Spanish business investment in China from the perspective of the consulting firm Garrigues

Abstract

PurposeThis article aims to analyse the reasons for Spanish companies to invest in China and the factors that influence the success or failure of the venture during the implementation process.Design/methodology/approachThis paper is based on an interview held with the two partners of the Garrigues office in Shanghai, Francisco Soler and Manuel Torres. Francisco Soler was responsible for opening and subsequently managing the office from 2005 through to August 2011, when he handed over the reins to Manuel Torres.FindingsThe main reason for investing in China is its market. It is worth mentioning here that there has been a paradigm shift whereby China has gone from being the “world's factory” to the “world's market”, not just because of its size but also because of the dizzying speed at which it continues to grow. To minimise the risks of investing in China, the interviewees pointed out the crucial importance of the company committing a significant amount of all kinds of resources to the venture. They also maintain that the investing company should ensure that the people responsible for the project are fully committed to the company and completely familiar with its operations and corporate culture.Originality/valueThe value of this study lies in contrasting the practical viewpoint of Garrigues legal consulting firm with the existing literature on the topics discussed in the interview: the reasons why companies invest in China, and the factors that lead to their success or failure.