Rise of Multinational Giants Gaining Hold of Australian Market

As American or European banks are struggling globally with its financial standings, Chinese banks, like the Construction Bank of China and the Industrial and Commercial Bank of China, are setting up and gaining hold of the Australian market, even taking in big clients like Woodside and Telstra.

These banks have opened branches in the financial district in Melbourne, and are emerging as more established corporations, or multinationals giving stiff competition to still-established Western companies.

According to the Boston Consulting Group (BCG), the rise of multinationals in an emerging market such as Australia, is one of the current trends affecting business today. These companies are changing the way industries operate, with particular interest in the field of “aircraft to manufacturing, to medical devices, to e-commerce and mobile telephony.”

About half of these companies come from countries like India and China.

In fact, aerospace engineering company Aerostaff Australia was backed up by Mahindra & Mahindra, a well-known industrial giant in India, when it experienced a financial crisis in 2009. Today, the company is but part of the Mahindra enterprise, but it is thriving.

BCG also said that companies like these Chinese banks and Mahindra rely on affordable labour costs, while spending a fortune on research and development. In 2011, China availed of more US patents than any other companies from Australia.

BCG however stated that even as these companies are rising, state-owned enterprises have yet to prove their capabilities. Of the 44 Chinese businesses BCG reported as part of the 100 global challengers sometime in 2006, only 30 has retained their status in the market, while the rest have shipped its operations back home.