IT and China? Read our interview from earlier this year with Harvard Business School Professor F. Warren McFarlan, the dean of American IT academics and longtime China observer, who sees huge technological advantages in China, but also points to enormous challenges.
Also check out this other CIO Insight piece, Georgia Tech: China Now the No. 1 Tech Nation and China's IT Challenge.
