The unique strength of Chinese business alliances

March 9, 2021

The unique strength of Chinese business alliances

Alexander van Wijnen
March 9, 2021

The unique strength of Chinese business alliances

Alexander van Wijnen
March 9, 2021
The unique strength of Chinese business alliances
Alexander van Wijnen
Maya Turolla
March 9, 2021

Geely, one of China’s biggest automakers, has announced strategic partnerships with Tencent, Baidu and Faraday Future. Li Shufu, founder of Geely, argues that these partnerships are inspired by the School of Vertical and Horizontal Alliances, a school of thought from ancient China’s Warring States period that urges weaker organizations to cooperate in order to compete with incumbent powers. It may be difficult to determine whether Li’s vision is markedly different from regular strategic cooperation between companies. However, there seems to be a unique quality to the cooperation of Chinese tech firms. Geely, Tencent, Baidu and Alibaba create collective business models to an extent that U.S. tech firms such as Amazon, Google, Facebook and Apple do not. Besides the School of Vertical and Horizontal Alliances, the idea of guanxi capitalism, which assigns high importance to interpersonal relationships, further adds to the importance of such cooperation within the Chinese economy. Furthermore, the developmental state tradition of China places the Chinese state at the center of facilitating such cooperation. In the coming years, Chinese business alliances will likely gain importance and could increasingly come to create a global competitive advantage for Chinese tech firms.

Burning questions:
  • To what extent do Chinese business alliances create a competitive advantage over the U.S. and Europe?
  • Does Li’s reference to the School of Vertical and Horizontal Alliances reflect the growing tensions between the Chinese state and Chinese tech firms?
About the author
At sister company Dasym, Alexander has been assigned a variety of tasks, for his interests transcend branches of knowledge as well as geographical boundaries. In brief, he writes policy papers, interprets and elucidates global developments, and conducts thematic investment research. His academic background spans public administration, history of international relations, and philosophy, having published dissertations on smart cities, Ethiopian sovereignty and independence, and Chinese philosophy towards technology. Integral to his responsibilities, Alexander wades through the latest literature on geopolitics, technology, financial markets and cultural anthropology.
You may also like