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In ADG’s 18 years helping Western technology companies grow in China, 2018 was certainly an unusual year. Today’s environment is the culmination of years of China’s economic growth and policies that by their sheer success have not only gotten the world’s attention but led to fears, frustration and disruption globally. 2018 was the year the world transitioned from debating the validity of the China model to understanding what it really means to their future. One thing is clear, there is no returning to the old-world order and with change inevitably comes concern and uncertainty. Thus far the world has handled it relatively poorly leading to today’s new normal with trade wars, protectionism, xenophobia and sometimes overzealous concerns. Over confidence on all sides has receded and we are now at a new place.

Fortunately, we see much opportunity and reasons for optimism. Among the business and diplomatic community in Beijing many have shared with us how the turmoil is presenting a unique opportunity for the world’s top superpowers to reset their relationship in a more balanced way. Previously, what may have taken years of careful negotiations and baby steps to drive meaningful change has been replaced with the expectation that everything is on the table for renegotiation and progress will be quicker and more transformative as both sides seek to redefine their relationships to reflect the new reality.

On a daily basis we're asked how the current climate is affecting ADG and our Western technology clients. To some surprise, ADG had a strong year of growth and most of our clients are seeing business as usual or even improvements. While there are certainly areas that are being impacted it is clear that China’s outward-bound trajectory has just begun and this trend will lead to continued growth in cross border partnerships for the foreseeable future. We also see positive changes for Western technology companies that are facing Chinese competitors in global markets and expect these systemic and geopolitical changes to continue which will provide some relief for Western companies that have seen their competitive advantages beginning to erode.
 

Throughout 2018, we continued developing commercial and strategic partnerships for our clients with many of China’s leading companies – such as Xiaomi, Alibaba, Baidu, Didi, Lenovo, Digital China, SF Express, Huawei, Vivo, Tencent, Toutiao, Oppo, Sunny, and many others. We are seeing strong demand in emerging technology sectors including enterprise software and SaaS (yes, foreign companies have a place in China SaaS), connected devices, cloud and big data, everything AI, robotics, and connected cars and anything 5G related.

Cooperation between the West and China is important for the world as it improves innovation, reduces costs for consumers and enterprises, reduces the risks of conflict, and increases the standards of living for the world’s citizens. We’re happy to be part of this and to be working with top VCs and their portfolio companies to build and execute successful China strategies. Despite all of the changing winds and uncertainty in the global economy, the underlying trend is that China will continue to emerge and with it the need for partnerships between its burgeoning technology leaders and the rest of the world.

 

Happy China New Year of the Pig!

 

The ADG China Team

 

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Alliance Development Group

Gateway Plaza 18 Xiaguangli North, East Third Ring Road, Beijing, China


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