China’s International Expansion Agenda
Jack Perkowski is the chairman and chief executive officer of ASIMCO Technologies, one of the most important players in China's automotive components industry. He founded the company in February 1994, after spending three years investigating opportunities in Asia and China and before others recognized the significant role that China would play in the global economy. With seventeen factories in eight provinces and fifty-two sales offices located in every corner of the country, ASIMCO Technologies is unique because it functions as a foreign-invested company built to specifically to serve the Chinese market. Under Perkowski's leadership, ASIMCO has gained a reputation for developing local management and integrating a broad-based China operation into the global economy. In 2005, ASIMCO was named one of the "Ten Best Employers in China," ranking third in a survey conducted by Hewitt Associates and 21st-Century Business Herald.
Jack’s new book Managing the Dragon: How I’m Building a Billion Dollar Business in China (Crown Business; March 18, 2008) discusses Jack’s experiences building ASIMCO from the ground up and the lessons he learned in developing the company’s local management team. The book also covers a wide range of topics such as decentralization; China’s different cost perspective and how it creates two markets for any product; intellectual property concerns; and practical advice on how to start a business in the country.
Jack Perkowski: They started to do it a little bit. If you ask any CEO in China, I don’t care how big or small his company is, he wants to be global. No question. Whether they buy something or whether they just expand, they want to be global. That’s they don’t see their territory limited to China. And I think they’re smart enough to realize that if they get big in China, by definition, they’ll be one of the biggest companies in the world. Why does some of the industry leaders in the United States get to be so large? Because they happen to have grown up in the US, which has become, become the largest economy in the world. Well China is now on that path to becoming the largest economy. So why wouldn’t be the companies that are large in China aren’t going to end up being some of the largest companies in the world? I think it’s only logical that that’s going to follow. So now, they’re all thinking that way. They’re all thinking about going global. They’re all doing things. Some of them are making acquisitions in the States. Some of them are starting to sell their products outside China. And one by one, they’re improving their management, they’re improving their technology, they’re improving their competitive position in China which, again, prepares them for the world.
Let’s take the auto industry.
This year, China will make 10 million vehicles. To put in perspective, the US market is about 16 million but only 11 million are made here because 5 million are imported from Japan, Korea, Europe. Because at what’s going on economically, most people, a lot of people predict for the first time since 1992, the US will make less than 10 million vehicles.
So that means that in addition to 2008 being the Olympic year for China, this could also be the very first year when China actually produces more vehicles than United States, which when I first happened upon that statistic, it blew my mind and it just came so fast.
Of those 10 million vehicles, China’s looking to export a million too by the way. So, and that was in 2004, that was only 78,000. So China is becoming a big exporter of vehicles in addition to everything else.
Recorded on: September 22, 2008
As was once the case in the U.S., becoming big in China will soon mean becoming big on the global scale.
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