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Opinion | To compete, Asia must learn from how China breeds apex predators
China’s growing supply chains offer short-term opportunities but Asia must quickly learn from how it tests and strategically nurtures firms
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By the time they expand internationally, most Chinese companies have been through a Hunger Games-like winnowing process that makes them formidable competitors on the global stage. As well as being tempered by the fire of a hyper-competitive domestic economy, they have also been nurtured by a policy framework designed to support the best innovators with preferential taxes and access to financing.
This unique model has produced the corporate equivalent of apex predators in global sectors from e-commerce to electric vehicles (EVs) and renewable energy. It also creates a hard but unavoidable question for policymakers and C-suites across the Asia-Pacific and beyond: how to respond to the growing international success of China Inc?
For most Asian economies, tariffs are not an option because of their reliance on trade with the region’s biggest economy. Instead, China’s neighbours need to take a short- and longer-term approach.
The international expansion of Chinese companies presents significant opportunities for businesses in the rest of Asia. Chinese investment is a key driver of economic growth across Southeast Asia, for example.
The growth of supply chains driven by Chinese brands creates opportunities for other Asian firms to participate and learn. Over the longer term, the potential of artificial intelligence (AI) to transform businesses should create more decentralised supply chains and a more level playing field for smaller economies.
China itself provides a key example. It surprised the world when a Chinese company disrupted the established AI order at the beginning of this year. With the right investment in this technology and related skills, other regional economies could surprise the world with breakthroughs too, and compete in the economy of the future.
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