President Xi Jinping has brought 15 senior Chinese business executives with him on his first state visit to the United States this year.
Among them are the heads of China’s two largest banks – the Bank of China (BOC) and the Industrial and Commercial Bank of China (ICBC) – Lenovo CEO, Yang Yuanqing, China’s largest container shipping company, COSCO, and Internet giants Baidu, Alibaba and Tencent known locally as BAT, according to Paulson Institute.
Delegates are set to meet and greet executives from 15 US companies including Apple, Microsoft, Amazon, Cisco, Boeing and Starbucks. Google, Twitter and Facebook are notably absent from this list.
Some of the Chinese companies present already have businesses in the US and in Lenovo’s case see a significant share of their sales coming from overseas. Chinese automotive component manufacturer Wanxiang purchased US green-car startup Fisker Automotive and battery maker A123 last year, eyeing to build electric cars to rival Tesla. Chinese meat producer Shuanghui, acquired the United States’ largest meat producer, Smithfield Foods, two years ago. Lenovo, having purchased IBM’s PC division back in 2005, is now the world’s largest PC vendor by unit sales.
This is the first time all three BAT bosses have accompanied a Chinese president on an overseas trip, and a first for Tencent founder, Pony Ma visiting the U.S. with a Chinese president. This visit is the highest profile political endorsement for private entrepreneurs in China to date.
All three BAT companies are seeking to diversify from their core business and to build a stance in the international market.
In spite of multiple attempts to expand beyond China’s borders, BAT companies have struggled in some extent to make progress in their overseas ventures, especially in the Western market. Alibaba’s e-commerce ventures in the US are negligible, having bought up a few small-time online shopping portals. Its higher-key investments are instead placed in Hollywood films, eyeing to tap the booming movie market back in China.One area that may prove fruitful is its investment in transportation companies.
WeChat, Tencent’s most successful product after QQ, has slowed down in user growth inside of China after attacting about 800 million users. It claims to grow 100 million outside of China. Baidu launched its search service in Japan in 2007 but saw stalled progress, and finally closed the Japan service in April.
Edited by Rohan Malhotra
(Albert Sun is a guest writer at AllChinaTech.com)