The Next Wave

Monday, January 16, 2006 8:47
Comments Off on The Next Wave
in the last 12-18 months, China has begun to see what many classify as China’s third wave: investment by the second tier manufacturers. While companies like GM, Dell, and Caterpillar have been in China for 15+ Years, it has only been in recently that their second and third tier suppliers have begun to enter the market.  

This group is atypical of the previous investors as they are often organizations whose CEOs have a III or IV at the end of their name, and the pictures of a companies founders are family portraits.

With up to 500 million USD in sales, these companies are now looking to China as not only part of the expansion plan, but also as a necessary step to retain customers in their home markets and third markets like Africa and Latin America.

Unlike their predecessors, these 2nd and 3rd tier component suppliersd o not have to wait 3-5 years for profits as their clients are the ones who are pulling them in. Furthermore, this is also a chance to add to their client base by selliing into and partnering with local Chinese companies…. While traditionally seen as risky, partnerships in certain industries have resulted in success.

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