Spanish business investment in China from the perspective of the consulting firm Garrigues

Abstract

Purpose -This article aims to analyse the reasons for Spanish companies to invest in China and the factors that influence the success or failure of the venture during the implementation process.Design/methodology/approach -This paper is based on an interview held with the two partners of the Garrigues office in Shanghai, Francisco Soler and Manuel Torres. Francisco Soler was responsible for opening and subsequently managing the office from 2005 through to August 2011, when he handed over the reins to Manuel Torres.Findings -The main reason for investing in China is its market. It is worth mentioning here that there has been a paradigm shift whereby China has gone from being the ''world's factory'' to the ''world's market'', not just because of its size but also because of the dizzying speed at which it continues to grow. To minimise the risks of investing in China, the interviewees pointed out the crucial importance of the company committing a significant amount of all kinds of resources to the venture. They also maintain that the investing company should ensure that the people responsible for the project are fully committed to the company and completely familiar with its operations and corporate culture.Originality/value -The value of this study lies in contrasting the practical viewpoint of Garrigues legal consulting firm with the existing literature on the topics discussed in the interview: the reasons why companies invest in China, and the factors that lead to their success or failure.

Entry modes and barriers to internationalisation in China: an overview of management consulting firms

“…This reform has enabled China be one of the world’s leading economies three decades after because it has been the main recipient of foreign direct investment (FDI) since 2009 according to the World Bank data (Jiang et al , 2013). Therefore, there are many companies that have invested in this Asian country and many who continue to do so, first because it was the factory of the world and, at present, because it has become the market of the world (Banchieri et al , 2012).…”