How China Reset Its Global Acquisition Agenda

No other nation has come close to matching the economic strides China has made since the late 1970s. The changes in the country have been so rapid and dazzling, however, that they often blind observers to the fact China has had its share of failure, too. The cross-border mergers-and-acquisitions spree that Chinese companies went on in the past decade bears ample testimony to that. Many of those mergers - which included TLC's acquisition of France's Thomson Electronics, SAIC's takeover of South Korea's Ssangyong Motor Co, Ping An's investment in the Belgian-Dutch financial services group Fortis, Ningbo Bird's strategic partnership with France's Sagem, and the D'Long Group's purchase of America's Murray Inc. - ended in utter failure, with Chinese companies having to pull out of or sell off their acquisitions. Unlike other developing nations, however, China wasn't paralyzed by failure, and it has quickly - and quietly - changed course to take another shot at its goals. The Chinese, especially the older generation, believe that failure is not about falling down but about refusing to get up. Instead of buying global brands, sales networks, or goodwill, Chinese companies now mainly try to acquire concrete assets, such as mineral deposits, or state-of-the-art technologies and R&D facilities. By failing spectacularly and early, China's takeover artists could well have discovered how to succeed in the future.