To develop in other countries, one must have an in-depth understanding and comprehensive grasp of the country’s national conditions and market. The Japanese business community adheres to its usual prudent stance when investing in the United States. It conducts very serious market research before making investment decisions and the review process is rigorous. Because corresponding measures have been formulated for existing risks and possible problems before making a decision, once the decision is made, the execution is very quick and smooth. In the late 1980s, I published a large number of articles in Japanese newspapers and periodicals, introducing the U.S. economy, society and financial markets, and guiding Japan to enter the U.S. market. I am also often invited to speak to Japanese investors, which is very popular.
Anything done in the United States will inevitably face opposition, and the same is true for Japan's investment in the United States. Mitsubishi Estate and its parent company Mitsubishi Corporation, which acquired Rockefeller Center, and Sony Entertainment and its parent company Sony, which entered Hollywood and acquired Columbia Pictures, are all members of the Japan Club and were companies I directly managed during my time at Fuji Bank. These two acquisitions and the large number of items I acquired on behalf of Japanese companies inevitably aroused strong opposition, but these did not affect the acquisition decision at all. Because the United States is billed as a legal country with free speech, no one can stop the transaction except the parties and the judge. The government will not and has no right to interfere with normal commercial activities.
Currently, many Chinese companies only focus on "how to go global." As for how to gain a foothold and successfully develop after going abroad, they rarely consider the resistance and opposition they will face before making decisions. Since we are not fully able to withstand the opposition that will inevitably arise when we go abroad, we will retreat on our own at the first sign of trouble. As a result, some investment projects were hastily canceled, stopped midway, or fell into a dilemma. Going global will not be smooth sailing. We must have enough understanding of the inevitable opposition and market risks and formulate corresponding preventive measures. Investing always comes with risks. During the Asian financial crisis that swept the world, I was responsible for the brunt of risk management for dozens of multinational companies at Fuji Bank. Although most companies were saved, a few bad companies had to go bankrupt. I directly participated in the handling of the bankruptcy of three of the world's largest companies, including Yamaichi Securities, the world's fourth largest investment bank. However, it is worth mentioning that Japan’s economic depression at that time originated from the structural problems of the Japanese economy itself, not from the failure of investment in the United States. On the contrary, a large number of Japanese companies were saved thanks to the good performance of their American subsidiaries. Even though the three companies went bankrupt, their US subsidiaries have continued to make huge profits. Even after the parent company went bankrupt, the U.S. subsidiary continued to generate revenue, which reduced our debt losses.
Understanding the laws of market changes and economic fluctuations can turn risks into opportunities. In the mid-1990s, the U.S. economy was in recession, and some Japanese companies fell into panic and sold off investment properties. Among them, Rockefeller Center is on sale at half price. Most Japanese companies have not followed suit. The Takenaka Group that I represent not only did not sell off U.S. assets, but also took advantage of the dip to enter the market and increased its investment in the United States. ORIX is the most typical company. At this time, it aggressively entered the U.S. market and became unique in the Japanese financial industry. I joined the company for a short period of time and was in charge of China's investment and financing business. At that time, I also recommended to all walks of life a great opportunity to enter the market at a low price. Many Chinese and some Chinese investors also invested heavily in American real estate and made huge profits. Among them, the value of several properties purchased by Chinese investors has doubled every year at an annual growth rate of more than 100%, plus huge profits from the operation of the buildings.
Therefore, before China makes the decision to go global, it should focus on research, strictly review the risks, challenges and countermeasures after going global, and scientifically conduct a comprehensive and all-round feasibility demonstration. Not only should we stay firm amid market changes and fluctuations, but we should also enhance our adaptability, turn risks into opportunities, and ensure higher returns on overseas investments amid turmoil. The Japanese have a tradition of "keeping together", which is even more obvious when investing overseas. On behalf of Japan's Takenaka Group, I invested and acquired a large number of projects in the United States. Among them, the New York Japan Club Building, controlled by the Takenaka Group, is Japan's largest center overseas. Its members include all large Japanese companies, as well as Japan's three ambassadors to the United States, the United Nations and New York. It is also a member of the Nippon Keidanren and the Japan Chamber of Commerce and Industry. External window. The center is a command center for guiding Japanese investment in the United States and an important place for exchanges between Japanese and American political and economic leaders.
The Japan Club Building regularly holds various cultural and sports exchange activities to deepen friendly relations with local people and integrate into mainstream society. Various lectures and exhibitions such as tea ceremony, flower arrangement, calligraphy, and Japanese language are also held to promote Japanese culture. The Japan Club regularly holds current affairs briefings to provide information and resolve emergencies. In response to the problems faced by Japan in doing business in the United States, we will strengthen communication with the U.S. government through the Japanese government and the embassy and consulates in the United States and formulate corresponding measures. In particular, in response to the complexity of American society, the bilateral investment protection agreement signed between Japan and the United States has enabled Japanese companies to do business in the United States smoothly. For example, there is no visa exemption for personnel exchanges between Japan and the United States, L visas are provided for multinational company managers and professionals and their families to come to the United States and can be directly transferred to green cards, and preferential tax policies are formulated. In particular, the special policies of corporate management ensure that Japanese-owned enterprises are absolutely controlled by Japanese people and are exempt from US federal and local regulations.
When Chinese-funded enterprises conduct overseas business, they mostly operate independently and rarely interact with each other. Once a problem occurs, there is nothing you can do quickly and without help. At the same time, they face great difficulties in terms of visas to the United States, taxation, company management, etc., and cannot even guarantee the basic operation of the invested enterprises.
Therefore, as China goes global, it should improve mechanisms and strengthen management and services. Domestic authorities and embassies and consulates stationed abroad should establish and improve overseas Chinese-funded associations, carry out exchange activities with host countries in various fields, and provide guidance and services to overseas enterprises. Work closely with the host country’s government to improve the overseas environment for Chinese businessmen, improve regulations, improve bilateral and multilateral investment protection mechanisms, and ensure the smooth development of Chinese-funded enterprises’ overseas business. When Japan first entered the United States, it made a large-scale acquisition of Rockefeller Center and entered Hollywood, which caused a sensation around the world and aroused strong anti-Japanese sentiment among the American people. Japan has withstood the pressure and will not give up business opportunities because of any opposition or resistance. On the other hand, in order to reduce unnecessary friction and noise, change the way of doing business and start to keep a low profile. Although Columbia Pictures was acquired in 1989, Sony Entertainment's name did not dare to appear in a small line of text below the title until 1993. In 1992, we re-registered the century-old Japan Club Building under the American name of "Plaza 57". Although the Japanese companies I represent and the Japanese companies I supervise have acquired more large-scale projects, they are very low-key and not announced to the public. As a result, although many famous buildings have been acquired by Japan, the identities of their owners have not yet been exposed.
Currently, some Chinese companies are making a big splash in order to go global. However, even before they are completed, they have caused a stir in the city, attracting resentment from the media, local society and the public. Competitors and related industries took advantage of the opportunity to suppress it, causing the plan to be frustrated. Over the past decade, many domestic financial institutions and investors have wanted to establish bases like the Japan Club Building in New York. There was a lot of publicity in the Chinese and foreign media in advance, and banners such as "China Center" were used to build momentum, but the result was nothing. The Japanese government and embassies and consulates abroad play an important role in guiding and helping Japanese companies expand overseas business, but they are mainly limited to inter-governmental cooperation matters and the formulation of regulations between the two countries. Specific corporate investment and business operations are entirely conducted by the companies themselves, and the Japanese government will not intervene. The United States is a market economy country dominated by private enterprises. The concept of free and fair competition does not allow the government to interfere with normal corporate behavior. If business practices are tainted with official colors, things will go wrong. For example, when the Japan Club expands and opens, the Japanese Ministry of Foreign Affairs plans to rent the entrance window portion of the building as an external publicity agency. When the news spread, many Americans came to blackmail them. Among them, a woman who opened a cultural relics shop nearby claimed that she also wanted to rent this place, otherwise she would have to pay a fee. If the demands were not met, she would expose the matter to the major media outlets that captured the news. As a result, we had to abandon this plan and rented it to a private jeweler, and no one came to make trouble again.
Many Chinese companies come to the United States to find congressmen, governors, mayors, etc. through official channels. And some lobbyists even took advantage of the situation and profited from it. Due to the intervention of politicians, business practices have become politicized and have fallen into fierce partisan fights, triggering backlash from the media, society, and related industries. Some normal mergers and acquisitions have become the focus of attention through negative media hype, lobbying by relevant industries, and the involvement of politicians and lobbyists. It was originally a simple real estate investment project, but it was promoted to be an "overseas Chinese political, economic and cultural center"; an ordinary corporate investment was promoted to the outside world as "part of China's global energy strategy." Money was spent but things went wrong.
Therefore, when Chinese companies come to the United States for development, they must avoid politicians, seek partners with strong and reputable industries, and make full use of local resources and funds. The American industry pursues a win-win situation and is willing to provide strong financial support and comprehensive services for overseas companies to develop in the United States. I am currently working at Citibank in the United States, providing funds to hundreds of entrepreneurs in the United States, including Chinese Americans, every year, and successfully realizing their dreams. Japan rose from the ashes of defeat and used its own advantages to go global and dominate many industries, which China can learn from.
Relying on the huge foreign exchange savings formed by rapid economic growth and the appreciation of the yen, Japan quickly dominated the world's financial markets. Fuji Bank, where I worked, suddenly became the largest bank in the world, and Japanese banks dominated the top ten banks in the world. Since foreign banks have high costs in the retail industry and cannot compete with local banks in terms of customer relations and supervision, Japanese banks in the United States have concentrated on large investment banking businesses with advantages.
Many Japanese companies under my supervision have grown into world leaders in various industries in their external development, including Toyota in the automobile industry, Sony in the electronics industry, Nomura Securities in the investment bank, Mitsui & Co., Ltd. and Mitsubishi Corporation in the business world, and financial institutions. FCMC of futures, etc. Of course, Japan also failed in its industrial selection when investing in the United States. For example, in the case of Sony's acquisition of Columbia Pictures, due to the huge differences in foreign cultures and lack of experience in entertainment industry management in the United States, it resulted in huge losses of billions of dollars.
Chinese companies have begun to emerge in the international market in industries such as computers and home appliances. China's current strong foreign exchange savings and the gradual appreciation of the renminbi have given China the ability to gradually become a financial power. With the improvement of professional level, competitiveness and management efficiency, China's competitiveness and status in the international financial community will also accelerate. U.S. real estate is a profit-making industry with low risks, high returns, few industrial policy restrictions, low technical requirements, convenient financing, avoidance of labor disputes, and easy management. It is also an industry that must be entered before going global and developing other industries.
Foreign investors, including many Chinese and Chinese investors, are most likely to achieve great success in U.S. real estate investment. At present, China has many advantages in going global. Corresponding industrial development plans and corresponding support policies should be formulated to promote Chinese enterprises to establish a foothold in the international market.