Inside fDi: Are China’s brand plans coming to fruition?

It was inevitable that China’s ascendance as a global power would eventually translate into an enhanced national brand. A study by consultancy Nation Brands confirms that Brand China is on the rise while Brand USA is in decline.

Nation brands and FDI are intrinsically linked. A new breed of globally minded Chinese companies, led by tech players such as Huawei, have led the charge of international expansion and become prolific generators of greenfield FDI around the world – in the process, further raising the prestige of Brand China. 

Chinese outbound investment is highly sought after – and fiercely fought for – in nearly every country on the globe now, even despite suspicions in some corners over Chinese government motives behind the overseas push and restrictions placed by some countries on Chinese investment in ‘sensitive’ sectors. Though inbound greenfield FDI into China has slowed down recently, the country’s preeminent importance as a business destination cannot be denied.

China’s rise up the Nation Brands 2017 ranks has it knocking on the door of the top placed US – a country whose international image has taken a battering thanks to the bombastic, combative current occupant of the White House. How well Brand USA can withstand Donald Trump’s unique take on diplomacy is uncertain, but the US’s chaotic leadership has not yet dented its appeal to foreign investors. Many companies welcome Mr Trump’s proposed plans to cut taxes and regulation and seem prepared to ignore the rhetoric and weekly Twitter wars. Indeed, the initial investor reaction to Mr Trump’s inauguration was positive and FDI levels are trending well for the US so far in 2017.

The same cannot be said for investor reaction to political upheavals in the US’s closest ally nation. The UK’s decision to leave the EU and the uncertainty this has unleashed has done some short-term damage to the UK’s once-enviable FDI position, if greenfield investment figures are anything to go by. London remains atop international financial centre rankings but rivals are working overtime now to try to dethrone it, especially European centres. The value of its national brand has not been negatively impacted by Brexit, according to the 2017 rankings; but whether the UK maintains its broadly favourable nation brand will depend on how successful it is at managing the delicacies of these evolving crossborder relationships and whether it can parlay Brexit into an opportunity to pursue the 'global Britain' of many Brexiteers’ imaginations. Only time will tell on this score. 

Courtney Fingar is editor-in-chief of fDi Magazine. E-mail: courtney.fingar@ft.com