(March 26): Chinese companies aren’t retreating from the Arabian Gulf despite turmoil in the region, according to one of the world’s top management consultants.
Executives view the war with Iran as a short-term freeze on their ambitions in the Middle East, rather than a fundamental deterrent, Denis Depoux, global managing director at Germany’s Roland Berger, said Thursday on the sidelines of the Boao Forum for Asia.
For Chinese investors, the Gulf’s combination of sovereign wealth, a determination to diversify beyond oil, and proximity to key natural resources, outweighs geopolitical instability, he said.
“Chinese companies are still looking at investment in the Middle East because they see the pool of capital that is available, and the appetite for building new industries,” Depoux said. “People tend to underestimate the very good fit between these Gulf countries trying to build industries from scratch in the desert, and Chinese companies that have done this before.”
Depoux also sees more appetite for investing in China from foreign companies, driven by a need to more effectively compete with their Chinese rivals. He cited carmakers as a prime example, after some multinationals realised “they simply don’t have what it takes to succeed in the Chinese market,” he said.
“Unless they invest to create new products that can compete on-par with Chinese rivals, they will simply disappear,” he said. “It’s a vital threat for all the automakers, not only Japanese, Europeans, but also American.”
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