Premier Li Keqiang delivered a speech to 1,000 business leaders at the World Economic Forum last week with the message that the China market is still open to foreign investors, according to an article in Bloomberg Businessweek. However, FSG’s Senior Analyst for China says executives should stay cautious.
“Premier Li’s statement at a recent World Economic Forum meeting suggests that Chinese leaders are cognizant of how their aggressive antimonopoly campaign is impacting multinational sentiment. Even so, executives with operations in China should remain cautious about recent policy movements in Beijing and prepare an effective government engagement strategy to mitigate the associated risks,” says Shailene Zhu.
Colombia‘s economy grew 4.3% on construction spending this quarter, showing expansion at a healthy pace despite less overall growth than expected, according to the Wall Street Journal.
“Construction spending will not only drive Colombia’s economy through the medium term, but projects such as the 4G highway network will also help Colombia overcome some of its logistical bottlenecks. Multinationals set to benefit from increased connectivity, and should evaluate how improved logistics and transportation infrastructure will affect their overall cost structure in Colombia,” says Gabriela Mallory, senior analyst for Latin America.
Russia is threatening to cap western car and clothing imports following a new round of EU sanctions that seek to block the country’s largest oil companies from raising money on European capital markets, according to The Financial Times. FSG’s Head of Research for Europe, Middle East and Africa says executives should prepare for a Russian backlash.
“The likelihood of Russian trade retaliation is high and MNCs should be prepared for the repercussions this could have for their business and customers. A car import ban could be particularly damaging not only for Western, but also for Central European markets with large automotive sectors such as Hungary, Slovakia, Poland, Romania, etc.,” says Martina Bozadzhieva.
On the global frontier, Mumbai-based transnational pharmaceutical company Lupin has entered into a long-term partnership with Merck Serono with the goal of expanding in emerging markets.
FSG’s Associate Practice Leader for Global Analytics Sam Osborn says the pact is “a great example of how partnering with an emerging-market based organization can be a mutually beneficial relationship for the multinational and local company.”