Huawei, Alibaba Now More Powerful Than Countries

By Jocelyn Richards, March 21, 2016

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Stretching across national borders, oceans and even rules of law, multinational corporations are increasingly vying with governments for global dominance. This week, Foreign Policy released a list of the world’s top 25 ‘corporate nations’ that already claim more supremacy than nation states.

Two Chinese companies made the list – telecommunications firm Huawei Technologies, headquartered in Shenzhen, and e-commerce giant Alibaba Group, based in Hangzhou

Pulling in annual revenues of $60 billion and $12 billion respectively, these Chinese corporations rank among leading global powers like Microsoft, Uber, Accenture, McDonald’s and Facebook.  corporate-superpowers

Considering the mainland only embarked on modern economic development 30 years ago, in the mid 1980s, its ability to raise two companies of such international clout illustrates the competitiveness of the so-called ‘socialist’ system. 

But more importantly, as stateless, ‘metanational’ companies decouple themselves from national pride, it’s possible that China’s homegrown success stories will contribute little to mainland growth and prestige. Private firms, after all, will inevitably act in their own interest to maximize profit. That could mean transferring resources and personnel to the most favorable economic climates, wherever they may be, and holding revenue overseas. 

In other words, will huge companies like Huawei and Alibaba strengthen China’s resume and help it become the world’s next superpower? Or will they act independently as power-hungry corporate nations? 

According to Foreign Policy, the question is still up in the air: 

The debate over [the] term [“global superpower”] usually focuses on states – that is, can any country compete with America’s status and influence? In June 2015, the Pew Research Center surveyed people in 40 countries and found that a median of 48 percent thought China had or would surpass the United States as a superpower, while just 35 percent said it never would. Pew, however, might have considered widening its scope of research – for corporations are likely to overtake all states in terms of clout.

READ MORE: The US and Japan are besties, and Pakistan loves China - Pew Poll

Huawei, the world’s largest telecommunications equipment manufacturer, was founded in 1987 by a former engineer of the People’s Liberation Army. In the 1990s, the company enjoyed support from the Chinese government and military, which considered Huawei a source of national pride.

After 1997, however, when Huawei won its first overseas contract, the company drifted from its ties to the state, setting up research facilities in over 10 countries, including the US, Canada, the UK, France and Russia. In 2013, Huawei even became the main sponsor of the Jonas Brothers’ summer tour in an effort to promote its brand in the States. 

Huawei-presents-the-Jonas-Brothers-tour.png

Today, Huawei sells its products and services to more than 140 countries worldwide and serves 45 of the largest 50 telecom operators.

Alibaba, founded in 1998, also functions outside the bounds of the Chinese state. Its mobile financial services Ant Financial and Yu’e Bao, for example, have challenged official banking policies on the mainland.

In 2015, Alibaba bought uncensored Hong Kong English-language newspaper South China Morning Post, claiming: “the world needs a plurality of views when it comes to China coverage.” In that sense, Alibaba was confirming its loyalty to the mainland but also taking on a responsibility traditionally left to the government – that is, seeking to establish China’s reputation abroad.

south-china-morning-post

Regardless of whether Alibaba and Huawei choose to operate within the bounds of the state, however, they are still largely regarded as Chinese – not stateless – companies. And as long as that is the case, their influence abroad will be viewed as a reflection on China as a country.

[Images via Foreign Policy and PR Newswire]

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