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22 D+C  e-Paper  December 2015 In the past 20 years, companies from China have grown faster than those from almost any other country. Chinese firms are now among the top players worldwide. The western public, however, is hardly aware of them. Doris Fischer, professor at Würzburg University, who specialises in the economy of the People’s Republic, explains matters and assesses the Communist regime’s policy in an interview with Hans Dembowski and Sabine Balk. Interview with Doris Fischer Which Chinese companies are considered ­multinational? Companies are considered multinational if they are active in multiple countries and do not feel alle- giance to any single nation in particular. According to this definition, there are only very few multina- tional companies worldwide, and that is true of China too. This definition probably does not even apply to a company like Alibaba (see box for brief profiles of Chinese companies on p. 25). The way China supports companies, moreover, helps to keep them aware of their home country. If, however, we define “multinational” in the sense of companies run- ning operations in multiple countries, then there are some Chinese multinationals, Huawei and Alibaba for instance. Some scholars consider the 500 largest companies in the world to be multinational, but that is not fully adequate, because that list also includes Chinese companies, for example the big banks, that are mainly active inside China. They are huge simply because their home market is huge. How can it be that China is considered a world- champion exporter, but we are familiar with so few Chinese brands? Well, in the past, this was the case for Japan and Taiwan as well. Both countries initially decided to invest in cheap export-driven industries, rather than in brands of their own. In the meantime, Asian and other corporations have invested in China because of low production costs, and their exports now contrib- ute to China’s export statistics. Over 50 % of Chinese exports can be traced back to companies with foreign investors. One example is the Taiwanese company Foxconn. Foxconn manufactures digital components and devices for globally known mobile-phone and tablet-computer brands in China, but it does not make end consumers aware of its own name. Chinese companies have adopted that strategy too. However, others have established their own brands, including Haier, Huawei or Chery. How do Chinese companies choose to expand? There are different approaches. Markets with physi- cal or linguistic proximity to China are considered interesting, as are those where the business environ- ment is attractive, for instance Southeast Asia or Africa. Companies are investing primarily in sales, but also in production facilities. Chinese managers like less-regulated markets because they understand them better and know how to operate there. But some companies are also eager to become engaged in industrialised nations; they feel attracted by issues such as rule of law or advanced technology. What industries do Chinese multinationals operate in? That is rather difficult to say. Seventy percent of Chinese investments go to so-called tax havens like Hong Kong or the Virgin Islands. We don’t know what is done with those funds next. Do they flow back to China? Are they invested in traditional sec- tors or other industries? There is little reliable data. If we consider statistics on mergers and acquisitions, we see that China has become a very powerful player in industries like the natural-resource extraction and telecommunications. Nevertheless, other sectors are now growing faster than commodity companies. At the moment, China’s steel industry has enormous excess capacities because the domestic market has become saturated therefore some steel industry com- panies try to expand internationally. What is China’s relationship like with Hong Kong and Taiwan? Formally, Hong Kong is now a special administra- tive region of China that has been granted 50 years of autonomy. Hong Kong has close economic ties Government doesn’t control everything