A much more complex option

Investing in a foreign country is much more complex than investing domestically. Nearly every area of operation and practice will be different in a foreign environment, fundamentally because of the differences between cultures. Culture shapes the behaviour of human beings, hence their decision-making processes, operational patterns, problem-solving, thinking process and so on. Therefore, investments into culturally different environments become highly dependent on the local situation for their success or failure.

China has the largest cultural gap between it and any country among Western nations. Investing in China is often a highly controversial set of contradictions. On one hand, China is very attractive with its 1.3 billion (official) population. On the other, most Western companies know very little about these 1.3 billion consumers. At the same time, the evidence of low prices of goods and labour misleads organisations into thinking that investments can be made at low monetary cost. However, they do not know that investments are often required on a large scale; and the timeframe for any returns is often much longer because of a lack of local market knowledge.

Examples in this chapter will demonstrate this and also what difference it makes when bicultural personnel are used.

Historical overview of foreign direct investment

Organisations pursue foreign direct investment (FDI) generally to seek growth and expansion, when their domestic or nearby markets are small, saturated, crowded and/or limited. Specific foreign markets have the potential to produce a higher rate of return, in the short or long term. For Australia in particular, with its entire market size of about 21 million consumers, pursuing international markets is obviously attractive.

The history of FDI goes back much further than recent years and commercial globalisation. The initial British involvement in continental Europe began as early as 1029–1087 with holdings in France, and by 1860 Britain was the world’s largest trading nation. The Dutch had established the Dutch East Indies Company in 1602 in Indonesia to pursue trade and become a dominant European power, while the Portuguese had established a share of world trade and business from as early as 1500 in Brazil.

Investments have been in many different forms, direct and indirect, jointly and separately. But investing in an environment of foreign culture has never been an easy task. Historically, nations have sometimes refused trade initiatives mostly for reasons of protecting national interests. Americans in 1837 and 1846 tried to trade with Japan but were unsuccessful and a British and Chinese trade dispute led to the Opium War in 1839.

The modern challenge of China

Being a huge market of rapidly growing prosperity, China is attractive to multinational corporations around the world. In 2006 it was the second-largest recipient of FDI in the world, according to CIA statistics. For Australia, according to the Department of Foreign Affairs and Trade, China is now its largest partner in two-way trade.

The economic importance of China to the world, including Australia, is clearly shown by rapidly increasing trade figures. China has been Australia’s largest trading partner since 2007, according to the Australian Bureau of Statistics. Total trade that year grew 15 per cent to $58 billion. Australia’s exports of goods to China rose 17 per cent to $23.8 billion.

Companies from around the world have been pursuing the Chinese market in a more focused manner since the economic reforms of 1978. Inward investment in China in 2005 and 2006 was around $70 billion a year (Davies 2007). However, only a very small number of firms are meeting profitability projections and many others have made large capital write-downs. Most US and European multinational corporations have never made a profit in China, according to Haley and Haley (2006).

The first business challenge for foreign businesses in China is to examine the investment strategies. Why are companies interested in investing overseas, especially when the cultural differences are so difficult to overcome? Apart from the cultural hurdles, there are general issues such as availability and cost of land and raw material; the cost and quality of labour; capital; efficiency of production; access to supporting industries and technology; closeness to existing and potential markets; and the possibility of tax incentives and/or other local benefits. Arbitrage between these factors is a major motivation for organisations to pursue larger profit margins.

These factors can be grouped to determine the homogeneity of countries where investments are made in order to assist the decision-making process (Zhang 2000; Zhang and Zhang 2001). The grouping exercise is one way of helping to improve the chances of success, because similarities usually mean a higher success rate. This assumption generally works better when market similarity exists and the gap in differences is small. For a market like China, this general rule does not work because market differences are mainly determined by cultural differences.

Three waves of investment

Foreign investments into China came in three major waves. The first investment fever occurred in the late 1980s. After the 1978 open-door policy, only the curious and brave companies went to China. I recall translating the joint venture law for a young Canadian entrepreneur who was anticipating selling his motorbike to enable him to invest in China.

‘The Law of the People’s Republic of China on Chinese-Foreign Joint Ventures’ was adopted by the Second Session of the Fifth National People’s Congress on July 1, 1979 and was promulgated and became effective on July 8. Although the Chinese Government did allow wholly foreign-owned enterprises under this legislation, it actively promoted the concept of joint ventures, which was reflected in the title of the legislation (Chu 1986). Foreign companies were often under the impression that only joint ventures were permissible for foreign direct investment. Foster’s, the world’s largest beverage company, was a case in point when it invested in China in the early 1990s.

Between 1979 and 1986, there were 7978 enterprises established using foreign investments. Of those, 7798 were joint ventures and only 180 were wholly owned foreign enterprises (Chu 1986). Through joint ventures, China hoped to not only obtain capital investment but also gain access to Western management skills (which was seen by the Government, and still is today, as of major importance) and new technologies.

In joint ventures it was typical for Chinese firms, especially the rundown ones, to provide the land, existing equipment (often out of date) and employees as part of the deal. Foreign investors typically brought in investment capital, new technology and equipment, and Western management systems and philosophy. Through this process, many outdated state enterprises were upgraded and their efficiency dramatically increased, bringing them much closer to international standards.

The brewing industry was a typical example. In the early 1990s China had 850 breweries (Major 2001), a large number of them unsustainable, and by 2004–2005 only around 250 had survived.

By 2008, the benefit of China’s approach could be seen. It now has the world’s largest foreign currency reserves and no longer requires huge amounts of foreign direct investment. In 2006, major changes were made to the original 1979 law governing Chinese–foreign joint ventures. The previous tax-free incentive of three years for joint ventures no longer exists. The so-called ‘two into one’ tax system, which is a straightforward 25 per cent tax, applies to all organisations. This change means more uncertainty for foreign investors, but reflects the current attitude of the Government towards foreign direct investment.

In 2010, the Chinese Government was using the same approach to establish a hitherto non-existent age-care industry. China’s population has an increasing percentage of aged people. The Government tells developers, local and foreign, that it does not have the capital funds needed but is happy to support the establishment of a healthcare industry by providing very cheap land. Depending on the specific local government, incentives include tax breaks, reduction of land prices and even free land. In Beijing the facilities are subsidised on the basis of per resident.

Companies have been searching for the correct form of foreign direct investment, mainly because the success rate in general of these investments has not been high (Breth and White 2002; Bruton and Ahlstrom 2003). Foreign direct investment is gaining in popularity, especially on the back of the third Chinese investment wave, which is one of the largest, and so far appears to be producing better results than the first two.

Assessing methods of entry

Books on international business theory always suggest methods of entry should follow a sequence in all foreign investment activities. The sequence involves exporting, international licensing, international franchising, specialised models, and foreign direct investment. Graduate and executive training programs are inclined to include exercises that follow these sequences. However, in practice, other elements such as the companies’ financial backing, type of industries, existing business activities, and/or competitors, should also be considered. This is similar to the grouping exercise that allows more certainty. For executives, this is a more tangible way of planning and assessing markets before entry.

More importantly, in this book, the Chinese market is regarded as the number one priority. Rather than considering these options as a sequence of steps, the most important element for China is its cultural difference. Strategies without the input of cultural differences are doomed to fail. The following three major factors (Breth and White 2002) are specifically related to decision-making criteria when entering the Chinese market, based on cultural differences compared to the Australian market:

Because of the cheap labour, and sometimes raw material as well, companies form the perception that investing in the Chinese market is low cost. This often leads to insufficient capital, which causes projects to be discontinued or additional budgets having to be sourced. The false impression is caused by an imbalance of income and price distribution. Although the earnings of a waitress can be 20 per cent less than in Australia, a cup of coffee may cost two or three times more.

The truth is, on two levels, China can be a costly place for investments: the length of time it takes to do business with Chinese and the scale of investment required.

Because Chinese do business on the basis of relationships and trust, it takes some time to build a workable relationship. Generally a minimum of 18 months to two years is required for people starting on their own. A bicultural consultant who speaks the language and understands the culture can greatly reduce the time to six to nine months, allowing for trips back and forth to visit people in China.

As a bicultural consultant myself, I have worked with clients for whom I was able to secure contracts on the first trip but that type of success is usually based on an existing personal relationship before an important visit. Generally, when I work with clients on overseas visits to China, I improve the efficiency by between 200 and 300 per cent.

The scale of operations in China often surprises Westerners, especially Australians coming from a country of 22 million people. It can take some time to get used to dealing with the zeros relating to numbers, such as those for employees, products, orders, etc. The Chinese numbering system does not translate easily with the English system, as in thousand, ten thousand, one hundred thousand. Chinese has a separate character for its first four digits (up to 10,000), then starts counting by ten thousand, one hundred ten thousand, a thousand hundred ten thousand, and so on. When the number reaches ten million a new and totally different character is introduced. It is easy in a translation to lose or add a zero by mistake.

The degree of control

The degree of control is an important consideration when companies decide on the form of market entry into China. A fully owned subsidiary means companies have more say in final decision-making, whereas a joint venture can cause difficulties in the managing process. But the real issues are how the corporate structure affects operations and whether companies can manage in China on their own.

The attitude of a company towards foreign investment can also affect their investment policies. For example, in the first wave of China investment fever, funding in millions of dollars was common. In the second wave, when investments involved tens of millions, companies such as Foster’s felt the pressure to follow suit and rush in, fearing being left behind.

The urge for speed was understandable for two reasons but was also a double-edged sword: other international competitors were getting into the market and grabbing the spotlight; and those not there, such as Foster’s, were losing investment opportunities rapidly because their competitors were buying up breweries and the required capital was increasing rapidly. On the other hand, the rush and pressure caused long-term problems flowing from not being well prepared before entering the market.

In the third wave, investments are required in the hundreds of millions. Carlsberg is a good example. It entered the market roughly at the same time as most other major international brewers in the early 1990s, purchasing Chinese breweries for between $10 million and $20 million each. By 2003, its major purchases of Chinese breweries were in hundreds of millions. For companies the size of Foster’s and Carlsberg, several million dollars only represent a very small percentage of their total investment portfolio.

For them and many international companies, China in the 1980s and 1990s was simply an unknown quantity and a mystery, and the feeling was that investments counted in the millions represented very small risk. The total of $250 million that Foster’s officially wrote down over several years represents less than 1 per cent of its total foreign investment portfolio. Foster’s finally left China in 2006 after 13 years. Perhaps this small percentage was one reason the company paid insufficient attention to its investment and operational strategies in China right from the start of planning its entry.

How joint ventures lessen the risk

The reason a joint venture is such a popular form of entry for international companies is that it can reduce the level of risk – financial, political and cultural. A joint venture reflects an unwillingness to commit the huge amounts of capital required by a wholly owned foreign enterprise and also, in the Chinese market particularly, recognition of a lack of knowledge and cultural awareness that only a local partner can provide.

The essential ingredient for a successful joint venture is the ability of each partner to provide what the other cannot. By pooling their resources, skills and experience, the partners are able to create a more successful business operation than if each were to operate independently.

Companies use joint ventures as a market entry strategy to optimise their overall approach to international expansion (Beamish and Karavis 1999; Lin and Germain 2000; Guillen 2003). In reality, there is no consistent proof of the success of joint ventures despite their popularity. One of the costs associated with setting them up is the search for an appropriate local partner and integrating the pooled assets of the partners (Madhok 1997). In China this is especially critical because the majority of foreign companies have had trouble working with their partners because of cultural differences.

For example, what really surprised Foster’s was that China’s breweries were mostly owned by the Ministry of Light Industry, which formed joint ventures between individual local breweries and various international breweries. This meant the same joint venture partner was forming different joint ventures with its own competitors. Foster’s found its trade secrets were being passed on to its competitors via the Ministry link. This was difficult for managers to deal with and they had no experience or training in managing in these circumstances. Simply, they were out of their depth in trying to find strategies to combat the situation.

Joint ventures can be an attractive form of market entry in China for several reasons:

However, the 2006 changes to the law on Chinese–foreign joint ventures may change the thinking of some organisations. The main difficulty for foreign investors is the different interpretations of investment policies by different local governments. For example, a new joint venture foreign university received incentives in the higher education industrial park in Suzhou, in the form of buildings and staff to service them. When the university grows, it simply asks the local government for more buildings.

It is difficult for a Westerner to understand that these incentives are not written down, in a contract or any other way. The university can give no clear indication how long the buildings will be available to the foreign company.

But it does understand that the industrial park is built to accommodate universities, and being the first foreign university with a Chinese partner, the company is confident it will not be asked to leave in a couple of years. This is a hard concept for a Western mind, and especially a legal practitioner, to understand. The foreign university in question appointed a Chinese academic with mainland background to head its campus. He has successfully persuaded his senior executives in the foreign country to allow him to operate under the local government regimen.

The drawbacks of joint ventures in China include:

Wholly owned foreign enterprises, on the other hand, enable companies to retain complete responsibility and control over all aspects of the business (Davidson and McFetridge 1984). Such enterprises avoid the conflicts in interests and objectives with local partners that often characterise joint ventures, enabling the foreign company to pursue its own goals free from internal interference (Tse and Pan 1997). This form of entry has been gaining popularity in the third investment wave.

Foreign companies in China are gaining more experience, which they believe reduces their need for a local partner to smooth the way when increasing resources and financial commitments to local operations, and in gradually increasing their proactive role and risk-taking in the market. Companies that choose this strategy may have had some years of poor experience in managing joint ventures in China.

Foster’s is a perfect example of this. In 1997, the Australian-based brewer reviewed its investments in China and decided to sell the Guangdong and Tianjin joint venture breweries and keep the one in Shanghai. In Shanghai, Foster’s was gradually buying back the 40 per cent shareholding of the Chinese partner. By the end of 2001, Shanghai Foster’s was a fully owned foreign subsidiary. But the fact it never reached the profitability break-even point was evidence that this form of investment holding is not the key and only factor to success.

The blame game hides the truth

I argue, controversially perhaps, for the opposite. My experience and research suggest that failures have been mainly because of the deficiencies of Western companies in managing organisations in China, whether involved in a wholly owned foreign subsidiary or a joint venture. I rarely hear self-analysis of how and why the joint venture management was not successful. Instead, the finger is always pointed at the joint venture partners. The most common remark is ‘the Chinese partner interfered with management and operation’. To my knowledge, no Western organisation has ever said, ‘we had no idea how to manage in China’.

The real truth behind failure in managing organisations – be they joint ventures or wholly owned – is the lack of capacity to understand the differences between cultures and not having successful strategies to manage these differences. This can only be achieved by bicultural personnel who have the understanding of both sides of the cultural divide. Without this, the differences cannot even be identified, let alone rectified.

Another reason for the argument in favour of joint ventures in China, regardless of the format, is that no organisation can escape controls of one form or another. Under the Chinese system of government it is better to have a partner who understands that system well and will collaborate and assist.

Wholly owned foreign enterprises are also said to be the preferable option because of the greater possibility of profit increases as a result of efficiency associated with management autonomy (Woodcock, Beamish, and Makino 1998). However, they are only likely to be more profitable if substantial knowledge of the local market is not required (Vanhonacker 1997). Therefore this is almost near impossible for foreign enterprises in China unless they have the support of a bicultural management team.

In China, because of the very high level of cultural differences, many multinationals have found that local market knowledge cannot be obtained without the participation of local partners. Foster’s was certainly fully aware of this and the joint ventures approach was seen as a necessity in its initial entry decision.

The argument of interference also seems to miss the fundamental point that a company operating in China cannot avoid constant dealings with Chinese organisations, especially Government at multiple levels. Joint ventures with an equal amount of equity and a sharing of management control tend to have a higher rate of success; performance tends to suffer when the foreign partner exercises dominant control (Avruch 1991).

Foster’s certainly tried to dominate the control of all its joint ventures, something its Chinese partners did not appear to object to in most cases. This dominating pattern in management, operations and marketing was not recognised by Foster’s as a contributing factor to failure. And it continuously pursued further control. The real tragedy of Foster’s was that it never reflected on finding out what was going wrong. Even during the research period for this book, I observed the same mistakes being repeated.

The Foster’s entry and growth strategy

The Foster’s entry strategy for China was aimed at seeking growth and expansion at an international level. As a part of this international strategy, Foster’s ventured into the Middle Eastern market in the 1980s on a small scale. Although some would question this move, at least it provided Foster’s with much-needed international market experience. Senior executives then investigated some Asian countries, including Indonesia, Malaysia and Singapore as well as China. On a social-cultural basis, China was a favourite and its potential for 1.3 billion customers was extremely attractive.

In the late 1980s and early 1990s, China’s per capita beer consumption was expected to grow quickly and match the 3 per cent growth rates of other Asian countries. The size of the beer market in China was predicted to overtake the United States by 2002 and become even larger than Germany’s, according to the feasibility study by Foster’s. This has proved to be correct. The Chinese beer industry became, and still is, the fastest growing in the world and overtook the US in 2003 to become the world’s largest beer market.

The decision to establish joint ventures in Shanghai, Guangdong and Tianjin strategically positioned Foster’s to cover the entire country. The market for Foster’s Shanghai covered the heavily populated and relatively affluent Yangtze delta region (which includes the city of Shanghai). The Guangdong joint venture was established to exploit China’s fastest-growing province as well as to serve Hainan Province, Hong Kong and Macau. The Hainan market came with the Princess Brewery, Foster’s Guangdong partner. Foster’s Tianjin joint venture was located in one of China’s largest cities, one of the three direct-municipal cities at the time. (Direct-municipal cities are under direct guidance of the State Council and have the same status as provinces.) A major objective was to use this as a base to penetrate the lucrative Beijing market, about 100 kilometres away. The initial attempt to purchase a brewery in Beijing had failed.

To keep capital commitment to a minimum, all three joint ventures were to rely on existing regional breweries, which Foster’s believed could be transformed into efficient operations. Foster’s also wanted to use existing breweries so as not to delay its market entry into China and give its foreign competitors a head start. Foster’s purchased additional land with each of these breweries, to provide scope for future expansion and protection against inevitable escalation in land prices.

Importance of local knowledge

Foster’s recognised that entering the Chinese market would be a learning exercise and that success could best be achieved initially through smaller operations. Furthermore, by establishing joint ventures, it would benefit significantly from the Chinese partner’s knowledge of the domestic market, which Foster’s could never hope to match. In particular, Foster’s could take advantage of its partners’ knowledge of existing distribution channels, their ability to source skilled labour and raw materials, and their expertise in dealing with the various levels of the government bureaucracy. This proved to be largely the case.

All products from the joint ventures were to be sold within the Chinese market and none exported until after 2002. At management level, mistakes were made in areas such as sacking joint venture partners’ existing sales staff in the hope of achieving distribution the Foster’s way.

The goals of Chinese and venture partners are often diametrically opposed (Png 1992). The foreign partner sees China as the world’s largest potential market and a cheap source of labour and raw materials. The Chinese partner seeks to raise the level of managerial skills and technology with a view to increasing exports and earning foreign exchange.

In 2009, Chinese organisations were mostly seeking access to foreign markets, knowledge and experience, rather than technology as in the 1980s and the 1990s. Chinese are quick learners, and are not mghtened to learn from anyone and any culture. This fast learning curve in all sectors has no doubt contributed to China’s rapid economic development, achieving in 30 years what the West managed to do in 100 to 150 years.

The Chinese partners in the Foster’s joint ventures were expecting new machinery, Western management techniques and quick profits. Apart from the Western management techniques, which were not well accepted by the Chinese staff anyway, the Chinese partners were disappointed. Tianjin Foster’s Brewery Limited was a joint venture with Wheelock, a Hong Kong investment firm, and Tianjin Brewery. Wheelock’s contribution to the joint venture was capital investment. Foster’s also hoped for the possibility of future marketing development. But Wheelock lacked knowledge of the beer industry, especially in China, although its initial selection as a partner was based on the perception that Hong Kong companies have a good knowledge of the Chinese market.

Foster’s found out the hard way that this is not necessarily so. Chinese culture in China is unique to itself. There is no generic ‘Chinese culture’. This is another example of the necessity of bicultural personnel. It is not just a simple matter of being ‘Chinese’ and speaking the language, and certainly overseas Chinese are not qualified automatically because of that. This is covered further in other chapters.

Success of a joint venture is also based on a large number of business factors (Luo 1995), such as product quality, pricing, sales force marketing and flexible terms of payment. Industry structure, partner selection and timing of market entry are significant moderators affecting the relationship between business strategy and joint venture performance.

The industry structure in China was specifically commented on by many executives at Foster’s, with it being described as a ‘low level’ industry operated by people from a less-educated background. This is because the level of government funding for light industries, which include breweries, is of less importance than for heavy industry such as iron and steel. Credits were poorly managed by wholesalers and industry manufacturers. It was also noted that change management and time were required to adjust the industry for the better.

Nevertheless, full credit must go to the industry’s effort, largely because of the contribution by foreign breweries, for current results: the Chinese beer industry has gradually moved up to operate at world standards. Those brewers who do not make the effort to survive are forced to close down. Today, all those that survive can produce world quality products. Larger groups such as Qingdao and Yanjing are not only competing in international markets with its products but also in the stockmarket.

Chinese role is omnipresent

As stated previously, no organisation should hope to escape the important role played by Chinese Government organisations, both as active participants and influencers of performance in joint ventures (Osland and Cavusgil 1996). Many executives at Foster’s noted this important role while others expressed a lack of understanding of their own roles as well as those of the Chinese.

When Australian managers discovered their Chinese partner was also the partner of a competitor, it was often a big shock. To the Chinese, this was very normal, because a Ministry can form as many joint ventures with as many foreign investors as it sees fit. An even bigger shock to Foster’s managers was when Chinese staff moved from one joint venture to another.

At Shanghai Foster’s Brewing Ltd, a Chinese manager disappeared one day. He had been moved to another joint venture, also owned by the Ministry. The Australian management was not told why, or where he was moved to. The Ministry’s view was that it could choose to move staff to where they were most needed. Staff were not only moved from one joint venture brewery to another, but also from one industry to another, because each Ministry administers several industries.

In the Western business environment, information about a specific company is regarded as trade secrets and should be kept within the organisation. Giving information to competitors is unethical. But in China there are no secrets and it has to be assumed that everyone knows everyone and everything in the industry. Talking about industry-related information with people within the industry is seen as building relationships and networks. After all, usually one Ministry owns all the competitors; the Ministry of Light Industry owns 850 breweries.

Information exchange is not unethical because the breweries are not really competitors to each other. In fact, they help each other at times such as lending their labels to each other when necessary. These fundamental differences in business practice highlight how Western and Chinese business people differ. What Westerners see as unethical, Chinese see as normal business practice and therefore there is nothing to worry about.

The Foster’s review of its investment position in 1997 was clearly related to the fact that the ‘China’ venture was not profitable after four years. The fact that the then CEO had little idea how the China market worked was directly related to this decision. He was reported to have told the first general manager in Shanghai to ‘just make a profit’, which would show he had little idea how long that would take in China.

Foster’s was unable to sustain consistent heavy losses (according to one executive’s notes, as high as $42 million in one year). The review by the board in 1997 resulted in a decision to sell the Guangdong and Tianjin breweries and to buy out the Chinese partner in the Shanghai brewery. In the meantime, the international strategy continued to be developed and soon Foster’s ventured into Vietnam and India. Today, Foster’s no longer owns any breweries in Asia. It owns a brewery in Fiji, which has long been a training ground for brewers.

That a large part of the China decision was because the Chinese partner was unable to sustain its financial contributions, is understandable under the circumstances. The partner, the Ministry of Light Industry, only invested in the joint venture by contributing the brewery and the workforce that went with it. The Ministry had no expectation of contributing capital at a later stage. This would only be understood by bicultural personnel.

Other major factors in the decision were based on management operations. At Foster’s head office it was recognised that a fully owned subsidiary would operate more efficiently and effectively. Foster’s pursued a gradual increase in its shareholding to increase its level of control. It is not difficult to comprehend that investment decisions are not a single-factor process. They are complex, involving accurate information and decision-making (Daft 2001). For China, it is even more complex because of cultural differences.

By the late 1980s the downturn of beer consumption in the Australian and British markets had forced Foster’s to seek growth opportunities elsewhere in the world. As mentioned previously, the Middle East and Asia were investigated. The Middle Eastern market was not pursued because of its Muslim culture. Although Foster’s was exporting a small amount to India, the discouraging foreign direct investment policy of the Indian Government gave little reason to pursue that market.

A preliminary investigation of the Chinese market began in late 1991 and entry followed in 1993. At that time, Asia was considered by the then Foster’s CEO, Ted Kunkel, as ‘one of the last remaining blue-sky options for brewers’. China represented an integral part of the Foster’s Asia strategy as it sought to build a global brand image (Breth and White 2002).

The opportunity began when officials of the Ministry of Light Industry (owner of 850 breweries at the time), were on a state visit to Australia. It is an example highlighting the culture of Chinese business and how much it depends on relationships rather than text-book investment strategies. Foster’s was asked by the Prime Minister’s Office to host the Chinese Minister. Consequently, he invited Foster’s to visit China.

In late 1992, Foster’s Brewing Group set up a taskforce at board level to oversee its strategy for entering the Chinese market and Foster’s China was established. It marked the beginning of a business adventure in China that lasted about 13 years.

References