Chinese firms eager to expand abroad clinched some quality deals over the past two years, taking advantage of the opportunities created by the global financial crisis.

But some of those Chinese companies are now finding that swallowing up a foreign competitor can cause a bad case of initial indigestion that is a lot more complicated than a passive equity stake-holding to address.

One example is Zhejiang Geely Holding Group, which acquired Volvo from the Ford Motor Co in August.

Geely founder and Chairman Li Shufu told a forum in Shanghai earlier this month that he has had to learn to cope with "disagreements" with the management team in Sweden.

"Volvo should retain a brand image of luxury cars," he explained. "It is unwise to make Volvo cars smaller in size or simpler in design. If people want stretch limousines, Volvo should produce them."

His thinking is based on the fact that many Chinese like big cars as a way of flouting their wealth and social status.

That's not how some senior executives in Volvo view the future of "gas guzzlers." They insist that big cars are on the way out as people across the world become more environmentally conscious and the market for low-carbon vehicles picks up momentum.

Yes, cross-border integration has its headaches.

Li took pains to stress that he has never quarreled with or confronted his colleagues in Sweden, but it's obvious that a cultural gap has opened in their corporate strategy.

Geely acquired Volvo with an eye to going global. How that goal might be affected by differences in basic approach has yet to play out.

During the interview, Li reiterated that Geely and Volvo are two separate companies. He said Volvo can take advantage of Geely's established sales network in China, while Geely can learn from Volvo how to build better, safer cars.

His international ambition for Geely may rely less on Volvo than originally expected. Geely, a medium-sized Chinese start-up auto maker, acquired Volvo for US$1.5 billion, less a third of the price Ford paid for Volvo back in 1999.

"Li needs to learn to speak on level ground with former bosses of Volvo," said Zhou Xiaolin, a professor and president of the Shanghai Association of International Economic and Technological Cooperation.

"It is truly hard for an entrepreneur from an emerging market to hold sway with a group of seasoned automobile veterans," Zhou said. "That will be hard to change, even though Li is now in the driver's seat and has an amazing track record."

Chinese companies poured US$40.5 billion of direct investment in 2,570 overseas firms in 119 countries and regions in the first 10 months of this year. Many of them are discovering the underlying problems that pop up after the ink on the contract is dry. In some cases, they lack the confidence to elucidate their merged business strategies.

From American gas, Canadian energy and Brazilian electricity grids, Chinese firms have expanded their footprints quite quickly. The World Bank said Chinese buyers have accounted for a 10th of the value of cross-border deals so far this year.

At the end of last year, more than 12,000 Chinese companies had established 13,000 direct branches overseas, with foreign assets more than 1 trillion yuan (US$150 billion), the National Bureau of Statistics said.

In 2009 alone, about a quarter of Chinese outbound foreign investment went toward acquiring or investing in overseas firms of resources. Of the rest, about 16 percent involved the business services sector, 19 percent related to retail, and 4 percent went into manufacturing.

It's a steep learning curve for many Chinese companies with aggressive overseas ambitions.

Bai Ming, vice director and research fellow at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, said Chinese companies in foreign markets often face financial and labor disputes.

"Some countries try hard to attract Chinese investors," Bai said. "But they do little to explain, or even attempt to hide risks and loopholes in deals."

For example, Chinese companies may find the companies have more debt than originally disclosed, may have a restive work force unhappy about the change in management and may operate in governmental environments where it's hard to fire staff.

"Some investors never anticipated such problems, and the problems can fester, grow and eventually thwart global expansion plans," Bai said.

The financial crisis hasn't helped. Trust is harder to forge in a climate of sinking fortunes and high unemployment. Everyone gets edgy.

In the past, many Chinese overseas forays came only after a Chinese and a foreign company got to know one another over many years of cooperation. That gave Chinese companies time to test the waters.

But the financial crisis left many foreign companies in dire straits, and the bait of low prices encouraged some Chinese investors to leap before they looked.

"It is dangerous because merger and acquisition deals are difficult to exit if they don't work out," Bai said. He advises Chinese investors to take their time and carefully examine a company before proceeding with mergers or acquisitions.

It also helps, he said, if Chinese companies with a global ambition work together and with government officials to present a more united front when bargaining.

Above all, Chinese investors can learn from multinational companies doing well in China. Those companies have had three decades of experience in establishing roots on foreign shores, where cultures, work forces, labor laws and government restrictions are often very different.

To some degree, attitude is also important. Geely's Li advises companies that want to acquire a foreign firm to do it "legally, in a friendly manner and with respect."