China is poised to become a major exporter of innovation, ideas and home-grown products as it enters a new phase in its globalization, fueled by a new breed of dynamic private companies.
The country has long been regarded as the world’s factory, cementing its position as the world’s largest exporter back in 2009. Since then, it’s broadened its horizons significantly to become a major source of capital, with Chinese investors pouring money into everything from trophy offices and hotels, to football teams and technology companies.
And its evolution doesn’t stop there; the next decade will be marked by the internationalisation of China’s increasingly competitive firms.
“China’s success is no longer all about manufacturing output, infrastructure investment and fast growth. We need to take a much closer look at how China is taking an increasingly central role in the global innovation economy,” says Jeremy Kelly, Director of Global Research, JLL. “The strategic ‘Made in China 2025’ program will be at the forefront of this shift.”
Domestic companies and cities share fortunes
Huawei, Alibaba, Tencent – they may not be household names yet, but they’re developing the scale to challenge the likes of Apple, Google, Amazon and Facebook. In doing so they’re becoming symbols of an increasingly digital, tech-savvy and innovative nation.
“China’s corporate landscape is changing fast,” says Joe Zhou, head of research for China, JLL. “The ‘old guard’ of state-owned giants, private sector firms and multinational corporations have been joined by a new wave of homegrown companies, many of which are at the cutting edge of China’s progression up the value chain.”
They are helping drive forward China’s most innovative cities too – the likes of Beijing, Shenzhen and Shanghai as they not only snap up office space but also encourage new forms of space to be developed and designed, from state-of-the-art campuses to more flexible and technology-enabled workspaces.
Take Hangzhou, the home of Chinese e-commerce titan Alibaba. When the company floated on the New York Stock Exchange in 2014, it was the largest IPO ever. In large part thanks to Alibaba, Hangzhou has established itself as a leading corporate hub with a thriving tech scene and a population of 9 million people.
Going global
The influence of China’s increasingly innovation-focused firms is being felt abroad, as well as at home. While the government’s ‘Belt and Road Initiative’ is the most visible manifestation of China’s global ambitions, the growing presence of Chinese corporates across the globe adds a more subtle dimension to China’s relationship with the rest of the world and its impact on real estate markets.
A number of Chinese firms already have a footprint in many countries. Telecoms giant Huawei, for example, has been involved in telecoms networks across Africa, Asia and Latin America, and is at the forefront of the development of 5G.