China draws foreign firms, Chinese flee

By Wei Gu

BEIJING (Reuters) - The grass is always greener on the other side in China: foreign companies want to tap the country's 1.3 billion consumers while some Chinese firms are desperate to escape the cut-throat competition at home.

Foreign executives attending Reuters China Century Summit said they are investing for the future in China, though with an increased focus on the bottom line.

Many Chinese companies, by contrast, are frustrated with intensifying competition and razor-thin margins at home and eager to make forays into overseas markets.

"Chinese companies want to broaden their footprint and foreign companies want to tap into the high-growth emerging markets," said Vincent Chan, head of China equities at Credit Suisse. "It makes sense for both sides."

Foreign firms, which poured $60 billion into the country last year, are lured by China's break-neck growth that promises returns higher than most other places.

"If you see a $100 bill, a $500 bill, and a $1,000 bill on the ground, which one are you going to pick up first?" asked Frank C.T. Lin, chief financial officer of Tingyi (Cayman Islands) Holding Corp. (0322.HK: Quote, Profile, Research, Stock Buzz), a Taiwanese food and beverage company dubbed as China's instant noodle king.

"Of course the $1,000 bill, and that stands for China."

Foreign banks are licking their lips at the $2 trillion in savings tucked away in Chinese banks. They are also vying to get a slice of China's bourgeoning credit card, mortgage and wealth management business, as China is slated to allow them to provide local currency business to its citizens in December.  Continued...