Wanda bids Spain farewell.
A new mythical case of investment failure is born.
The information that the official Spanish media gave was confirmed 3 hours ago: Wanda Group announces that they will close the offices in Madrid and fire progressively their current 20 employees. The emblematic skyscraper of “Edificio España” in Madrid will hang again the ‘’For Sale’’ sign after having invested €650 million in its purchase. Everything suggests that the biggest investment of China in Spain up to now will come to an end.
From June 2014 to January 2016, 20 months of negotiations, who would imagine that this would be the fate of the spotlight of Chinese people living in Spain. Is it because of the ignorance of the legal framework by Chinese investors or is it because the government of Spain doesn’t give investors green light?
My opinion is ultimately that there are some points that future investors should have into account:
- In western countries, the government doesn’t decide anything because the law is above all and people are equal before the justice. The investors’ starting point will be analyzing the laws of the country.
- In western countries, the multi-party system prevails. You shouldn’t think that you can already get everything by having the support of a party. The actions of each party are limited by the others and its power only takes effect in the period in which it governs. Once this period ends, it expires. On the other hand, although the party that has an absolute majority runs the country, the chance of pacts forged between parties must not be forgotten.
- Under no circumstances do you invest in election period; each party has a different stance. Anything the party promises can be changed by the substitute party.
- You shouldn’t underestimate the small emerging parties. Some people think that they’re very young, don’t take the blame, do things without order, don’t understand the economy or do something silly, but they’re people that have come into political power in several countries and they could even control the world in the future. That’s why we have to be careful with young parties, mainly when it comes to deciding on a large investment.
- It’s necessary to know the habits of the country and its culture. You shouldn’t think ‘’I’m the boss because I invest, and I have money’’. Money isn’t almighty in many places.
- If you’re going to employ people, you should recruit staff who knows the culture of both countries and, thus, both cultures can be used as a bridge for the agreement and to achieve a fulfilling relationship between the government of both countries. You shouldn’t hire only people from the home country or only Chinese; the combination of both cultures is what can produce different effects in alternative situations.
- You have to adapt to the problem. You shouldn’t change things your way.
- You should be patient. The development speed of processes abroad is incredibly slow, especially in more leisure countries. The chance of earning money and doing paperwork quickly or achieving short-term goals is small. Therefore, once you have decided to invest abroad, you should have a long-term approach (do things step by step).
Wanda comes and goes quietly. Spain retains its building that has become a tourist destination for all the Chinese who visit the country. If all tourists hear ‘’Wanda’’ from the guide, this inversion may produce advertising effects after all.