America, Big China Isn't Interested

The nation's largest firms have enough to keep them busy at home.
At Closing, May 23th
240.39 USD

Chinese companies are a risk to the American way of life, according to at least one White House contender. 

Yet, for all their own talk of internationalization and geographical expansion, the nation's biggest firms don't appear to be too interested in stealing revenue, or jobs, from Uncle Sam.

Take Tencent, the Shenzhen-based social networking juggernaut that's best known for its WeChat and QQ instant messengers. Outsiders might be forgiven for thinking that China's largest company by capitalization is beating a path to America's door. In reality, Tencent gets more than 90 percent of revenue from inside China, and its reliance on the domestic market is rising not falling.

Then there's Alibaba, the e-commerce play headed by a former English teacher. You'd think that with 80 percent of its New York-listed shares held by U.S. or British investors, Alibaba would have a huge international presence. Not so. Again, more than 90 percent of its sales come from the Middle Kingdom.

Sold in China

The country's largest companies are very comfortable focusing on their domestic market

Source: Bloomberg

Note: Baidu is No. 12 by market cap. Alibaba data is for 12 months ended March 30 of year cited. Figures for the two banks, ICBC and CCB, are pre-tax income.

Baidu -- often referred to as China's Google and the third member of the B.A.T. internet triumvirate -- is even more reliant on Asia's largest economy. Its U.S.-traded shares may be overwhelmingly foreign owned, but 98.9 percent of its revenue is homegrown.

Even when Big China does make overseas forays, companies don't venture far. In April, Alibaba said it would pay $1 billion for a controlling stake in Southeast Asian e-commerce group Lazada. Its other foreign focus is India, where it has investments in payments and online retail.

Outside of technology, the country's two biggest lenders, Industrial & Commercial Bank of China and China Construction Bank, both derive less than 10 percent of their pretax income from abroad.

Just as Donald Trump contends that China is manipulating its currency and stealing U.S. jobs, Alibaba's Jack Ma maintains he's keen for global expansion, with a goal of generating half the company's revenue offshore. But data from the past three years show Alibaba is becoming more reliant on China. Most overseas activity has been focused on making it easier for Chinese tourists to shop when they travel. 

Baidu, which has an R&D lab in California staffed by some of the world's top machine learning scientists, is hard at work developing artificial intelligence that will teach cars to drive themselves. Even that expertise, however, is set to be deployed in China, through tie-ups with domestic partners such as electric-vehicle maker BYD.

So while Americans may be schooled to fear China's rise, the reality is its biggest firms have quite enough to occupy them right on their doorstep.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

    To contact the author of this story:
    Tim Culpan in Taipei at

    To contact the editor responsible for this story:
    Katrina Nicholas at

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