【新浪财经】 谢祖墀 | 改变规则:企业战略新纪元

文 | 谢祖墀

创新只是把不同的东西连接起来

传统的企业发展战略理论,无论是迈克尔•波特的五力模型、波士顿矩阵,还是营销“定位”理论,它们的关键假设是行业、企业、竞争对手都是静态的,每一个企业都处于某一个固定而有清晰界定的行业范围,行业的边界和它里面的竞争对手是不变的。

当今科技发展为人类社会和商业世界带来范式革命,这些战略理论已经不合时宜,其短板在未来也将更加显著,主要原因有四:

第一,摩尔定律引领的科技发展大大加速了创新的步伐。新兴技术正迅速发展并得到广泛应用,大数据、人工智能、虚拟/增强现实、移动互联网和工业互联网等应用正在彻底改变传统行业的价值链和竞争态势。

第二,科技创新同时改变了消费者的行为,他们对产品的质量和服务的便捷性要求变得更高,需求越来越多样化和个性化。消费者的价值快速迁移,使得未来充满了未知,倒逼企业以更快速度的迭代更新和大胆试验。

第三,基于互联网技术的平台战略、轻资产模式、按需服务、共享经济、智能硬件、虚拟货币等商业模式正迅速改造着行业的结构,价值获取和价值创造等商业逻辑被重新梳理。

第四,数字化渗透到各个垂直领域,行业边界变得越来越模糊。不管身处在哪一个行业,都会看到“新物种”出现,成为新竞争者。原本静态的行业规则突然被撬动,过往的企业竞争优势在今天变化多端的时代里逐渐失效,甚至成为负担。

面对未来的不确定性,可持续增长成为企业首要的战略难题。然而,传统的核心竞争力理论和分散投资理论都无法解释这些来自规则的变化。这是全新的商业游戏,需要创新、动态和非线性的思维。

管理变革主要有三个方面:一是对变革做出反应;二是对变革做出预测;三是领导变革,即走在变革的前面, 改变竞争的游戏规则。我们认为真正的赢家能够摒弃传统的“旧游戏”和预设的规则,在战略关键点创造出“新游戏”和“玩法”,带头发现新的市场或竞争方式。

要做到“改变游戏规则的战略和组织”,企业应该要“在边缘上竞争”,意即不能停滞下来,就像在屋脊上行走,要在平衡中不断地向前行;根据市场及自身变化,不断寻求新的战略目标以及实现目标的方法,动态调整企业战略,优化组织结构,使其相互适应;在组织结构的“固定”和“松散”之间平衡,寻求最佳模式并把握节奏。

管理变革主要有三个方面:一是对变革做出反应;二是对变革做出预测;三是领导变革

真正能够改变游戏规则的赢家最初往往处在不显眼的业务边缘,不被关注。尽管他们一开始与巨头们的业务规模差距甚大,而且面临多方挑战,但他们凭着技术或者商业模式的创新获得战略制高点,重新定义游戏规则,在激烈竞争和不稳定的环境中找到非线性成长的机会。

举例来说,腾讯发展出“超级应用”微信把人们连接起来,成功逆袭电信运营商,打破了电信行业的“深宫高墙”。过去扎根在手机短信、电话、国际漫游等服务上的商业利益通通被互联网即时通信、互联网音频和视频等新模式粉碎,新的游戏规则由此诞生。而随后衍生出来的电商、支付和以内容为核心的新服务更是多维度渗透到不同行业,以“连接一切”为目标,一步一步重塑各种行业规则。

Netflix 以DVD 租赁起家,后来发现客户的线下痛点转型为“DVD 在线预订+ 邮递”的模式,之后更因为互联网的发展进一步革新成为线上串流媒体平台,采取月费订阅模式。这些新的玩法让当时主流的DVD 租赁公司Blockbuster 无法适从,最终破产。到了今天,Netflix 更利用大数据分析观众的口味和兴趣,个性化推荐内容和打造潜力题材,改变了整个数字娱乐行业的游戏规则。

苹果开创了生态系统战略的先河,通过对极致产品设计和对最佳用户体验的不懈追求,创造了革命性的创新产品生态。然而,让其产品具备粘性的是它无缝连接的软件和丰富的内容服务,如AppStore苹果商店,iTunes 和iCloud 云服务等,而其应用(APP)生态更是打造了一个全新的行业。苹果为传统智能手机行业带来了新的游戏规则,从此成为了行业的龙头和创新的先锋。

乔布斯说过,“创新只是把不同的东西连接起来”。 麻省理工学院媒体实验室(MIT Media Lab)的创办人兼执行总监尼古拉斯•尼葛洛庞帝教授(Professor Nicholas Negroponte)也说过,“新的想法从哪里来? 答案很简单:差异。创新来自看来不可能的并置混合(unlikely juxtapositions)”。

数字化和新科技应用是改变游戏规则的重大挑战和机遇

创新的机会其实往往埋藏在不同、众多的垂直领域之间,在这些地方挖掘潜在创新机会,我们称之为“跨界激活”。比如说,“关键词搜索+ 广告”成就了谷歌;“移动互联网+ 出行”成就了优步;“图形处理器芯片+ 人工智能”成就了英伟达近年的变革;“航空技术+ 飞行摄影”成就了大疆创新;“大数据+ 互联网保险”成就了众安保险。他们各自取材于不同行业,通过技术和商业模式的结合,发展出跟原来的行业不一样的“玩法”和特质,成为自成一家的企业,孵化出新的行业和市场。

数字化和新科技应用是改变游戏规则的重大挑战和机遇。认识到变化的根本原因,认识到变化的背景(context)和它带来的断裂(discontinuity),是企业发展的关键能力。创新有时候是所谓的“黑天鹅”,不一定能够容易预测;但有时候其实是有迹可循的, 比如跨界激活。在混沌中动态平衡秩序,警惕战略盲点,捕捉快速多变的市场机会,寻找开创新游戏规则的突破点,需要一套“在边缘上竞争”的战略思维去领导组织变革。

本文发布于新浪财经,原文摘自《亚布力观点》(2017年5月刊)并保留所有权利

关于作者:
谢祖墀博士(Dr. Edward Tse)是高风管理咨询公司(Gao Feng Advisory Company)的创始人兼首席执行官。中国管理咨询业的先行者。过去的20年里,他创立并领导了两大国际管理咨询公司在大中华区的业务。外界评价他为“中国的全球领先商业战略家”和 “谢博士之于中国企业界就如大前研一之于日本企业界”。他曾为数以百计的公司(总部设在中国及其它地区)咨询过所有关键战略和管理方面的业务,涉及中国的各个方面和中国在全球的地位。他还为中国政府在战略、国有企业改革和中国企业走出国门等方面做过咨询。他已发表200多篇文章并出版了4本书,其中包括于国际获奖的《中国战略》和《创业家精神》。谢博士获得了加州大学伯克利分校工程学博士、MBA以及麻省理工学院的工程学学士、硕士。

 

China Daily | Global Connect

By Andrew Moody (China Daily)
Updated: 2017-04-14

One month and counting.

More than 20 heads of state and government, as well as 1,200 delegates from countries around the world will descend on Beijing for the Belt and Road Forum for International Cooperation, which will be held on May 14 and 15.

It’s a landmark event for the Chinese initiative, launched by President Xi Jinping in 2013.

Since then, the initiative-which consists of the Silk Road Economic Belt and the 21st Century Maritime Silk Road-has resulted in cooperative agreements with China from more than 40 countries and international organizations, and Chinese companies have invested some $50 billion in mainly infrastructure projects.

One of the aims of the forum is to move the concept from being a China-led initiative involving bilateral agreements to a multilateral concept that will help foster greater global connectivity.

Xi made his ambitions for the Belt and Road Initiative clear at the World Economic Forum in Davos, Switzerland, in January, when he defended globalization and called for countries to work together to tackle the world’s many uncertainties.

“We should join hands and rise to the challenge,” he said. “History is created by the brave. Let us boost confidence, take action and march arm-in-arm toward a bright future.”

The main tangible elements of the initiative so far are the Silk Road Fund, for which the Chinese government pledged $40 billion in 2014 for investment in countries along the routes, and also the Asian Infrastructure Investment Bank, whose founding members include many Western countries, including the UK, France and Germany, along with leading Asian countries such as India, Pakistan and Vietnam.

Hugh White, a professor of strategic studies at Australian National University who was an adviser to former Australian prime minister Bob Hawke, believes the forum will be about making clear that the initiative is for everyone, not just China.

“For it to work, it has got to be something that has wider ownership and acceptance than just being a Beijing initiative,” he said.

“It has the potential to be something very significant. The countries participating will be involved in creating a vision and framework for globalization for the next few decades. So it is of immense significance.”

Joint development
Tom Miller, senior Asia analyst at Gavekal Research and the author of a new book, China’s Asian Dream: Empire Building Along the New Silk Road, agrees the aim will be to make clear that the initiative is very much about joint development.

“The mistake you can make about the Belt and Road Initiative is to think it is purely a Chinese project,” he said. “It can’t be just that, because whatever China is doing, it is doing with enterprises in other countries. So it has to be about joint development.”

Edward Tse, founder and CEO of management consultancy Gao Feng Advisory, believes the Belt and Road is still at the formative stage, and the forum will include a progress review and provide a forward vision.

“It is critical for the whole initiative. These leaders are coming together to discuss where to go next. Belt and Road started off as a concept, but the concept changed very quickly into some very tangible ideas like the AIIB and the Silk Road Fund and some very real infrastructure projects,” he said.

“We don’t have 100 percent clarity as to what it is or will evolve into; on the other hand, the participants have a lot of aligned interests and will want to be part of it.”

Some critics of the initiative have seen it as China trying to exert greater geopolitical influence.

Shen Dingli, professor of international relations and executive dean of the Institute of International Studies at Fudan University, rejects this notion.

“We have no geopolitical agenda. It is not a strategy. At first it was bilateral, but it can also be China working with two or more countries, and it can also include projects in which China is not involved at all,” he said.

“If they want to be involved, Japan can also bid for projects and be part of it. It is a global interconnectivity initiative. China does not have to be involved at all, but it is the country that initiated it, that’s all.”

Not a Chinese tool
Shi Yinhong, director of the Center for American Studies at Renmin University of China and one of China’s leading foreign policy experts, says it would simply not work if it was seen as a Chinese geopolitical tool.

“If it was just about China’s geopolitical interests, then other members would become suspicious and have their own concerns,” he says.

“It is certainly not the message that China wants to put across. China, of course, does have many geopolitical interests, but it sees them as entirely separate from this initiative.”

With the new administration in the United States having a protectionist agenda, the Belt and Road does reaffirm China’s commitment to a new form of globalization based on connectivity.

Sun Yongfu, former director-general of the European Department of the Chinese Ministry of Commerce, believes this will be one of the strongest messages from the forum.

“I believe the Chinese government would like to use this platform to send a strong message that China supports globalization,” he said.

“China is open to different ideas. It does not just want to put its own ideas forward, but also wants to listen to others. It is about what countries can do in cooperation with each other, jointly, bilaterally and multilaterally.”

Wang Huiyao, president and founder of the Center for China and Globalization, China’s largest independent think tank, said the forum offers the opportunity for some form of restatement of the importance of globalization.

“It could prove to be the new driving force behind globalization and provide the necessary impetus to stimulate the global economy and provide economic growth for the future. It has been three years since it was first proposed, and now is the right time to get to the nitty-gritty.”

One of the benefits to China of the Belt and Road Initiative might also be to provide new export markets for its heavy industries that supply the construction sector, now that the domestic economy is slowing down.

“In that way it is a business initiative,” said Shen at Fudan Universty. “Selling cement, iron and steel and overcapacity that we don’t need at home. People are losing jobs in China and it is a way for them to continue to be employed.”

Tse, also author of China’s Disrupters: How Alibaba, Xiaomi, Tencent, and Other Companies Are Changing the Rules of Business, thinks this is overplayed.

“There is a lot of business involved, but to equate the Belt and Road Initiative as a way for China to export its overcapacity does not make sense economically. You can’t really export products like cement. You cannot realistically transport it from Northeast China to Eastern Europe, as just one example. It is a very local business.”

Peter Frankopan, director of the Centre for Byzantine Research at Oxford University and author of the best-selling book The Silk Roads, said the initiative has created major interest in the countries that were along the ancient Silk Road.

“Pakistan, Saudi Arabia, Russia and the Central Asian republics have all started to think about their economic futures in terms of these connections,” he said.

“The reason there is so much excitement about these routes is that they have existed before. You only have to look back in history to see how all these connections and pathways were made.

“If they have existed before, it can work again. It will lead to a greater level of ease of distributing goods and services along the routes, which will make the whole process cheaper and quicker.”

Vision recognized
Rana Mitter, director of the Dickson Poon China Centre at Oxford University, believes many in Europe now see the potential of these new connections.

“If you look at southern Europe and look at the way Chinese investment in Greece, Bulgaria and Romania is rocketing up, these could be more organically connected by this new initiative. I also think Turkey is important in all of this,” he said.

The China historian and author of China’s War with Japan, 1937-1945: The Struggle for Survival, however, believes there is so far less understanding of the potential benefits in Western Europe.

“If we are talking of the Chancellery in Berlin or the presidential palace in Paris, where there is the distraction of the French election, I think this is the case. There is a certain amount of interest in Brexit Britain about the potential opportunities,” Mitter said.

Tse believes the Belt and Road offers a real opportunity for the UK after it leaves the European Union.

“The UK will gravitate more toward China, as its relationship with Europe is uncertain. From the Chinese investor standpoint there are a lot of potential deals to be made in the UK. With the lower level of the pound, a lot of potential targets are looking pretty reasonable right now,” Tse said.

Sun, the former Ministry of Commerce European department head, believes many who have signed cooperation agreements will be looking for ideas about their own economic development at the Beijing forum.

“China initially learned a lot from the developed world in terms of technology, setting up special economic zones in the late 1970s and being open to ideas,” he said. “It now has 34 years of experience to share with others.”

 

Caixin | Starbucks Sips Up to Beijing’s Elder Care Agenda

Apr 12, 2017 BUSINESS & TECH
By Yang Ge

(Beijing) – The elderly in China are getting a pick-me-up from the world’s biggest coffee chain, with the announcement that Starbucks will extend health insurance to parents of its employees for critical illness.

Analysts said the move should bring positive publicity to Starbucks Coffee Co., in a country where the elderly traditionally command a high degree of respect. The move also comes as Beijing and local officials plead with younger Chinese to take better care of their parents, many of whom survive on modest pensions and live in distant villages from the big cities where their children work.

Starbucks said its new program will provide insurance for up to 10,000 of its employees’ parents if they become critically ill.

It said the new coverage is designed to supplement China’s national health plan, and is an outgrowth of a broader program the company launched in 2010 to provide financial assistance to its workers. An analysis of data from that program showed that 70% of employees were concerned about the health of their parents as they aged.

China is in the midst of overhauling its health system to provide basic care to all of the nation’s more than 1.3 billion people. Many of those have fallen through the cracks in the country’s transformation from a planned economy, where health care was provided by state-run employers, to a market-based system where such coverage isn’t always guaranteed.

“The active participation by the private sector is critical to China’s efforts to further enhance the social security system to support our aging population,” said Jiang Chongguang, deputy secretary-general of the Insurance Society of China. “Starbucks has responded positively to the government’s call to elevate the commercial health insurance industry, our social security network and to promote a ‘healthy China.’”

Starbucks has been one of the stronger advocates of such corporate social responsibility (CSR) in China, alongside other big multinationals like The Coca-Cola Co. and Apple Inc., said Edward Tse a corporate strategist and CEO of Gao Feng Advisory Co. Programs like the latest one from Starbucks are particularly important in China, where big multinationals can sometimes get criticized for generating big sales in the country without giving back through investment and other social contributions.

“This is a great move by Starbucks in China as it sends a strong signal to its China employees that ‘We care,’” said Tse. “Taking care of the elderly is a core value of the Chinese culture. With the employer taking a proactive initiative to help, it sends the right goodwill message to its staff. This will bode well for Starbucks in China and sets a benchmark for other western companies operating in China.”

Tse added that Starbucks is probably also being motivated by recent calls by Beijing and local governments for young people to do more to support their parents, leading some observers to say that filial piety can’t be legislated.

A law passed in 2013 required children to pay frequent visits and ensure the spiritual and financial needs of parents older than 60. The law also allowed parents to sue their children if they are negligent, but did not specify penalties in cases of guilty children. In cases where parents sue, some judges have ordered children to make specified numbers of visits each month and provide support. But experts have pointed out the law and verdicts from ensuing lawsuits could be difficult to enforce.

Shanghai also made related headlines last year when it said children who violated the law could have their credit ratings reduced.

 

How China’s ‘Copycat’ Tech Companies are Now the Ones to Beat

PUBLISHED : Thursday, 30 March, 2017
Edward Tse

Edward Tse and Marco Gervasi say the country, once derided as good only for producing fake products, is today producing leaders in innovation, becoming a model for others to follow

For a long time, Chinese companies have been known for copying market-proven products, brands and business models from the West and adapting them for the local market with only minor modifications. Such a phenomenon is known as shanzhai, a Chinese term thatwas originally used to describe a bandit stronghold outside government control. In today’s slang, it refers to businesses based on fake or pirated products.

Shanzhai has been prevalent in China in recent decades and this has earned China the reputation of being a“copycat nation”. Western media report that China’s preferential policies and regulations to restrict market access, such as the the “Great Firewall” in the internet industry, and the lack of intellectual property protection, give Chinese companies an unfair home advantage to create copies.

Yet, the by-product of such protectionism has been the development of a unique innovation ecosystem. The innovation brought about by China – an evolutionary approach on a mass scale –is different from that in the West, and it is influencing both emerging and developed economies.

While shanzhai is common across a range of products and services, it is particularly prevalent inthe internet sector. Chinese internet companies are often compared to theirWestern counterparts based on the similarity of their business models. For example, Baidu is known as the “Google of China”, Alibaba as the “eBay of China”, and Xiaomi as the “Apple of China”, just to name a few.

What is usually neglected in these comparisons is the underlying context in China that gave birth to these companies and how they have evolved. For example, though Alibaba adopted an eBay-like model in its early years, it has gone through so many changes that, today, its business model can best be described as a combination of the models of at least three internet titans – Google, eBay and Amazon. In fact, the success of many Chinese companies, across sectors, has depended on their ability to evolve and adapt foreign ideas for the mass market. This form of evolution, with continuous micro-innovations, is touching the lives of hundreds of millions.

Another example is Tencent ,which launched WeChat in 2011, a simple instant messenger mobile application that gradually evolved into a global “super app”, with one-stop hybrid features of Western models such as WhatsApp, Facebook,Instagram, Skype, Uber, Tinder and others. Today, WeChat has 846 million monthly active users worldwide.

Largely due to the success of WeChat, Tencent expanded into other innovative business models in social networking and mobile gaming. Tencent now leads in the world in terms of mobil eapp monetisation. The recent developments of Facebook Messenger, WhatsApp and Kik Messenger have shown a clear reference of WeChat’s strategy and functionalities.

The innovation brought about by China – an evolutionary approach on a mass scale – is different from that in the West

Besides Tencent, there are also a number of areas where Chinese companies are ahead of the rest of the world, such as in the emerging industries of internet finance, new social media,artificial intelligence, virtual reality, augmented reality and intelligent transport. Justin Kan, founder of Twitch.tv, a US-based video game broadcasting platform that has been acquired by Amazon, said: “Like everybody wants to know what is happening in Silicon Valley, I think we should also be aware of innovations coming from China. You will begin to see a lot of Chinese innovations diffusing into the US.”

For the first time, Western tech models are being challenged by those from China. And people are beginning to recognise this development. At a technology conference held last year in Beijing, Uber’s founder and CEO Travis Kalanick predicted that in“next five years, there will be more innovation, more invention, more entrepreneurship happening in China, happening in Beijing than in Silicon Valley”.

Last year, Baidu, Huawei,Tencent, Didi Chuxing and Alibaba (which also owns the South China Morning Post) were named the “50 Smartest Companies” by MIT’s Technology Review, alongside Tesla, Nvidia, SpaceX, Facebookand others. DJI and Ehang, two Chinese drone makers, have become the world’s leading innovators in unmanned aerial vehicles.

In the post-shanzhai era, China will see a proliferation of business models and innovations. Some companies in the rest of the world are beginning to “reference” Chinese companies, especially in the tech sector. We call this phenomenon “reverse shanzhai”.

Tokopedia, Indonesia’s No 1e-commerce platform, markets itself as the Taobao of Indonesia. “I really like how visionary Jack Ma is,” said William Tanuwijaya, Tokopedia’s co-founder, who adopted Alibaba’s business model after research.

A worker at Indian e-commerce company Snapdeal makes a call to acustomer before delivering a package in Ahmedabad, India, in 2015. Beforelaunching Snapdeal, Kunal Bahl and his partner Rohit Bansal visited China in2011 and noticed that the Indian market had more in common with the Chinesemarket than with the market in the US. Photo: Reuters

Snapdeal, dubbed the “Alibaba of India”, is a top e-commerce company in the country. Before launching their platform, Kunal Bahl and his partner Rohit Bansal visited China in 2011 and noticed that the Indian market had more in common with the Chinese market than with the market in the US. They realised Alibaba’s platform strategy would solve India’s biggest issue: aggregating India’s millions of small brands and sellers.

The same happened in Nigeria, where e-commerce website Konga.com was originally launched as a local Amazon at the beginning of 2014, only to morph a few months later into the “Alibaba of Africa”. And this trend is not limited to e-commerce. Indian entrepreneur VIjayShekar Sharma, an admirer of Jack Ma, modelled his company Paytm after Alibaba.The company, seen as the “Alipay of ­India”, has raised fresh funding from Ant Financial.

Stationless bike-sharing is the latest export of China-originated innovation. Mobike, the leading player, has gone from zero to 23 Chinese cities in 10 months, recording 200 million ridessince its launch in April 2016. It is now expanding into overseas markets.Others, such as oBike and LimeBike, have already been rolled out in Singapore and Silicon Valley respectively.

In some cases, Chinese companies enter new overseas markets by making strategic investments in foreign companies. For example, Alibaba invested in Singapore-based e-commerce leader Lazada to build an “Alibaba of Southeast Asia”. Didi Chuxing also invested in Grab, the leading ride-hailing platform in Southeast Asia.

Malaysia’s Prime Minister Najib Razak (third from left) and Alibaba Group founder and executive chairman Jack Ma (centre) in Kuala Lumpur this March, at the launch of the country’s digital free trade zone. Photo: AFP

Furthermore, Jack Ma has been appointed a key adviser to the Malaysian and Indonesian governments for theirdigital economy aspirations. This is a significant achievement as it provesthat China is becoming the benchmark, rather than the follower.

Yet, “reverse shanzhai” is not simply “copy and paste”. The recent struggles of the likes of Xiaomi and LeEco have shown that some Chinese companies still lack experience to sustain their business beyond borders. Often, one cannot simply transfer Chinese business models to another market without any adaptation. As Tokopedia’s Tanuwijaya putit: “Chinese e-commerce is a source of inspiration, but it is not a format that can be simply imposed on any market. You have to grow it from within.”

The trend of “reverse shanzhai”will be increasingly prevalent internationally, as China’s innovation and entrepreneurship continue to thrive.

The world should take notice.

Edward Tse is founder and CEO of Gao Feng Advisory Company and author of China’s Disruptors.

Marco Gervasi is executive director of Red Synergy Business Consulting and the author of East Commerce.

 

Trump Threats Push China’s Top SUV Maker to Review Mexico Plant

Bloomberg News, March 9, 2017

China’s biggest SUV maker is reconsidering its plan to build an auto plant in Mexico that would have made its best-selling vehicles for the U.S. market, joining a growing list of global automakers reviewing investment plans after tax threats by President Donald Trump.

Great Wall Motor Co., ltd by billionaire Chairman Wei Jianjun, may choose the U.S. instead for its first North American plant, General Manager Wang Fengying said in an interview. The company has a research center in Los Angeles and will accelerate preparations to develop U.S.-certified versions of its Haval SUVs for sale by 2020, Wang said.

“Your decisions should always adapt to the dynamic changes,” said Wang, a delegate at this week’s National People’s Congress in Beijing. There used to be many carmakers building plants in Mexico but Trump’s changes have affected their decision making, Wang said.

Trump has promised to renegotiate the North American Free Trade Agreement and criticized auto companies including General Motors Co. and Toyota Motor Corp. for shifting production south of the border. Under threats of punitive import duties, Ford Motor Co. and Japanese auto-parts maker Nisshinbo Holdings Inc. said they’ll scrap or reconsider new plants in Mexico.

Great Wall, based in Baoding, Hebei province, is one of several Chinese automakers hoping to break into the U.S. with their own brands. Guangzhou Automobile Group Co. plans to start exporting its Trumpchi models to the U.S. from next year, while Warren Buffett-backed BYD Co. and Volvo Cars owner Zhejiang Geely Holding Group Co. have also declared American ambitions.

Lowering Risks

“Building in the U.S. is a hedge against a potential future trade barrier with Mexico,” said Bill Russo, managing director of Gao Feng Advisory Co. and a former head of Fiat Chrysler Automobiles NV’s Chrysler unit in China. “It would add cost to producing the vehicles but it reduces the potential tax risk.”

For more than 20 years, China has asked foreign carmakers wanting to set up manufacturing plants in its country to do so through joint ventures with domestic auto companies, a move that allowed many Chinese manufacturers to gain technology and eventually set up their own brands. Local marques like Geely, Trumpchi and Haval now account for almost half the Chinese market.

The Chinese carmakers are trying to reverse the tide and sell their own models to Europe and the U.S., just as the Republican-led House of Representatives is considering implementing a border-adjustment tax on companies’ imports but not their exports.

The proposals by Trump and lawmakers would raise the average cost of a car in the U.S. by about $3,300 and could even cost American jobs because carmakers source parts from around the world, Munich-based consultant Roland Berger GmbH. said in a presentation on March 8. The price increases would lead to about $34.6 billion in higher costs to consumers, assuming U.S. sales at the 17.5 million level recorded in 2016, the Center for Automotive Research said in a report Thursday.

Local Sales

In China, Great Wall is enjoying a sales surge as Chinese drivers embrace SUVs, despite government efforts to curb fuel consumption and emissions. The company’s domestic sales rose 26 percent last year to 1.1 million units, putting it ahead of Japan’s Mitsubishi Motors Corp. in global vehicle production. Abroad, though, it’s had less success, selling only 17,379 units last year, mainly in countries such as Russia, South Africa, Bulgaria and Australia.

The company is exploring opportunities in developed markets and wants to make the Haval brand global by 2020, said Wang. The company markets its SUVs in China as offering good value for money and prints ads with the title “See. Drive. Believe.” While overseas it also uses pictures of its vehicles driving in the off-road Dakar rally competition.

More than four out of every five vehicles Great Wall sells is an SUV and the company is under pressure at home as China tries to clean up the choking air in its biggest cities. The government has proposed rules that would require automakers to improve fuel economy and produce a higher proportion of so-called new-energy vehicles such as battery-powered cars. Wang said Great Wall plans to invest at least 60 billion yuan ($8.7 billion) in developing new-energy vehicles by 2025, without giving details on how the investment would be funded.