35641 Ã Vol. 10 September 15, 2003 Public Disclosure Authorized Recent Business Highlights Sichuan Vice-Governor meets CPDF donors and management team IFC-CPDF officially kicks off Business Edge SME management training courses IFC-CPDF delivers basic credit training to about 90 CCCB loan officers IFC-CPDF wraps up BPIP coaching sessions for local consulting firms IFC-CPDF and Beijing Office held 1-day retreat to better leverage our work Visitors To IFC-CPDF IFC-CPDF donors, William Mako of World Bank, Karin Finkelston, Oliver Ryan, Lilian Yu, and IFC Beijing Office staff People Among Us Wanjie Chen, who spends most of her spare time gardening News From The Region Intel and Motorola show big commitments to investment in Chengdu Chengdu private capital explores business opportunities overseas Domestic private conglomerates team up to create a logistics center Public Disclosure Authorized Sichuan’s foreign trade volume takes the top spot in the West China region Coming Up Soon Israeli VC experts invited to deliver lecture to financial institutions and SMEs IFC’s Global Retail team to visit Chengdu for potential investment targets IFC-CPDF to participate in the 4th West China Expo in late September Recent Business Highlights Business Enabling Environment (BEE) Sichuan Vice Governor praises IFC-CPDF for its efforts in supporting SME development… Public Disclosure Authorized In a meeting with IFC-CPDF donors and management on September 9, Mr. Huang Xiaoxiang, Vice- Governor of Sichuan Province, spoke highly of CPDF’s work in the province. He particularly emphasized the value placed by the provincial government on the recently completed Administrative Cost Survey conducted by CPDF. This survey, covering 601 enterprises in the cities of Chengdu, Leshan, and Mianyang, provided local government agencies with significant insight into the key constraints faced by SMEs in the region. Vice Governor Huang also encouraged IFC-CPDF to build a regular, direct dialogue with the Sichuan Provincial Government, and to provide more assistance, both financial and technical, to the local private sector. Tom Davenport and Eric Siew thanked the Sichuan Government for its support for IFC-CPDF, and reiterated CPDF’s commitment to working closely with the Sichuan Investment Promotion Bureau, IFC-CPDF’s local counterpart, to assist local SMEs through various programs. International expert visits Chengdu to review and discuss local credit registry proposal… From August 18 to 22, IFC-CPDF invited Tony Lythgo, an Australian consultant who has provided Public Disclosure Authorized consulting services to Shanghai credit registry, to offer expert advice to the Chengdu municipal government and support the latter’s efforts on establishing a city-wide credit reporting system. Individual interviews were held with the Chengdu branch of PBOC, China’s central bank, and local banks and government agencies. Mr. Lythgo also gave a presentation highlighting his main comments/suggestions for the registry proposal prepared by the Chengdu SME Bureau. (news contributed by Lin Huang, BDO with the CB/BEE team) Capacity Building (CB) IFC-CPDF kicks off Business Edge brand training for Sichuan SME managers… On September 10, IFC-CPDF officially launched its SME Management Training Program under IFC’s Business Edge brand. CPDF’s Business Edge training product is following the successful model first developed by MPDF. At the first training seminar in Chengdu, 36 SME executives received a full day of intensive training in Pricing and Pricing Strategies, one of seven Marketing courses IFC-CPDF has localized to the Sichuan market. The event was marked by strong media attendance and the visit by CPDF donor representatives. The training will be delivered, starting in October, by the first 16 trainers from the four CPDF-certified partner organizations including universities and private training firms. The next group of trainers will be prepared and certified in the near future. (news contributed by Godfrey Firth, Marketing Specialist with the CB team) All coaching sessions for local consultants participating in BPIP completed with success… Mr. Brenton Siviour, from Australia’s Mckessar Tieleman, completed the last of 5 coaching sessions recently for the Business Performance Improvement Program (BPIP), a management consulting capacity building project introduced by IFC-CPDF in August of last year. About 30 local consultants attended the session. The BPIP program has already resulted in the 5 participating local consulting firms acquiring contracts with 19 SMEs totaling US$651,000. Also in August, Sichuan Television Station and 11 other television stations throughout western China aired a video program on BPIP, featuring interviews with the GMs of the 5 partner consulting firms and a number of their Sichuan SME clients, who benefited from the program. Financial Sector (FS) IFC-CPDF offers two basic credit workshops to front line loan officers of a local bank… Two one-week training sessions on “Basic Credit Analysis” were delivered between August 18 and 29. Jointly delivered by the CPDF financial sector team and two international experts formerly employed by Citibank, the courses were designed to strengthen the credit evaluation skills of about 90 front-line loan officers from Chengdu City Commercial Bank, representing its main credit force. Another 10 officers from two other city commercial banks in Western China (one is a IFC portfolio bank) also participated in the training, reflecting substantial potential demand for this service. (news contributed by Wenfang Chen with the FS Team) Investment Service (IS) IFC-CPDF inks a new IS mandate with a local SME… The IS team of IFC-CPDF signed a mandate on September 5 with Chengdu Jin Feng, a specialized producer of custom-made steel tubes, to provide technical assistance to improve its operational performance and, as a result, raise finance needed for Jin Feng’s growth. Visitors To IFC-CPDF Representatives of IFC-CPDF’s core donors gathered for the 3rd IFC-CPDF Donors’ Meeting on September 9 and 10 in Chengdu. Attending were: Mr. Michael Willcock, Minister-Counselor, and Mr. Yang Yu, Senior Program Officer, from AusAID of Australia; Mr. Strahan Spencer, Economic Adviser, and Mr. Nick Bridge, Economist, from British Embassy Beijing; Ms. Esther Hauert, Investment Promotion Officer, from SECO of Switzerland; and Mr. Tom Davenport, Manager of the SME Department, as well as Ms. Karin Finkelston, Country Manager of China and Mongolia, from IFC. Mr. William Mako, Lead Private Sector Development Specialist from the World Bank, was also invited to join the meeting. Mr. Oliver Ryan, Senior Engineer from the Agribusiness Department at the IFC headquarters, and Ms. Lilian Yu, Investment Officer of IFC Hong Kong Office, visited IFC-CPDF on August 20 to discuss the Linkage Program, which helps local SMEs successfully integrate with the supply chains of large corporations, particularly companies in the IFC portfolio. IFC Beijing Office staff visited Chengdu on September 2 for a joint retreat with CPDF staff. During the retreat, the two offices gained a better understanding of one another’s operations and explored a number of promising avenues for future cooperation. Staff also had the opportunity to better know each other. People Among Us Ms. Wanjie Chen, Team Assistant of the Financial Sector team, joined CPDF in September 2002, after working as a project assistant for Siemens on the first BOT project in Sichuan, Chengdu No. 6 Water Plant B. Before that, she worked for 2 years as secretary in a Sino-German joint venture involved in the Ertan Hydropower Station, and also spent three years with an advertising design firm. Wanjie loves photography, collecting stamps & telephone cards, and gardening. In her spare time, she spends a lot of time in her little roof-top garden. News From The Region Business – MNCs dramatically increase investments in Chengdu… Intel CEO Craig Barrett signed an agreement on August 27 with the Chengdu Municipal Government to set up a chip assembly and testing plant in the city, with a total investment amounting to US$375 million. Sichuan saw off fierce competition from Shanghai, Jiangsu and Fujian to woo the U.S. semiconductor giant. Nine days earlier, the Motorola Chengdu Software Center officially moved in to its new, expanded building in the Chengdu Hi-tech Development Zone, heralding the transfer of more research work to China from Motorola’s R&D Center in the UK. Business – A surge of overseas investments by private firms based in Chengdu… The latest statistics from the Sichuan Provincial Department of Foreign Trade and Economic Cooperation show that Chengdu-based private firms have made total overseas investments of over RMB30 million (US$3.6 million) since the beginning of 2003, with accumulated overseas private capital investments exceeding RMB120 million (US$14.5 million). In a typical example of these investments, Mr. Wu Jun of Chengdu signed contracts setting up 40 CNG gas stations in Pakistan. Business – Domestic private conglomerates co-invest in a local logistics center… Four domestic private companies, Xin’ao Group of Hebei (North China), Delixi Group of Zhejiang (East China), Nanxiang Group of Anhui (East China) and Wumei Group of Beijing (North China), will jointly build a modern logistics and trade center, covering an area of 333 hectares, in Chengdu’s Chenghua District. The total cost of the center is estimated at RMB500 million (US$60 million), and construction is expected to be completed within 5 years. Business – Sichuan’s foreign trade picks up the pace… During the first half of this year, total imports and exports of Sichuan Province were US$2.48 billion, an increase of 33.8% over the same period in 2002 and ranking first among all western provinces and autonomous regions of China. Sichuan’s exports reached US$1.32 billion, up 20.1%, while its imports were US$1.16 billion, up 53.6%, with a trade surplus of US$160 million. Coming Up Soon Two Israeli consultants active in the venture capital (VC) sector in Israel, the USA and China, will come to Chengdu in the second half of September to deliver a set of presentations and speeches to local SMEs and VC firms.