By Xixi Liu In 2008, Huawei launched an acquisition of 3Com Corporation in order to enter the North American market. But the Committee on Foreign Investment (CFIUS) in the United States rejected the purchase request on the ground of “national security”. Starting from May 2010, Huawei acquired parts of patent of 3Leaf Company who had announced bankrupt. On February 11, 2011, CFIUS proposed Huawei to withdraw the transaction with 3Leaf for the same reason- national security. On February 19, Huawei said in a statement, “This is a difficult decision. We decided to accept the recom- mendation of CFIUS to withdraw our application to acquire specific assets of 3Leaf.” Huawei’s second attempt to crack the North America market was ended in failure once again. As the world’s second largest telecom equip- ment supplier, Huawei set up its North America headquarters as early as 2001. There are 13 offices and 8 R&D centers as well as 1,000 employees. However, Huawei has never achieved great break- throughs in the U.S. market. Huawei believes, get the U.S. market, get the world market. Realizing its American dream is indeed a difficult road for Huawei. It is because of not only its own technolo- gy and capacity issues, but also the cultural differ- ences, such as communication between Huawei and the U.S. and the technical controls of U.S. in foreign economic relations. Continued on page 2... The Stillman Exchange Made possible by the generous support of the O’Brien Family WEDNESDAY, MARCH 23, 2011 The Official Business Publication of Seton Hall University S P E C I A L E D I T I O N Best Buy Withdrawal from China —defeated by its own business model? By Edison Yin The United States-based consumer electronics retailer Best Buy announced on February 22, 2011 that it had decided to stop running its nine stores in China. Best Buy claimed that it was a very hard decision, but they would be focusing on localized development by enhancing the development of its wholly owned Chinese brand—Five Star Electronics Co. Inc. Best Buy also claimed that it would not withdraw from China entirely because Five Star would take charge of one or two Best Buy retail store and reopen them with a brand new business model. In fact, Best Buy had failed to gain national influence since its entering Chinese market in 2006 because most of its retail stores were located in East China. There has been talk during the six years about its withdrawal. It has been said that Best Buy’s failure in China is based on its “famous”, “advanced” business model. It has been well accepted that the Best Buy business model stands for a higher business civilization; nevertheless, a direct consequence of Best Buy model was that the retail store cost was too high, failing to provide a competitive price. It significantly reduced Best Buy’s competitive power in this way, especially in China. When Best Buy entered China in 2005, the Chinese suppliers were not terrified at all; instead of it, they deeply expected it—the business model of Gome and Suning (Two Chinese biggest household appliance retailers) had had an ingrained vicious circle which was suffocating every supplier. Household appliance manufacturers expected a new model that could contend against the current model; in addition, the carrier must be strong enough—such as Best Buy, the biggest household appliance retailer in the world. Continued on page 2... The marriage between Huawei and overseas market fails again and again Photos courtesy of gb.chinareviewnews.com and designed by Herbert Chao Xu Huawei’s American Dream By Chang He President Barack Obama officially nominates cur- rent Secretary of Commerce Gary Locke as the new U.S. Ambassador to China. Locke replaces former ambassador Jon Huntsman, Jr. Upon senate approval, Locke is to become the first Chinese-American to take on this post since the U.S. established formal relations with the People’s Republic of China. At 61 years of age, Locke was born in Seattle, Washington. A, third generation Chinese-American, Locke is a descendant of Luo Binwang, a famous Chinese poet who is known to be one of the “Four Greats of Early Tang Dynasty”. A graduate of Yale University and Boston University School of Law, Locke was elected Washington House of Representatives in 1982 and later Washington State Governor in 1996 as the first Chinese-American state governor. Serving two terms as state governor until 2005, Locke assumed the role of U.S. Secretary of Commerce in 2009. Many supporters believe that Locke has both the experience and the talent will be more than enough to prepare him for the new Ambassador position. During his tenure as a member of the Washington House of Representatives, the Washington Governor and later the Secretary of Commerce, Locke has built great official and personal relationships with the leadership in China. At the same time, Locke’s Chinese- American background is expected to help him effec- tively conduct effective communications with the Chinese. It is also expected that Locke’s Chinese roots will resonate with the Chinese side making him a well- respected and highly-regarded “distant-family mem- ber” and “guest” of the Chinese nation. Though iron- ically, compared to the former Ambassador Jon Huntsman, Jr. who is the “Whiteman who speaks Chinese”, Locke is the “Chinese man who does not”. Nevertheless, Locke has expressed his fondness of his ethnical roots and is proud of the Chinese civiliza- tion’s achievement in the past few thousand years. Despite all in the end of the day, Locke will nonethe- less continue to identify himself as a typical American citizen whose job will is to represent the standpoints and interest of the American government and people. "I'm going back to the birthplace of my grandfather, my father, my mom and her side of the family, and I'll be doing so as a devoted and passionate advocate for America, the country where I was born and raised," Mr. Locke said. Arguably, US-China relations is one of the most important bilateral relationship in the 21st Century. However, foreign relations involves many levels of leaderships on both sides, Locke’s full level of influence on US-China relations is understandably ques- tionable. However, we know for sure that his role as the Ambassador to China will involve two sides: the adamant supporter of the strengthening of Sino-U.S. cooperation and communication as well as the equally as adamant defender of U.S. interest. On the other side, the Chinese will not only welcome and love their distant relative whose achievement they are proud of, but also at the same time, they will not back off in defending their rights either. Contact Chang He at [email protected]Obama Officially Nominates Locke Ambassador to China Gary Locke Secretary of Commerce of U.S. Photos courtesy of United States Department of Commerce and designed by Herbert Chao Xu
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Transcript
By Xixi Liu
In 2008, Huawei launched an acquisition of
3Com Corporation in order to enter the North
American market. But the Committee on Foreign
Investment (CFIUS) in the United States rejected
the purchase request on the ground of “national
security”. Starting from May 2010, Huawei
acquired parts of patent of 3Leaf Company who had
announced bankrupt. On February 11, 2011, CFIUS
proposed Huawei to withdraw the transaction with
3Leaf for the same reason- national security. On
February 19, Huawei said in a statement, “This is a
difficult decision. We decided to accept the recom-
mendation of CFIUS to withdraw our application to
acquire specific assets of 3Leaf.” Huawei’s second
attempt to crack the North America market was
ended in failure once again.
As the world’s second largest telecom equip-
ment supplier, Huawei set up its North America
headquarters as early as 2001. There are 13 offices
and 8 R&D centers as well as 1,000 employees.
However, Huawei has never achieved great break-
throughs in the U.S. market. Huawei believes, get
the U.S. market, get the world market. Realizing its
American dream is indeed a difficult road for
Huawei. It is because of not only its own technolo-
gy and capacity issues, but also the cultural differ-
ences, such as communication between Huawei and
the U.S. and the technical controls of U.S. in foreign
economic relations.
Continued on page 2...
The Stillman ExchangeMade possible by the generous support of the O’Brien Family WEDNESDAY, MARCH 23, 2011
The Official Business Publication of Seton Hall University
S P E C I A L E D I T I O N
Best Buy Withdrawal from China
—defeated by its own business model?
By Edison Yin
The United States-based consumer electronics
retailer Best Buy announced on February 22, 2011
that it had decided to stop running its nine stores in
China. Best Buy claimed that it was a very hard
decision, but they would be focusing on localized
development by enhancing the development of its
wholly owned Chinese brand—Five Star Electronics
Co. Inc. Best Buy also claimed that it would not
withdraw from China entirely because Five Star
would take charge of one or two Best Buy retail store
and reopen them with a brand new business model.
In fact, Best Buy had failed to gain national
influence since its entering Chinese market in 2006
because most of its retail stores were located in East
China. There has been talk during the six years about
its withdrawal. It has been said that Best Buy’s failure
in China is based on its “famous”, “advanced”
business model.
It has been well accepted that the Best Buy
business model stands for a higher business
civilization; nevertheless, a direct consequence of
Best Buy model was that the retail store cost was too
high, failing to provide a competitive price. It
significantly reduced Best Buy’s competitive power in
this way, especially in China.
When Best Buy entered China in 2005, the
Chinese suppliers were not terrified at all; instead of
it, they deeply expected it—the business model of
Gome and Suning (Two Chinese biggest household
appliance retailers) had had an ingrained vicious circle
which was suffocating every supplier. Household
appliance manufacturers expected a new model that
could contend against the current model; in addition,
the carrier must be strong enough—such as Best Buy,
the biggest household appliance retailer in the world.
Continued on page 2...
The marriage between Huawei and overseas market fails again and again
Photos courtesy of gb.chinareviewnews.com and designed by Herbert Chao Xu
Huawei’s American Dream
By Chang He
President Barack Obama officially nominates cur-
rent Secretary of Commerce Gary Locke as the new
U.S. Ambassador to China. Locke replaces former
ambassador Jon Huntsman, Jr. Upon senate approval,
Locke is to become the first Chinese-American to
take on this post since the U.S. established formal
relations with the People’s Republic of China.
At 61 years of age, Locke was born in Seattle,
Washington. A, third generation Chinese-American,
Locke is a descendant of Luo Binwang, a famous
Chinese poet who is known to be one of the “Four
Greats of Early Tang Dynasty”. A graduate of Yale
University and Boston University School of Law,
Locke was elected Washington House of
Representatives in 1982 and later Washington State
Governor in 1996 as the first Chinese-American state
governor. Serving two terms as state governor until
2005, Locke assumed the role of U.S. Secretary of
Commerce in 2009.
Many supporters believe that Locke has both the
experience and the talent will be more than enough to
prepare him for the new Ambassador position. During
his tenure as a member of the Washington House of
Representatives, the Washington Governor and later
the Secretary of Commerce, Locke has built great
official and personal relationships with the leadership
in China. At the same time, Locke’s Chinese-
American background is expected to help him effec-
tively conduct effective communications with the
Chinese.
It is also expected that Locke’s Chinese roots will
resonate with the Chinese side making him a well-
respected and highly-regarded “distant-family mem-
ber” and “guest” of the Chinese nation. Though iron-
ically, compared to the former Ambassador Jon
Huntsman, Jr. who is the “Whiteman who speaks
Chinese”, Locke is the “Chinese man who does not”.
Nevertheless, Locke has expressed his fondness of his
ethnical roots and is proud of the Chinese civiliza-
tion’s achievement in the past few thousand years.
Despite all in the end of the day, Locke will nonethe-
less continue to identify himself as a typical American
citizen whose job will is to represent the standpoints
and interest of the American government and people.
"I'm going back to the birthplace of my grandfather,
my father, my mom and her side of the family, and I'll
be doing so as a devoted and passionate advocate for
America, the country where I was born and raised,"
Mr. Locke said.
Arguably, US-China relations is one of the most
important bilateral relationship in the 21st Century.
However, foreign relations involves many levels of
leaderships on both
sides, Locke’s full
level of influence on
US-China relations is
understandably ques-
tionable. However, we
know for sure that his
role as the
Ambassador to China
will involve two sides:
the adamant supporter
of the strengthening of
Sino-U.S. cooperation
and communication as
well as the equally as
adamant defender of
U.S. interest. On the other side, the Chinese will not
only welcome and love their distant relative whose
achievement they are proud of, but also at the same
time, they will not back off in defending their rights