My Op-Ed in The Wire China
My Op-Ed in The Wire China
All about Hillhouse and GGV's China Shedding Strategy
Dear readers,
I’m so excited to share with you my first Op-Ed for The Wire China titled “The Dilemma of the China Shedding Strategy”. The publication has long been my trusted source for insightful analysis on China's global business influence, and it’s a personal milestone to be able to share my thoughts on The Wire China.
My piece focuses on Hillhouse and GGV’s “China Shedding Strategy.” I first wrote about this idea in the context of Temu and Shein downplaying their Chinese identity.
I argued that the best way to defend corporate reputation is to shape those ideas and play offense. Actions must ultimately match the perceived reputation, but as you will read in the Op-Ed, that’s often not the case.
In a nutshell, the funds' are pursuing a"China Shedding Strategy" because of the following reasons:
Shifting allocation and investment priorities of US institutional investors like pension funds
New proposed U.S. restrictions on investments in Chinese technology
Fundraising cycle and the need to appeal to investors who are wary of the funds’ China risks
Demands from lawmakers to address China affiliation and conflict of interests
However, the shift of Chinese companies away from their roots in China is accompanied by challenges and potential repercussions for their reputation.
Notably, Hillhouse is attempting to hedge against this perception. Before moving to Singapore in 2022, it completed the first closing of a renminbi-denominated carbon-neutral industry investment fund, totaling over 4 billion renminbi ($600 million). This could be seen as an effort to remain aligned with China's broader goals and demonstrate continued commitment to the country. Hillhouse is also fundraising on the basis of its China expertise and making a play on undervalued Chinese stocks. It is an opportunistic move that goes against the Chinese government's efforts to bolster real economic productivity. These efforts suggest that Hillhouse is not ready to shift its focus entirely away from China just yet.
Playing both sides is not a long-term strategy. Especially when you’ve also got Hillhouse sending out its team of executives talking to media about “the firm has long sort of grown past [Asia]…and looking to take advantage of opportunities around the world.”
Funds like GGV and Hillhouse and companies like Temu, Shein, and TikTok will find themselves at a crossroads. They will have to find a way to balance ties to China with their global aspirations and navigate regulatory demands and investor expectations.
P.S. If you’d like the full PDF article, shoot me an email ivy@waveletnyc.com
As always, thank you for reading.
Ivy
Public announcement: If you plan to build or revamp your corporate narrative strategy and manage PR risks, let’s chat. ivy@waveletnyc.com https://waveletnyc.com