Opportunities and challenges
Geographically, China is 36 times the size of New Zealand, has a population over 300 times the size of ours and has a growth rate that sees the value of its economy double every seven years.
By some calculations China is on track to become the world's largest economy by 2020, but it is still a developing country. China's economic growth over the past 25 years is probably the largest and most sustained period of wealth creation in the history of the world. In 1800 China generated 25 percent of the world's industrial output. By 1975 it had fallen to 1.5 percent. It is now on its way back to 25 percent.
But experienced business people in China emphasise patience when doing business in China. Brendan O'Toole, Managing Partner of Summergate, says while China is growing rapidly, firms shouldn't lose sight of the long-term: "It's still very immature, very embryonic. The real prize to China is 30, 40, 50 years and beyond."
Back to top
The opportunitiesThe opportunities arise from rapid economic growth in the world's largest market and the availability of a cheap manufacturing base from which to sell to China and the world. From a manufacturing perspective, China in the long run will be distinguished by its overall business strength and structure, including the huge investments made to ensure China has a modern competitive manufacturing sector.
New Zealand businesses need to be clear about whether they want to sell or manufacture in China. Long-term, China business strategies shouldn't be based on the availability of cheap labour - this is disappearing as China becomes wealthier.
In 2007 China had 106 US dollar billionaires - more than any country other than the USA. There were just 15 in 2006 and none in 2002.
A new generation of consumers is emerging in China - they are young, well educated and familiar with non-Chinese cultures. This 'Y generation' of 240 million, born between 1980 and 1990, is now the highest earning age group in the country and is looking for a new way of life.
They typically live in the major cities on the Eastern seaboard of China and in particular in Beijing, Shanghai, Shenzhen and Guangzhou where GDP per person is now over US$5,000 but corresponds in Purchasing Power Parity terms to four times that amount.
Grant Walsh, a Kiwi businessman with 10 years' experience in China, says if his food business wasn't located in China he wouldn't be able to give the levels of service or meet the volumes demanded by customers. "I think it's really that simple."
Back to top
The challengesStarting to do business in China is likely to be more costly and time consuming than in other markets.
Challenges arise because of China's size, its 'gold rush' style growth and the fact China has a very different business culture and environment from what we are used to in New Zealand and in other export markets.
New Zealand and China are also markedly different in size,culture, politics, geography, history and economic structure.
These issues can present challenges for companies looking to sell or invest in China which can only be overcome by thorough research, spending a lot of time in-market and following a focused business plan.
Much of the information available on China may appear contradictory. You need to see for yourself which advice is right for you.
From a distance China appears huge. The reality is that it is several large regional markets and many more numerous niche and micro-niche markets which helps to make China more accessible to New Zealand businesses.
Differences between the size and focus of the two economies, rather than being an obstacle to doing business in China, often present opportunities for New Zealand businesses.
The Chinese dairy market is typical of the mix of the opportunities and challenges facing New Zealand businesses. Chinese consumption of dairy products is just one fifth of the international average, but is predicted to move more into line with the norm as incomes rise. It is estimated that if each Chinese person drinks half a kilogram of milk a day, the country's dairy consumption would equal more than a third of the world's total dairy production.
There's a twofold challenge for New Zealand companies wanting to take advantage of this opportunity. Firstly every other major dairy producer in the world is similarly focused and secondly the domestic Chinese dairy industry itself is growing rapidly.
You should also not underestimate the size and quality of your competition in China. The government's pro-growth policies have produced a host of businesses pursuing each and every opportunity.
Other challenges include the uneven application of regulations, local protectionism, indirect subsidies to local industry such as low interest bank loans, intellectual property violations and the need to build up closer relationships with business partners than would be usual in New Zealand.
While there are unique difficulties in doing business in China, they are not as great as they sometimes seem from a distance. Companies already in China see problems as fewer in number and of lesser importance than those looking at China from back in New Zealand.
2009年1月21日
Business Opportunities
http://www.eastmids-china.co.uk/businessopportunities.html
Business Opportunities
Please do not contact the East Midlands China Business Bureau in regards to these opportunities. Appropriate contact details can be found within the opportunity details.
Export Opportunities
Wed, 07 Jan 2009
UK furniture retailing, accessories design and children's furniture design opportunities
Large furniture manufacturing and retailing companies and export-oriented furniture companies in China require UK design to enhance their competitiveness. Children's furniture also in great demand.
Mon, 05 Jan 2009
New energy vehicle research & development
It is the first company in China focusing on new energy vehicle research and development. It is attached to a local group company who plans to mass produce.
Chongqing Online Gaming Developer seeks International Cooperation
U-Soft is a local online gaming developer with overseas background in the US. It seeks international cooperation in terms of Business Inteligence, ERP, CRM, MIS, HIS and etc either via technology transfer or co-development. It also wishes to represent international online game products in local region and China at large and seeks agents for its own products in overseas market at the same time.
Opportunity for UK Brands of Mattresses & Bed Linen
A local retailer and importer in China would like to be the licensee promoting a selected UK brand of spring mattresses and bed linen products to China market. Their plan is to purchase products, which are designed and made in the UK, at the initial years and market them in the China market. A few years later, they are happy to introduce the production to their plant in Shenzhen City, China with an agreement aligned by both parties.
Fri, 02 Jan 2009
Industrial design development
With support from Tianjin municipality, Tianjin Internal Combustion Engine Research Institute is looking for foreign industrial design companies to work with its member companies to develop the city development not only in automotive sector but also include all the other sectors.
All Export Opportunities
Import Opportunities
Wed, 10 Dec 2008
Chinese Telecommunications Company Seeks UK Agent
Nanjing Putian Telecommunications Co., Ltd is looking for UK partners to distribute their products, and potential co-operation opportunities in products and technologies in high-tech telecommunication field.
Thu, 23 Oct 2008
Partners/Distributors Sought for Ultrasound Medical/Surgical Equipment
A Chongqing company is looking for distributors/partners for it's ultrasound medical/surgical devices
Thu, 27 Sep 2007
Distributors for machinery and electronic connectors
Huafeng group is looking for distributers dealing with machinery and electronic connectors to open its European market. The company is also interested in cooperating with connector manufactures for technology cooperation and best practice sharing.
Fri, 24 Aug 2007
Integrator/Distributor for Routers/VOIP equipment required
Chengdu based company looking for a UK distributor.
Tue, 27 Mar 2007
Organic chemical company looking for CERs Buyers
An company in Guiyang, Guizhou Province is looking for buyers of CERs that will be generated from a CDM project developed by the company's own funding.
All Import Opportunities
Projects for Tendering
Page:123456»
Displaying results 1-10 of 57
Tue, 20 Jan 2009
Procurement of Airport Weather Observation for Changsha Huanghua Airport
International tender for procurement of airport weather observation equipment
Mon, 05 Jan 2009
Tender of the Design Contract of Sewage Treatment Projects
Guangzhou Construction Engineering and Trading Centre (www.gzzb.gd.cn), entrusted by the purchaser – Guangzhou Sewage Treatment Co. Ltd, invite sealed bids from a consortium of domestic and overseas design companies, for studying and designing the two sewage treatment projects in Guangzhou, i.e. Phase IV of Lie De Sewage Treatment Plant and Phase II of Li Jiao Sewage Treatment Plant.
Wed, 10 Dec 2008
Procurement of Airport Seating for Baiyun International Airport
International tender for procurement of airport seating at East 3 and West 3 Corridors and some connection areas of Guangzhou Baiyun International Airport expansion project.
Wed, 12 Nov 2008
Procurement of Wheelchair Lifts for Guangzhou Metro Line
Guangdong Machinery & Electric Equipment Terdering Center entrusted by the purchaser, invites sealed bids from eligible suppliers home and abroad for the supply of the following goods and/or service by way of International Competitive Bidding.
Tue, 09 Sep 2008
City Plan and Design of the four banks of the two rivers in Chongqing
Chongqing Urban Planning Bureau and Chongqing Yuzhong District Government are inviting companies to join the planning and design of further development of the four banks of the two rivers, Yangtze River and Jialing River for the Yuzhong District section.
Mon, 01 Sep 2008
Procurement of Metro Trains for Guangzhou Metro Line
China CNTC International Tendering Corporation entrusted by the purchaser, invites sealed bids from eligible suppliers home and abroad for the supply of the metro trains by way of International Competitive Bidding.
Tue, 15 Jul 2008
Sightseeing Facilities on Top of the New TV Tower Project
GZ new TV tower, the world’s tallest TV tower and the future architectural symbol and tourist attraction of Guangzhou city is now seeking the sightseeing facilities design and equipment procurement within the permissible range of top construction, structure and site conditions of the outer shell steel structure.
Fri, 27 Jun 2008
Procurement of Aircraft Parking Guidance System at Baiyun International Airport
Guangzhou Baiyun International Airport is one of the major gateways to China. The airport is currently the second busiest in China based on passenger flow, and the third largest based on cargo movement. GMG International Tendering Co.,Ltd. entrusted by the purchaser, invites sealed bids from eligible suppliers home and abroad.
Wed, 11 Jun 2008
Procurement of pig waste treatment systems
GMG International Tendering Co., Ltd, entrusted by the purchaser – Guangdong Agriculture Environment and Energy General Office, invites sealed bids from domestic and overseas suppliers by way of international competitive bidding, for the supply of pig waste treatment systems to a demonstration project of animal waste management in Guangdong using the World Bank Global Environment Fund.
China National Pension Fund Seeks Global Equity Managers
According to the "Interim Provisions on the Administration of Overseas Investment by National Social Security Fund", National Council for Social Security Fund intends to select a group of external investment managers to provide global investment management services.
Page:123456»
Displaying results 1-10 of 57
Investment Opportunities
Tue, 20 Jan 2009
Qingdao helicopters company looking for investment and technology partners
Apart from trying to set up a service centre in the UK, Haili is also seeking to attract investment and advance technology to support its development in China and regional markets. They are looking for potential partners from the UK who will consider investing in the company, they are particularly interested in venture capital investment, as well as potential technology partners.
Mon, 12 Jan 2009
Partnership with Chinese Automobile Group
ShaanXi Auto Group is seeking collaboration with foreign companies in areas such as whole vehicle manufactures or suppliers of design and component parts.
Oil Storage Project Opportunity in Chaozhou
A state-owned reorganized stock company in China is looking for foreign partner to set up an oil storage reserves in Chaozhou, Guangdong, China.
Mon, 05 Jan 2009
Partner sought for pharmaceutical project
Hubei Jinggong Bioengineering Co Ltd is seeking for a partner on a project to produce 100 tons of pharmaceutical intermediate.
Partnership with XAC/China super large company
XAC, established in 1958, is a super-sized aviation industry enterprise integrated with scientific R&D and production, is a base for developing and manufacturing large and medium-sized aircrafts in China.
All Investment Opportunities
Technology Transfer Opportunities
Wed, 10 Jan 2007
Click here for a list of technologies that Chinese companies are seeking to co-operate with British firms on
New Project for the Production of High-Purity Yellow Phosphorous
Chinese company expanding production of computerised car washing machines
Joint Venture project on chemical preparation for locust preventing and controlling
Project on Cambrian Period Park
Technical Support for Life Style Management Project
Industrial company seeks liquid injection related equipment
R&D, Manufacturer system of digital watermarking anti-forgery in printing (Chengdu)
Distributor of telecommunication products sought
Loncin seeks cooperation with a Motorcycle design company
Retail business seeking strategic partner
Electronics company looking to work with UK firms
Coal Mine Methane Development Project
New Chendgu Sports Centre
Chengdu electronics company seeking partner
Motorcycle Factory looking for Joint Venture Partners
Agricultural Firm Seeking Foreign Management Expertise
Chinese company is seeking a partner to develop motorcycle engines
Shineray looking for technical support for engine development
Listing, Venture Capital and Banking Services for a Leading Minerals Manufacturer
B-ray Media company seeking strategic partner
Manufacture and sale of electronics and telecommunication products
Seeking Financial Services Consultancy to help list overseas
Retail Business Seeking Strategic Partner
Organic chemical company looking for CERs Buyers
Supply and Delivery of Railway Materials
Mobile light measurement equipment required
Tenders for the Supply & Installation of Passenger Boarding Bridges invited
Medical company looking for partners in product development
Guangzhou Surexam seeks UK Suppliers for Biomaterial
Ball valves used in Oil and Gas Sector required
Air Disk Brake Project
450cc Motorcycle Engine Technology needed
Film Distributor seeking UK films
Game Publisher to Localise and Distribute Foreign Console and PC Games
UK investor for a JV hospital sought
Opportunity to export Bullet-proof steel plate/Glass
JV opportunity in pharmaceutical development
Pharmaceutical Development Project
Central Yunnan Roads Development Project
Jonway Auto is looking for strategic investor
Virtual Reality Technology Partnership Opportunity
Coal Mine Methane CDM Project
Non-Oil ignition Technology and Systems Sought
UK Mobile Single games are Required
Mobile Value Added Services, Interactive TV and Programs Are Required
Fume denox technology required
Automotive and Motorcycle Gear Manufacturer looking for financial services
Skyman Industrial Group Seeking Strategic partnership
Southern Sichuan Road Development Project
White Goods Treatment Technology Required
Invitation for Bids on Coal Mine Methane Development Project
JV opportunity for heavy load trucks - Guangzhou
Elevator company seeks to distribute European goods
Integrator/Distributor for Routers/VOIP equipment required
Opportunity to jointly research and develop, Manufacture, and sell communication equipment
Partnership with UK firms in animation sector sought
Medical Waste Treatment Solution Required
Aircraft Engines and Industrial Gas Turbo Manufacturing Equipment required
Sichuan company looking for production line for disposable glass tubes
Guangzhou legal service provider seeks overseas partner
Solid waste separation & remediation technology required
Joint Venture opportunity for furniture manufacture
Wind Power CDM Project
Footwear designers / company needed in China
Short-Term Training for Auto Engineers in China
New Hope Group seeking international partnership and financial services
JV engineering laboratory
Chicken feet for Eastern China
Milk transport trucks required
Distributors for machinery and electronic connectors
Chinese paint and coating company seeking UK partner
Iron & Steel Financial Expertise sought
China-end-of-life vehicle treatment required
Technology for utilisation of gas with low methane concentration required
China (Chongqing) - Tourism Development Planning
Chuan Wei Looking for Financial Service
Pre-qualify for the Architecture Design Competition for Asian Games Village
Theatre Stage Lighting and Acoustics Design and Consulting
Joint Ventured Opportunity in Instant Noodles Production Equipment
Wasdon wishes to import UK leisure food
Joint training programme on recycling economy education
Shenzhen Gas Looking for Training Opportunities in UK
Changsha healthcare company seeks UK JV partner
Partner with Chinese firms on Electrical Switchgear
Partner with Chinese firms in software industry
China Polysilicon Mine Seeking UK investment partners (feasibility study available)
Bus Manufacturing Joint Ventures Opportunity
Seeking partnership in WEEE project
CNOOC Blue Chemical Ltd is looking for UK technologies in acetic acid
Culture and Art Centre Planning and Construction Design Competition
Partnership for Agriculture Project
Guangzhou leisure food company looks for marrowfat pea suppliers from the UK
Asian Games Architecture Design Competition
Procurement of Sewage Disposal Equipment
Procurement of Acid Oil
Xiamen East Ocean Fishery Co. seeks JV partner for a natural taurine extraction project
SAMIC looking for UK Aeroengine Parts sub-contractors
Procurement of Sewage Pumps, Mixers, Blowers, Dewatering and Disinfection Systems
Procurement of Solid Waste Vertical Compression Transfer Station
Sofa Manufacturer Wants Leather Sofa Design Service For Export to European Market
Rolling stock for inter-city transit of Guangzhou - Foshan Section
Baiyun New City Urban Design and Planning Competition
Office/Interior Space Design
Technical Transfer on New Building Material
Treatment and recycling of solid waste
Technology/solution required for utilisation of geo-thermal energy
Procurement of Waste Incinerators, Fume Cleaning Systems, Steam Turbine Power Generators
Business Opportunities
Please do not contact the East Midlands China Business Bureau in regards to these opportunities. Appropriate contact details can be found within the opportunity details.
Export Opportunities
Wed, 07 Jan 2009
UK furniture retailing, accessories design and children's furniture design opportunities
Large furniture manufacturing and retailing companies and export-oriented furniture companies in China require UK design to enhance their competitiveness. Children's furniture also in great demand.
Mon, 05 Jan 2009
New energy vehicle research & development
It is the first company in China focusing on new energy vehicle research and development. It is attached to a local group company who plans to mass produce.
Chongqing Online Gaming Developer seeks International Cooperation
U-Soft is a local online gaming developer with overseas background in the US. It seeks international cooperation in terms of Business Inteligence, ERP, CRM, MIS, HIS and etc either via technology transfer or co-development. It also wishes to represent international online game products in local region and China at large and seeks agents for its own products in overseas market at the same time.
Opportunity for UK Brands of Mattresses & Bed Linen
A local retailer and importer in China would like to be the licensee promoting a selected UK brand of spring mattresses and bed linen products to China market. Their plan is to purchase products, which are designed and made in the UK, at the initial years and market them in the China market. A few years later, they are happy to introduce the production to their plant in Shenzhen City, China with an agreement aligned by both parties.
Fri, 02 Jan 2009
Industrial design development
With support from Tianjin municipality, Tianjin Internal Combustion Engine Research Institute is looking for foreign industrial design companies to work with its member companies to develop the city development not only in automotive sector but also include all the other sectors.
All Export Opportunities
Import Opportunities
Wed, 10 Dec 2008
Chinese Telecommunications Company Seeks UK Agent
Nanjing Putian Telecommunications Co., Ltd is looking for UK partners to distribute their products, and potential co-operation opportunities in products and technologies in high-tech telecommunication field.
Thu, 23 Oct 2008
Partners/Distributors Sought for Ultrasound Medical/Surgical Equipment
A Chongqing company is looking for distributors/partners for it's ultrasound medical/surgical devices
Thu, 27 Sep 2007
Distributors for machinery and electronic connectors
Huafeng group is looking for distributers dealing with machinery and electronic connectors to open its European market. The company is also interested in cooperating with connector manufactures for technology cooperation and best practice sharing.
Fri, 24 Aug 2007
Integrator/Distributor for Routers/VOIP equipment required
Chengdu based company looking for a UK distributor.
Tue, 27 Mar 2007
Organic chemical company looking for CERs Buyers
An company in Guiyang, Guizhou Province is looking for buyers of CERs that will be generated from a CDM project developed by the company's own funding.
All Import Opportunities
Projects for Tendering
Page:123456»
Displaying results 1-10 of 57
Tue, 20 Jan 2009
Procurement of Airport Weather Observation for Changsha Huanghua Airport
International tender for procurement of airport weather observation equipment
Mon, 05 Jan 2009
Tender of the Design Contract of Sewage Treatment Projects
Guangzhou Construction Engineering and Trading Centre (www.gzzb.gd.cn), entrusted by the purchaser – Guangzhou Sewage Treatment Co. Ltd, invite sealed bids from a consortium of domestic and overseas design companies, for studying and designing the two sewage treatment projects in Guangzhou, i.e. Phase IV of Lie De Sewage Treatment Plant and Phase II of Li Jiao Sewage Treatment Plant.
Wed, 10 Dec 2008
Procurement of Airport Seating for Baiyun International Airport
International tender for procurement of airport seating at East 3 and West 3 Corridors and some connection areas of Guangzhou Baiyun International Airport expansion project.
Wed, 12 Nov 2008
Procurement of Wheelchair Lifts for Guangzhou Metro Line
Guangdong Machinery & Electric Equipment Terdering Center entrusted by the purchaser, invites sealed bids from eligible suppliers home and abroad for the supply of the following goods and/or service by way of International Competitive Bidding.
Tue, 09 Sep 2008
City Plan and Design of the four banks of the two rivers in Chongqing
Chongqing Urban Planning Bureau and Chongqing Yuzhong District Government are inviting companies to join the planning and design of further development of the four banks of the two rivers, Yangtze River and Jialing River for the Yuzhong District section.
Mon, 01 Sep 2008
Procurement of Metro Trains for Guangzhou Metro Line
China CNTC International Tendering Corporation entrusted by the purchaser, invites sealed bids from eligible suppliers home and abroad for the supply of the metro trains by way of International Competitive Bidding.
Tue, 15 Jul 2008
Sightseeing Facilities on Top of the New TV Tower Project
GZ new TV tower, the world’s tallest TV tower and the future architectural symbol and tourist attraction of Guangzhou city is now seeking the sightseeing facilities design and equipment procurement within the permissible range of top construction, structure and site conditions of the outer shell steel structure.
Fri, 27 Jun 2008
Procurement of Aircraft Parking Guidance System at Baiyun International Airport
Guangzhou Baiyun International Airport is one of the major gateways to China. The airport is currently the second busiest in China based on passenger flow, and the third largest based on cargo movement. GMG International Tendering Co.,Ltd. entrusted by the purchaser, invites sealed bids from eligible suppliers home and abroad.
Wed, 11 Jun 2008
Procurement of pig waste treatment systems
GMG International Tendering Co., Ltd, entrusted by the purchaser – Guangdong Agriculture Environment and Energy General Office, invites sealed bids from domestic and overseas suppliers by way of international competitive bidding, for the supply of pig waste treatment systems to a demonstration project of animal waste management in Guangdong using the World Bank Global Environment Fund.
China National Pension Fund Seeks Global Equity Managers
According to the "Interim Provisions on the Administration of Overseas Investment by National Social Security Fund", National Council for Social Security Fund intends to select a group of external investment managers to provide global investment management services.
Page:123456»
Displaying results 1-10 of 57
Investment Opportunities
Tue, 20 Jan 2009
Qingdao helicopters company looking for investment and technology partners
Apart from trying to set up a service centre in the UK, Haili is also seeking to attract investment and advance technology to support its development in China and regional markets. They are looking for potential partners from the UK who will consider investing in the company, they are particularly interested in venture capital investment, as well as potential technology partners.
Mon, 12 Jan 2009
Partnership with Chinese Automobile Group
ShaanXi Auto Group is seeking collaboration with foreign companies in areas such as whole vehicle manufactures or suppliers of design and component parts.
Oil Storage Project Opportunity in Chaozhou
A state-owned reorganized stock company in China is looking for foreign partner to set up an oil storage reserves in Chaozhou, Guangdong, China.
Mon, 05 Jan 2009
Partner sought for pharmaceutical project
Hubei Jinggong Bioengineering Co Ltd is seeking for a partner on a project to produce 100 tons of pharmaceutical intermediate.
Partnership with XAC/China super large company
XAC, established in 1958, is a super-sized aviation industry enterprise integrated with scientific R&D and production, is a base for developing and manufacturing large and medium-sized aircrafts in China.
All Investment Opportunities
Technology Transfer Opportunities
Wed, 10 Jan 2007
Click here for a list of technologies that Chinese companies are seeking to co-operate with British firms on
New Project for the Production of High-Purity Yellow Phosphorous
Chinese company expanding production of computerised car washing machines
Joint Venture project on chemical preparation for locust preventing and controlling
Project on Cambrian Period Park
Technical Support for Life Style Management Project
Industrial company seeks liquid injection related equipment
R&D, Manufacturer system of digital watermarking anti-forgery in printing (Chengdu)
Distributor of telecommunication products sought
Loncin seeks cooperation with a Motorcycle design company
Retail business seeking strategic partner
Electronics company looking to work with UK firms
Coal Mine Methane Development Project
New Chendgu Sports Centre
Chengdu electronics company seeking partner
Motorcycle Factory looking for Joint Venture Partners
Agricultural Firm Seeking Foreign Management Expertise
Chinese company is seeking a partner to develop motorcycle engines
Shineray looking for technical support for engine development
Listing, Venture Capital and Banking Services for a Leading Minerals Manufacturer
B-ray Media company seeking strategic partner
Manufacture and sale of electronics and telecommunication products
Seeking Financial Services Consultancy to help list overseas
Retail Business Seeking Strategic Partner
Organic chemical company looking for CERs Buyers
Supply and Delivery of Railway Materials
Mobile light measurement equipment required
Tenders for the Supply & Installation of Passenger Boarding Bridges invited
Medical company looking for partners in product development
Guangzhou Surexam seeks UK Suppliers for Biomaterial
Ball valves used in Oil and Gas Sector required
Air Disk Brake Project
450cc Motorcycle Engine Technology needed
Film Distributor seeking UK films
Game Publisher to Localise and Distribute Foreign Console and PC Games
UK investor for a JV hospital sought
Opportunity to export Bullet-proof steel plate/Glass
JV opportunity in pharmaceutical development
Pharmaceutical Development Project
Central Yunnan Roads Development Project
Jonway Auto is looking for strategic investor
Virtual Reality Technology Partnership Opportunity
Coal Mine Methane CDM Project
Non-Oil ignition Technology and Systems Sought
UK Mobile Single games are Required
Mobile Value Added Services, Interactive TV and Programs Are Required
Fume denox technology required
Automotive and Motorcycle Gear Manufacturer looking for financial services
Skyman Industrial Group Seeking Strategic partnership
Southern Sichuan Road Development Project
White Goods Treatment Technology Required
Invitation for Bids on Coal Mine Methane Development Project
JV opportunity for heavy load trucks - Guangzhou
Elevator company seeks to distribute European goods
Integrator/Distributor for Routers/VOIP equipment required
Opportunity to jointly research and develop, Manufacture, and sell communication equipment
Partnership with UK firms in animation sector sought
Medical Waste Treatment Solution Required
Aircraft Engines and Industrial Gas Turbo Manufacturing Equipment required
Sichuan company looking for production line for disposable glass tubes
Guangzhou legal service provider seeks overseas partner
Solid waste separation & remediation technology required
Joint Venture opportunity for furniture manufacture
Wind Power CDM Project
Footwear designers / company needed in China
Short-Term Training for Auto Engineers in China
New Hope Group seeking international partnership and financial services
JV engineering laboratory
Chicken feet for Eastern China
Milk transport trucks required
Distributors for machinery and electronic connectors
Chinese paint and coating company seeking UK partner
Iron & Steel Financial Expertise sought
China-end-of-life vehicle treatment required
Technology for utilisation of gas with low methane concentration required
China (Chongqing) - Tourism Development Planning
Chuan Wei Looking for Financial Service
Pre-qualify for the Architecture Design Competition for Asian Games Village
Theatre Stage Lighting and Acoustics Design and Consulting
Joint Ventured Opportunity in Instant Noodles Production Equipment
Wasdon wishes to import UK leisure food
Joint training programme on recycling economy education
Shenzhen Gas Looking for Training Opportunities in UK
Changsha healthcare company seeks UK JV partner
Partner with Chinese firms on Electrical Switchgear
Partner with Chinese firms in software industry
China Polysilicon Mine Seeking UK investment partners (feasibility study available)
Bus Manufacturing Joint Ventures Opportunity
Seeking partnership in WEEE project
CNOOC Blue Chemical Ltd is looking for UK technologies in acetic acid
Culture and Art Centre Planning and Construction Design Competition
Partnership for Agriculture Project
Guangzhou leisure food company looks for marrowfat pea suppliers from the UK
Asian Games Architecture Design Competition
Procurement of Sewage Disposal Equipment
Procurement of Acid Oil
Xiamen East Ocean Fishery Co. seeks JV partner for a natural taurine extraction project
SAMIC looking for UK Aeroengine Parts sub-contractors
Procurement of Sewage Pumps, Mixers, Blowers, Dewatering and Disinfection Systems
Procurement of Solid Waste Vertical Compression Transfer Station
Sofa Manufacturer Wants Leather Sofa Design Service For Export to European Market
Rolling stock for inter-city transit of Guangzhou - Foshan Section
Baiyun New City Urban Design and Planning Competition
Office/Interior Space Design
Technical Transfer on New Building Material
Treatment and recycling of solid waste
Technology/solution required for utilisation of geo-thermal energy
Procurement of Waste Incinerators, Fume Cleaning Systems, Steam Turbine Power Generators
New Resources Consulting
Greetings, Oliver:
As an independent consultant, you work hard to maintain and expand your network. Your clients have learned to trust your judgment, and you take your relationship with them very seriously. While working with them, you identify opportunities to add resources to their projects. You see the potential to increase your income, but you know how much more work that this will add to your already overbooked schedule.
If this sounds like you, New Resources would like to invite you to become part of ConsultantConnection. As a member of this community, we’ll partner with you to bring creative solutions to your clients. And the best part? We share the margin with you to bring you additional revenue. We’ve seen consultants add tens of thousands of dollars to their bottom line through this program and would like to add you to our list of happy partners.
Please visit www.nrconsults.com/consultants for more information. We look forward to a mutually prosperous relationship!
Best Regards,
Michael A. Stone
Vice President, New Resources Consulting
As an independent consultant, you work hard to maintain and expand your network. Your clients have learned to trust your judgment, and you take your relationship with them very seriously. While working with them, you identify opportunities to add resources to their projects. You see the potential to increase your income, but you know how much more work that this will add to your already overbooked schedule.
If this sounds like you, New Resources would like to invite you to become part of ConsultantConnection. As a member of this community, we’ll partner with you to bring creative solutions to your clients. And the best part? We share the margin with you to bring you additional revenue. We’ve seen consultants add tens of thousands of dollars to their bottom line through this program and would like to add you to our list of happy partners.
Please visit www.nrconsults.com/consultants for more information. We look forward to a mutually prosperous relationship!
Best Regards,
Michael A. Stone
Vice President, New Resources Consulting
Looking at acquiring a business or working on big government projects in China?
Looking at acquiring a business or working on big government projects in China?
China is not just the World Factory, most booming market for resources and consumer goods and the fastest growing economy in the world with an average GDP of over 10% in the past decade. It is also the most attractive destination for foreign investment since China opened its door to foreign businesses in 1978. With China’s access to WTO in 2000, less restriction on foreign investment, new infrastructure, supply of abundant quality and cheap labour, there are good opportunities to invest in a quality business or acquire businesses in China.
Acquiring an existing business is a way to quickly establish your own presence in China and leverage its facilities, resources and networks to access the Chinese market or conduct low-cost manufacturing in China and then export to the global market. Working with Chinese government on big projects is another avenue to develop your market in China.
Australian Business International Trade Services has acquired a list of Chinese businesses (PDF) that are looking for business partners and acquisitions and government projects. The businesses and projects cover mining, agricultural, high tech, environmental protection, food and beverage, bio-technology, construction, manufacturing, etc.
Heilongjiang provincial government is organising a delegation including some of the businesses in the list to visit Australia mid this year.
If you are interested in these opportunities and would like to meet with the delegation or intend to identify other quality investment projects in China, please email
China is not just the World Factory, most booming market for resources and consumer goods and the fastest growing economy in the world with an average GDP of over 10% in the past decade. It is also the most attractive destination for foreign investment since China opened its door to foreign businesses in 1978. With China’s access to WTO in 2000, less restriction on foreign investment, new infrastructure, supply of abundant quality and cheap labour, there are good opportunities to invest in a quality business or acquire businesses in China.
Acquiring an existing business is a way to quickly establish your own presence in China and leverage its facilities, resources and networks to access the Chinese market or conduct low-cost manufacturing in China and then export to the global market. Working with Chinese government on big projects is another avenue to develop your market in China.
Australian Business International Trade Services has acquired a list of Chinese businesses (PDF) that are looking for business partners and acquisitions and government projects. The businesses and projects cover mining, agricultural, high tech, environmental protection, food and beverage, bio-technology, construction, manufacturing, etc.
Heilongjiang provincial government is organising a delegation including some of the businesses in the list to visit Australia mid this year.
If you are interested in these opportunities and would like to meet with the delegation or intend to identify other quality investment projects in China, please email
2009年1月20日
Chinese Companies Go Abroad (Part 1: The Auto Sector)
Part 1: Auto Sector
The following is part one of a ten part report evaluating the progress of key Chinese industries as they expand overseas (see the introduction to this series here). CMR interviewed several hundred key executives in each of ten industries to better understand the extent of their globalization thus far, their goals and plans going forward, and the major challenges they are meeting along the way. This section describes the opportunities and challenges facing China's automobile industry.
The auto industry is one of the most advanced Chinese industries in the move to expand overseas. As recently as 2001, many companies were reluctant to begin the move. Today, Chinese brand autos are sold in 188 countries and regions worldwide, for a total of 54.38 billion RMB ($7.23 billion USD) in 2007. While overseas demand for Chinese autos has slowed dramatically in recent months due to effects of the financial crisis on key markets, both auto companies like Chery and the Chinese government will continue to prioritize expansion overseas going forward as it is considered crucial to the continued growth of the Chinese auto sector, for reasons to be described below. 10 out of 10 respondents have started moving overseas, and all consider further development abroad a high priority.
Motivations
From Ford (F) and GM (GM) to Bentley and Rolls Royce, auto companies worldwide have been keen to leverage China as a key source of growth where growth rates have hovered at a 20% clip the last several years before sales slowed dramatically in Q4 of 2008. At home, domestic Chinese auto companies are having difficulty competing with international companies in terms of reliability, safety, and emissions control, and are increasingly looking abroad for growth opportunities. Nearly all respondent companies mentioned fierce domestic competition from international and other domestic auto companies as a top factor motivating their expansion overseas.
While demand has dropped steeply in recent months due to the financial crisis, respondents also mentioned high demand as a top factor motivating their overseas expansion; exports reached 557,736 units in the first three quarters of 2008, up 34.9 from the previous year. Because Chinese cars have significant price advantages in foreign markets, companies are finding large demand for their autos overseas, in emerging markets in particular where cheaper and smaller cars are popular. While the financial crisis has slowed demand in many of China's key overseas markets such as Vietnam, Russia, and Ukraine, overseas markets will remain crucial to Chinese auto companies' long term growth plans.
Chinese auto companies are also looking to move abroad as a way to build their brand image, a top priority to nearly all respondents, before refocusing on the domestic China market. By moving abroad, respondents felt, they could evolve from being "simply a Chinese domestic company" to becoming a true an international brand. They feel being able to call themselves "international" will add prestige and cache to the brand, which they can leverage via marketing to compete better both abroad and at home. In the words of one respondent, "selling to so many countries makes us more than a Chinese company. Different countries get to know us and we become an 'international' brand, which is really good for our image."
Current and Future Operations
Emerging markets are currently the top destinations for Chinese auto companies like Chery which just secured a billion + USD loan soley for overseas expansion. 100% of respondents have already established operations in such areas as Russia, the Middle East and Southeast Asia. These emerging markets have less stringent rules and regulations than North America and Western Europe, meaning Chinese companies can more easily enter the market with their existing technologies. Because Chinese cars can be priced considerably lower than others, there is considerable demand for Chinese cars in these areas.
In addition to meeting the rising demand for cheaper but "good enough" vehicles in emerging markets, Chinese auto companies are seizing the opportunity to sell to markets not open to other countries. For example, two industry leaders interviewed are expanding operations in North Korea: one is exporting and one has a complete knockdown (CKD) factory there.
While emerging markets are the primary target for Chinese auto companies now, the vast majority of respondents have as their goal to enter North American and Western European markets in the future, though most lack specific plans at the moment. Chinese companies value these areas not only because of the market size, but because they feel selling in these markets, meeting the array of rules and regulations, and passing the extensive quality and safety tests, signifies their brands have moved up to the next level, achieved truly global status, and they can compete meaningfully in any market.
Thus far, the vast majority of companies interviewed have chosen to develop their presence abroad by finding a partner in the target country. These partnerships can allow Chinese companies access to a wide range of resources and information, such as factories and the partner's own technical knowledge and networks.
Access to factories in the target countries is a crucial step for Chinese auto companies' move abroad. Nearly every respondent company is using access to their partner's factories as their method of bringing their vehicles to market. To avoid the hefty taxes involved with shipping whole vehicles abroad, Chinese companies are exporting via complete knockdown (CKD) or semi knockdown (SKD) – manufacturing auto parts in China and shipping the unassembled or partially assembled parts abroad for final assembly in the target market. Access to these factories in the target market is also crucial in that it allows Chinese companies to provide after-sales services, which cannot easily be supported by export alone. Having a factory abroad also allows Chinese companies to ease rising costs due to RMB appreciation, a key concern for all respondents.
In addition to factory access, Chinese companies are seeking partnerships and setting up R&D centers abroad to help build their own technical and managerial skills. One respondent company has set up an R&D center in Italy, for example, where they have hired professionals to focus on appearance and design, and an R&D center in Japan to focus on design of technological and electrical components.
A minority of companies interviewed are also using M&A as a way of building their presence abroad. With the help of a 2 billion RMB low-interest loan from China Exim Bank—the kind of governmental support described in China's "Going Out" (Zou Chu Qu) policy—Nanjing Auto Group purchased British auto company MG in 2006 as a way to gain access into foreign markets. As the company told us, "the MG brand already has channels in foreign markets, and it is already famous, so we don't need to start from scratch with marketing." While it allows quick access to existing resources, M&A has been a less popular choice for Chinese auto companies due to its capital intensive nature. This past December, Chery received another loan from China Exim, this time totaling 10 billion RMB ($1.5 billion USD), to help support continued international expansion.
Challenges
Respondent companies reported getting autos past international rules and regulations as the biggest challenge in entering overseas markets, and North America and Western Europe in particular due to their strict quality standards. Nearly all companies also complained of serious challenges in finding the appropriate talent to lead development in both technical and managerial aspects, as well as experts with cross-cultural experience who can help lead the push abroad and develop long-term strategy. As one respondent told us, "We have talented people now but they are young and lack experience. We have problems that need solving now, and we cannot wait until they get more experience to fix them." Thus, some Chinese auto companies like Jianghuai Auto and Nanjing Auto have invested and established R&D abroad and hired foreign talent to do interior designing and development, so that they can produce automotives with world class advanced technology.
Going Forward
While 2009 will be a tough year for Chinese automakers, both in exports and domestic sales, expansion overseas will remain a key long term goal. Chinese auto companies should not be too hasty in their rush to grow abroad. Rather, they should focus energy and resources now on improving their quality and safety, and building the right brand image from the start. While it is possible for brand image to deteriorate quickly from good to bad, it is much harder to build from weaker brand image to good, especially with records of mediocre performance on quality and safety tests.
The following is part one of a ten part report evaluating the progress of key Chinese industries as they expand overseas (see the introduction to this series here). CMR interviewed several hundred key executives in each of ten industries to better understand the extent of their globalization thus far, their goals and plans going forward, and the major challenges they are meeting along the way. This section describes the opportunities and challenges facing China's automobile industry.
The auto industry is one of the most advanced Chinese industries in the move to expand overseas. As recently as 2001, many companies were reluctant to begin the move. Today, Chinese brand autos are sold in 188 countries and regions worldwide, for a total of 54.38 billion RMB ($7.23 billion USD) in 2007. While overseas demand for Chinese autos has slowed dramatically in recent months due to effects of the financial crisis on key markets, both auto companies like Chery and the Chinese government will continue to prioritize expansion overseas going forward as it is considered crucial to the continued growth of the Chinese auto sector, for reasons to be described below. 10 out of 10 respondents have started moving overseas, and all consider further development abroad a high priority.
Motivations
From Ford (F) and GM (GM) to Bentley and Rolls Royce, auto companies worldwide have been keen to leverage China as a key source of growth where growth rates have hovered at a 20% clip the last several years before sales slowed dramatically in Q4 of 2008. At home, domestic Chinese auto companies are having difficulty competing with international companies in terms of reliability, safety, and emissions control, and are increasingly looking abroad for growth opportunities. Nearly all respondent companies mentioned fierce domestic competition from international and other domestic auto companies as a top factor motivating their expansion overseas.
While demand has dropped steeply in recent months due to the financial crisis, respondents also mentioned high demand as a top factor motivating their overseas expansion; exports reached 557,736 units in the first three quarters of 2008, up 34.9 from the previous year. Because Chinese cars have significant price advantages in foreign markets, companies are finding large demand for their autos overseas, in emerging markets in particular where cheaper and smaller cars are popular. While the financial crisis has slowed demand in many of China's key overseas markets such as Vietnam, Russia, and Ukraine, overseas markets will remain crucial to Chinese auto companies' long term growth plans.
Chinese auto companies are also looking to move abroad as a way to build their brand image, a top priority to nearly all respondents, before refocusing on the domestic China market. By moving abroad, respondents felt, they could evolve from being "simply a Chinese domestic company" to becoming a true an international brand. They feel being able to call themselves "international" will add prestige and cache to the brand, which they can leverage via marketing to compete better both abroad and at home. In the words of one respondent, "selling to so many countries makes us more than a Chinese company. Different countries get to know us and we become an 'international' brand, which is really good for our image."
Current and Future Operations
Emerging markets are currently the top destinations for Chinese auto companies like Chery which just secured a billion + USD loan soley for overseas expansion. 100% of respondents have already established operations in such areas as Russia, the Middle East and Southeast Asia. These emerging markets have less stringent rules and regulations than North America and Western Europe, meaning Chinese companies can more easily enter the market with their existing technologies. Because Chinese cars can be priced considerably lower than others, there is considerable demand for Chinese cars in these areas.
In addition to meeting the rising demand for cheaper but "good enough" vehicles in emerging markets, Chinese auto companies are seizing the opportunity to sell to markets not open to other countries. For example, two industry leaders interviewed are expanding operations in North Korea: one is exporting and one has a complete knockdown (CKD) factory there.
While emerging markets are the primary target for Chinese auto companies now, the vast majority of respondents have as their goal to enter North American and Western European markets in the future, though most lack specific plans at the moment. Chinese companies value these areas not only because of the market size, but because they feel selling in these markets, meeting the array of rules and regulations, and passing the extensive quality and safety tests, signifies their brands have moved up to the next level, achieved truly global status, and they can compete meaningfully in any market.
Thus far, the vast majority of companies interviewed have chosen to develop their presence abroad by finding a partner in the target country. These partnerships can allow Chinese companies access to a wide range of resources and information, such as factories and the partner's own technical knowledge and networks.
Access to factories in the target countries is a crucial step for Chinese auto companies' move abroad. Nearly every respondent company is using access to their partner's factories as their method of bringing their vehicles to market. To avoid the hefty taxes involved with shipping whole vehicles abroad, Chinese companies are exporting via complete knockdown (CKD) or semi knockdown (SKD) – manufacturing auto parts in China and shipping the unassembled or partially assembled parts abroad for final assembly in the target market. Access to these factories in the target market is also crucial in that it allows Chinese companies to provide after-sales services, which cannot easily be supported by export alone. Having a factory abroad also allows Chinese companies to ease rising costs due to RMB appreciation, a key concern for all respondents.
In addition to factory access, Chinese companies are seeking partnerships and setting up R&D centers abroad to help build their own technical and managerial skills. One respondent company has set up an R&D center in Italy, for example, where they have hired professionals to focus on appearance and design, and an R&D center in Japan to focus on design of technological and electrical components.
A minority of companies interviewed are also using M&A as a way of building their presence abroad. With the help of a 2 billion RMB low-interest loan from China Exim Bank—the kind of governmental support described in China's "Going Out" (Zou Chu Qu) policy—Nanjing Auto Group purchased British auto company MG in 2006 as a way to gain access into foreign markets. As the company told us, "the MG brand already has channels in foreign markets, and it is already famous, so we don't need to start from scratch with marketing." While it allows quick access to existing resources, M&A has been a less popular choice for Chinese auto companies due to its capital intensive nature. This past December, Chery received another loan from China Exim, this time totaling 10 billion RMB ($1.5 billion USD), to help support continued international expansion.
Challenges
Respondent companies reported getting autos past international rules and regulations as the biggest challenge in entering overseas markets, and North America and Western Europe in particular due to their strict quality standards. Nearly all companies also complained of serious challenges in finding the appropriate talent to lead development in both technical and managerial aspects, as well as experts with cross-cultural experience who can help lead the push abroad and develop long-term strategy. As one respondent told us, "We have talented people now but they are young and lack experience. We have problems that need solving now, and we cannot wait until they get more experience to fix them." Thus, some Chinese auto companies like Jianghuai Auto and Nanjing Auto have invested and established R&D abroad and hired foreign talent to do interior designing and development, so that they can produce automotives with world class advanced technology.
Going Forward
While 2009 will be a tough year for Chinese automakers, both in exports and domestic sales, expansion overseas will remain a key long term goal. Chinese auto companies should not be too hasty in their rush to grow abroad. Rather, they should focus energy and resources now on improving their quality and safety, and building the right brand image from the start. While it is possible for brand image to deteriorate quickly from good to bad, it is much harder to build from weaker brand image to good, especially with records of mediocre performance on quality and safety tests.
Chinese Companies Go Abroad (Part 2: The Consumer Electronics Sector)
Part 2: Consumer Electronics
The following is part two of a ten part report evaluating the progress of key Chinese industries as they expand overseas (see the introduction to this series and part 1). CMR interviewed several hundred key executives in each of ten industries to better understand the extent of their globalization thus far, their goals and plans going forward, and the major challenges they are meeting along the way. This section describes the opportunities and challenges facing China's consumer electronics industry.
Consumer electronics is one of China's most mature industries, and one of its most developed in terms of overseas expansion. For some Chinese consumer electronics companies, the move abroad started as early as the 1990s, and even the late 1980s. 100% of large industry leaders interviewed have already started moving abroad, as have 80% of smaller leading companies.
Motivations
80% of large industry leaders interviewed consider building their brand image from domestic Chinese to global name brand their primary goal in expanding abroad. Respondents hope to establish themselves as a top-rate international brand not only to build their reputation for quality, reliability, and innovation, but for reasons of national pride, to become "a Chinese brand known to all the world" that can compete with Japanese and Korean brands like Sony (SNE) and LG. Many respondents indicated they were willing to spend up to 10 percent of their annual budget on marketing efforts abroad to build this sort of brand awareness.
While overseas sales have slowed recently for companies including Haier (600690) and TCL (000100) due to the financial crisis, a large majority of respondent companies are moving overseas in response to strong demand for their products, especially from emerging markets which have been less afflicted and still expect to see positive economic growth in 2009.
Current and Future Operations
Chinese consumer electronics companies strategies differ greatly as to which overseas markets they choose to target, and when. Some larger industry leaders such as Haier chose to go straight to the developed markets of North America and Europe to build their image as top rate international brand and facilitate later transition into other developed and/ or emerging markets. Other large companies such as TCL and the majority of smaller company respondents have chosen to enter emerging markets in places such as southeast Asia and Africa first, where their brands are more competitive with their existing technology, quality, and brand image. All respondent companies hope ultimately to establish a profitable presence in Europe and America, and will establish more R&D centers in these areas to better utilize the talent and technology advantages there and expedite the improvements in technology, durability, and brand image that will enable them to compete in these developed markets.
Many respondent companies began their move overseas exporting as original equipment manufacturers (OEM). Larger and smaller industry leaders alike are now pushing their own brands overseas. As one respondent told us, "the whole home appliance industry has realized that selling their own branded products is the only way a company can succeed in the long run. Selling OEM is more profitable than trying to sell with our own brand in the short term, but in the long run, we must build up our own brand."
Establishing partnerships and joint ventures was by far the most commonly pursued method by respondent companies in getting their branded products to market overseas. By partnering with a company already successful in the target market, Chinese consumer electronics companies can utilize the partner's pre-existing distribution and retail networks to bring their products to market, saving the time and expenses of building these key resources from scratch. Haier, for example, teamed up with Japan's SANYO (SANYY.PK) in 2002 to form joint venture SANYO Haier Co. Ltd. and used SANYO's sales network to sell Haier branded products in Japan. The JV was liquidated in 2007, but only because both companies shared agreed "it had fulfilled its role of permeating the Haier brand into the Japanese market".
In addition to selling their products overseas, Chinese consumer electronic companies are increasingly investing in moving production closer to their target markets. Industry leaders such as Haier, TCL, Gree, Changhong (SHA:600839), Hisense (SHA:600060), for example, have all already established factories overseas in order to expedite and improve profitability of their expansion. Having factories abroad lets these companies avoid anti-dumping and tariff barriers, and reduces exchange rate risk. As inflation and labor costs rise in China, the move abroad also helps these companies keep costs down. As one respondent company told us, "inflation in China has increased production costs for air conditioners 20% year on year. We really don't have a choice—producing in lower-cost countries is becoming more and more important to growing profit."
Challenges
Respondents feel the biggest challenge in moving abroad is understanding and adapting to a new business environment—learning the ropes, for example, in how to work with local distributors, and other local business practices and routines essential to smooth and successful operations abroad.
Working under international regulations and laws is another top challenge, getting the various certifications required by different countries for market entry in particular. This is most challenging for smaller and medium-sized companies, for whom the high fees of applying for these certifications alone are restrictive.
For larger companies involved in a wide array of partnerships, joint ventures, and different ownership strategies, building the right organizational structure to manage these company sub-segments has also proven difficult.
A related challenge is differences in culture. Cultural differences have proved challenging not only in efforts to tailor a product or marketing campaign to local tastes, but when working with and managing local team members.
Finally, and crucial to solving the above problems, Chinese consumer electronics companies are having a hard time finding the talent they need to expand abroad, both in terms of technological capability and experience leading and managing in a cross-cultural environment.
Going Forward
These challenges are not insurmountable; Chinese consumer electronics companies already compete with other multinational brands in developed and developing markets all over the world. Going forward, in addition to maintaining strict dedication to quality control and innovation, Chinese consumer electronics brands should learn from companies like Haier, for example, and work to develop deep understanding of their target markets in order to best meet needs of local consumers.
They also need to learn how to create long-term brand value and not compete solely on price.
The following is part two of a ten part report evaluating the progress of key Chinese industries as they expand overseas (see the introduction to this series and part 1). CMR interviewed several hundred key executives in each of ten industries to better understand the extent of their globalization thus far, their goals and plans going forward, and the major challenges they are meeting along the way. This section describes the opportunities and challenges facing China's consumer electronics industry.
Consumer electronics is one of China's most mature industries, and one of its most developed in terms of overseas expansion. For some Chinese consumer electronics companies, the move abroad started as early as the 1990s, and even the late 1980s. 100% of large industry leaders interviewed have already started moving abroad, as have 80% of smaller leading companies.
Motivations
80% of large industry leaders interviewed consider building their brand image from domestic Chinese to global name brand their primary goal in expanding abroad. Respondents hope to establish themselves as a top-rate international brand not only to build their reputation for quality, reliability, and innovation, but for reasons of national pride, to become "a Chinese brand known to all the world" that can compete with Japanese and Korean brands like Sony (SNE) and LG. Many respondents indicated they were willing to spend up to 10 percent of their annual budget on marketing efforts abroad to build this sort of brand awareness.
While overseas sales have slowed recently for companies including Haier (600690) and TCL (000100) due to the financial crisis, a large majority of respondent companies are moving overseas in response to strong demand for their products, especially from emerging markets which have been less afflicted and still expect to see positive economic growth in 2009.
Current and Future Operations
Chinese consumer electronics companies strategies differ greatly as to which overseas markets they choose to target, and when. Some larger industry leaders such as Haier chose to go straight to the developed markets of North America and Europe to build their image as top rate international brand and facilitate later transition into other developed and/ or emerging markets. Other large companies such as TCL and the majority of smaller company respondents have chosen to enter emerging markets in places such as southeast Asia and Africa first, where their brands are more competitive with their existing technology, quality, and brand image. All respondent companies hope ultimately to establish a profitable presence in Europe and America, and will establish more R&D centers in these areas to better utilize the talent and technology advantages there and expedite the improvements in technology, durability, and brand image that will enable them to compete in these developed markets.
Many respondent companies began their move overseas exporting as original equipment manufacturers (OEM). Larger and smaller industry leaders alike are now pushing their own brands overseas. As one respondent told us, "the whole home appliance industry has realized that selling their own branded products is the only way a company can succeed in the long run. Selling OEM is more profitable than trying to sell with our own brand in the short term, but in the long run, we must build up our own brand."
Establishing partnerships and joint ventures was by far the most commonly pursued method by respondent companies in getting their branded products to market overseas. By partnering with a company already successful in the target market, Chinese consumer electronics companies can utilize the partner's pre-existing distribution and retail networks to bring their products to market, saving the time and expenses of building these key resources from scratch. Haier, for example, teamed up with Japan's SANYO (SANYY.PK) in 2002 to form joint venture SANYO Haier Co. Ltd. and used SANYO's sales network to sell Haier branded products in Japan. The JV was liquidated in 2007, but only because both companies shared agreed "it had fulfilled its role of permeating the Haier brand into the Japanese market".
In addition to selling their products overseas, Chinese consumer electronic companies are increasingly investing in moving production closer to their target markets. Industry leaders such as Haier, TCL, Gree, Changhong (SHA:600839), Hisense (SHA:600060), for example, have all already established factories overseas in order to expedite and improve profitability of their expansion. Having factories abroad lets these companies avoid anti-dumping and tariff barriers, and reduces exchange rate risk. As inflation and labor costs rise in China, the move abroad also helps these companies keep costs down. As one respondent company told us, "inflation in China has increased production costs for air conditioners 20% year on year. We really don't have a choice—producing in lower-cost countries is becoming more and more important to growing profit."
Challenges
Respondents feel the biggest challenge in moving abroad is understanding and adapting to a new business environment—learning the ropes, for example, in how to work with local distributors, and other local business practices and routines essential to smooth and successful operations abroad.
Working under international regulations and laws is another top challenge, getting the various certifications required by different countries for market entry in particular. This is most challenging for smaller and medium-sized companies, for whom the high fees of applying for these certifications alone are restrictive.
For larger companies involved in a wide array of partnerships, joint ventures, and different ownership strategies, building the right organizational structure to manage these company sub-segments has also proven difficult.
A related challenge is differences in culture. Cultural differences have proved challenging not only in efforts to tailor a product or marketing campaign to local tastes, but when working with and managing local team members.
Finally, and crucial to solving the above problems, Chinese consumer electronics companies are having a hard time finding the talent they need to expand abroad, both in terms of technological capability and experience leading and managing in a cross-cultural environment.
Going Forward
These challenges are not insurmountable; Chinese consumer electronics companies already compete with other multinational brands in developed and developing markets all over the world. Going forward, in addition to maintaining strict dedication to quality control and innovation, Chinese consumer electronics brands should learn from companies like Haier, for example, and work to develop deep understanding of their target markets in order to best meet needs of local consumers.
They also need to learn how to create long-term brand value and not compete solely on price.
Chinese Companies Go Abroad (Part 3: The Financial Services Sector)
Part 3: Financial Services
The following is part three of a ten part report evaluating the progress of key Chinese industries as they expand overseas (see the introduction to this series, part 1 and part 2). CMR interviewed several hundred key executives in each of ten industries to better understand the extent of their globalization thus far, their goals and plans going forward, and the major challenges they are meeting along the way. This section describes the opportunities and challenges facing China's financial services industry.
Expansion abroad is a top priority for China's financial institutions. Given the current worldwide financial crisis, and relatively large amounts of liquidity at their disposal, Chinese banks are in a good position to make meaningful progress towards this goal. 100% of large industry leaders interviewed have already started moving overseas, and all respondents have either begun the move or plan to begin within the next five years.
However, there is fear right now by the Chinese Government that too much losses will be incurred by financial institutions if they go abroad and buy non-transparent financial assets which will slow some of the acquisitions. Perhaps their experience with Non-performing Loans (NPLs) make them cautious. For instance, the Bank of China has not gotten final approval yet for its announced 20% stake in Rothschild. Expect this cautious note to prevail for the next several months as the China Investment Corporation (CIC) has been burned with investments in Morgan Stanley (MS) and Blackstone (BX). While the CIC is an investment vehicle and not an actual bank like an ICBC, the experiences of CIC clearly is influencing all relevant regulatory bodies in China and making them think thrice before giving approvals.
Motivations
Chinese financial institutions initially moved overseas to serve corporate clients expanding their businesses abroad. Maintaining these clients' business is a top priority today as well, as increasing numbers of Chinese companies move overseas, and competition increases at home with the influx of foreign banks like Citigroup (C) and Standard Chartered. These initial moves abroad came about via organic growth as well as M&A.
Perhaps most importantly, Chinese banks are viewing expansion abroad as a way to get training in management, organization, and risk assessment. ICBC [1398.HK] paid $5.6 billion USD for a 20% stake in South Africa's Standard Bank [JNB:SBK] last year, for example, not only to better serve the growing ranks of Chinese companies doing business in the region, but to learn technical skills, management and operation techniques directly from their partners. These ventures are opportunities to train their own talent and to attract foreign talent for their future oversea expansions.
Current Situation and Methods of Expansion
Chinese financial institutions are using M&A to build more quickly a meaningful strategic presence abroad. The first major stake by a mainland Chinese bank in a European bank was made in July, 2007, when the China Development Bank (CDB) purchased a stake in Barclays Bank [LON:BARC] in order to help finance the British group's bid for Dutch ABN AMRO (ABN). While Barclays did not ultimately win the bid, CDB successfully established partnership with one of the top global commodity banks. CDB expects to learn from Barclays expertise in global commodity markets, investment banking, and risk management.
The first strategic investment by a mainland Chinese bank in a U.S. bank was made last October when China Minsheng Bank bought 5% of UCBH Holdings, the holding company of San Francisco's United Commercial Bank, a bank catering mainly to small and medium-sized local Chinese-American run businesses. Minsheng purchased another share in March for a total 9.9 percent share valued at 2.5 billion RMB ($317 USD). Minsheng intends to purchase another 10 percent before the end of 2009.
Last November, China's Ping An Insurance Company [SHA:601318] became the largest shareholder in Belgian financial company Fortis N.V., having acquired a 4.18% stake for €1.81 billion ($2.7 billion). This past March they upped that stake to 4.99%, in addition to purchasing half of Fortis' asset management business for €2.15 billion. The business will be rebranded as Fortis Ping An Investments.
As recently as September 2008, Bank of China announced its plans to purchase a 20% stake in French bank LCF Rothschild for 236.3 million euros ($340 million USD). The two banks will work together to develop asset management services for China's newly wealthy once approval is given.
Challenges
Chinese financial institutions' push overseas will not be without its challenges. Chinese banks still face significant rules and regulations, as well as a degree of suspicion and protectionism as they move to expand abroad. One of the main reasons UCBH was willing to partner with Minsheng Bank, for example, was, as a private bank Minsheng had minimal connections to the government, and thus the partnership was more likely to be approved by the Fed. Satisfying requirements of regulatory bodies like the Fed, and learning how to operate under these rules in a new business environment were considered key challenges by a majority of respondents.
As mentioned previously, in addition to financial return on investment, Chinese financial institutions' push to acquire stakes in international heavyweights is in large part to get access to management, organizational, and technical expertise not yet fully developed at home, and assistance in developing new service areas, such as wealth management in the case of Bank of China and LCF Rothschild. Respondent companies overwhelmingly agreed that finding people with experience leading a cross-cultural operation overseas, and people with the necessary technical, managerial, and/ or operational skills is a top challenge in their push abroad. With the Wall Street calamity, Chinese financial institutions have been increasing their recruiting of mainland Chinese who work(ed) in Wall Street and are now vying to come back to China.
Going Forward
While Chinese financial institutions are still in the early stages of moving abroad, this presence was increasing rapidly as Chinese banks conduct M&A in target areas until the financial crisis. These institutions are generally moving first to developing regions, where the business of their Chinese clients is increasing most rapidly, though they continue to work towards building presence in North American and Western European countries as their ultimate goal. Expect the pace of M&A to slow down in 2009 as a note of caution prevails but the long-term trend is clear.
Chinese financial institutions need time to find and train the right talent, as well as time to improve operations and organizational structure to be competitive in international markets. Banks should continue to view expansion methods such as M&A as an opportunity to learn and strengthen the skills they currently lack in addition to a fruitful investment.
It is also important for the larger banks to adapt and become more client focused. Too many of the big banks -- Bank of China and ICBC for instance -- focus more on State-Run Enterprises and on political issues than on developing the services that cater to the needs of SMEs and retail clients. In the China market, they lag behind nimbler private banks like China Merchants Bank in customer satisfaction.
The following is part three of a ten part report evaluating the progress of key Chinese industries as they expand overseas (see the introduction to this series, part 1 and part 2). CMR interviewed several hundred key executives in each of ten industries to better understand the extent of their globalization thus far, their goals and plans going forward, and the major challenges they are meeting along the way. This section describes the opportunities and challenges facing China's financial services industry.
Expansion abroad is a top priority for China's financial institutions. Given the current worldwide financial crisis, and relatively large amounts of liquidity at their disposal, Chinese banks are in a good position to make meaningful progress towards this goal. 100% of large industry leaders interviewed have already started moving overseas, and all respondents have either begun the move or plan to begin within the next five years.
However, there is fear right now by the Chinese Government that too much losses will be incurred by financial institutions if they go abroad and buy non-transparent financial assets which will slow some of the acquisitions. Perhaps their experience with Non-performing Loans (NPLs) make them cautious. For instance, the Bank of China has not gotten final approval yet for its announced 20% stake in Rothschild. Expect this cautious note to prevail for the next several months as the China Investment Corporation (CIC) has been burned with investments in Morgan Stanley (MS) and Blackstone (BX). While the CIC is an investment vehicle and not an actual bank like an ICBC, the experiences of CIC clearly is influencing all relevant regulatory bodies in China and making them think thrice before giving approvals.
Motivations
Chinese financial institutions initially moved overseas to serve corporate clients expanding their businesses abroad. Maintaining these clients' business is a top priority today as well, as increasing numbers of Chinese companies move overseas, and competition increases at home with the influx of foreign banks like Citigroup (C) and Standard Chartered. These initial moves abroad came about via organic growth as well as M&A.
Perhaps most importantly, Chinese banks are viewing expansion abroad as a way to get training in management, organization, and risk assessment. ICBC [1398.HK] paid $5.6 billion USD for a 20% stake in South Africa's Standard Bank [JNB:SBK] last year, for example, not only to better serve the growing ranks of Chinese companies doing business in the region, but to learn technical skills, management and operation techniques directly from their partners. These ventures are opportunities to train their own talent and to attract foreign talent for their future oversea expansions.
Current Situation and Methods of Expansion
Chinese financial institutions are using M&A to build more quickly a meaningful strategic presence abroad. The first major stake by a mainland Chinese bank in a European bank was made in July, 2007, when the China Development Bank (CDB) purchased a stake in Barclays Bank [LON:BARC] in order to help finance the British group's bid for Dutch ABN AMRO (ABN). While Barclays did not ultimately win the bid, CDB successfully established partnership with one of the top global commodity banks. CDB expects to learn from Barclays expertise in global commodity markets, investment banking, and risk management.
The first strategic investment by a mainland Chinese bank in a U.S. bank was made last October when China Minsheng Bank bought 5% of UCBH Holdings, the holding company of San Francisco's United Commercial Bank, a bank catering mainly to small and medium-sized local Chinese-American run businesses. Minsheng purchased another share in March for a total 9.9 percent share valued at 2.5 billion RMB ($317 USD). Minsheng intends to purchase another 10 percent before the end of 2009.
Last November, China's Ping An Insurance Company [SHA:601318] became the largest shareholder in Belgian financial company Fortis N.V., having acquired a 4.18% stake for €1.81 billion ($2.7 billion). This past March they upped that stake to 4.99%, in addition to purchasing half of Fortis' asset management business for €2.15 billion. The business will be rebranded as Fortis Ping An Investments.
As recently as September 2008, Bank of China announced its plans to purchase a 20% stake in French bank LCF Rothschild for 236.3 million euros ($340 million USD). The two banks will work together to develop asset management services for China's newly wealthy once approval is given.
Challenges
Chinese financial institutions' push overseas will not be without its challenges. Chinese banks still face significant rules and regulations, as well as a degree of suspicion and protectionism as they move to expand abroad. One of the main reasons UCBH was willing to partner with Minsheng Bank, for example, was, as a private bank Minsheng had minimal connections to the government, and thus the partnership was more likely to be approved by the Fed. Satisfying requirements of regulatory bodies like the Fed, and learning how to operate under these rules in a new business environment were considered key challenges by a majority of respondents.
As mentioned previously, in addition to financial return on investment, Chinese financial institutions' push to acquire stakes in international heavyweights is in large part to get access to management, organizational, and technical expertise not yet fully developed at home, and assistance in developing new service areas, such as wealth management in the case of Bank of China and LCF Rothschild. Respondent companies overwhelmingly agreed that finding people with experience leading a cross-cultural operation overseas, and people with the necessary technical, managerial, and/ or operational skills is a top challenge in their push abroad. With the Wall Street calamity, Chinese financial institutions have been increasing their recruiting of mainland Chinese who work(ed) in Wall Street and are now vying to come back to China.
Going Forward
While Chinese financial institutions are still in the early stages of moving abroad, this presence was increasing rapidly as Chinese banks conduct M&A in target areas until the financial crisis. These institutions are generally moving first to developing regions, where the business of their Chinese clients is increasing most rapidly, though they continue to work towards building presence in North American and Western European countries as their ultimate goal. Expect the pace of M&A to slow down in 2009 as a note of caution prevails but the long-term trend is clear.
Chinese financial institutions need time to find and train the right talent, as well as time to improve operations and organizational structure to be competitive in international markets. Banks should continue to view expansion methods such as M&A as an opportunity to learn and strengthen the skills they currently lack in addition to a fruitful investment.
It is also important for the larger banks to adapt and become more client focused. Too many of the big banks -- Bank of China and ICBC for instance -- focus more on State-Run Enterprises and on political issues than on developing the services that cater to the needs of SMEs and retail clients. In the China market, they lag behind nimbler private banks like China Merchants Bank in customer satisfaction.
订阅：
博文 (Atom)
