Harvard China Forum focuses on Chinese firms' expansion

The two-day 15th Harvard China Forum concluded here on Sunday, with Chinese and U.S. business leaders and scholars discussing the opportunities and challenges Chinese companies face while expanding overseas.

Anthony Leung, former financial secretary of China's Hong Kong Special Administrative Region (HKSAR) and now chairman of Blackstone Group (Greater China), said Saturday Chinese companies need to be fully prepared for some key obstacles when expanding abroad.

"Chinese companies, especially those state-owned companies, were always questioned about the source of their investment," Leung said. "They tend to be judged through colored glasses."

Leung also pointed out some challenges coming from within the structure of the companies themselves, such as the lack of experienced international management personnel and proper incentive mechanisms.

Meanwhile, Chinese banks need to provide more support to those companies during their overseas expansion, Leung said.

"Chinese banks have secured three spots in the world's top-ten list, but frankly speaking, their overseas abilities are very limited," Leung said.

Edward Zeng, founding partner of China Bridge Capital, held a similar view to Liang's. He said there is an "invisible Great Wall," or non-economic factors, which keep Chinese companies from expanding globally.

In order to overcome this barrier, Zeng suggested Chinese companies make sure they have the right research team to aim for the right target and timing in the pre-merge phase and the right integration team to deal with cultural differences and work out an incentive package in the post-merge phase.

Despite the challenges mentioned, Lawrence Tian, founder and chairman of the China Entrepreneurs Forum, believed the number of Chinese mergers and the amount of money invested will rise significantly in the coming years.

"Real estate will be the hottest sector for Chinese companies seeking cross-border investment," Tian said. "Chinese investment has also been surging in U.S. manufacturing, biopharmaceuticals, finance and green energy sectors. I think the momentum will continue to pick up."

Founded in 1998, the annual Harvard China Forum is one of the largest conferences that focus on China in North America. It attracts high-profile guests and speakers as well as hundreds of participants from across the world every year.