AUG. 2014 No. 542 Sponsored by CCPIT Since 1956 CHINA’S F REIGN TRADE
Field of Hope — Build a China Pavilion, we will come.
China Pavilion image at Milan Expo 2015
国内邮发代号：80-799 国内刊号：CN11-1020/F 国际邮发代号：SM1581 国际刊号：ISSN0009-4498
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Policies Regulator streamlines M&A process Pledged supplementary lending, a lending instrument backed by collateral, is a new The China Securities Regulatory Commission will simplify the review process monetary tool to guide medium-term interest for major asset restructuring programs and takeovers of listed companies, the market rates. regulator said in a statement, China Daily reported. “Previously, the PBOC mainly relied on Listed companies will no longer need CSRC approval for major asset restructuring the adjustment of the reserve requirement ratio, programs, except in the case of backdoor listings. re-lending, central bank bills and open market Such listings involve acquisitions of companies that already trade on stock operations to adjust the money supply. exchanges by enterprises that don’t qualify for listings on their own. “Now, with the introduction of PSL, There’s an exception to this rule. If a listed company plans to acquire assets by the central bank will tend not to cut the using its own shares, it will still need CSRC approval. reserve requirement ratio. Instead, it will be The regulator also said that listed companies no longer need to provide profit able to increase money supply by using this forecasts when they acquire assets. new tool,” said Zhu at a media briefing in The requirements for backdoor listings are the same as those for initial public Beijing. offerings, and no listings by purchasing shell companies will be allowed on the The central bank is trying to avoid large- ChiNext board, China’s Nasdaq-style market. scale economic stimulus measures for fear these could lead to a debt crisis. A uniform RRR PBOC to use new tools for liquidity operations reduction for all banks may cause money to flow into the housing sector and local government The central bank will use unconventional monetary tools such as re-lending financing vehicles. and pledged supplementary lending to maintain relatively loose liquidity, rather than turning to conventional tools including lowering interest rates or the reserve Cabinet unveils guideline to requirement ratio, Zhu Haibin, chief China economist at JP Morgan Chase & Co., was ensure fair competition quoted as saying by China Daily. The People’s Bank of China’s State Council, the country’s China has developed two or cabinet, unveiled guidelines to “promote fair three monetary tools to guide market competition” and “safeguard normal short- and medium-term interest market order”. rates via an effective monetary The guideline is meant to let the market policy transmission mechanism, play a decisive role and let the government said PBOC Governor Zhou play a better role in allocating resources, and Xiaochuan on the sidelines of to correct the problem of “incomplete market the China-US Strategic and system, excessive government intervention and Economic Dialogue in Beijing insufficient regulation,” said the State Council. on July 10. To achieve the goal, the State Council first
Figures
17.3% 12.1% 1.1%
China’s fixed asset China’s retail China’s producer price investment grew 17.3 sales grew 12.1 index (PPI) for industrial percent year on year percent year on year products, which measures in the first six months to 12.42 trillion yuan inflation at the wholesale of 2014, the National ($2.02 trillion) in the level, fell 1.1 percent year Bureau of Statistics January-June period, on year in June, the NBS (NBS) announced. the NBS said. said.
2 Quotes
China shall be able to achieve a stable economic growth of around 7.5 percent in line with the official target. China hopes for its economic reforms and adjustments to be carried out amid a gradual and stable process of slowdown instead of a sharp one, so that the gains in productivity can make up for factor-driven slowdown. — Zeng Peiyan, former vice premier
The world needs a strong Chinese economy over the long run, not the short run, as the nation’s economic restructuring will lead to more sustainable growth. The most important thing for China to do is to get on urged a relaxation of market access, a path of more sustainable growth. saying the government should not restrict — Jim Yong Kim, president of the World Bank Group any market access unless the investment activities are forbidden by law or harm the interests of a third party, public The current summer recovery should help lessen pressures on interest or national security. policymakers to deliver more significant policy easing measures for According to the guideline, market the next couple of months. As the government tries to strike a balance regulation will be strengthened and between reforms and restructuring on the one hand, and growth on the monopolies or unfair competition will be other, any upcoming easing measures will likely continue to be fine- harshly penalized. tuning. The State Council aims to establish — Wang Tao, chief China economist at UBS a market regulatory system featuring sophisticated mechanisms and clearly defined rules and regulations by the end of 2020.
8.5% 2.3% 5.3%
China’s tax revenue, The consumer China’s power consump- a major source of the price index (CPI), tion rose 5.3 percent year on government’s fiscal income, a main gauge of year in the first half of 2014, grew 8.5 percent year on year inflation, softened to picking up slightly from the 5.2 in the first half of 2014, the a 2.3 percentyear-on- percent growth in the January- Ministry of Finance (MOF) year growth in June, May period, official data announced. the NBS said. showed.
3 Policies
trading under the policy continues. China to add The policy was introduced to help boost R&D spending in foreign trade and attract foreign investment. The GDP country needs to increase the use of domestic steel, said Xie Shuangqing, an analyst at Hua’An National Bureau of Futures. Statistics plans to include Imported steel accounts for more than 6 million research and development tons or nearly half the total national imports. Most is spending as it revises the hot-rolled and cold-rolled steel coil. calculating methodology “A large number of imported steels will lose for gross domestic product, their advantages over the cancellation of the tax 21st Century Business protection policy, making domestic steel able to Herald reported. compete on an equal footing,” said Xu Xiangchun, The statistics bureau chief information officer of Mysteel.com. has completed a draft plan and will submit it to the State Council for approval before the end of the year. China to accelerate develop- The change will lead to a rise of the aggregate economy and economic growth ment of insurance sector rate, the newspaper said. Some eastern cities, such as Beijing, have heavier research input. The revision China vowed to improve insurance services will increase the gap of total GDP between eastern and western regions. to stimulate innovation and entrepreneurship, China spent 1.19 trillion yuan ($191 billion) on research and development in 2013, Xinhua reported. an increase of 15.6 percent over the previous year. Experts say about three quarters Faster development of the sector will optimize of the research input can be transferred to GDP, and it will contribute about 1 trillion the economic structure and promote innovation in yuan ($160 billion) if counted, or a lift of 1.56 percent, according to China Daily. social governance, according to a statement released after a meeting of the State Council, China’s cabinet. China to end imported steel tax policy The insurance and social security systems will be integrated, making commercial China is to cancel its tax protection policy for certain types of imported steel, insurance a major pillar of social security, the according to the Ministry of Finance, General Administration of Customs and State statement said. Administration of Taxation, China Daily reported. Competent insurance companies are From July 31, tariffs and import taxes will be imposed on 78 products the encouraged to roll out commercial pension domestic market is capable of producing, such as steel wire and electrical steel. and health care plans, to invest in the old-age For orders signed before July 31 with goods to be shipped before year’s end, pension industry, participate in the integration
Figures
7.2% 8.8% 5.9%
China’s exports expanded 7.2 China’s fiscal revenue Revenue of State-owned percent year-on-year compared rose 8.8 percent year on year enterprises reached 23.31 trillion with a 7 percent gain in May and to 7.46 trillion yuan ($1.21 yuan ($3.76 trillion) in the first the strongest pace in five months, trillion) in the first half of half, with year-on-year growth of the General Administration of 2014, the MOF said. 5.9 percent, according to statistics Customs said. released by the MOF.
4 Quotes
of the health sector and develop new The timetable to liberalize interest products. rates will be mostly carried out according Insurance will be incorporated into to conditions of the domestic economy and the disaster and accident prevention and global economy, but we believe it could be alleviation system. It will also reinforce realized within two years. After the interest industrial upgrades, support agriculture rate is freed up, the central bank will have its and insurance funds will be encouraged policy rate play a guiding role in the market to invest in urbanization, infrastructure via mechanisms on the monetary market and residential renovations. and the bank is preparing two or three sets The insurance sector should be of such tools. a modern corporate system with new — Zhou Xiaochuan, China’s central market entry and exit mechanisms, bank governor advanced practices and technology from abroad, able to export domestic insurance services. China should expect lackluster external demand to continue for years to come as the world’s major economies may be entering a period of ‘great moderation’. The contribution of net export to China’s economic growth will be zero or even in the negative territory. — Hu Yifan, chief economist at Hong Kong-based securities firm Haitong International
There is currently little incentive for green investment in China, so polluting projects enjoy an oversupply of capital while environmentally friendly ones are faced with a severe capital shortage. The country should build a policy system to direct more investment into the green sector. — Ma Jun, economist with the People’s Bank of China
5.44t 2nd 100
China’s outstanding China became the A total of 100 Chinese foreign debt hit 5.44 world’s second largest firms have made this year’s trillion yuan ($891.41 printing market in 2013, Fortune Global 500 list, billion) by the end of according to official according to the annual March, the country’s statistics released at an ranking. forex regulator said. event in Shanghai.
5 http://cft.ccpit.org www.ccpit-cft.net.cn 08/2014 No. 542
China’s economy is seeing a stable 08 growth in the first half of 2014. Special report
08 China’s Economy Sees Stable Growth in H1 10 China’s H1 Growth Shows Economic Resilience 11 Balancing Growth and Transition 12 Economy of H1: Stability with Pressure 14 Experts’ Insight While China’s auto production 16 Institutions’ Voice 32 and sale continue to increase, automobile export has declined. ECONOMY
20 China’s Residential Property Market is Tougher 24 Chinese Investment Emigration is Surging 26 Fast Growth of FDI in China’s Service Sector 29 From “Won’t Pay a Penny” to “Shake Hands”
Industrial Watch More and more Chinese firms high- 40 light the data analytics capabilities. 30 China Nuclear Plants Face Crucial Opportunity 31 Green Supply Chain Evaluation System Released 32 Bumpy Road 34 Transportation Capacity: Chinese Ports Take the Lead 36 The Post-80s Build up Fast Logistics 37 More IPOs to be Expected in H2 38 ICT Market: Revolution and Reconstruction Milan in Italy will be the host of the 46 World Expo next year. 40 Chinese Consumer Companies Focus on Data Analytics
Cover Story
46 What Will Expo Milan Bring to China? 48 Field of Hope 49 More Chinese Enterprises Involved in Milan Expo 2015
Regional Trade & Investment Go and see the most beautiful water 66 in China, Jiuzhaigou in Sichuan. 53 Shorter Negative List Welcomed by European Industry 54 China & South Korea Strengthen Bilateral Trade Ties
for the Future Sponsored by (主管) CCPIT(中国国际贸易促进委员会) 56 THABS to Become the Most Influential Expo in Africa Operated by (主办) Trade Development and Cooperation Center of CCPIT 58 Suifenhe Exposition: To Facilitate Port Trade 中国国际贸易促进委员会贸易推广交流中心 60 ATA Carnet Center Opens in Erguna Published by (出版) China’s Foreign Trade Magazine 61 Guizhou Eyes Co-op with Swiss 中国对外贸易杂志社
社长 President 石 净 Shi Jing Lifestyle 总编辑 Editor-in-Chief 孟燕星 Meng Yanxing 副社长 Vice President 杨复强 Yang Fuqiang 62 Delicate Embroidery Work Shines with Classics 编辑部副主任 杨 蔚 63 “Gold Partner” 9th China Super Model Final Contest Editorial Deputy Director Yang Wei 编辑部 Editorial Department 郭 艳 Guo Yan Tel:86-10-68053271 竹子俊 Zhu Zijun Ended Successfully with “Fantasy” as the Theme 赵 炜 Zhao Wei 流程总监/图片编辑 张 越 64 South Korea Fashion in Beijing Operation Director/Photo Editor Zhang Yue 英文校审 English Copyeditor Lewis McCarthy（英） 65 Seeking Release in Cracking Margaux Schreurs（英）
市场部总监 李英宏 THIS IS China Marketing Department Director Li Yinghong 项目总监 Project Director 白义峰 Bai Yifeng 66 渠道总监 Channel Director 游万龙 You Wanlong Jiuzhaigou, the Most Beautiful Water in China 广告总监 Advertising Director 李小冬 Li Xiaodong 项目经理 Manager 徐榕梓 Xu Rongzi eye on china Tel:86-10-68069328
推广部项目经理 王岱凌 70 Catering for Foreign Tastes Distribution Department Manager Wang Dailing Tel:86-10-68013072 王晓龙 Wang Xiaolong 71 Relationships between Young People 理事会秘书长 杨复强（兼） Council Secretary General Yang Fuqiang 秘书处主任 刘晓东 Council Secretariat Director Liu Xiaodong 联络专员 Assistant 王 飞 Wang Fei Tel:86-10-68020773 于 洋 Yu Yang 戚英杰 Qi Yingjie 石 林 Shi Lin Index of Advertisements HUACHEN JINBEI 特邀法律顾问 Legal Counsel 周红梅 Zhou Hongmei 封二-1 华晨金杯汽车 Beijing Sheng Xifu Headwear Co., Ltd. General Distributor For Overseas Subscribers 18-19 盛锡福帽业 国外发行总代理 China National Publications Import & Export (Group) Corporation Bombardier 44-45 中国图书进出口(集团)总公司 庞巴迪 Add: 16, Gongti East Road Beijing, China China Auto International Exhibition Tour Post Code:100020 52 中国汽车国际巡展 地址：北京市朝阳区工体东路16号 Anhui Jianghuai Automobile Co., Ltd. Tel: 86-10-65066688-8822 65063082 封底 安徽江淮汽车股份有限公司 China International Book Trading Corporation 中国国际图书贸易总公司(GUOJISHUDIAN) Add: Box 399, Beijing 100044, China 地址：中国北京399号信箱(100044) 国内邮发代号 80-799 国际邮发代号 SM1581 国内统一连续出版物号 CN11-1020/F 国际标准刊号 ISSN0009-4498 Cooperation Media AD LICENCE No. JXGS/G-0249 广告经营许可证号 京西工商广字第0465号
Domestic Price 国内订价 50元(RMB) Overseas Price 国外订价 US$20 设计制作 北京锋尚制版有限公司 印刷 北京瑞禾彩色印刷有限公司 虚假新闻举报热线 86-10-68053271 License Mark of General Administration of Press and Publication, the People’s Republic of China China’s Economy Sees Stable Growth in H1 8.0% By Zhu Zijun 7.9%
7.8% 7.7% 7.7%
7.7% 7.6 %
7.6%
7.5%
7.4%
7.3%
7.2%
7.1%
2012 2013 Q4 Q1 Q2 7.0% Source: National Bureau of Statistics 8 hina’s economy is seeing a In terms of industry, the added half. This indicates a transition from stable growth in the first value of the primary industry reached industry-led growth to service-led half of 2014 amid challenges 1,981.2 billion yuan, up 3.9 percent growth in the Chinese economy. after a bumpy start in the year on year; the added value of The above data shows that beginning of this year. the secondary industry expanded China’s economy is recovering, helped CData from the National Bureau to 12,387.1 billion yuan, growing by stable agricultural and industrial of Statistics (NBS) shows that China’s 7.4 percent year on year; the added growth, expansion of market sales, GDP in the first half of this year value of the tertiary industry stood at export recovery and structural reached 26,904.4 billion yuan, up 12,536.1 billion yuan, a year-on-year adjustment. China could realize GDP 7.4 percent year on year. Growth in increase of 8.0 percent. growth this year of 7.5 percent or even the second quarter accelerated to 7.5 It is notable that the added value higher, Premier Li Keqiang said at a percent, up from 7.4 percent in the of the tertiary industry accounted for seminar with economists. first quarter. 46.6 percent of GDP, outperforming However, the stable growth still the primary and secondary in the first faces various challenges against the background of complex economic environment at home and abroad. Downward pressure still remains. 7.7% % How is the performance of 7.7 China’s economy in the first half? What is the trend of China’s economy in the second half? The Special Report of this issue will have a further discussion on these topics.
China’s GDP Growth 7.5 %
7.4 %
2014 Q3 Q4 Q1 Q2
9 China’s H1 Growth Shows Economic Resilience
By Xinhua News Agency
Online retail sales jumped 48.3 percent.
hina’s economy showed Sheng said China has been industry-led growth to service-led strong resilience in the first working to leverage the role of growth in the Chinese economy,” half of 2014, with growth technology innovation in spurring Sheng said. “It will bring profound and momentum rebounding in growth and this has shown some far-reaching implications to economic the second quarter and expansion in the effects, citing a boom in online sales growth and the job market.” firstC six months reaching 7.4 percent and fast growth in the high-tech sector. Weak housing market year on year. NBS figures showed that online Helped by an export recovery retail sales jumped 48.3 percent year China’s property market has been since April, and new sources of on year in the first half, reaching 1.14 cooling since the beginning of the year, growth emerging from the structural trillion yuan (185 billion U.S. dollars). weighing on economic growth. adjustment, expansion accelerated to Value added output of the high- NBS data showed that property 7.5 percent in the second quarter from tech sector grew 12.4 percent during investment rose 14.1 percent year 7.4 percent in the previous one, the the period, 3.6 percentage points faster on year in the first six months, 2.7 National Bureau of Statistics (NBS) than the average growth rate of all the percentage points down from the first said. industrial sectors. quarter. “The Chinese economy showed Sheng also highlighted the Floor space of commercial good momentum of stable and expansion of the tertiary sector, buildings sold during the six-month moderate growth in the first half of the which outperformed the primary and period dropped 6 percent year on year,” NBS spokesman Sheng Laiyun secondary industries during the period, year, and meanwhile, sales revenue of told a press conference. leading to further improvement in the commercial buildings went down 6.7 Steady, moderate growth country’s economic structure. percent from a year earlier. In the first six months, the added “The adjustment in the property New growth drivers have offset value of the tertiary industry accounted sector has become the biggest most of the negative drag from the for 46.6 percent of GDP, 1.3 percentage uncertainty in the Chinese economy,” country’s property downturn and a points higher than the same period last said Lian Ping, chief economist of the serious adjustment in some heavy year, NBS figures showed. Bank of Communications. industrial sectors in the first half. “It indicated a transition from The downturn has hurt steel,
10 cement and other producers and curbed Looking into H2 requirement ratios, is expected to boost sales of household electronics, furniture agricultural investment in the coming and other goods. Reform will continue to be on top months, according to a note from Kuang Xianming, director of of the government agenda in the second Moody’s Analytics. the Research Center for Economy at half, according to Kuang. The government’s support the China Institute for Reform and More measures on boosting measures such as increased rail Development, said an economic growth private investment and unleashing investment will also push growth rate of 7.4 percent in the first half despite the potential of domestic demand are toward the full-year target, said the a slowdown in property investment expected to be introduced, and the note. growth showed that the Chinese macro-economic policy will be kept Sheng warned that the economy is on track in becoming less stable, he said. domestic and international economic dependent on the property sector. “Favorable factors in the economic environment is still complicated and In Sheng’s view, the adjustment in operation that we have observed will the national economy still faces many the housing market will leave pressure continue to lift growth momentum challenges. on the Chinese economy, but in the in the coming months, and economic China will continue to deepen long run, it is good for the healthy expansion will be around 7.5 percent in reform, promote innovation, adjust development of the sector and the the second half of the year,” he said. economic structure and transform sustained development of the national The central bank’s fine-tuning, development patterns to consolidate economy. including a cut in rural banks’ reserve growth momentum, Sheng said. Balancing Growth and Transition By China Daily
he country has got as much rate was nothing to be afraid of — if It is easy to either keep piling economic growth as it not to be welcomed to convey a sense of up unsold products or to simply let needs. Its annualized GDP urgency to companies that they needed unprofitable companies sink. It is much growth was 7.4 percent in to change their way from low quality harder and riskier to try to strive for the first half of the year, falling short and low value-added production. both growth and transition. But there Tof its yearly target by a negligible 0.1 percentage point, amid ample signs that it can still attain that in the second half. So in all likelihood, China will meet its yearly growth target of 7.5 percent. This should bolster people’s confidence that China can sustain relatively high growth while making the successful transition to higher quality. The reality, as shown by the latest figures from the National Bureau of Statistics, is contrary to the concerns circulating in the capital market earlier this year that the sustainability of China’s growth would inevitably suffer as a result of the flagging export demand, limited domestic buying power, and an almost fathomless level of local government debts. That was a time when some economists said a tumble in the growth
11 is a bonus in doing so, because by projects that generate jobs and quality the first half of the year, and is likely to delivering both, Chinese leaders will growth. Economically, the country still work to an even greater extent over the earn the confidence of the people and has vast discrepancies. Given the right next few years. global businesses. policies, those discrepancies can become Now China has learned, and has Politically, Beijing has the opportunities, such as the internal proved to have learned well, the ways to authority to make local governments migration of the rural population to the iron out business cycles and to maintain restructure their debts, and can cities. This unprecedented urbanization growth despite difficulties, one can use decrees both to shut down the will result in a much larger consumer reasonably expect the second half of the unwanted industrial capacity and base for new services. year to feature more actions to facilitate provide incentives to the industries and The above strategy was at work in the economy’s transition.
Economy of H1: Stability with Pressure By Zhu Jianhong
Stability — stable growth promote reform, adjust economic by 3.07 million, up by 1.8%. The rate, stable price and stable structure and benefit people’s welfare. consumption price rose by 2.3% year agriculture They emphasize innovation and reform, on year and the CPI ranges between facilitate structure adjustment and 1.8% and 2.5% during January to June. How to describe the national let the market play its role. Through Agriculture production is stable, with economy for the first half year? Sheng purposeful control and regulation, the good harvest of summer grain for 11 Laiyun, spokesman of National Bureau national economy shall run smoothly at consecutive years, up by 3.6% than last of Statistics, used three stables in his reasonable growth rate. year. Both rural and urban residents reply: generally stable, stable progress Sheng said that there are five have witnessed a fast increase of their and stable growth. points showing the economy is running income. All these indicators show In the first half year, the Chinese stable, which include stable growth rate, that the current economy is stable and economy met huge downward pressures stable employment, stable commodity reasonable. with complicated situations both price, stable agriculture and stable In the first half year, the Central home and abroad. The Party Central growth of people’s income. Party Committee and State Council Committee and State Council take The GDP for the first half have exercised mild policy adjustments the initiative to coordinate growth, year grew by 7.4% on a year-on-year and pay great attention to purposeful basis. The second quarter growth rate adjustment and control. A series of reached 7.5%, 0.1% higher than the policy measures aimed to stabilize first quarter. The employment is stable, growth, promote reform, adjust with newly increased urban employed structure and benefit people’s livelihood people surpassing 7 million and rural were implemented. labors working in cities increasing According to Sheng, these policy measures have proved effective, especially for the second quarter.
12 Take June for example, there has been very bright prospect,” said Sheng. The from industry-oriented to service- positive changes in some indicators, high-tech industry and equipment oriented model and considering foreign and economy turns better than the manufacturing industry develops experiences, the rising proportion first quarter. PMI reached 51%, an greatly. of service industry will lead to slow increase for 4 consecutive months. Total At entrepreneurial level, it is found economic growth. The reason is that investments in fixed assets stopped that companies with high innovation the service industry has short industrial decline and the growth rate between capacity and spirit develop well. As chain and investments are weaker January to June reached 17.3%, up product level, self-owned products than second industry, so is the labor by 0.1% from January to May. The with independent intellectual property productivity. The growth of service industrial indicators also improve with rights sell well. All these conditions industry may not compensate the added industrial value rising by 9.2% show that Chinese economy is gaining impacts caused by slowing second year on year, up by 0.4% from May. momentum for upgrading with new industry growth and the overall Positive changes are also seen in other business and old industry coexisting. economic growth rate may drop. indicators like generated electricity and A breakthrough will be made in the However, the service-oriented transportation volume. economic upgrading. economy has less fluctuations which Improvement — structural Sheng emphasized several shining will promote economic stability, the adjustment and economic points of the economic development. employment and income growth. upgrading The service industry grows fast with “When we look at the Chinese growth rate and proportion of GDP economy in the past two years, the Faced with downward pressure exceeding the second industry. Last slow growth rate, more stability, rising and sluggish growth, the Chinese year the third industry accounted for investments, stable consumption and economy also has achieved new 46.1% of GDP, surpassing second improving employment are all signs progress besides stable growth. industry for the first time and this first of the economic restructuring and First is the improvement in half year the proportion rises to 46.6%. speed-up development. We shall follow structural adjustment. Sheng also “We think it will be a trend, such trend and take advantage of the summarized five points. The first is indicating that the Chinese economy situation, to speed up service industry improvement in industrial structure. will change from industry-oriented to development and transformational The third industry accounted for 46.6% service-oriented. Such a transformation upgrading of the Chinese economy,” of GDP, up by 1.3% from last year; the will bring deep and long-lasting Sheng said. second is demand structure. Domestic impacts on Chinese economic growth When analyzing the economy demands continued as major driving and employment,” Sheng said. for the second half year, Sheng said force behind economic growth, with Stable growth ready to achieve that the situation is still complicated domestic demand contribution to the and there are both momentum to GDP reaching 102.9% for the first half The economic growth met promote economic stability and year; the third is regional structure, bottleneck, structural adjustment pressures limiting the economic with the economy for the east, middle brings new problems and stimulate growth. Considering the impact, the and west Chinese develop toward policies are being absorbed. These three three factors’ impact will continue and more coordinated balance; the fourth factors have huge impacts on Chinese economic restructuring will still pose is income distribution structure, with economy. Investments, industries and negative impact on traditional sectors. narrowing gap between urban and rural export slow down, causing a sluggish But in general, the basic income. growth of GDP for three consecutive conditions of Chinese economic The resident income growth years. The real estate market slows development remain unchanged and rate is higher than finance and profit markedly for the first half year, with the vitality to support economic growth growth rates by 2% and 1% respectively, housing sales area down by 6% and is higher than downward pressures. The indicating a rising proportion of sales down by 6.7% during January to open-up reform and innovation will resident income in the national income June. The real estate price in second-tier increase vitality of the economy. The distribution. The fifth is energy saving and third-tier cities also keeps going government has carried forward many and emission reduction. The energy down. reform measures and the effects begin consumption for unit GDP dropped The adjustment of real estate to emerge. “When looking at the export by 4.2% year on year. These are market did bring certain pressures on and real estate sectors that witness huge achievements in the realm of structural the economy for the short run. Sheng challenges, things are recovering and adjustment. Laiyun said that for the long run, the real estate market growth slows down. The second is new progress in adjustment and control of real estate Based on these observations I think the economic upgrading. “As the economy market will promote healthy and economy for the second half year will becomes stable, there are also deep sustainable development of the market remain stable and conditions are ready changes in economic structure. New and economy. for rapid development,” Sheng noted. industries, business and products Sheng noted that the Chinese emerged and developed, showing a economy is undergoing transformation (Source: People’s Daily)
13 Experts’ Insight
Li Daokui Guo Tianyong Professor of Economics, Tsinghua Professor at School of Finance, Director University of Research Center, China
The GDP growth rate for the second quarter Chinese economy has witnessed a downturn from increases by 0.2% year on year, with annual last year, but such economic slowdown is reasonable as incremental growth reaching more than 8%. This it reflects that China’s economy is having a new growth shows that the economic downturn has reversed. Data model. The high-speed model has become the past from the service industry, retail industry and farmer memory and in future the growth rate will stay between income are prominent. It is still worrying that the 7% and 7.5%. As both investment and consumption money stock increases too fast. At the end of June, become sluggish, the economic slump shall be avoided. the M2 reserve amounts to 120.96 trillion yuan, up Considering the economy for the second quarter, the by 14.7% year on year, 5% higher than GDP and possibility for big economic slump has been much lower. CPI growth rate combined. This is reasonable for the The whole economy is stable and recovering. short run, but cannot continue for the long run. The In the future the country will keep positive monetary problem now exists in the macro financial structure, policy and exercise mild adjustments according to economic rather than the monetary policy, such as unavailability condition. Reforms shall be deepened to release economic of long-term debt such as treasury bonds. growth vigor and vitality through structural adjustment.
Wang Jun Lian Ping Deputy director of consulting and Chief Economist, Bank of research department, China International Communications Economy Communication Center
In general, the Chinese economy for the first half The recent data show the economy is becoming year remains table and meets the targets. It has overcomes more vigorous. The electricity consumption rising the economic slump problem for the first half year and will shows the recovery of the economy. PMI in June is rise and recover for the second quarter. 51%, an increase for 4 consecutive months. As leading However, we shall be clear that the second quarter indicator of the macro economy, the PMI is above economic recovery and stable economy in the first half 50%, showing a stable economic recovery. Meanwhile, year is attributed to the government policy guidance. The the credit date is at the peak, showing robust market inner driving force of the economic growth is never strong, demands. It is worth mentioning that the expectation especially at the corporate level, the operation profits shall of M1 by the Bank of Communications is about 7%, be further enhanced and improved. while the publicized data is 9%, showing a more Considering the investment, it is necessary to vigorous corporate activity and stock market. Therefore, confirm policies soon to stabilize the real estate industry, the economy growth rate of the first half year is stable to avoid dragging down the national economy. For and reasonable. consumption, it is necessary to improve people’s income, Downward pressures on the economy are still especially the urban residents. For export, we shall huge and risks begin to emerge. The economic growth promote market-based reform of the exchange rate, to rate shall not be too low in the short run and the 7.5% expand floating range of RMB exchange rate step by step growth rate is enough to support structure adjustment by keeping the exchange rate balanced and stable. We and eliminate overcapacity. The economic growth rate shall increase flexibility for RMB exchange rate double- will fall into reasonable range and it will be stable and direction floating to release pressures on export companies’ developing. exchange rate.
14 Zhao Xijun Liao Qun Deputy director of School of Finance, Chief Economist, CITIC Bank Renmin University
The GDP growth rate of 7.4% fits the expectation, The economic growth for the second quarter fits which is normal. If the related policies are in place the expectation, showing a recovering economy. Both at second half year, the GDP growth target is quite international and domestic consumptions turns good. The promising. If we look at the economy by quarter, the first central government’s stimulus policy has been effective. quarter grows by 7.4% and second quarter up by 7.5%. The The recovery economy is also turning better. It is estimated PMI of the first quarter is increasing markedly and the that the economic growth rate for the second half year will growth rate of loan credit and monetary becomes quite reach 7.6-7.7%. stronger than the first quarter. Although the GDP growth The central government now adopts a loose rate is same with the first quarter, the second quarter is economic policy and there is no need to take stimulus much more stable than the first quarter. measures. The micro-stimulus policies will have the Since the beginning of second quarter, our country impacts seen in the second half year. It is believed that has adopted control and adjustment measures. If these the central government will not increase stimulus in the measures are well put in place, it will have positive effect near two months. If the world economy does not reach for the second half year. Although pressures remain for expectation and impacts China’s export, or the domestic the second half year economic growth, the current trend economic growth fails to reach expectation, there is still shows that growth rate is becoming more and more space for the central policy to adjust. reasonable.
Yao Jingyuan Researcher at Advisory Office of State Council
It is praiseworthy for the contributions of micro-stimulus in the first half year for keeping our national economy stable and continuous. However, if we want to keep the Chinese economic growth coordinated and sustainable, it needs reform rather than simple stimulus.
Liu Mingkang Sun Xuegong Former chairman of China Banking Deputy head of Economic Research Regulatory Commission Institute, National Development and Reform Commission
Although the world economy is recovering, trade Chinese economy faces huge downward pressure protectionism is on the rise, especially the divergence in for the first half year, but the Chinese government has monetary policies of various economies. These factors will controlled the whole situation through macro-economic further complicate the outside situation China will face in adjustments, to reserve the economic trend. Now as the the next two years. economy recovers, downward pressure still remains. GDP We shall be dedicated into deep reform, and clear growth rate depends on two conditions: first is the risk those un-applicable laws and regulations, stimulate factors like real estate industry or overcapacity situation; investment, reduce tax burden and financing costs for the second is like export and policy that could compromise companies, speed up state-owned enterprise reform, downward trend. According to current estimation, the eliminate overcapacity risks and avoid long-term trouble on annual GDP growth will reach 7.6%. the economic development.
15 Institutions’ Voice
Weaker Chinese export competitiveness
As the economy for the first quarter U.S. economic growth. Japanese economy keeps going down, the government has is bearing more pressures after the lifting of issued stimulus policies since March. These consumption tax. Emerging economies face Monetary Research policies belong to four categories including sluggish economic growth and weak import investment, foreign trade, finance and during the structure reform process. These Center, Bank of tax. As the policy becomes effective, the factors will all pose pressures on the world Communication macroeconomic data keeps rising and the market. economic growth is recovering. Second, Chinese export competitiveness First, manufacturing boom indicators is facing multiple pressures. On the one begin to rebound; second, industry added hand, labor and land costs keep rising value growth rate keeps rising; third, and the restrains from environment and the export growth rate recovers; fourth, resources are strengthening. Domestically, the infrastructure and manufacturing the industry upgrading and environmental investment growth rate keeps rising; fifth, the protection are in conflict with stabilizing consumption growth rate keeps rising; sixth, growth and protecting employment. So the the credit keeps stable and rises fast. competitiveness of labor-intensive economies The current macro economy is turning like China will be weaker and weaker. On better, but considering uncertainties about the other hand, competitions from emerging rising domestic and international demand markets become more fierce and the finance growth rate, the downward pressures on the environment in Southeast Asia, East Europe economy still exist. Fixed asset investment and Mexico are improving and production is stable but large increase is very hard to costs there are lower. achieve. The consumption growth is stable, The third is that the RMB exchange rate but people’s income growth slowdown and is depreciating. There is a clear drop of RMB real estate market adjustment will pose spot rate after the floating range of the RMB- negative impacts on the consumption. Export Dollar exchange rate expands 2%. To some growth is expected to recover but it will be extent this will alleviate finance pressures very hard to gain improvement. of export companies and will bring benefits The outside environment is improving, to export growth. However, the current and the export is recovering. But the growth Chinese economy and basic condition do not is hard to gain speed and it will be difficult support large depreciation of RMB and after to achieve 7.5% growth target. There are the trade surplus reaches its peak of recent some positive elements in export growth. five years in May. The RMB exchange rate is The first is that the outside environment is facing more appreciation pressures. Even if in turning better; the second is that the policies future the RMB will not appreciate against to stabilize foreign trade are taking effect; U.S., the depreciation of other countries’ the third is that the exchange rate drops currency against the USD will lift up RMB’s slightly, which alleviates pressures on export actual exchange rate, which will bring new companies; the fourth is that the base effect is pressures to the export. disappearing, which will be conducive to the Based on the three points, it is estimated recovery of export growth rate. that the economy growth rate will rise up in Now we cannot underestimate the the whole year. The GDP growth rate for Q3 complicated situations affecting export and Q4 is 7.4% and 7.6% respectively year growth. Firstly, the world economy is still on year (2.2% and 1.9% higher than previous facing risks and crisis. The world bank and month). The GDP growth rate for 2014 will IMF is are lowering estimates about the stay around 7.5% and the whole-year goal will world economic growth rate. The U.S. federal be achieved even if the growth rate is slightly reserve is also reducing expectation of the lower than last year.
16 More positive demand signals in Q4
During the second quarter the real policy will be further implemented, and GDP grew by 7.5%, M2 rose by 14.7% in extra measures, like targeted RRR cuts, June year on year and social finance value re-loan program policy banks, railroad grew by 16% year on year. However, the financing, and across-the-board RRR cuts. Standard Charter recovery is not on stable basis with several Under the loose liquidity environment, Bank reasons: M2 growth is slowing down, across-the-board measures will become if taking out the effect of shadow bank more like a strong signal. The foreign capital capital; in view of the anti-corruption inflow will be very limited during the third campaign and its uncertainties, officials quarter, which will become an excuse for from central and local governments tend policy-makers to cut targeted RRR. to take conservative economic policies’ It will take at least half year before the since the real interest is high, investment in impacts of loan credit growth passed on manufacturing industry is growing slowly; real economic activities. Export will have domestic consumption is weaker than last limited effect on stimulating the macro year and as the real estate market is facing a economy and real estate market will become new round of adjustment the consumption sluggish as still. Therefore, conditions of will become weaker; credit loan growth is the third quarter will be no better than the recovering and the trust economies which second quarter. There will be more positive have been actively involved in real estate demand signals in the fourth quarter, which market finance, are turning to small and will depend on the real estate sales. Then medium-sized cities. the rising GDP will help better achieve the It is estimated that micro-stimulus annual growth target.
Lower CPI pressure
CPI growth rate is low and the CPI of last June is low. The raw material and reduction for June is higher than market overcapacity industries have witnessed slump expectation. The less vigorous catering of price, which is major dragging force CICC industry and rising pork price is lower than behind lower PPI growth. expectation. Non-food commodity price is In general the pressures on CPI are stable, including the house rent, showing that lower than expectation, and PPI is even the real estate market adjustment is impacting decreasing from last quarter. This shows that rent market. Liquor and cigarette have the recent economy is turning more stable, witnessed weak price due to anti-corruption but the demands are still weak. Also the PPI campaign. is lower than CPI inflation rate, showing PPI growth rate is lower year on year that consumption is gaining larger portion and than that of the last quarter. The rising of overall demands compared with the growth rate is because the base number investment.
17
China’s Residential Property Market is Tougher
By Lan Shen, Stephen Green
* Housing sales and new starts are now contracting. * We model future housing inventories; sales will have to rise substantially if inventories are to be cleared. * Policy is now more obviously moving towards supporting the market.
pril will not be the cruellest Figure 1: Housing activity is now contracting across the board month for China’s residential Floor space started,under construction and sold,% y/y,3mma property market, in our view – we believe there are tougher times ahead. But the April data was bad Aall the same: • Residential housing starts contracted 18.1% y/y in April (Figure 1). This will feed through to slower investment growth in H2. Investment growth has already slowed to 15.5% y/y. • Property sales fell 15.7% y/y in volume terms (Figure 1). According to Soufun, a private data vendor, a sample of 25 major cities showed an even larger plunge of 17.8% y/y in April (Figure 2). • After inflating last year, property prices have stabilised across the board, according to the National Bureau of Source: CEIC, Standard Chartered Research Statistics’ official 70-city survey (Figure 3). But given that developers tend to keep headline prices stable while April, up from 37 cities in March. The understandably more hesitant to step in offering other discounts, price cuts momentum is clearly negative. This with immediate support. Our Equity might already be widespread. Indeed, downturn appears worse than previous Research colleagues hosted a talk with Soufun reports that 45 of 100 cities episodes – the scale of oversupply is the founder of Centaline Property experienced m/m price declines in likely to be larger, and policy makers are Agency, a major real-estate broker.
20 E CONOMY
He reported that his agency’s scale of overdue receivables apartment supply now. Land purchases in Tier 2 and from mainland developers has never been worse. How far lower-tier cities fell sharply in April, by 12% and 1.4% y/y, can the real estate sector fall? The answer to this question respectively (Figure 5). Land prices still seem to be rising in is complicated by the lack of reliable data on the scale of most cities, especially top-tier cities, but we think it is only a over-building in lower-tier cities, developers’ vulnerability matter of time before they start to fall (Figure 4). to further cash-flow squeezes, and uncertainty on potential Inventories of unsold apartments are building up. Total buyers’ reactions to price cuts by developers and on policy official inventories in Tier 1-3 cities have risen to 17 months’ support from Beijing. The new work we present today on worth of sales. Inventories in Tier 2 and Tier 3 cities have inventories suggests that further price cuts and policy easing climbed more rapidly than in Tier 1 cities (Figure 6). We will be needed to clear the market. This is going to be a tough, assume that 5-10 months’ worth of inventory represents a if not cruel, year for the sector. relatively tight market. In contrast, inventories of more than Substantial land buying in 2012-13 means 15 months represent oversupply, which creates considerable more apartment supply now funding pressures for developers and generates downward apartment price pressures. Inventories continue to rise, as Aggressive land buying in 2012-13 means more Figure 6 shows. But how far will they go?
Figure 2: Declining sales across Tier 1-3 cities Figure 3: Prices are almost flat now Transaction volume of 25 cities, mn sqm Official residential housing price for 70 cities, % m/m
300% 25 T1 T2 T3 250% T1 cities 20 200%
150% 15 100% The rest 10 50%
0% 5 -50%
0 -100% 2008 2009 2010 2011 2012 2013 2014 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Source: Soufun, Standard Chartered Research Source: CEIC, Standard Chartered Research
Figure 4: Land-sales growth has slowed in most Figure 5: Land sales have turned negative on a cities y/y basis Land price and transaction volume, CNY/sqm, mn sqm Land sales, % y/y, 3mma
100% 90 2012S 2013S 2014S 14,000 80% 80 12,000 60% Lower-tier 70 2014P 2013P cities 10,000 40% 60 50 8,000 20%
40 6,000 0% 30 4,000 -20% Tier 2 cities 20 -40% 2012P 2,000 10 -60% 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Source: Soufun, Standard Chartered Research Source: Soufun, Standard Chartered Research
21 Figure 6: Inventories have risen Figure 7: Possible direction of inventories Official inventories in Tier 1-3 cities, months of sales Scenarios: base case (sales flat), bull case (sales up 2.5% m/m, bear case (sales down 2.5%m/m) 50 45 45 40 Sales continue 40 to decline 35 35 30 30 Tier 2 25 25 Sales flat 20 20 Tier 3 15 15 10 10 Tier 1 Sales begin to 5 5 rise again 0 0 2012 2013 2014 2015 2008 2009 2010 2011 2012 2013 2014 2010 2011 Source: Soufun, Standard Chartered Research Source: Soufun, Standard Chartered Research
In Figure 7 we model three different scenarios, depending future inventories. But even a 2.5% m/m increase from current on sales growth. We forecast future apartment supply using land levels will only be enough to reduce inventories gradually. It sales in the past three years. Our three scenarios assume (1) that would take two years to bring inventories back to mid-2013 home sales remain at the average level of the last six months; (2) levels. This would represent an extended period of pain for a bull case, in which sales rise 2.5% m/m from the current level many developers and would likely be associated with a wave of to end- 2015; and (3) a bear case, in which sales fall 2.5% m/m bankruptcies in the sector, as many could not cope with high from now to end-2015. Scenario (2) translates into a 7.6% decline financing costs for such a long period. In order to clear the in sales in 2014 versus 2013, while scenario (3) translates into a surplus more quickly, sales will need to pick up substantially. 20.9% drop in 2014. Our model suggests that national sales need to rise at a 6% m/ Our model suggests that if sales nationwide remain at m pace for inventories to fall back to the 10-month level in six current levels, then inventories will not be cleared; rather, they months’ time. This translates into 3.6% y/y sales growth for will continue to rise and create even more stress for developers. 2014. For this to happen, developers will have to cut prices, A continued slide in sales at a 2.5% m/m clip would cause and Beijing will need to ramp up policy support to boost extreme distress. sentiment. A pick-up in sales is the only way to clear current and Beijing’s reformers likely do not want to re-inflate the
Figure 8: Developers’ financing has tightened Figure 9: Mortgages are more difficult to obtain New loans, other financing (advance payment and Individual mortgages outstanding, volume and mortgages) for developers, % y/y, 3mma growth, CNY bn, % y/y
150% 12,000 70% y/y%(RHS) 130% 10,000 60% CNY bn 110% 50% 90% 8,000 70% 40% 6,000 50% Loans 30% 30% 4,000 10% 20% -10% 2,000 10% Other -30% financing 0 0% -50% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Mar-06 Sep-07 Mar-09 Sep-10 Mar-12 Sep-13
Source: CEIC, Standard Chartered Research Source: CEIC, Standard Chartered Research
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Table 1: Most DesirableCities for Real Estate Purchases by Chinese HNWIs
Date Entity Measure Details
Zhengzhou issued draft rules to promote residential home purchases by low to-middle-income households, according to a statement posted on its To promote 9 May 2014 Zhengzhou official website. Borrowers will get preferential treatment from lenders on home purchases loan rates after finding guarantors for their mortgages, according to the draft rules. The city government is soliciting opinions on the draft rules.
Tongling, a Tier 3 city in eastern China's Anhui province, enacted ‘Suggestions on promoting the continuous development of the property market’ on 1 May 2014. Measures that have received the most attention include tax subsidies and the loosening of loan criteria. To promote 7 May 2014 Tongling Between1 May and 31 December 2014, house purchases in Tongling home purchases will enjoy a tax subsidy of 1% if the total area does not exceed 144sqm. Required payments into the housing provision fund for mortgage applications were reduced to three consecutive months from six previously. Down payments for loans based on housing funds were cut to 20% from 30%.
Nanning, the capital city of Guangxi Zhuang Autonomous Region, announced that residents of five smaller neighbouring cities in the Northern Gulf Economic Zone can now enjoy the same right as local Nanning residents to buy homes To promote 28 April 2014 Nanning in the city, effective 25 April 2014. Previously, non-locals were required to home purchases present documents related to the payment of local income taxes for at least one year to be eligible to buy homes in Nanning. This restriction was imposed in 2011 to rein in speculative investments in the local housing market.
Source: Local governments, Standard Chartered Research housing market. However, they must also realise that a deep more time – up to six months – to approve applications. We market correction lasting two or more years would cause show mortgage lending in Figure 9. Mortgage loans increased considerable collateral damage. We believe that Beijing now by 21.0% in 2013, versus home-sales growth of 26.6%. needs to adjust policy in order to soften the market correction; Market outlook properly done, this would not re-inflate the housing market, but would rather limit the potential pain. We expect property investment growth to trend We do not have any inventory data on housing in down throughout 2014. We forecast an increase of c.13%, Tier 4-7 cities, which account for the majority of China’s versus 20% in 2013, as construction activity is scaled construction activity and sales. There are clearly some small back significantly. Inventory will continue to weigh on cities with massive inventories – cities such as Tangshan, prices. Huhehaote, Jinzhou, Yingkou, Changzhou and Lianyungang Given the importance of the property sector to China’s have been in the news recently. Official data suggests that economy, we think the government will introduce more Jinzhou City in Liaoning province has 14 years’ worth of loosening measures to mitigate the impact of a housing- inventory available. However, we have no way of knowing market slowdown. how extensive such extreme over- supply situations are in Several city governments have announced local loosening a country that has around 150 cities with more than 1mn measures, including relaxations of purchase restrictions, lower inhabitants. This makes it difficult to accurately estimate down payments, and easier access to local bank mortgages. We the scale of the 2014 correction in construction. Given our expect more lower-tier cities to follow suit, which will help to outlook, though, we have a bearish near-term view on iron prevent local markets from collapsing. ore and copper prices, and on the overall demand cycle for The PBoC has also requested that banks speed up Q2 and Q3. mortgage lending, set mortgage rates at reasonable levels, and The need to ease credit, moderately do more to meet first-home buyers’ mortgage requirements. Given the risk of further price declines in many cities, we As a cyclical industry, the property market is sensitive believe the banks are unlikely to respond aggressively. The to the credit cycle, and the tightening of the past six months PBoC move was significant, though, because it signalled that has affected developers. With their funding growth slowing the central government would like to stabilise the housing (Figure 8), more companies have been forced to cut prices as market. We expect to see more relaxation of financing to sales momentum has slowed. developers and a possible reserve requirement ratio (RRR) cut An additional challenge has been banks’ increased in the near term. reluctance to increase mortgage lending in the past 12 months. Banks have removed mortgage rate discounts and are taking (Authors: from Standard Chartered Bank)
23 Chinese Investment Emigration is Surging
By Audrey Guo
* Education, pollution and food safety concerns are three main reasons for emigration. * Los Angeles, San Francisco and Vancouver are top overseas real estate investments for Chinese. * 66% of those who have emigrated, or are applying or considering doing so, say they would consider getting a foreign passport after moving overseas.
.3 million individuals have This report, Immigration Main reasons for emigration emigrated from China, and the Chinese HNWI 2014, is ranking fourth after India, based on a survey of 141 Chinese According to the report, educa- Mexico and Russia, according high net worth individuals tion, pollution and food safety to the UN International World (HNWIs) currently in the process concerns are the three main reasons for Migration9 Report 2013. of emigration or considering emigration. “The recent surge of interest by emigrating. Respondents had family China’s millionaires see the UK rich Chinese applying for investment wealth of no less than 6 million as the best place to study at high school visas abroad, is another sign of this CNY (US$1 million), with an level and below; while US is preferred for age of China’s globalisation,” said average wealth 42 million CNY undergraduate level and above. 28.7% of Rupert Hoogewerf, Chairman and (US$7 million). 6% had wealth the children of China’s millionaires see Chief Researcher of Hurun Report. exceeding 100 million CNY (US$15 the UK as the best place to study at high The proportion of HNWIs who million). The survey was carried school level and below; at undergraduate have emigrated, or are planning to do out in March and April 2014, with level and above, 36% favor the US. The so, rose to 64%, up from 60%, driven 60% of respondents from Tier 1 average age at which millionaires send mainly by the number of super- cities in China (Beijing, Shanghai, their children to study abroad is 18; the rich who have already emigrated, Guangzhou and Shenzhen). The super-rich, however, send their children according to the Hurun Chinese average age was 41, 57% were male. abroad earlier, at an average age of 16. Luxury Consumer Survey released in David Chen, Partner Lawyer US and Canada are preferred January 2014. of Visas Consulting Group China, countries for investment immigration, Hurun Report and Visas Consul- said:“In recent years, there has mainly because of the ease of obtaining a ting Group, a leading immigration been a surge of interest in Chinese green card, clear application procedures, agency with offices in many Chinese investment emigration, partly because and the large Chinese communities, cities, released Immigration and of a clearer application process than including friends and family, already the Chinese HNWI 2014, a 24- before and also partly because they there. page report on the emigration trend have a more global network, with Statistics show that 66% of those amongst China’s wealthy, as well as many having friends and family who have emigrated, are applying or are their investments abroad. already living overseas.” thinking of doing so, would consider
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giving up their Chinese nationality education are the main reasons for Table 2: Most desirable cities to get a passport of the country they investing abroad. for real estate purchases by move to. The biggest headache in the 70% are interested inbuying- Chinese HNWIs process are long waiting time, language residences abroad for themselves; only barriers and difficulty in integrating one-third buy for pure investment 1 Los Angeles 18% into society. Preferred amount to spend purposes. Average value of residence is 2 San Francisco 16.5% on investment immigration is 5 million US$1 million. 3 Vancouver 13.6% CNY (US$830,000). There are currently 458 dollar- 4 New York 9.9% Professional services and track billionaire Chinese diaspora 5 Seattle 8. 5% record are the two most important billionaires, accounting for 24.5% of 6 Toronto 7.7% criteria when selecting an investment global billionaires. 7 Boston 5.5% immigration consultant. UK, Switzerland, Singapore, 8 Sydney 2.2% Education concerns, pollution Canada, UAE and Monaco are 9 Melbourne 1.8% and food safety are the main reasons immigration destinations of choice for 10 Singapore 1.8% driving China’s HNWIs to consider global billionaires, according to Hurun 11 New Zealand 1.8% emigrating abroad, accounting for Global Rich List. 12 London 1.8% 21%, 20% and 19% respectively. Regarding to overseas investment Other considerations are social confidence: one third of respondents welfare (15%), medical facilities (11%), said they felt confident about investing respectively. Los Angeles, San wealth security (8%) and childbirth overseas. Francisco and Vancouver are the (4%). The US and Canada are the top For overseas asset allocation, top three cities for buying property choices for investment immigration. on average, overseas investments abroad. Los Angeles, San Francisco and accounted for 16% of their total wealth. 38% of those surveyed say Vancouver are the most desirable 8% have put more than 50% of their that detached villas are the type of cities for emigration. wealth overseas. For more than 70% of property they plan to invest in abroad, those surveyed, overseas investments followed by apartmentswith 26%. accounted for less than 20% or less of Townhouses accounted for 14%, and Table 1: Emigration destinations their total wealth. farms 7%. Asset diversification was the most When it comes to the type of Emigration destinations common reason given for investing neighborhood where they want to buy 1 US 52% abroad with 19.8%, followed closely property, 46% of those surveyed say 2 Canada 21% by children’s education with 19.4%. they would choose an area close to 3 Australia 9% Investing in the hope of being able to schools and education facilities, while emigrate accounted for 16%, retirement 4 Europe 7% 17% would choose city centers. nest egg for 11%. 5 New Zealand 4% The US tops the rankings for Overseas residential is king: 6 Singapore 3% the most immigrant billionaires, Overseas real estate was by far the with 41, or 9% of its total number 7 Hong Kong 2% primary choice of overseas investments, of billionaires. They come from a 8 Japan 1% selected by 43% of respondents. Fixed number of countries and regions, Source: Hurun Research & Visas income products and equities followed including China, South America and Consulting with 17% and 13%. Hungary. The UK ranks second, with Overseas property 30 immigrant billionaires, accounting for 39% of its total number. They Overseas investments Motivation for buying property come from countries including India, overseas – and amount invested: 70% Russia, Brazil and the US. Real estate is the number one of those surveyed were looking to It is worth making the point choice for overseas investments, for over buy real estate to live in; only around that countries like the US have a 40% of respondents. one-third planned to buy as a pure strong track record for attracting Los Angeles, San Francisco and investment. The average investment in entrepreneurs, who then go on to $ Vancouver are top choices for overseas overseas real estate was US 1 million. set up a business there. High-profile property investment. Almost half Close to a quarter of those surveyed entrepreneurs include the Russian co- choose an area close to schools and would consider buying real estate in a founder of Google, the Ukrainian education facilities. Other popular country to which they have no plans founder of WhatsApp, the South places for the purchase of residential to emigrate. African founder of Tesla, etc… real estate are NY, Seattle, Toronto, The US is the first choice The UK is the capital for billionaire Boston, Sydney, Melbourne, Singapore, for overseas property investment, immigrants, followed by Switzerland, New Zealand and London. with 60%, followed by Canada Singapore, Canada, UAE and Asset diversification and children’s and Europe, with 22% and 7% Monaco.
25 Monthly Data - H1, 2014
Fast Growth of FDI in China’s Service Sector
China’s foreign trade in the negative to positive and expanding 5. Import and export of first half of 2014 monthly. Growth in April-June was conventional trade maintained 0.8%, 3% and 6.4% respectively. a rapid growth and import of According to Customs figures, 3. Trade with developed processing trade began to pick up. China’s total import and export in markets remained increasing, and In June, China’ s import and January-June reached 12.4 trillion trade with Hong Kong regained export of conventional trade totaled yuan, down 0.9% year on year (the growth. US$187.29 billion, up 5.7%, 3.6 same below). Export was 6.5 trillion In June, trade with the EU, the percentage points higher than that yuan, a decrease of 1.2%, and import U.S. and Japan increased 13.4%, 4.8% of May. The import and export of 5.9 trillion yuan, down 0.6%. Trade and 3.2% respectively, 12.2, 3.6 and processing trade totaled US$108.68 surplus was 630.61 billion yuan, a 2 percentage points higher than that billion, up 5.8%. Among others, decrease of 6.5%. In terms of U.S. of national export in June. Growth the export of processing trade was dollars, total import and export stood of trade with the EU and the U.S. US$67.87 billion, up 1%. The import of at US$2,020.86 billion in January-June, remained the same with that of the first conventional trade registered US$40.81 up 1.2%. Export was US$1,061.86 five months, and trade with Japan was billion, up 15.3% from -1.2%. billion, up 0.9%, and import US$959.0 2.8 percentage points higher than that 6. Exports of State-owned and billion, up 1.5%. Trade surplus was in May. Trade with Hong Kong grew private enterprises enjoyed a rapid US$102.87 billion, a decrease of 5.1%. 5.8%, regaining growth after decreasing growth while exports of foreign- The main characteristics of foreign in five consecutive months. Trade with owned enterprises grew slowly. trade in June are as follows: emerging entities had ups and downs, In June, exports of state-owned and 1. Both export and import among which, trade with ASEAN, private enterprises reached US$21.47 enjoyed a positive growth. India and South Africa was up 10.9%, billion and US$81.86 billion, respectively, In terms of U.S. dollars, China’s 9.6% and 5.8% respectively, while trade going up 3.6% from 0.7% of May and up import and export in June reached US$ with Russia and Brazil decreased 2.3% 16% from 13.2%, respectively. Exports 342.01 billion, up 6.4%. Among that, and 3.3% respectively. by foreign-owned enterprises totaled export reached US$186.79 billion, up 4. Exports of mechanical and US$83.46 billion, with a growth rate of 7.2%, and import US$155.22 billion, electrical products and high-tech 0.6% from 3.2% in May. $ up 5.5%. Trade surplus was US 31.56 products went down by a small Utilization of foreign billion, up 15.8%. margin. investment 2. Inf luence of high cardinal In June, exports of mechanical and number decreased and growth of electrical products and high-tech products In January-June of 2014, a total of import and export expanded. registered US$102.52 billion and 10,973 foreign-funded enterprises were Influenced by the high cardinal US$50.67 billion, respectively, up 5.1% approved, up 3.2% year on year. Actually number of last year (mainly the first and 3.3%, respectively, each with a drop utilized FDI reached US$63.33 billion four months), in the first four months of 1.5 percentage points than that of May. (equivalent to 389.95 billion yuan), of this year, export and import of The export of textiles, clothing, bags & up 2.2% year on year (excluding data February and March witnessed a suitcases, footwear, toys, furniture and of banking, securities and insurance). negative growth, decreasing 4.9% and plastic products was US$41.05 billion, up In June, utilized foreign capital was 9% respectively. From April, growth of 5.7%, 0.6 percentage points lower than US$14.42 billion (equivalent to 88.86 import and export began turning from that of May. billion yuan), up 0.2% year on year. The
26 E CONOMY
main characteristics of foreign investment average of the whole. Investment from ASEAN, EU, Australia, U.S., Russia in January-June are as follows: the ROK and the UK reached US$2.8 and Japan reached US$28.82 billion, 1. Utilized FDI in the service billion and US$700 million, up 45.6% taking up 66.5% of the total foreign sector maintained fast growth. and 76.4% year on year respectively. direct investment during the same In the first half of 2014, utilized That from Japan and the U.S. was period, with the proportion decreasing FDI in the service sector registered US$2.4 billion and US$1.74 billion, by 4.2 percentage points. Investment in US$35.2 billion, up 14.8% year down 48.8% and 4.6% on a year-on- Hong Kong fell by 29.3% year on year. on year, accounting for 56% of the year basis respectively. Meanwhile, Investment in EU and Russia increased national total, of which, utilized actual FDI from 28 EU countries in by 221.7% and 109.5%, respectively. FDI in the distribution service January-June reached US$3.58 billion, Investment in ASEAN was US$2.52 industry took a larger percentage and down 11.2% year on year and that from billion, up 14% year on year. Investment reached US$4.69 billion. Utilized ASEAN totaled US$3.42 billion, down in the U.S. reached US$2.46 billion, FDI in agriculture, forestry, animal 19.2% year on year. up12.8%. Investment in Australia totaled husbandry and fishery amounted 3. Utilized FDI in central US$1.69 billion, up 8.3% year on year. to US$900 million, down 0.2% China enjoyed rapid growth. Contracted projects overseas year on year, accounting for 1% of In January-June this year, utilized In January-June of 2014, the the national total. Utilized FDI FDI in eastern China was US$52.6 turnover of China’s contracted projects in manufacturing was US$22.8 billion, up 2.8% year on year; utilized overseas amounted to US$61.58 billion billion, down 13.9% year on year, FDI in central China was US$6.1 (equivalent to RMB 378.02 billion), accounting for 36% of the national billion, up 9.6% year on year, and up 6.5% year on year. The value of total, of which, utilized FDI in utilized FDI in western China was newly-signed contracts was US$81.04 electronic equipment manufacturing US$4.6 billion, down 11.5% year on billion (RMB 497.47 billion), up 5.7% including telecommunications year. In January-June, paid-in FDI in year on year. The projects each with a equipment and computers reached China’s eastern, central and western contract value of over US$500 million US$3.74 billion, down 4.2% year regions accounted for 83%, 9.6% and were 302 (23 less than last year’s 325), on year, transportation equipment 7.4% respectively of the total. with a total contract value of US$65.08 $ manufacturing reached US 2.42 Overseas investment and billion, taking up 80% of the total value billion, down 8.49%, and chemical economic cooperation of newly-signed contracts. The projects raw materials and chemical products each with a contract value of US$100 manufacturing reached US$1.73 Direct investment overseas million or more were 168, 20 less than billion, down 30.8%. In the first half of 2014, Chinese that in the same period of last year. 2. Investment from major investors made direct investment in 3,224 In June, the turnover of China’s countries and regions maintained businesses overseas in 146 countries and contracted projects overseas was steady growth. regions. Total direct investment reached US$14.68 billion (RMB 90.11 billion), In the first six months of 2014, US$43.34 billion (equivalent to RMB up 4% year on year. The value of newly- actual FDI in the Chinese mainland 266.05 billion), down 5% year on year. sighted contracts was US$27.68 billion from top 10 investors (Hong Kong, As of the end of June 2014, China’s non- (RMB 169.92 billion), up 37.3% year Taiwan, Singapore, the ROK, Japan, financial direct investment overseas on year. the U.S., Germany, the UK, France totaled US$569.0 billion (equivalent to Labor service cooperation and the Netherlands) amounted to RMB 3,492.86 billion). overseas US$59.53 billion, accounting for 94% In January-June of 2014, The In the first six months this year, of the total, up 3.9% year on year, and Chinese mainland’s investment in labor service personnel dispatched 1.7 percentage points higher than the seven economies, namely Hong Kong, overseas reached 255,000, an increase of 29,000 over the same period of 2013. Labor service personnel sent abroad for contracted projects were 124,000, and those for labor cooperation projects were 131,000. By the end of June 2014, all labor service personnel dispatched overseas were 936,000, 65,000 more than that at the end of June 2014. In June, labor service personnel dispatched overseas was 55,000, an increase of 14,000 over the same period of 2013. (Source: Press Conference of Ministry of Commerce on July 15, 2014)
27 Case Study From “Won’t Pay a Penny” to “Shake Hands” — Learnings from mediation of steel quality disputes By Wang Fang between Hebei company and Ukrainian Company
Case background Mediation Center to show proof for the The mediator observed that in spite of rusty keels, the Ukrainian company kept official inspection report and real object contacting the Center for the submission to prove the rusty keels, the Ukrainian At the end of December, 2011, the and translation of the inspection and counterpart was not sure whether the Mediation Center of China Council for proof documents. Meanwhile, the Hebei company would compensate. the Promotion of International Trade Center communicated with the Hebei The delivery mode for the commodity and China Chamber of International company to figure out the reason of the was FOB Tianjin, which according to Commerce received a complaint call dispute. After effective communication, international practice means that all the from a Ukrainian steel company, who the Hebei company preferred to settle seller’s responsibilities are transferred to claimed a compensation for the poor- the dispute via business mediation. the buyer once the commodity passes quality keels it imported from a Hebei the ship’s rail. For the two compensation building material company. But the Mediation process requests proposed by the Ukrainian exporter refused the compensation as it company, the Hebei company patiently denied that the commodities had any explained and restated that it was not quality problems at the time of port According to the business responsible for the quality problem departure. mediation procedures, the Mediation caused by the buyer’s improper storage. Then the Mediation Center Center determined the time, place and Besides, the Hebei company made a immediately contacted the Hebei mediator for the mediation meeting claim for the interests caused by the exporter, who actively submitted an after communication with both the Ukrainian counterpart’s delay final explanation statement. In the statement, Ukrainian company and the Hebei payment, which was not mentioned in the company clarified the reason why company. the Ukrainian company’s compensation the keels got rusty and declared its At the mediation meeting held in request. And the Hebei company stand for refusing compensation claim. Beijing, both sides presented the case, was angry about the agent’s impolite Upon the request from the dispute focus and compensation claim. treatment for the final payment
28 E CONOMY
reminders. The mediator perceived uncertainties had to be considered. and the establishment of business that the Hebei company’s interest After contacting the headquarters, the relations. The lifetime of a company compensation claim was actually a trick Ukrainian company finally confirmed highly depends on its relations to counter the Ukrainian company’s to accept the Hebei company’s offer. with business partners. A survey compensation request. The mediator drafted the shows that the average lifetime for The mediator continued to settlement agreement and negotiated European companies is 40 years, communicate with both sides to earn the compensation currency, payment that for Chinese companies is 7 their trust and took notes of the issues mode and invoice issuance at the joint years and only 2.9 years for domestic that the sides could not strike an meeting of the two sides. Eventually, private companies. Therefore, when agreement after learning about the both sides signed the triplicate pursing profits, the companies have to dispute facts. The mediator also asked settlement agreement and agreed that maintain a good reputation and sound for the other side’s consent every time the payment would be supervised by the relations with business partners. for having separate talks with one third-party mediator. Afterwards, the Third, with high flexibility me- side and described the progress about Hebei company completed the payment diation is suitable to settle disputes the separate talks before continuing within 10 working days upon receiving between overseas and domestic separate talks with the other side. all the necessary documents. Thus, the companies. Companies want help Besides, the mediator guided both business dispute was successfully settled at low cost of time, energy as well sides to actively think about how to with business ties maintained. as human and financial resources. resolve the disputes with a practical Featuring high f lexibility and attitude rather than focusing on the Learnings from efficiency, mediation is easily accepted disagreements and conflicts. by and suitable to companies. In the separate talks, the media- mediation Based on the principle of two sides’ tor tried to make both sides fully intention, business mediation focuses understand their position in the case First, timely mediation takes on future business interests to solve with the advantages and disadvantages effect for international trade disputes. export trade disputes. Business clarified. When the Hebei company Once problems occur, the two sides mediation is more like negotiation exclaimed “we won’t pay a penny”, concerned have to negotiate calmly and between two parties rather than the mediator realized this kind of then an authoritative and neutral third judgment of right or wrong. And the negative speech had to be stopped party can be resorted to for mediation time, place and mediation approach and asked the Hebei company to read if the disputes cannot be settled. for the low-cost and flexible business the United Nations Convention on Timely mediation may avoid serious mediation can be determined by two the Recognition and Enforcement of consequences. parties’ negotiation. In addition, the Foreign Arbitral Awards and Notice Second, the parties concerned mediator acts as a neutral third party from the Supreme Court to enforce should focus on establishing good to carry forward the negotiation the Convention on the Recognition business relations rather than merely rather than a final judge. and Enforcement of Foreign Arbitral caring about their own interests. Awards, which the mediator prepared Companies are supposed not to (Author: from Mediation Center in advance. In this case the two sides have behaviors unfavorable to the of CCPIT and China Chamber of had nailed down arbitration clause, company’s sound development International Commerce) by which once dispute could not be settled, arbitration would be filed to the Ukrainian Industry and Commerce Arbitration Court. After several rounds of negotia- tion, the two sides stroke a preliminary agreement that the Hebei company would pay a certain amount to the Ukrainian counterpart based on the commodity status quo. But big difference existed for the compensation amount and neither side would like to compromise. In separate talks with the Ukrainian company, the mediator clarified that the amount offered by the Hebei company was its bottom line and if another mediation procedure was initiated to resolve the dispute, time and money cost as well as result
29 ENERGY
China Nuclear Plants Face Crucial Opportunity By Lily Wang
ecently, China’s National from 1% at Daya Bay to 64% at Ling Ao design, construction and operation of Energy Administration and 85% at Yangjiang. nuclear power stations with a capacity (NEA) announced 164 In 2007, it was announced that of up to 10 million kilowatts on its industry standards, about half three state-owned corporations had been own. The policy is being pursued at a of which are related to nuclear power, a approved by national nuclear security high level politically, utilizing China’s Rsignal that China will support its nuclear administration (NNSA) to own and economic and diplomatic influence. sector with new approvals for plants. operate nuclear power plants: China Experts said China’s massive Crucial moves expected National Nuclear Corporation (CNNC), development of nuclear power capacity China General Nuclear Power by not only providing technical support Mainland China has 20 nuclear Corporation (CGN) and China Power but also getting involved in operation power reactors in operation, 28 under Investment Corporation (CPI). Any and investment. construction, and more about to start other public or private companies are to Recently, China’s president Xi construction. have minority shares in new projects, Jinping has just wrapped up his three- Earlier in July, China General which is proving a severe constraint day visit in Argentina. During his visit, Nuclear Power Group signed a 38 billion on the ambitions of the country’s main Xi signed more than 20 agreements with yuan ($6.1 billion) contract to build power utilities (including Huaneng, President Cristina Kirchner, including two nuclear power plants in Southwest Huadian, Datang and Guodian), all of huge investments in hydroelectric power, China’s Guizhou province. which have set up nuclear subsidiaries or shipbuilding, railways and a deal to help The National Energy Administration become involved in nuclear projects. Argentina build its fourth nuclear plant. is putting an emphasis on the nuclear Talking about the project in In Pakistan, two new 300 MWe industry with detailed standards for Guizhou, CGN will spend 35 billion CNP-300 PWR units are being built upstream and downstream segments such yuan by 2020 on two 1.25 gig watt at Chasma, joining the two built there as primary coolant pumps, a key reactor generating units for a nuclear plant earlier. In 2013 CNNC announced an component, as well as instrument and in the city of Tongren in Guizhou export agreement for twin ACP1000 control systems. province, as well as 3 billion yuan on a units, for Pakistan’s Karachi Coastal “Clearly, these measures will smaller plant with two units. Power station, costing $9.6 billion. This provide a stimulus and introduce Apart from Guizhou, other will now probably involve ACC1000/ standard practices for the entire industry inland regions such as Jiangxi, Hunan Hualong 1000 technology. chain of China’s nuclear power sector, and Hubei provinces are also eager for In May, Romania’s Nuclearelectrica including fuel suppliers, equipment approvals. signed an agreement with CGN to manufacturers and power transmission Hunan has two nuclear power further explore the prospect of building and distribution enterprises,” said Chai projects on the discussion — the Taohua two new reactors at Cernavoda, which Guohan, chief engineer of the Ministry River power station and the Xiaomoshan currently has two Candu 6 reactors. of Environmental Protection’s nuclear project. Earlier CGN had expressed interest in and radiation safety center. However, Chai warned that new investing in the project, providing non- The move comes at a crucial time, inland nuclear projects won’t start nuclear equipment. In November 2013 with many speculating that the NEA’s operation until 2015. two nuclear cooperation agreements action may expedite the resumption of Going abroad were signed by Nuclearlectrica with new approvals for inland nuclear projects. CGN, one a letter of intent relating to The first two nuclear power plants China has a determined policy of construction of units 3 and 4. in mainland China are at Daya Bay exporting nuclear technology. Based on For the layout of the new European near Hong Kong and Qinshan, south of the technologies and experience gained energy market, CGN recently set up Shanghai, with construction starting in from the Daya Bay nuclear power a subsidiary CGN European Energy the mid-1980s. Localization has risen program, China has mastered how to Company in France.
30 I ndustr i al Watch ENVIRONMENT
Green Supply Chain Evaluation System Released By Zhu Zijun
green supply chain it is the most important to fix,” said and Toread have already started to evaluation system was Linda E. Greer, Director of NRDC’s enact green procurement policies. released recently to measure Health and Environment Program. “Over the past few years, Chinese a brand’s perfor-mance in Director of the Institute of Public products and services have been managing the environmental impacts and Environmental Affairs Ma Jun distributed globally, with supply chains Aof their supply chains in China. said the inaugural CITI evaluation of Chinese companies extending The evaluation system, looks at brands that have hundreds of worldwide and Chinese outbound namely the Corporate Information millions of customers across the world. investment rising. This means Chinese Transparency Index (CITI), was The inaugural CITI assessment multinationals, in respect to their released by the Institute of Public and looks at eight industrial sectors with environmental management, will Environmental Affairs (IPE) and the significant environmental impacts: IT, be subject to many different local Natural Resources Defense Council textiles, food and beverage, household regulations and also public supervision (NRDC) at the 2014 Eco-Forum and personal care, automobile, from consumers across the world,” Global Conference in Guiyang, capital breweries, and leather. said Wang Limin, vice secretary of of Guizhou Province in July. Apple, H&M, Unilever, Coca the SEE Foundation, adding that The CITI has been developed Cola, Stora Enso, and Puma were “Therefore, it’s important that Chinese to help address the environmental top performers in their respective enterprises develop their green supply challenges brought forth by global sectors. However, 47 of the brands chain management.” production and procurement. were unable to provide any sort of The inaugural CITI evaluation “Despite the central importance response to questions about their shows that green procurement of supply chains in globalized business supply chains, demonstrating that policies are reducing energy use and core function, and the heavy impact there’s a long road ahead before the emissions. As of June 2014, Chinese of pollution from manufacturing in goal of green supply chains can be and foreign brands had collectively this way, company corporate social attained. pushed more than 1,600 suppliers responsibility programs generally In addition, the CITI evaluation to issue statements on their specific pays very inadequate attention to includes numerous Chinese brands. pollution problems or to disclose their pollution from their supply chain. To While Chinese brands have lots of emissions data, and several hundred of the contrary, they focus on where it room for improvement, Huawei, these companies have taken corrective is easiest to start, rather than where Lenovo, Li-Ning, Youngor Group, actions.
31 AUTO Bumpy Road — The Export of China’s Own Brand of Automobile
By Cai Hongbo, Man Chao
Continued to decline According to statistics from China Association of Automobile Manufacturers (CAAM), while China’s auto production and sale continue to increase, automobile export has declined. Statistics show that the number of China’s automobile export declined in 2013 with overall export of 977,300, a decrease of 7.5% compared to 2012. The number of PCV export was 596,300 with a decrease of 9.8% over last year. The number of business vehicle export was 381,000 with a decrease of 3.5% over last year. According to the statistics released by China’s Auto Market the first half of 2012 grew by more can be divided into two categories: Yearbook 2013, Asia was still the largest than 210% compared to that in the the one is domestic own brand using market for china’s auto export in 2012. first half of 2011. Other China’s own imported technology, the other is The number of China export to Russia brand of automobiles like Great Wall domestic own brand using technology was USD 12,665,200, ranking the first and FAW Haima, also have prominent developed independently. For the latter, and accounting for 9.23%. So far, the performance. However, since 2014, the full intellectual property rights are main export destinations of Chinese the export of China’s own brand of mastered by domestic enterprises. These automobile of own brands are still automobile has suffered a huge decline. brands are regarded as the representative developing countries. Yao Jie, deputy secretary-general of of China’s national auto industry. Compared to the increase of CAAM said: “In terms of export target #1. “National team” represented the China’s auto production and sale, countries, compared to 2012 the absolute by FAW, SAIC and Dongfeng the situation of China’s own brand of value of the export declined in Iraq, Iran China’s own brand of automobile automobile is not very good. China’s and Algeria because of local politics and was born in a series of stateowned own brand of automobile suffered an some objective factors. On the other enterprises supported by the government. unprecedented fall of market share in ten hand, since US policy of quantitative China FAW Group Corporation consecutive months, from September easing and the competition with produced China’s first Jiefang truck in 2013 to June 2014. At present there is Japanese and Korean in third market, 1956, China’s first Dongfeng car and the still no recovery sign in July and the trend the competitive advantage of China’s first limousine in 1958. In 2013, FAW is also difficult to change in the second auto has been cut down actually.” Only sold 2,558,000 automobiles, reported half of 2014. The market share of 36.51% a few China’s own brand of automobiles revenue of 417.9 billion Yuan and ranked goes farther away from the government’s performed well in such case. For the 141th in “The world’s largest 500 expected target of 40%. When the market example, Lifan started the construction companies”. share continues to decline, especially of the new factory in Ethiopia last year. Now own brand of automobile limited purchasing orders are put into Great Wall built 12 overseas factories is still one of the highlights of FAW. effect in first-tier cities, the pressure and plans to invest 7 factories more. Pentium sedan, FAW heavy truck, FAW of the export of China’s own brand of At present JAC has 12 overseas KD J6, FAW small business vehicle, FAW automobile become more serious. factories. Chery is accelerating the small PCV, Charade are all performing There was a peak of the export construction of the plant in Brazil on the well. However, as an automobile for China’s own brand of automobile basis of its 15 overseas factories. manufacturing supported by the state, in 2012. The total export of Geely in China’s own brand of automobiles auto enterprises represented by FAW
32 I ndustr i al Watch
have similar weaknesses: with adequate In recent years, some own brands of car. Thus, some American enterprises funding and resources, the capability automobile like Great Wall and BYD go have already regarded China’s own of self-dependent innovation is not into public view and perform well. They brand of automobiles as their important so strong, and they rely on long-term come from behind to win races. Great competitors. What’s more, China’s own external parties. The gold content of these Wall entered South Africa in 2007. In brand of automobile have a growing own brand of automobiles is not high. 2008, after a very short time, it made awareness of foreign export because they #2. Chery, Geely – the pioneer of gratifying achievements. When South can gain export tax rebates and foreign China’s own brand of automobile African press group went to production exchange earning reward. The benefits Chery, Geely are pioneers of base of Great Wall to interview, a from the export are always higher than China’s own brand of automobiles, journalist from a very influential South those in the domestic market. So this which are also the first enterprises who African automotive media Business encourages more enterprises to explore directly focus on the world market. Day Motor News said, “Better to see the road of “going abroad”. Geely entered the car market in 1997. than to hear, I did not expect such a Weakness: The lack of innovation Because of its flexible mechanism and fast and strong development of China’s is particularly serious in the China’s continuous self-dependent innovation, automobile industry. Great Wall has automotive industry. China’s own Geely developed rapidly. In 2009 it such good equipment, such standardized brand of automobile easily lags behind completed its USD1.8 billion buyout of management. Their products are good the automotive industry of developed Ford Motor’s Volvo, biggest purchase enough to make customers from China countries in technology, appearance and ever of a foreign carmaker in China. rest assured. Sincerely hope to see more quality. This results in that for a long time They became one of the Fortune 500 and better Great Wall motors in South China’s cars always give an impression of companies for the first time in July, Africa”. Yet later Great Wall exposed cheap goods in the international market. 2012. Since 1998, when the first Geely the shortcomings of R&D, technology When the cheap prices play a limited role auto was produced, Geely has owned innovation and management mechanism. in the foreign markets, the whole export Economic car, Midsize sedan and Sports The SWOT analysis goes into the depression. car. Now Geely’s annual production Opportunity: China joining capacity is 200,000 vehicles. Strengths: John Harmer, vice WTO and the economic globalization The appearance and development president of Geely US introduces that have brought unprecedented of China’s own brand of automobile like the average hourly labor cost of a Geely opportunities for the export of China’s Geely make people change their ideas car is USD3.5. If taking health benefit, auto especially China’s own brand about China’s own cars from cheap pension and so on into account, the of auto. Now we can get a relatively low-end to cost-effective. Due to some average hourly labor cost of a General fair business environment. It is more unreasonable goal-setting, considered to Motor car is USD73.73. John Harmer conducive to export of automotive catch up with world-class foreign brands adds that this is of course relating with products, and will not easily be in a short time, China’s enterprises RMB exchange rate. However, even if constrained by arbitrary trade protection. including Geely have taken a detour on the appreciation of the RMB against the At the meantime, the government the way. USD doubles, the average hourly labor introduced a series of policies to #3. Great Wall, BYD – private cost of a Geely car is still only USD7, still encourage self-dependent innovation and enterprises of own brand of automobile less than 10% that of a General Motor support export. This provides effective help for the China’s auto enterprises. Figure 1: Sale of the world's major automotive market in 2013 Threats: In the international market Unit: ten thousand units the extra attention to intellectual property rights forces China to export its own 2500 brand in the true sense and makes it less possible to sell copycat. At the same time, 2000 the high standards and requirements of the importers make many China’s own brand of automobile unqualified. 1500 China’s automobile enterprises face dramatic changes in the international 1000 business environment. Tariff barriers, political unrest, economic fluctuations 500 and so on all probably make the export affected. Particularly at present with the 0 appreciation of RMB, the export faces increasing cost pressures. Italy China India Brazil Japan Korea France America Germany (Authors: from Business School Source: CAAM of Beijing Normal University)
33 TRANSPORTATION Transportation Capacity: Chinese Ports Take the Lead — Outlook of Container Throughput at Global Top 20 Ports in 2014
By Guo Yan
ccording to Outlook of Figure 1: The capacity and the rate of growth (YoY) of container Container Throughput at throughput of ports in Yantze Delta Global Top 20 Ports in (Unit: ten thousand standard containers/% ) 2014 released by Center for Forecasting Science (CEFS), Chinese 4,000.0 40.0 Academy of Sciences, the transportation 3,500.0 A 30.0 capacity will keep raise after new container vessels brought into service. In 3,000.0 20.0 sum, the global transportation market 2,500.0 will still face uncertainties in 2014. 10.0 The global economy faces 2,000.0 1,500.0 challenges 0.0 1,000.0 The global economy in 2014 will -10.0 see a moderate recovery since developed 500.0 economies gain steady resurgence. 0.0 -20.0 However, the risk for a potential 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 F economic downturn still exists. The Shanghai Ningbo-Zhoushan Shanghai YoY Ningbo-Zhoushan YoY emerging economies will remain relatively Source: CEFS, Chinese Academy of Sciences rapid growth, but they are facing some new challenges such as the adjustment of economic structure and volatility of Figure 2: The capacity and the rate of growth (YoY) of container demand. First of all, the U.S.’s endogenous throughput of ports in Pearl River Delta economic growth persists and the overall (Unit: ten thousand standard containers/% ) U.S. economy enjoys a mild momentum 3,000.0 60.0 of recovery. Secondly, the economy in 50.0 euro zone takes on a slowrecovery, and 2,500.0 the pattern of the economy is in need of 40.0 profound transformation with expensive 2,000.0 cost. Thirdly, in order to ensure Japanese 30.0 economy’s growth, Abe government 1,500.0 20.0 introduces a new economic stimulus 10.0 planand raises the consumption tax 1,000.0 rate, which will lay pressure on private 0.0 500.0 consumption. Thus, economic growth -10.0 rate may suffer a sharp decline. 0.0 -20.0 Furthermore, developing economies 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 F and their monetary policies will be Shenzhen Guangzhou Hong Kong in great stress and challenges as the Shenzhen YoY Guangzhou YoY Hong Kong YoY Federal Reserve gradually winds up the quantitative easing policy. For China, Source: CEFS, Chinese Academy of Sciences
34 I ndustr i al Watch
opportunity for economy boost coexists respectively. In the Pearl River Delta, China should strive hard to be one of with challenge and great uncertainty. On ports will have a low-speed growth rate. the major participants during the order the one hand, the improving overseas The growth rate of container throughput making process for international ocean demand will lead China’s economy to a at Hong Kong port, Shenzhen port and shipping. To achieve that, China’s stable and positive trend. On the other Guangzhou port will be 2.0%~2.7%, administration have to discovery hand, China is facing problems such as 0.8~1.8% and 7.3%~8.6%, respectively. converging points of common interests the adjustment of economy structure, For major ports in Asia, the growth for various departments in both local and the decline of demographic dividend, rate of container throughput will remain global transportation systems, enhance andexcessive production capacity in some above the global average, while most cooperation and coordination based on industries, etc. European and American ports will these converging points. Meanwhile, Growing demand for global maintain a steady but low-speed growth. the idea of development should be container transportation The rankings of the Top 20 ports transformed from the pure expansion in 2014 will be similar to those in 2013 of the physical sites, to the building of Under such a circumstance, in except some slight changes as described ports’ soft power, such as upgrading 2014, the demand for global container in the following four points: service quality and efficiency, improving transportation will continue to grow. First, for the first time, Ningbo- industrial chain around port, etc. However, the growth rate of container Zhoushan port will overtake Busan Suggestions throughput would be constrained by port, becoming the fifth largest port in uncertainties such aseach country’s the world. First, separating government political and monetary policy. As a large Secend, because of its more than function and enterprise management, the batch of new vessels will be in commission, 20% of growth rate of total throughput, government should avoid excessive and the pressure of overcapacity will be Dalian Port will exceed Port Klang, direct interference in business at ports. relieved and the transportation capacity of Malaysia and rise to the 12th on the Second, investment and policy container market will be improved. ranking sheet. support are needed to promote more The global container throughput will Third, Xiamen port will overtake appropriate management mode. enjoy a stable and healthy development Port Antwerp to rank the 16th. Third, containers from hinterland as the global economy and international With rapid domestic economy cities to ports should be developed trade are in a good momentum of growth boost, increasing contribution to global through integrating multiple industries led by the economic recovery in developed economy and trade, and promoting such as service industry, manufacturing economies such as the United States and status in international ocean shipping, industry and financial industry. European Union. Its development could Table: Container throughput forecast and rank of global Top 20 be characterized by the following main ports in 2014 points: Chinese ports continue to take the Container 2014 2013 Port Country/Region Throughput Growth Rate(%) lead in the growth rate of the handling (10 thousand TEU) capacity of the container throughput. 1 1 Shanghai China 3500~3530 4.3~5.2 In 2014, 10 out of the Top 20 ports will 2 2 Singapore Singapore 3360~3390 3.1~4.1 come from China and 7 out of the Top 3 3 Shenzhen China 2330~2355 0.8~1.8 10 ports will be in China. It is estimated that in 2014 the 4 4 Hong Kong China 2280~2295 2.0~2.7 difference of the growth rate of the 5 6 Ningbo-Zhoushan China 1900~1920 10.4~11.6 handling capacity between different 6 5 Busan Korea 1810~1830 2.4~3.5 regions in China will be narrowed down. 7 7 Qingdao China 1650~1670 4.0~5.3 Among the Top 20 ports, each Chinese 8 8 Guangzhou China 1630~1650 7.3~8.6 ports achieves growth in 2014. Among 9 9 Tianjin China 1400~1420 2.9~4.4 them, the growth of transportation 10 10 Dubai Emirates 1375~1395 5.7~7.3 demand in Bohai Rim has achieved 11 11 Rotterdam Netherlands 1165~1185 0.2~2.0 a stable and moderate decrease. 12 13 Dalian China 1080~1095 7.9~9.4 Qingdao port will gain a growth 13 12 Port Klang Malaysia 1065~1080 2.9~4.3 rateof 4.0%~5.3%, while Tianjin port 14 14 Kaohsiung Taiwan, China 1000~1010 0.6~1.6 and Dalian port will achieve growth 15 15 Hamburg Germany 965~975 4.2~5.3 rate of 5.7%~7.3% and 7.9%~9.4%. 16 17 Xiamen China 870~880 8.6~9.9 Ports in Yantze Delta will maintain a 17 16 Antwerp Belgium 860~870 0.3~1.4 steady developmentwith rapid growth 18 18 Los Angeles U.S.A. 810~820 2.9~4.2 increase of container transportation demand. Shanghai port and Ningbo- 19 19 Tanjung Pelepas Malaysia 775~785 1.6~2.9 Zhoushan port will achieve growth 20 20 Long Beach U.S.A. 675~685 0.3~1.8 rates of 4.3%~5.2% and 10.4%~11.6%, Source: CEFS, Chinese Academy of Sciences
35 LOGISTICS The Post-80s Build up Fast Logistics By Alice Yang
Ji Jie Logistics Co., Ltd. was established in 2008. After six years, based on the Shanghai Port, the company grows into a big one, with extensive business networks and large group of customers, due to its quality service and management. China’s Foreign Trade magazine had an interview with its President, Mr. Gu Liwei, Gu Liwei, who was born in the 1980s in China thus labeled as “The President of Ji Post-80s”, to find the key to success. Jie Logistics Co., Ltd.
: The demand of modern logistics professionals is far from enough. years of development. Currently, we Qin China is growing. China’s work with supply enterprises covering Twelfth Five-Year Plan also supports : What has the Ji Jie Logistics electronics industry, machinery, food the logistics industry development. Qdone in the construction of industry, book industry, chemical What impact will it have on your information technology, which is industry and so on. We have established company? vital to modern enterprises? stable and cooperative relationships with some big brand manufacturers, : The Twelfth Five-Year Plan : In the increasingly competitive including Unilever, China Petroleum Areleased a positive signal for China’s Alogistics industry, the construction & Chemical, Giti tire, Sinochem logistics industry. The favorable policies of information technology is critical International, and Shanghai Kerry. The will support the long-term development to improving the quality of logistics trust from our customers is our biggest and benefit my company. We will work services, and ensuring the safety and treasure. hard on building up a leading brand in effectiveness of transport. In terms of the logistics industry. information technology, Ji Jie Logistics : What is the plan for the future Co., Ltd. has established a supply Qof Ji Jie Logistics Co., Ltd.? : We noticed that almost every chain management platform. We have Qlogistics company is recruiting. an electronic inquiry system, and our : The Company has experienced Does the current rapid development customers can directly query the status Amany difficulties from the of the logistics industry cause the of goods through the internet, which is establishment to now. But it is all shortage of talents? convenient to control the goods delivery worthy when taking a look at the during the transport. The system has company nowadays. Speaking about : The industry is short of improved the work efficiency, and the future plans, first of all, we will Aprofessional talents for a long ensured the goods safety. Meanwhile, get down doing the business now to time. There is a misunderstanding of the company has also installed GPS provide the highest quality services to the logistics industry. Many young in most of the cars involving in the our customers. Next, we will extend students take the industry the same transport, to make sure the people, sea transport networks for domestic as the express logistics, which they vehicles and goods all in safe. containers to the road transport and show little interest in. However, the warehousing service. Our target is to logistics industry is more accurately : Ji Jie Logistics has gained a good ultimately develop as a network-based defied as “Industrial Engineering and Qreputation in the industry. Are integrated logistics company, with Logistics”. The transportation and there any supply enterprises which Shanghai as the center, extending express are only a part of the logistics have long-term cooperation with to the north and south, covering the chain. What matters more in the the company? Yangtze River Delta and the Pearl industry is to solve the bottlenecks of River Delta, reaching the whole production scheduling, operational : We have established good trust China, with the all-around support research and optimization problems of Awith our customers and obtained by waterways, roads, water rail and production planning. The demand for a high reputation in the industry after aviation.
36 I ndustr i al Watch FINANCE
More IPOs to be Expected in H2 By Richard Zhu
he global IPO market being placed on hold for most of Terence Ho, EY’s Greater China IPO continued its recovery in the second quarter,” said Ivan Tong, Leader. the first half of 2014 and EY’s Assurance & Advisory Business “Investor confidence has been will see a rising tide in Services Partner. bolstered by the relatively strong after- the second half of this year, with “But with a further 100 Chinese performance of companies that have China’sT performance as a highlight, companies now expected to list in recently gone public compared to according to an EY survey named this year and solid investor confidence returns in the equity markets more EY Global IPO Trends: 2014 Q2. across a range of markets including generally. With a solid pipeline of The survey showed that there Hong Kong, Japan and Australia, IPO-ready businesses across a broad were a total of 588 deals raising around the stage is set for considerable, albeit range of geographic markets and from US$117.7b in the first six months of constrained, IPO activity in the second multiple sectors, there is no shortage of the year, an increase of 60% and 67% half of the year,” Tong added. supply. This will increase the pressure respectively on the same period in 2013 “In the second half of 2014 on pricing as investors will be wary of and the highest amount of capital raised we expect the global IPO market meeting over-optimistic valuations,” in the first half since 2007. In Q214, to be characterized by a period of Ho added. there were 333 IPOs raising US$70.7b, normalization. As economic recovery Ho expected a significant uptick a 30.6% increase on the previous continues in many markets, equity of IPOs in the second half of 2014 from quarter and a rise of 62.4% compared to indices remain buoyant and volatility is the financial, real estate, health care, Q213 by deal numbers. trending downward, the fundamentals technology and consumer products and Activity was spread broadly across are in place for a sustained period of services sectors, which will benefit from sectors, with health care the most active strong and steady IPO activity,” said an increase in consumer confidence. in the first half of the year, with 103 IPOs, more than double the volume in the same period in 2013. Technology IPOs doubled in number (78 IPOs), while energy raised the most capital through IPOs in the first six months of 2014 (US$17.6b). Asia-Pacific exchanges saw more IPOs in the first half of 2014 than any other region with 217 deals raising US$33.7b, an increase of 64% and 45% respectively on the first half of 2013. Four of the 20 largest IPOs in the first half of 2014 were on Asian exchanges — three IPOs on Hong Kong and one IPO on Tokyo Stock Exchange. However, activity slowed down in Q214 compared to the first quarter of the year. “After a bumper start to the year with the reopening of Mainland China’s exchanges to new listings, activity slowed due to approvals again
37 ICT
ICT Market: Revolution and Reconstruction By Lynn Yu
CT manufacturers have and tablet, wearable devices, Internet by the year of 2020, accounting for to adapt to the industrial of things, recognition system, robots, 17% in the world’s total. revolution and reconstruction 3D printing, various applications and Accordingly, China’s ICT so as to grab the business terminal security in the front end. market will grow steadily and by opportunities in the ICT market and China’s ICT market promises 2020 both China’s IT market and “Ito survive the third platform war,” IDC great potential telecommunication service market China’s president Kitty Fok said at the will exceed USD 300 billion, to be recently-held annual IDC China’s ICT The Chinese economy is in exact a total of USD 602.3 billion market trend forum. the stage of transformation and at an annual growth rate of 7.7% The past 50 years is for digitization, restructuring, and the downward during 2013-2020. The ICT market as concept, observation, algorithm, real estate and real economy impact will register a total scale of USD 3.8 behavior, process as well as knowledge economic growth. However, the trillion during 2013-2020. are in the course of digitization. The overall Chinese economy is on In spite of great challenges this ICT industry transforms from the first an upward trend and the large year, IDC predicts a minimum of platform with host-terminal as the core investments stimulated by new-type 7.3% growth rate for China’s GDP. In in the 1960s to the second platform urbanization, steady export growth the year of 2014, China’s IT market supported by PC, client/server and driven by developed economy, will grow to USD 200.6 billion, up LAN/Internet in the 1980s and upgrading domestic consumption 10% year-on-year. The domestic finally to the current third platform and the reform dividend released by telecommunication service market supported by cloud computing, big the 18th CPC National Congress will reach USD 206.5 billion, up 6.8% data, mobility and socializing. In the well support the steady growth of year-on-year. era of third platform, mobile internet the Chinese economy. According to Five trends in the ICT market and Internet of things will prevail and IDC’s predict, the Chinese GDP will will take the lead in the upcoming 5-10 years wisdom grow at an annual rate of above 7.2% will become physical, including during 2013-2020 to USD 18 trillion The traditional companies are recognition system, robot, 3D printing and biological synthesis. In the era of physical wisdom, the Figure 1: 2014 China IT market growth third platform will revolutionize and reconstruct all the industries and the 20% ICT manufacturers will confront great challenges, such as changes in terms of economic environment, technological trend, bio system and user needs. 12.9% 12.8% 10.0% But these challenges will also bring 8.3% 9.1% tremendous opportunities: new type 6.7% Feature urbanization, industrial transformation Peripheral Phone and reform, industrial Internet and PC personalized customer demands from Smart Storage IT Network Software Volume- Overall the macro and industrial perspective; Phone/ Service Server IT -6.1% -2.2% software-defined data center in the Tablets back end, cloud computing and service, big data and back-end security from the -41.0% technological perspective; smartphone Source: IDC Worldwide Black Book, Q1 2014
38 I ndustr i al Watch
talking about and launching “transfor- price effectiveness, delivery speed, electric Tesla are this kind of examples. mation and reform”, while the overall service and innovation. If the IDC holds that the following companies with Internet genes are company is able to do the best in one five trends of the ICT market will lead “revolutionizing and reconstructing” or several aspects, the industry will be industrial “revolution and reconstruction”: ● the traditional industries. The core revolutionized and reconstructed. Apple Mobility and perception is of revolution and reconstruction lies Inc.’s product experience, Xiaomi Corp.’s expanding intelligence to infinity ● in upgrading consumers’ expectation cost effectiveness, taobao’s reasonable Socializing and collaboration is towards products and services, including price and diverse commodities, bringing companies closer ● experience, communication mode, Jingdong’s speedy delivery and all- Big data and business analysis isinnovating product and business model ● Figure 2: Based on the five trends in the ICT market, business Software defining and cloud opportunities will emerge in the following 10 domains: computing is establishing f lexible corporate framework Mobility and perception ● Corporate mobility ● Physical wisdom is creating new is expanding ● Internet of things intelligence to infinity experience and industries 10 business opportunities will ● Socializing and Social business and collaboration emerge collaboration is bringing ● Crowdsourcing platform and companies closer crowdsourcing The above-mentioned 10 opportunities correspond to the third Big data and platform domains proposed by IDC, ● Big data business analysis is which means that the third platform ● Integrated expert analysis system innovating product is always leading thegrowth of the and business model domestic ICT market. ● IDCpredicts that by 2020 Software defining and Software-defined data center cloud computing is and cloud computing the third platform will become the ● establishing flexible Platform opening and corporate mainstream in the ICT market and the corporate framework app store development third platform ratio in the corporate IT market will increase to 44.1% from last year’s 22.6%. During 2013-2020, the Physical wisdom is ● Robot creating new experience third platform will register a market ● 3D printing and industries scale of USD 195.4 billion at an annual Source: IDC growth rate of 22%, much higher than that of the ICT market. “We are in the era of revolution Figure 3: China IT market is full of great business opportunities to and reconstruction and the ICT explore manufacturers are supposed to have advanced philosophy in the first place: revolution and reconstruction have to satisfy company’s urgent needs by treating applications and niche needs Four technologies as starting points, such as mobile solution, socializing solution and Internet of things solution. Finally the corporate processes and back stage are * Information consumption industry involved. Such technologies as cloud * Energy saving and environmental computing, big data and software- protectionindustry defined data center will be utilized to Five industries * Modern service industry help companies establish flexible IT * Infrastructure industry infrastructure framework. Only in this * Strategic new industry way, the ICT market can meet the * Eastern reform pilot zone challenges and make full use of the * Mid-west industry relocation area opportunities in the era of revolution Four major regions * Inland-Yanbian open area and reconstruction,” concluded Wu * Old industrial base reformation area Lianfeng, Assistant Vice President of China Industrial Research and Source: IDC Consulting Division of IDC.
39 Survey
Chinese Consumer Companies Focus on Data Analytics By Richard Zhu
ata analytics and digital tax compliance topped the list (53 percent). In 2013, top strategies are seen as priorities were R&D and innovation (55 percent), the key tools for business economy and consumer demand (42 percent) and supply development by Chinese chain and procurement (42 percent). consumer companies, as revealed in a “The shift in focus is imperative. The rapid recentD survey. proliferation of social and digital media has empowered The report, named Global customers as never before, prompting a retail industry that Consumer Executive Top of Mind must be open to serve customers anytime, anywhere, and Survey 2014, is jointly produced by KPMG International and The Consumer Goods Forum. It features insights from 469 senior executives from food, drink, and consumer goods manufacturers and retailers worldwide, with headquarters spanning 32 countries. The era of data and technology Data and technology is fundamentally transforming business models as many consumer companies focus on providing customers with seamlessly integrated experiences across all channels. The volume of customer data through transactions and social media, coupled with new mobile and targeting technologies, enable companies to understand and predict consumer preferences at an unprecedented level. And with all this data and technology, comes the challenge of maintaining customer trust amidst cyber-attacks and privacy breaches at companies of every size. In the survey, around half (48 percent) of the Chinese firms highlighted data analytics capabilities, while 42 percent said digital strategies will be very or critically important to their companies’ businesses in the next year. Meanwhile regulatory and
40 I ndustr i al Watch
in any way they choose to shop,” said Nick Debnam, advantage as new players arrive and traditional brands catch up. Asia Pacific Chairman, Consumer Markets, KPMG “It’s a huge challenge to link the clicks and the bricks,” China. said Peter Freedman, Managing Director of The Consumer “In China, of particular interest are the home- Goods Forum. “There is so much variety and experimentation grown platforms underpinning the rise of online going on right now, because everyone knows they have to get transactions, as well as the increasingly important roles this right. We’re at a strategic watershed, especially in retailing, of social media and mobile devices. These trends are where we have to learn which multi-channel and omni- fundamentally reshaping the way consumers in China channel mechanisms really work.” purchase goods and services, and how businesses Retailers clearly see rapid adoption of smartphones operate online,” Debnam added. and e-commerce as fundamentally transforming the retail Globally, respondents in the survey showed experience. Constructing an integrated “clicks and bricks” similar changes in strategic priorities. The executives customer experience across a variety of channels is driving surveyed were clearly affected by the transformative some retailers to transform their sales floors to create more impact that data and data-related issues are having on harmony between their digital and in-store operations, arming their companies and the industry. Data analytics was sales staff with tablets and providing free WiFi to customers. rated as being very or critically important to 56 percent Engaging with customers online helps manufacturers and of the companies, and data security was likewise rated retailers tailor their product offerings — 64 percent of Chinese by 47 percent. Further, 40 percent of executives said firms expect their customer strategy to avail of key consumer the importance of data overall was at a critical level. trends in order to drive growth over the next two years. As the amount of data being collected by “Companies are realizing the value of information and companies rises, so does its importance on the executive that, if used correctly, analysis of this information can be agenda. Understanding how to create value, engage a real differentiator. They have typically assessed historical customers and build trust from the digital disruptive patterns, but we increasingly see predictive analysis being forces of mobile, cloud, cyber, social media and analytics used in order to determine consumer spending patterns,” is critical to gaining — and maintaining — competitive said Egidio Zarrella, Clients & Innovation Partner, KPMG China. “Chinese consumers are rapidly interacting online, visiting web forums and discussing and researching brands on the internet. Digital media therefore is playing an increasingly significant role as it enables brands to interact with both existing and potential consumers. New technologies can also transform manufacturers’ revenue models, as the adoption of ‘smart’ technologies creates new revenue streams for companies,” Debnam remarked. Impact of data technology The survey found that for manufacturers, the rapid adoption of social media represents a real opportunity to foster more direct relationships with consumers, rather than relying solely on retailers. Social media conversations enable manufacturers to better understand the preferences and needs of their customers by “listening in” on them as they discuss their products, and responding proactively to issues that might arise. Some companies are hosting chat forums, creating online communities, or inviting consumers to crowdsource ideas that will inspire the next generation of consumer products. Companies such as Nike are employing gaming technology to build engagement and customer loyalty through apps like the Nike Training Club. New technologies can also transform manufacturers’ revenue models, as the adoption of “smart” technologies — or the Internet of Things — creates new revenue streams for companies that are able to add service plans to their products. From engine and appliance manufacturers to makers of healthcare products, the opportunity to “embed” chips into products and make them “smarter” allows manufacturers to add value and build loyalty at the same time. Engaging with consumers online not only helps
41 Survey manufacturers and retailers tailor their product township, was the single largest vendor offerings — it also helps companies tailor product of ultra-premium whiskey — mainly development and sales projections — 65 percent of to shoppers who lived 30 miles away. companies expect their customer strategy to exploit As the foundation of an effective key consumer trends in order to drive growth over omni-channel strategy, companies the next two years, especially those companies with are using predictive data modeling greater than US$5 billion in revenues (81 percent). to forecast their customers’ behaviors Advanced analytics can enable companies to and preferences throughout the entire predict customer needs and behaviors, optimize shopping cycle — often marketing pricing, improve production efficiency, and automate products and services to potential inventory management. Fifty-six percent of the survey consumers even before they themselves respondents cited data analytics as being very or know they have a need. critically important to their companies’ strategy over The survey listed some examples. the next 12 months. Data analytics was especially Advanced Companies like Amazon and other important to the retailers surveyed; 60 percent of analytics e-commerce sites have been the which identified data analytics as a “top of mind” can enable masters of predictive modeling priority, compared to 51 percent of the manufacturers. based on customers’ online shopping Understanding the individual customer companies to patterns. But now, new technologies better helps retailers compete effectively with predict customer are successfully being used by brick online competitors, explained Mark Batenic, CEO needs and and mortar retailers to track customers and President of IGA Inc., an alliance of 5,000 behaviors, in the off line world. HP’s new independent grocers worldwide, including 1,200 stores SmartShopper app enables retailers located in the US. “It’s all about gathering relevant optimize to send location-based offers to information about the shopper’s habits and needs,” pricing, improve customers’ smartphones in real time. he said. “Today, our members need to be able to send production It tracks shoppers’ movements through coupons directly to our customers’ mobile phones. We efficiency, their smartphones’ WiFi and then have to harness the power of information.” sends targeted messages based on their Retail companies are also learning to mine social and automate location and profile. media, in addition to transaction and other data, to inventory Apple’s iBeacon technology uses improve their ability to predict retail demand. In management. Bluetooth and geo-fencing to provide Japan, retailer Ryohin Keikaku, operators of the “no micro-location awareness. Retailers such brand” store Muji, uses the data created by more than as Duane Reade have been trialing the 4.7 million web and mobile users to gain a better technology to identify customers that understanding of how to manage its digital assets to have downloaded the app, the moment capture shoppers’ attention. In South Africa, Pickn they enter their store. Transmitters Pay stores was able to determine through data analysis are located throughout the store and why a particular store in Soweto, a relatively poor shoppers who opt-in can be reminded of items on their shopping lists, earn rewards or receive special offers. In 2014, a top priority for retailers will be to link the data obtained through online and offline channels to develop comprehensive and useful customer profiles and targeting strategies. Although many consumers see the benefit of sharing some information with companies, when they believe too much of their information is being tracked, or if they feel like they are being stalked, they will find ways to cut companies off altogether through the use of anonymous IP addresses or apps that block WiFi location tracking. However, the survey noted that the rapid advance of analytics and digital channels as part of the customer experience is both an opportunity and
42 I ndustr i al Watch
drive their business. As companies develop the capability to merge, integrate, and understand transaction data, consumer demographics, credit scores, weather and traffic patterns, and sales and product information, they will be afforded, as never before, the ability to understand — and even predict — future consumer behavior. This can make sales promotions, product innovation, and niche marketing strategies more focused and targeted than ever before. New technologies, platforms and mobile applications are providing customers with a growing number of ways to source, research and buy products anytime and anywhere. Increasingly sophisticated customers are demanding better service, seamless shopping experiences across channels, and access to real-time, accurate information. The ability to integrate threat. Retailers today can learn more than ever before platforms, information systems about their customers, even before they enter the store. and data to effectively address the But the misuse of that data — or being vulnerable to expectations and needs of tomorrow’s piracy or hacking — can have enormous consequences, consumers is a critical component to harming the reputation of manufacturers and retailers competitive advantage and success. and eroding customer trust. The survey listed some major Companies have to walk a narrowing line when it questions for companies in business comes to using customer data for targeted promotions. Data analytics model transformation: Does your At a certain point, having potential customers’ is creating the company have the strategy and smartphones alert them to unadvertised in-store opportunity for capability to make the most of your specials stops becoming an incentive, and starts to data? How are you using data to become more of an intrusion or annoyance. companies to drive growth and innovation? Is your Most of the companies surveyed are aware of not just develop business model customer-centric? If the risks that cyber-attacks can present, especially insights into what you were building your business today, as mobility and cloud platforms make organizations ? is happening how would you build it increasingly vulnerable. Not only did data security Furthermore, the research rank high among ‘top of mind’ issues overall — it was with their suggests that companies are not doing also one of the top three challenges companies expect customers and enough to protect their data. Given to face over the next 12 months. This was especially in their supply the enormous consequences, from a true for smaller companies. chains, but for cost, reputation and trust perspective, However, the fact that more companies did not consumer companies need to make rank data security as a significant or critical strategic those insights data security and privacy a greater issue (53 percent of respondents said it was at most of to drive their strategic and investment priority. moderate importance) suggests an overconfidence of business. Companies also need to be aware of executives in their companies’ ability to protect their the best way to use consumer data, data. Industry research indicates that not only is retail by recognizing the fine line between the top target for cybercriminals, but most breaches go personalization and intrusion. The undiscovered for weeks, months or even longer. risks involved in deploying ambitious Tips for companies in business model data-driven strategies need to be transformation considered and mitigated with caution. The important questions for the According to the survey, data analytics is creating companies in transition are as follows: the opportunity for companies to not just develop Do you have the right systems in place to insights into what is happening with their customers adequately protect your data? Are you at and in their supply chains, but for those insights to risk of eroding your customers’ trust?
43
What Will Expo Milan Bring to China? — An exclusive interview with Italian Ambassador to China, H.E. Mr. Alberto Bradanini
By Yang Wei
Italian Ambassador to China, H.E. Mr. Alberto Bradanini
e still remember the The aim of Expo 2015 is to open right after Russia and US last year. The Shanghai World up an international dialogue regarding Chinese tourist flow attracted by Expo Expo in 2010, which nutrition issues and the resources 2015 is estimated to reach one million impressed the whole of our planet. Human population individuals next year. world. After a blink, another World is growing faster and faster but the The Chinese representative of Expo is here soon. Milan in Italy resources of our planet are limited. Expo Milan has planned a sequence willW be the host next year, and the Therefore many nations are facing of promotion activities together with China Council for the Promotion of the challenge of guaranteeing food CCPIT in the largest Chinese cities, International Trade (CCPIT) will host to their people while respecting the the so-called “road shows”, which the China pavilion there. To know environment at the same time. will present Expo brand, give general more about the Milan World Expo China is a highly populated information and attract Chinese 2015, China’s Foreign Trade magazine country, which is making great efforts visitors. had an exclusive interview with Italian to develop in a sustainable way. It can On the Consulate side, we have Ambassador to China, H.E. Mr. be a good chance for China to share its Alberto Bradanini. achievements with other countries and learn new efficient models from other Would you please introduce nations. Q:the 2015 Milan World Expo briefly? What does the Expo want Chinese tourists in Milan most to show to the world, especially Q:become one of the largest to the Chinese people? foreign tourist sources of the city. Expo 2015 will be held It is also predicted that many more A:in Milan from May 1st to Chinese tourists will visit Milan and October 31st next year. 150 countries Italy during the World Expo next and institutions are expected to join year. Is there any service especially for the exhibition, while the number Chinese tourists? of visitors is estimated to exceed 20 According to the data million. The theme of the exhibition A:published by the Municipality will be “Feeding the Planet, Energy of Milan, 187,174 Chinese tourists for Life”, focusing on food, nutrition visited Milan in 2013. China ranked and sustainable development. the third largest foreign tourist source 46 already adopted measures to facilitate Italian agriculture machinery. Finally and technologies will be advantaged Chinese tourism in terms of visa. For there have been proposals of a new by the exposition. Chinese visitors will example, starting from July, individual project involving Italian and Chinese receive a better impression of Italian tourist visas have been issued within agro-industrial enterprises for mutual food, not only in terms of taste, but 36 hours since visa application is distribution of food products in the also in terms of safety. That could be received by the Italian Embassy. two countries. very helpful for the development of this sector in China. The Milan Expo and the For the first half of this year, Q:China Pavilion focus more Q:Italy ranked the fourth largest Besides the China Pavilion, on agriculture, grain and food. trade partner of China in the EU. Q:are there any other Chinese What is the agriculture cooperation Which industries are highlighted in companies involved in the Milan between the two countries now? Will the bilateral trade? Which industries Expo? there be more plans on the trade and will benefit more from the Milan At Expo Milan 2015 China investment in the agriculture industry? Expo? A:will be presented in three Agriculture has been an Statistical data show that 40% different pavilions, which are separate A:important sector of Sino- A:of Italian exports towards but interconnected with each another: Italian cooperation in the last twenty China consist of machinery and the China Pavilion; the Pavilion of the years. In the past ten years, Italian production technologies. Recent years property developer, Vanke; and the government has financed three major have also seen a rise of motor vehicles, China Corporate United Pavilion. All development projects in rural areas of drugs and chemicals. of the three pavilions will be self built. Xinjiang, Yunnan and Sichuan. A promising sector is what we Vanke, a leading multinational Chinese Ministry of Agriculture call “Made in Italy”. A large number of real estate company, will have a and the Administration of Quality Chinese customers choose top-brand pavilion of its own. The theme Supervision, Inspection and Italian products, such as garments, presented by this company is the Quarantine (AQSIQ ) have signed six shoes, furniture and accessories, which importance of food as an element of cooperation agreements with Italy for are famous in the world for their high socialization in line with the traditions the definition of periodical exchange quality and unique style. and culture of each country for the meetings, research and import of On the other hand, Italy has been development of urban contexts that are different products such as fruit, dairy importing goods from China for a increasingly international, sustainable products, heat treated and cured pork long time. Italian importers are used and fit for man. meat and frozen bovine semen. The to purchasing garments, furniture, The China Corporate United Sino-Italian Dialogue on Food Safety, toys and various gadgets from China, Pavilion is made up of more Chinese which has been successfully held in due to the competitive prices of these companies that present themselves Italian Embassy in July, is an excellent goods. So far, the most important to the world, while maintaining the example of cooperation between our sector for Chinese export towards Italy dreams and the hopes of their history. countries. is electronics. They will introduce themselves as Chinese authorities have The industry which will benefit the seeds of China, and seeds of the expressed their wish to deepen more from Milan Expo is definitively future. The number of companies cooperation for import of olive oil and the agricultural and food business. joining this pavilion will probably be wine as well as for the distribution of That means that both finished products up to one hundred.
47 Field of Hope — Build a China Pavilion, we will come. By Alice Yang
hina confirmed its output capacity of 800 kilograms per Gatti added that China has time- participation in World Expo hectare, nearly double that of standard honored food history and is one of the Milan in 2010 – a real early hybrid varieties. And it has contributed few reference food cultures at the global bird, the first country to do a lot to feeding not only Chinese people level. so. In 2010, China successfully held the but also people in southeast Asia and “We are sure that the China CShanghai World Expo, but this is the Africa,” Wang added. Pavilion will attract millions of visitors,” first time for China to open a national “Following the success of Shanghai Gatti said. pavilion overseas at an expo. Expo 2010, China has had a lead role in China Pavilion design The China Pavilion plan at world expositions. The China Pavilion Milan Expo 2015 catches limelight project for the Milan Expo is really The China Pavilion at the Expo and eyeballs from the beginning of its splendid,” Participant Division General is conceived by Tsinghua University release to the public. The architecture, Manager at Milan Expo 2015 Stefano in collaboration with New York-based shaped in the form of “rippling wheat,” Gatti remarked, when introducing design firm Studio Link-Arc. resembling billowing wheat fields, will the design and construction of China Hovering over the “field of hope” stretch for 4,590 square meters, second Pavilion. on the ground floor, a floating cloud in size only to the 4,900-square-meter Commissioner of Italian structure offers a distinctive undulating Germany Pavilion. Government for Milan Expo 2015 roof and shelters the cultural and “China Pavilion will convey Giuseppe Sala also underlined that the exhibition programs beneath. the core design concept of ‘Heaven, world exposition will be an opportunity The Pavilion’s roof uses a timber Earth, Human and Harmony’. The to consolidate the commercial relations frame that references a raised-beam design scheme was fully integrated between Italy and China, and will system found in traditional Chinese with Chinese traditional architecture give China a strategic opportunity to architecture, adapting it with modern structures and forms, as well as the share its own culture, traditions and construction technology. Clad in shingled modern technologies,” said Wang innovations too. panels that mimic terra-cotta surfaces, Jinzhen, general representative of the Links they are reinterpreted as large bamboo China Pavilion, as well as vice president China Pavilion for the Expo components to reduce the overall weight of the China Council for the Promotion Milan 2015 and create a shaded space below. of International Trade. Host: China Council for the Promotion An exhibition area themed with The food and agriculture theme of International Trade (CCPIT) “Heaven” will show the Chinese is both a challenge and opportunity Architect: Tsinghua University people’s respect for nature, while for China, Wang said. The idea of (Beijing-based), Studio Link-Arc (New another themed “Ground” will display the China Pavilion was inspired by York-based) harvest scenes and the diversity of rivers the image of China’s “super rice”, one Area: About 4,590 square meters and mountains across the country. of the most productive grains in the Shape: Billowing wheat fields Perfectly calculating Milan’s world, which was developed by Chinese Theme: “Field for hope, Food for life” sunlight, the pavilion uses cutting scientist Yuan Longping. Concept: Heaven, Earth, Human and innovation to maximize sunshine over “This hybrid rice has an average Harmony electric lighting.
48 More Chinese Enterprises Involved in Milan Expo 2015
By Dai Junyi, Cai Hongbo
Profile of Expo Milan 2015 Chinese enterprises participate in the Expo Open from May 1 to October 31, 2015, the Expo will be held in Milan, the industrial center and economic center of Italy, running for 184 days. The theme China will build three exhibition of Milan Expo will be “Feeding the Planet, Energy for Life”, focusing on food, pavilions at the Milan Expo: China nutrition and resources, like water and food security, global biodiversity and so on. Pavilion, China Corporate United The Expo will raise the issues instead of solutions, promoting people to think about Pavilion, Vanke Pavilion. Particularly and find solutions by themselves. China Corporate United Pavilion “Milan Expo will ensure that a huge number of countries and people are and Vanke Pavilion are Chinese made aware of nutrition – one of the most pressing issues of our times”, said Dante enterprises’ overseas first shows based Martinelli, Switzerland’s Commissioner General into the Expo. on the World Expo. China Pavilion choose “field of hope” as its theme, Table 1: Milan Expo 2015 Overview whose sponsors will be divided into three categories: global partners Time May 1, 2015 to October 31, 2015 (expected 8), gold sponsor (expected 8), Theme Milan, Italy specified goods or services suppliers Growth Type Feeding the Planet, Energy for Life (expected 10). Under the guidance of “Feeding the Planet, Energy for Life”, Participant (Forecast) Over 130 China Corporate United Pavilion Area One million square meters will take “China Seed” as the theme. Number of visitors Over 20 million As a supplement and continuation (Forecast) of the China Pavilion, its show will Employment (Forecast) About 191, 000 (from 2012 to 2020) exhibit the unique styles of Chinese enterprises. Following the successful Additional About 23.6 billion euro in total, tourism will benefit about 4.5 production (Forecast) billion euro (from 2012 to 2020) Vanke Pavilion at Shanghai Expo 2010, Vanke will build Vanke Pavilion
49 at Milan Expo 2015, and become the first Chinese enterprise which has the independent overseas pavilion during the 163 years of World Expo. As of June 30, 2014, more than 10 enterprises participate by sponsoring the China Pavilion of Milan Expo, 13 enterprises and Tsinghua University, Anhui Tea Industry Association, Shanghai Aerospace Technology Research Institute participate by establishing China Corporate United Pavilion, and Power Dekor, E-House (China) and other famous enterprises participate by joining hands with Vanke to build the Vanke Pavilion. These enterprises cover agriculture, building and building materials, food, clothing and jewelry, household goods, travel and leisure and so on. They all have good prospects, and adequate funding enterprise can be shown directly in can make full use of this high-lever support, nice social image and high front of people all around the world. In platform to do displays and various business reputation. With the high Osaka Expo 1970, enterprise pavilion promotion to the public. For enterprises sense of social responsibility, they not almost became the leading role. IBM who want to go abroad for business, it only pay attention to the quality of Pavilion, Fuji Pavilion, Iron and can facilitate the overseas establishment their products, but also concern the Steel Pavilion, Automobile Pavilion of the brands and images. And for relationship between man and nature, did perfect displays. The images of enterprises who have been abroad, it the healthy lifestyles and harmonious enterprises and brands and core- can help to promote the reputation, living environment. competitiveness of the enterprises were enhance the popularity, and increase Impact of the participations improved rapidly. This successful Expo business opportunities in a short time. contributed a lot to the development Second, at the World Expo, First, the World Expo is the of Japanese economy in the following the enterprise can provide high- world’s highest level of exhibition. 20 years. When Chinese enterprises capacity information in a short time, Participation into the Expo means the participate in the Milan Expo, they including R&D capabilities, advanced
Table 2: Chinese companies participating into Milan Expo (until June 30, 2014)
Pavilion Enterprises China Vanke Co.,Ltd., Anhui Gujing Distillery Company Limited, Inner Mongolia Yili Global partners Industrial Group Limited by Share Ltd., Chow Tai Fook Jewellery Group Limited, Hwa Yi Fashion Group, Cuilu Jewellery Kuaijishan Shaoxing Rice Wine Co., Ltd., Spring Holding Group Limited, Shuxiangmendi China Pavilion Gold sponsor (Shanghai) New Material Science and Technology Co., Ltd., Guangzhou Holike Creative Home Furnishing Limited by Share Ltd. Specified goods or Yunan Agricultural Science and Technology Co.,Ltd. services suppliers Kuaijishan Shaoxing Rice Wine Co., Ltd., Shuxiangmendi (Shanghai) New Material Science and Technology Co., Ltd., Guangzhou Holike Creative Home Furnishing Limited by Share Ltd, International Exhibition Group, China Corporate Ping Shan Tea Group Limited, Hainan HengXiang Yacht Industry co, Ltd., Hong Tu Wa Modern Agriculture United Pavilion Demonstration Base Comprehensive Development Ltd. of Jiangxi, HuangshanQimei Tea Travel Ltd. of Anhui Province, Anhui province Keemun Black Tea Development Co., Ltd., Victory Group, Bosideng Group, Yixing Enamel Color Purple, Shimao Group
China Vanke Co.,Ltd., China Construction Fourth Engineering Division Corp. Ltd., Love My Home Group, Vanke Pavilion Ningbo FOTILE kitchen utensils Co., Ltd., Tianhua Architecture Planning & Engineering Ltd., Beijing Oriental Yuhong Waterproof Technology Co., Ltd., Power Dekor, E-House (China), Hitachi Elevator (China) Co., Ltd.
50 Figure 1: Sponsors of China Pavilion at Milan Expo (until June 30, 2014)
Agriculture 9% The participation in the Expo may inspire Household the creativity and innovation of the Chinese goods 18% enterprises. Building and building materials 9% concepts, group culture and even the products, so that the visitors could make full use of their senses to understand and feel the enterprise all-around. At the Panama Expo 1915, various Chinese wine made their first attempt to go abroad collectively to demonstrate their colors, smells and tastes. They got 48 gold medals and became worldwide famous at Clothing and once. At the Shanghai Expo 2010, Vanke Pavilion told stories jewelry 27% Food industry 37% about the mutual respect of human, nature and cities, taking visitors to think about and explore the possibility of respect. In this way, Vanke demonstrated its concepts and achieved great popularity. Similarly, if Chinese enterprises are able to Figure 2: Sponsors of China Corporate United take advantage of Milan Expo to show their concepts, culture Pavilion at Milan Expo (until June 30, 2014) and products successfully, they may receive recognition fast and get more opportunities to expand the market. Technical Third, Italy is famous for its excellent design and ceramics Agriculture 7% 8% originality, and Milan is called the capital of fashion. At Travel and leisrue the Milan Expo, China Enterprise United Pavilion will 23% Building build a Chinese fashion platform to assist fashion industries and building and creative industries “going abroad”. By then, the fashion materials 15% and creative industry will together show the comprehensive strength through a series of innovative marketing activities. The Expo will promote the communication and cooperation between Chinese and foreign fashion, creative and cultural Household industries. Some fashion and creative enterprises, such as goods Holike and Hwa Yi Fashion which will participate in the 23% Milan Expo, will get the opportunities to contact with the world’s top fashion and creative enterprises, to learn from and Food industry dock with them. 31% Fourth, at the World Expo, the most innovative Clothing and jewelry 8% technologies and products will be displayed, which always represent the development trends of the industries. Thus, the participation in the Expo may inspire the creativity of the Figure 3: Sponsors of Vanke Pavilion at Milan enterprises. At the Chicago Expo 1933, some big enterprises Expo (until June 30, 2014) like General Motors Corporation established the enterprise Special equipment pavilions for the first time. Consistent with the theme of the 11% Expo “a century of progress”, General Motors Corporation Building fully demonstrated its leadership in the global automotive and building industry and advanced manufacturing technology of materials 56% Household automobile engine. goods On the one hand, if Chinese enterprises can convince 18% the world with their advanced technologies and excellent products, they can win the world’s attention. On the other hand, Chinese enterprises can also know their deficiencies through the communication, to improve technology and innovation. (Authors: from Business School of Beijing Normal University)
51
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Shorter Negative List Welcomed by European Industry
By Richard Zhu
China (Shanghai) Pilot Free Trade Zone
he Reduction to the number said the European Chamber. of European companies viewed the of Items in the China This is the first reduction to the inauguration of the CSPFTZ as a (Shanghai) Pilot Free Trade Negative List following its release major step towards the opening-up of Zone (CSPFTZ) “Negative nine months ago. Since then, the the Chinese market and the creation List” is welcomed by European Decision of the Third Plenum has been of a level playing field for foreign TIndustry which will benefit from the promulgated. business. The reduction to the scope measures, according to the European The Decision clearly shows that of the Negative List re-establishes Union Chamber of Commerce in there is consensus among China’s European companies’ confidence in China. leaders that deep and broad reforms are China’s commitment to the CSPFTZ,” The government’s recent an- required nationwide. The CSPFTZ, as said Stefan Sack, Vice President of the nouncement serves to reduce the such, has from the start been positioned European Chamber and Chairman of number of items for which foreign as a testing ground for these reforms its Shanghai Chapter. investment is still restricted from 190 and for further opening up to foreign “However, there is still great to 139. This represents a reduction of industry. room for further eliminating many approximately 27% to the scope of the Some of the items that have of the remaining barriers to foreign Negative List. been removed from the Negative List investment in the zone that would Besides adjustment and are in important sectors. The revised bring benefit both for European combination of some clauses, the list offers foreign enterprises greater business and for China. European 2014 version has in practice removed freedom to participate in inter alia Chamber members hope that additional 14 prohibitions on investment, and the real-estate sector by allowing amendments will be taken in a timely relaxed restrictions in 19 areas, China firms to invest in construction, and and transparent manner, and that these Daily reported. For example, it has certain manufacturing sectors such as further rounds will involve consultation given more freedom to financial pharmaceutical drugs, auto components with international stakeholders,” he operations and property development, and textiles. European investment into added. and removed the prohibition clause on these areas could serve to bring strong According to Stefan Sack, in the lottery industry. The negative list benefit to China’s continued economic addition to further reducing the now has 110 restrictive clauses and 29 and societal development. scope of the Negative List, what is prohibitive ones. Compared with the nationwide more important is that the Shanghai Although the extent of the cuts investment approval system, the authorities now also work with China’s is slightly lower than the European negative list is a fundamental change, central-level authorities to coordinate business community in China had making foreign investment easier, said a speedy nationwide rollout of the been hoping for and some previous Zhang Xiangchen, Chinese assistant Negative List approach and to ensure official press statements had forecasted, commerce minister. that those reforms successfully piloted it is still a substantial decrease and an “In a recent survey conducted in the zone start to be implemented all encouraging step in the right direction, by the European Chamber, over half across China this year. 53 ASIA-PACIFIC
China & South Korea Strengthen Bilateral Trade Ties for the Future
By Wei Hao, Fu Tian, Shen Rong
uring July 3-4, Chinese Figure 1: Top 10 foreign trade commodity of S. Korea in 2013 president Xi Jinping paid (Unit: 100 million USD, %) a formal visit to S. Korea, the first time since he % total Import % total Commodity Export Value export Commodity Value import became the president. This visit is Dstrategically important to the Sino- Mechanical facility 1948.15 34.8 Mineral product 1979.34 38.4 Korea relationship, as both countries Transport facility 1108.68 19.8 Mechanical product 1197.23 23.2 have become influential emerging Mineral product 547.87 9.8 Base metal 455.09 8.8 economies in the world. Strengthening the economic ties between the two Base metal prodcut 460.57 8.2 Chemical product 390.72 7.6 Optical medical countries has become an important Plastic rubber 394.94 7.1 180.64 3.5 topic for both leaders. Now China has product become S. Korea’s largest trade partner Chemical product 383.92 6.9 Transport facility 154.26 3 Optical and and largest export destination, as well 361.70 6.5 Plastic rubber 137.00 2.7 as source of import and investment medical product target. Also S. Korea is China’s third Textile product 157.26 2.8 Textile product 132.37 2.6 largest trade partner and fifth foreign Food beverage 41.82 0.8 Plant product 97.39 1.9 capital source. Precious metal 39.92 0.7 Food beverage 83.86 1.6 S. Korea seeks foreign trade growth Source: Ministry of Commerce of China
In 2011 the total trade value of Figure 2: 1992-2013 Sino-S. Korea bilateral trade S. Korea surpassed 1 trillion USD, (Unit:100 million USD) making S. Korea as the ninth country in the world with more than 1 trillion Sino-S. Korea China export China Import S. Korea Trade USD of trade value. Since the start of Year Trade Value to S. Korea from S. Korea Surplus 21 century, S. Korea’s trade volume has been increasing very fast. Before 2003 632.3 201.0 431.3 230.3 2009 financial crisis, S. Korea’s foreign 2004 900.7 278.2 622.5 344.3 trade volume kept a two-digit growth 2005 1119.3 351.1 768.2 417.0 rate between 2003 and 2008. But 2006 1343.1 445.3 897.8 392.5 after 2009, S. Korea’s trade was deeply impacted by world financial crisis and 2007 1599.0 561.4 1037.6 476.2 lower demands from Europe and the 2008 1861.1 739.5 1121.6 382.1 U.S., and great recession was seen in 2009 1562.3 536.8 1025.5 488.7 the year 2009. During 2010 and 2011 2010 2071.7 687.7 1384 696.3 the S. Korea’s trade experienced slight rebound but came to a halt in 2012 and 2011 2206.3 864.3 1342.1 477.8 2013. The country needs finding a new 2012 2151.0 808.0 1343.0 535.0 trade growth opportunity. 2013 2289.2 830.5 1458.7 628.2 Since 2001, S. Korea has been Source: UNCTAD in trade surplus with huge foreign exchange reserve. As of June 30, 2014, largest contributor to the trade deficit. the total foreign exchange reserve of S. Korea has only a land area of 100 thousand square meter, and the mineral S. Korea reached 366.55 billion USD. resource reserve is inadequate. But by way of its advanced technology, S. Korea has China is the major contributor to the a special competitive advantage in its foreign trade, especially in areas of electronics, trade surplus while Saudi Arabia is its vehicle and digital entertainment industry. The top 2 export commodities of
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S. Korea in 2013 were mechanical companies. There are four points that and regulations; second, both sides products and transport facilities. The both sides shall follow when dealing shall increase information sharing most import commodity is mineral with the bilateral trade relationship: about production and market, to sign product, accounting for 38.4% of total 1) Establish Sino-S. Korea free trade agreement documents in areas of heavy import. This exemplifies the trade zone and upgrade bilateral trade to a disputes to direct domestic production pattern of S. Korea of importing new level; 2) Both governments shall activities, also, Chinese exporters shall primary commodities and exporting strengthen coordination on macro- follow S. Korea’s market trend and processed products. economic policy and development consumer demands to adjust export Big potential for Sino-S. Korea strategy to promote exchange on structure and increase technology trade trade and economy; 3) Both countries and quality, to raise its products’ shall take measures to facilitate trade competitiveness in S. Korea’s market; Since formal diplomatic and investment, expand regional finally, both countries shall establish relationship was established between economic cooperation and build their own industry rules to forbid China and S. Korea, the bilateral industry demonstration park; 4) Both dumping activities in the foreign trade trade between the two countries has countries shall increase cooperation and optimize export structure. been increasing steadily. Excepts the on global stage and fight against trade Third, Encourage Chinese downfall in 1998 due to financial protectionism. The companies from companies to invest in S. Korea. crisis, other years have witnessed an both countries shall expand cooperation S. Korea companies’ investment increase. The trade value between the and discussion in making international has greatly promoted the Sino-S. two countries reached 34.5 billion standards, increasing international Korea trade development. However, USD in 2000 and 228.92 billion in market and regional integration. China’s investment in S. Korea is 2013. Second, China and S. Korea little. China shall organize a batch of For S. Korea, China is a very shall establish a coordination strong companies to invest in S. Korea, important export and import mechanism to deal with trade which could explore the local market destination. The import shares from disputes. and increase export. This process China to S. Korea had increased from There are some similarities in will also help Chinese companies to 8.87% in 2001 to 16.99% in 2008. And both countries’ industry structure acquire knowledge of management and the share remained above 16% for the and also trade disputes in some areas. production technology and apply such following years. The export share from Therefore, it is necessary to establish a experiences into domestic production. S. Korea to China had increased from trade dialogue mechanism to alleviate 15.55% in 2001 to 29.68% in 2010, losses caused by trade disputes. First, (Authors: Wei Hao & Fu Tian, and the share remained about 25% for both sides shall discuss candidly about from Beijing Normal University, Shen the following years. The share of Sino- the issues and reached agreements to Rong, from Southwest University for Korea trade volume compared with S. ensure compliance with WTO rules Nationalities) Korea’s total trade volume increased from 12.32% in 2001 to 23.24% in Figure 3: 2003-2013 Sino-S. Korea bilateral trade status overview 2010, and the share remained about (Unit: %) 20% for the following years. Share of Share of Sino- Share of Share of As for China, the Sino-S. Korea Share Share of China S. Korea S. Korea Sino-S. Korea of China S. Korea trade accounts for a small share of China’s Year Import foreign trade import foreign trade of export to export to total foreign trade volume. In 2013, From of China’s total from S.Korea’s total S. Korea China China export to S. Korea accounts for S. Korea foreign trade China foreign trade 3.76% of China’s total export and China’s 2003 4.59 10.45 7.43 22.25 11.24 16.97 import from S. Korea accounts for 5.5% of the total import (See Figure 3 for 2004 4.69 11.09 7.80 24.52 12.39 18.83 more details). Although the trade volume 2005 4.61 11.64 7.87 27.01 13.44 20.51 between China and S. Korea has kept 2006 4.60 11.34 7.63 27.59 14.39 21.16 increasing in the past decades, there is 2007 4.61 10.86 7.36 27.93 15.73 21.95 still large growing opportunity for the bilateral trade. 2008 5.18 9.90 7.27 26.58 16.99 21.71 Strengthening bilateral trade 2009 4.47 10.20 7.09 28.21 16.61 22.75 for the future 2010 4.36 9.92 6.97 29.68 16.17 23.24 First, both countries shall 2011 4.55 7.70 6.06 24.16 16.48 20.43 consolidate economic ties to deepen 2012 3.94 7.39 5.56 24.51 15.55 20.15 trade relationships. 2013 3.76 7.48 5.50 26.07 16.11 21.29 Both sides shall trust each other and expand cooperation between Source: UNCTAD
55 AFRICA
THABS to Become the Most Influential Expo in Africa By Liu Xinwei
uring June 22-24 of 2014, tools, hand tools as well as building professional audience and 64.69% of Trade Development & hardware supplies and relevant the senior professional audience is Cooperation Center of equipment were present at the Exhibi- president, CEO, proprietor and senior China Council for the tion. The Chinese exhibitors were executive in the enterprises. Professional Promotion of International Trade important contributors in the Expo, audience always has considerable (CCPIT)D led Chinese enterprises and the leading domestic hardware tool purchasing power. 56.68% of the buyers for the third straight time to attend enterprises such as Hangzhou Great signed contracts at the Expo, which is the South Africa International Tools, Star Industrial Co., Ltd. made special increasing steadily and 16.23% of the Hardware and Building Supplies design in the Exhibition, which became buyers recommended other clients. Exhibition(THABS) in Gallagher the highlight of the China Pavilion The Chinese enterprises and products Convention Center, Johannesburg of and even the whole Exhibition. With a enjoyed great popularity and attracted a South Africa in a bid to nudge into the total exhibition area of 8,100 sqm, the large number of professional audiences African market under the national “12th Exhibition attracted 850 enterprises at the Expo and the Chinese exhibitors Five-Year Plan”. from 45 countries and regions. agreed that they had yielded satisfactory General and household hardware The Exhibition boasts of results.
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Geographical location: Located Such prominent problems as social poverty, unemployment in the southern hemisphere and the and rich-poor gap will become the focus to be solved. southernmost of the African continent, South Africa-China trade relations: South Africa is South Africa is at south latitude of 22- China’s biggest trade partner in Africa with a bilateral trade 35 degrees and east longitude of 17-33 volume of over USD 100 billion. Every year the construction degrees. With a land area of 1,219,090 sector may create business opportunities worth USD 9 billion sq km, South Africa is surrounded by and the South Africa government is aiming to building the India Ocean and Atlantic Ocean in 56.68% of the construction sector into a pillar sector forits national economy, the East, South and West and borders buyers signed which will account for a ratio of 25% in its gross national on Namibia, Botswana, Zimbabwe, contracts at product. As a grant event in Africa, THABS has brought Mozambique and Swaziland in the favorable opportunities for both the domestic and international North. South Africa is equipped with the Expo. enterprises. China is South Africa’s biggest trade partner and the most mature transportation system South Africa is China’s biggest trade partner in Africa. As of in Africa, which plays an important role 2010, the bilateral trade volume reached USD 25.65 billion, in the economic development of South up 59.5% year-on-year, including USD 10.8 billion from Africa and the neighboring countries. China’s exports (up 46.7%) and USD 14.85 billion for imports Economic status quo: As the (up 70.4%). China mainly exports mechanical and electrical most economically developed country products, garment and auxiliary materials, high-tech products, in Africa, South Africa possesses rich textile yarns and shoes to South Africa; iron ore and its natural resources and is one of the concentrate, diamond and steel are China’s imports from South world’s big five countries for mineral Africa. In Q1/2009, China replaced the USA and Germany as resources. Particularly in recent years, South Africa’s biggest trade partner, exporter and importer. the government of South Africa has Construction sector in South Africa: Since the spared great efforts in infrastructure foundation of new South Africa in 1994, the government has construction and the 2010 World provided approximately 3 million houses for the poor and still Cup stimulated tremendous market 12.5 million people needs houses. According to the 2030 vision demands for the country’s building released by South Africa Housing Ministry, the government material sector. In 2010, South Africa will strive to solve the housing problem and will build registered a GDP of USD 369.4 billion supporting facilities, such as schools, hospitals and community at an annual growth rate of 2.8% and infrastructure. with per capita GDP of USD 7,402. Preferential policies: South Africa has no import limit Its imports stood at USD 83.57 billion for most commodities, but some certain commodities need and exports USD 84.29 billion. With government import license before shipment. Normally the steady growth, South Africa’s building import license can be obtained 3-4 days after application. industry accounted for a 17% ratio in Importers are supposed to freely consult South Africa Trade the national economy as of 2005 from and Industry Ministry about the import restriction commodity 14% in the 1990s. Currently, large-scale catalogue. The license remains effective within 12 months since infrastructure construction is ongoing the issuing date and the applicant has to register the license at in South Africa and China’s building the Customs. materials, production equipment and construction machinery are quite competitive in terms of product category, grade and price. Market environment: South Africa adopts free trade and is the founding member country of WTO. In October 2010, the cabinet proposed a new growth strategy, the first economic development strategy of the South Africa government. This new strategy attaches great importance to employment and plans to prioritize six domains such as infrastructure construction, agriculture, mining, green economy, manufacturing and tourism in the upcoming 10 years. With 5 million new jobs created, unemployment rate will be cut to 15% from the current 25%. The Exhibition attracted 850 enterprises from 45 countries and regions
57 LOCAL
Suifenhe Exposition:
To Facilitate Port Trade By Echo Zhao
o further promote the sustained innovation and excellent on Pogranichnyy in the east which construction of port service, with an aim to promote is the corresponding port in Russia facilities in China, as well international cooperation and port and directly connects to Vladivostok as enhance the international trade development, accelerate the which is the largest port in the Far port cooperation, China • Suifenhe transformation of development mode East of Russia. Suifenhe links up TInternational Port Trade Exposition of foreign trade, promote industrial with the southeastern coast of China, of 2014 (hereinafter referred to as restricting, and accelerate the Japan, Korea, America, Southeast Suifenhe Exposition for short) is to be development of modern service industry. Asia and other countries and regions held from August 8 to 11 this year in Suifenhe City: A port of via the ports of Russia in the east, Suifenhe City, Heilongjiang Province. hundred years and reaches Moscow and the central Suifenhe Exposition is hosted region of Europe in the west. Relying by China Chamber of International Suifenhe City is located in the on the excellent geographical location, Commerce (CCOIC) and the southeastern border of Heilongjiang Suifenhe has become an important People’s Government of Heilongjiang Province and is an internationally city undertaking the two strategies of Province, and it is considered the first famous port with a history of more than Northeast Revitalization of China and national and international professional one hundred years. Far East Development of Russia. It is exposition which takes port as the In the center of the economic “the Golden Channel” to Northeast theme in China. circle of Northeast Asia, Suifenhe Asia and the Asian-Pacific region. The first Suifenhe Exposition City borders on Primorskij Kraj which “Suifenhe has been an important in 2013 witnessed extensive attention is the most developed region in the port hub of Sino-Russian trade. It is and great success, which is expected Far East of Russia. Suifenhe is near also the golden channel connecting the to be continued in 2014, together with Harbin City in the west, and borders Northeast of China to Russia, Japan, Korean and Southeast Asia,” Zhang Wei, Vice Chairman of China Council for the Promotion of International Trade (CCPIT) and Vice Chairman of the CCOIC said. The unique geographical advantage of one-hundred-year Suifenhe Port will rely on to construct an comprehensive international port trade platform which combines information exchange, investment negotiation, exhibition, selling, trade, processing, public relation, logistics and port development together. Sino-Russian trade embraces more opportunities In recent years, economic and trade cooperation between China and Russia has seen rapid growth. The bilateral trade volume in 2013 hit a Suifenhe Port at Heilongjiang Province, northeast of China record high to USD 89.21 billion.
58 Regional Trade & Investment 59 8% Korea Japanand LOCAL 44.7% Other 47.3% Russia 47.3% During the first Suifenhe Exposition in 2013, according In the 2014 Suifenhe Exposition, the exhibition area In addition, a series of forums, projects promotion “Suifenhe Exposition shall achieve actual and long- “Suifenhe has actualized the transnational cargo Highlights of the Suifenhe 2014 Exposition to an official survey among letters exposition exhibitors, of the 72% purchaseof of them intent,signed soughtclients, highly 71% agentobtained marketbrands spoke information or or expandedmet during the acquainted newly valid the clients Among newbrandpublicity. exhibitors the of expo, 47.3% come from Russia and 54.2% 8% come from Korea and Japan. and hoped attend to the second Suifenhe Exposition in 2014. reaches 70,000 square meters, including and provincial,international regionalhalls, as well as automobilesexhibition and areas parts,related to textile culturalclothing, tourism,leisure productsmechanical for equipments,and furnishing, home consumer products light of industrybuilding and material electronics, etc. meetings and academic exchanges same time.will be conducted at the term effect. We shall themake strategic Suifenhe support Expositionup which of Suifenhe canbecome promote and theactualize opening-diversification the of internationalizationSuifenhe,” gain a clearZhao the idea of demands Chinese of enterprises the for Lianjun and said. “We shallRussian side, invite enterprises which have cooperated with the Russian side and make Suifenhe Exposition have the function of connection.” Figure 2: Valid new clients in 2013 Suifenhe Exposition Suifenhe 2013 in clients new Valid 2: Figure Province brought forward the plan of holding in the Suifenhe expositionwhich is an important port city of border trade in Northeast Asia after careful investigation and research. comprehensive Suifenhe of Committee Party the of transportation Secretary of Russia,Lianjun, Japan, Korea and China,”City said.Zhao “Meanwhile, Suifenhepreferential ispolicies, a promisinghuge investment land opening-up level. potentials It withis also the firstand pilot cityhigher in China for free circulation of Russian RubleSino-Russian trade.” and the settlement center for
89.21 2013 2012 88.16 2011 42.20 2010 59.34 2009 38.75 2008 56.90 2007 48.15 2006 33.38 2005 29.10 2004 21.22 2003 Since the full implement of Far East East Far of implement full the Since “China and Russia have complementary As the research plan for the land-ocean 15.75 0 20 40 60 80 100 Figure 1: Sino-Russian bilateral trade volume 1: Figure billion USD Unit: Development Strategy of Russia afterAPEC Economicthe InformalLeaders’ Meetings2012, Sino-Russian trade(IAELM) embraces new opportunities in to be further expandednoteworthy is that in January and 2014, Suifenhe deepened.became the only Chinese city in which trading with Russian What is Ruble is allowed. advantages in aspects such as resource and technology. Meanwhile, it is promisinghave more for tie-upsboth countries technologyin economics, and to so on,” Sun trade, Yao, Heilongjiang ViceProvince said. present, Governor“At Heilongjiangculture, of is endeavoring innovate to the cooperation with Russia in order to develop an effectiveplatform for improving the level foreign of economic and trading cooperation.” transportation channel of Suifenhe-Vladivostok- Japan, Korean and neighboringforwardand implemented, the economic and trading regions is brought cooperation among Korea, Japan, Russia and China will be more efficient, fast, smoothIn orderand toconvenient. promote the economiccooperation between and tradingNortheast Asia and China expandand the space for border Government and Heilongjiang of theCCOIC People’s trade cooperation, the of Russia for consecutive four years, and direct direct and years, four Chinaconsecutive has for become Russia of the largest than USD more was trading Russia to China from investment partner 4 billion in 2014, ranking 4th among Russia’s foreign investors. The bilateral trade volume is reach estimatedUSD 100 billion into 2015, and USD 200 billion in the year 2020. of LOCAL
ATA Carnet Center Opens in Erguna
By Zhu Zijun
n ATA Carnet center was preparatory work, processing time, goods. ATA is actually an acronym of launched in late June in and data transmission with the local the French and English words “admission the city of Erguna, North Customs. He encouraged the staff temporaire/temporary admission”. It is China’s Inner Mongo- there to get familiar with the work governed by the Istanbul Convention lia Autonomous Region to improve as soon as possible, seriously deal of 1990, which was established under Aservices for foreign trade. with the carnets and provide quality the auspices of the Customs Co- The CCPIT (China Council for service to citizens. Wang also visited Operation Council, today known as the Promotion of International Trade) the self-driving team and learnt their the World Customs Organisation. The Erguna Sub-council of Inner Mongolia arrangements of outbound tourism. ATA Carnet system is administered by was approved as the ATA Carnet Erguna, sharing a 673km-long Chambers of Commerce in countries organization by the CCPIT. It is the border with Russia, has two national which have ratified the Istanbul second agency of port cities after the ports — Heishantou and Shiwei. Convention. In China, it is administered CCPIT Manchuria Sub-council. As an important channel to expand by the CCPIT. The launch ceremony of the ATA China’s overseas resource development, The ATA Carnet is an interna- Carnet Center was held in Erguna by it is developing rapidly in trade with tionally recognized and accepted local governments. Vice chairmen of Russia, economic cooperation, cultural uniform Customs document to allow the CCPIT Wang Jinzhen attended the exchanges, and cross-border tourism, for the temporary importation of ceremony and announced the initiation especially self-driving to Russia. The goods into a member country, and of the ATA business. Then he issued establishment of the ATA Carnet this without having to raise Customs ATA Carnets to 10 car self-driving Center will play an active role in bonds, pay duty or fulfill other travelers driving to Russia. promotion of cross-border trade, Customs formalities in the country of After the ceremony, Wang tourism and civil exchange of the city. importation. It has the advantages of visited the ATA Carnet Center The ATA Carnet System is an simplification of Customs procedures, located at the service hall of the international Customs facilitation advance preparation and single local government and learned the scheme for the temporary admission of document for many countries.
60 Regional Trade & Investment 61 LOCAL During the meeting with Germann, Chinese Vice Germann said Switzerland is ready to expand bilateral As an independent international organization, the Eco The Sino-Swiss Dialogue includesfour panel sessions, Sino-Swiss Dialogue at the Eco Forum 2014 Global Annual 2014 Conference Guiyang and green economicalso development.provide pragmatic service for Thebilateralinformation exchange and project matchmaking.CCPITenterprises in will President Li Yuanchao said the newly enacted Sino-Swiss Free Trade Treaty was a milestone inXinhua bilateral reported.relations, He expressedsides will seizethe the hopeopportunity that to and explore cooperative potentialinvestment in the areasexpand the of trade,two increase sustainable growth and urbanization. cooperation in the and areascollaboration of betweenenvironmental local countries.governments of protectionthe two Forum is committed to improving the world business,by political, academicengaging and other leaders in the shaping global,of regional and industry agendas. namely The Effectand Significance of Clean Technology in Small-medium Cities, Ecological Tourism in Mountain Regionsthe — Powerful Push Sustainableof Development, Eco-civilization Construction and Industrial Development and Prospects of Sino-Swissexperts FTA.and businessmen attendedOver the Dialogue 200 to discuss officials,measures to deal with ecological security challenges and share experiences in ecological civilization construction. with Swiss The Eco Forum is committed to improving the world by engaging business, political, academic and other leaders in the shaping of global, regional and industry agendas. Co-op
outhwest China’s Guizhou Province is eyeingcooperation close with environmentalSwiss in protection and The Eco Forum Global Annual Around 1,000 guests, including Sino- forum, the of part As “Swiss, with advanced industrial He added the CCPIT will give
S Guizhou Eyes Eyes Guizhou By Zijun Zhu green economy. Conference Guiyang was held in 2014 Guiyang, capital of Guizhou with11 the themeon of “JoiningJuly hands, leveraging reforms to bring forth a new era of eco-civilization — government, enterprise and civil society: institutional framework and paths towarddevelopment.” green representatives from 61 countries andregions, have gathered share to opinions and experiences on climateclean change, technology, green production, and legislation environmental on protection. Swiss Dialogue 2014the theme Switzerland’s of “Mountainouswas of economy,held with States of President Green development”. of Council the Federal Assembly Hannes viceGermann, chairman of theChina Promotion of InternationalCouncil Trade for (CCPIT) Zhang Wei and Governor of Guizhou Province Miner Chen attended themeeting and delivered speeches. structure in chemical, pharmaceutical, tourism and finance, circular green economy, economy is leading in and low-carbon economy.similaritiesin geographicaland natural Sharing conditions and complementarityindustrial structure, Guizhou in has huge cooperation potential with Swiss,” said Zhang. full play to its advantages exchangesto promote of business circles sides andon support cooperation Guizhou’s both with Swiss in ecological environment
feature Lifestyle Delicate Embroidery Work Shines with Classics
By Guo Yan
At a recent exhibition held in 751 DPARK that features the art of embroidery by Cai Minqiang and Li Chunliang, pieces of embroidery work are remodeled to leave audience a fresh impression.
areas, witnessing the smaller number of embroidery workers, especially those highly-skilled workers. The economy is improving and promoting the embroidery art, but the young generation is no more involved in manual work (same as in the west). China’s modern embroidery art is fine and delicate, unmatched by those thousands of embroidery works collected in the As Chinese embroidery art Imperial Museum, but there is no work develops with new materials created having left its fame. Although different by high technology, it is no more embroidery styles and techniques have a symbol that includes assorted started integration, the embroidery work embroidery style, but a comprehensive could not achieve a high artistic level. art form that encompasses embroidery Since 1978 when China opened its doors on the material and raise their own works combining traditional art and to outside world, a lot of embroidery embroidery styles and methods. They modern technology. China’s four factories collapsed into small family- guide these chosen workers to research major embroidery styles integrate with based workshops. People were more on high quality embroidery works and regional styles and the art of embroidery concerned about earning for living and selecte out a dozen stations for further grows mutually, like double-sided copied techniques from each other. research. Almost every weekend, they embroidery, random stitch embroidery, The small size of workshop and small will visit embroidery workshops and golden stitch embroidery on raised pad. capital has created none classic works. In provide technical services. With delicate Various stitch application methods ancient times, the Chinese emperors set research and continuous innovation, have been absorbed and developed up special house of embroidery and royal these embroidery works were remade in different regions to promote the painters worked with skilled embroidery with paintings filled with vigor and development of embroidery art. workers to create a batch of classics. But vitality. It will be undoubted that this from the Republic period to now, the According to the two artists, exhibition will become another milestone number of real classics left in museums is they are now working on two huge for Chinese embroidery development. tiny. As prestigious experts in the field, embroidery works. The first one is Cai Minqiang and Li Chunliang are they felt very sad about the situation Apang Palace by Yuan Jiang, a famous glad to find that through intermingling and out of pure sense of responsibility, painter in Qing Dynasty, and another and integration, the different embroidery they request immediate actions to keep one is “Dawn at Mount Tai”, a painting styles are undergoing assimilation to records of the art classics for the Chinese work by famous modern artist Chen contribute to art prosperity of Chinese people. Keyong. The two works are estimated embroidery and a new embroidery style After new year 2012, Cai and Li to finish within 3 years, and will has taken in shape. began to choose visionary embroidery represent the highest achievement in However, China’s embroidery is workers from hundreds of workshops Chinese embroidery. Although in their facing embarrassed situation. In the nationwide with their accumulated sixties, the two artists still hope the past two years, Cai and Li traveled materials. They choose the topic, make Chinese embroidery art will have better around China’s major embroidery the embroidery samples, do research development in future.
62 FEATURE
“Gold Partner” 9th China Super Model Final Contest Ended Successfully with “Fantasy” as the Theme
By Guo Yan The “Gold Partner” 9th China Super Model Final Contest was successfully closed during the Mercedes-Benz China Fashion Week. The Contest was hosted by the Professional Fashion Model Committee of China Fashion Association, organized by China Bentley Culture Development Co., Ltd. and sponsored by Shanghai Gold Partner Bio-tech Co., Ltd. The 30 finalists utilized their competence and beauty to present a fashion feast for the audience. Geng Xuan, No. 13 player from Liaoning North Model School got the first place followed by No. 16 player Wang Ruiyu and No. 30 player Zhang Li from Beijing.
Models presented international fashion release on the T stage At the contest, the merry-go- round symbolizing the “fantasy” theme appeared at the center of the stage and the 30 players wore the latest JAMY WEE 2014 fashion to show their charm on the T stage. For the tailor-made swim suits provided by Hosa, the players teamed up to present the features of the suits, which vividly reflected the “gold partner” theme; For dresses, players wore “ jianji” fashionable and elegant dresses to create the climax of the contest; The garments at the final section were designed by Zhang Jingjing, who successfully released the 2014 Spring & Summer Series during the Mercedes- Benz China Fashion Week last October, Based on professional assessment and which earned big applause from the both domestic and international market audience. demands, the judges aim to select excellent models for the domestic model Professional judges to select domain. models based on market orientation Apart from honoring the top Upholding the market orientation three models, the final also selected 10 principle to select excellent models, outstanding models — Zhu Jie, Liu judges for the Contest include famous Ruoxi, Liu Jingyuan, Shan Shan, Qi Chinese fashion designers — Wen Jingru, Wang Wei, Pei Zhengwen, Model Final Contest not only cares Bo, Xie Feng, Wu Xuewei and Liu Luo qinyi, Ma Teng and Liu Menglu, much about professionalism, but also Wei, Wang Yi and Jiang Hao, Fashion of whom Liu Jingyuan was awarded innovates the competition system based Center Directors from sina.com and as the goodwill ambassador for “gold on international trend in a bid to assess Tencent, as well as Yang Houyu and partner”. the players from various perspectives. Yu Chan, Fashion Channel Chief The “Gold Partner” 9th China With an increasing number of players Editors from sohu.com and ifeng. Super Model Final Contest was and great influence, China Super Model com. Wang Zhuo, Vice Chairman of successfully concluded in Beijing Hotel. Contest has become a brilliant section China National Garment Association As a model selection competition in the Mercedes-Benz China Fashion acted as the chief judge for the contest. in the Fashion Week, China Super Week.
63 lifestyle
South Korea Fashion in Beijing
By Audrey Guo
During Mercedes-Benz China Fashion Week (2014/2015 Autumn/ Winter Collection), South Korea fashion designers joint press conference was held in the Banquet Hall of Beijing Hotel. 5 brands including SHIN JANG KYOUNG, ENZUVAN, RUBI&NA, Kumann YOO HYE JIN and Resurrection were presented.
Designer Shin Jang Kyoung: jacquard span, lace, nylon pad, wool, design to embody the unite effect of The designer reflects modern women’s leather, and wool sweater, etc. Swallow gird and digital printing. elegant side through 25 sets of dresses. Designer Rubina: The theme Main materials are wool/polyester, With minimalist technique, the of RUBI&NA is “cross culture” wool/nylon, wool/synthetic fiber, designer uses fox, mink, beaver fur shown by combining the beauty and polyester fiber, synthetic leather, and and leather and the combination of fashion of a variety of modern culture, artificial wool. Colors include black, felt, rubber, and silk to represent this emotion and energy. Connecting the white, grey, orchards, amber, pale concept. The colors mainly based on the different natural fabrics by skills with brown, cobalt blue, sapphire blue, and pure colors reflecting vitality. penetrating power mainly reflects in the yellow. Designer Hong EUN – details. It means to feel the traditional Designer Lee JU – YOUNG: JU: The theme of ENZUVAN is color of each region and ethnic group. Resurrection 2014 autumn/winters “beautiful paradox”. What is the Material is mainly based on the wool, collection gets the inspiration from definition of beauty? Is it clean and leather, fur, knitting yarn, felting, and an ideal resort. The Big rolling green simple clothes or exotic clothes with satin. Colors include camel color, sky hills, cliff on the island, the free-located complex adornment? In my life, I blue, warm cream, ivory, charcoal grey, and mysterious statue and rock... All want to define beauty by myself. This bronze, ancient gold, green, yellow, locate in the mysterious island facing collection reflects the beauty of clothes mustard, wine red, and black. the East China Sea quietly. Miles and by constant changes from a simple, Designer YOO HYE – JIN: The miles of green, blue and water grey and dark to exotic and sparkling ones. The theme of Kumann YOO HYE JIN is large pieces of rock, all of these show coexist of fine and strong, traditional “the intersection of time and space”. extreme simplicity style of modern and exaggeration, and simple and Designers have been exploring the way cement throughout the collection. The complicate group the counter element to combine simple structure design atmosphere with seeming no theme is to show the beauty of the clothes. The with digital print. In autumn/winter like a mirror reflecting all things in the Style is cocoon style with baggy pants, 2014 collection, the science fiction islands. Materials mainly include wool, H skirt, super knitting sweater, andthe idea of intersection of time and space woolen fabrics, wool, fur, and leather. mix of feminine and neuter style. The inspire her to createthree-dimensional Colors are gray, black, dark blue, and materials include velvet, velvet flocking, cutting, folded shape and 3D graphics khaki.
64 lifestyle
new way to release us in cracking and seek the balance in release. For the choice of fibers, Gioia Pan gets her new creative inspiration from “Bing Ba” shell fiber as its comfort, wet absorption, cool and shiny feature, and its excellent Knit patterns from yarn. Also, the property of supporting the environmental ideas makes Gioia Pan who pursues natural elements and comfort favor “Bing Ba” as her focus in her design field. The fashion designs bred by Gioia Pan’s unique tailoring technique and knitting technology brings the enjoyment of beauty for the whole stage,but also an unprecedented Seeking Release in Cracking visual shock. Held Since 2007, Asahi Kasei· By Audrey Guo China Fashion Designer Creative Award has held works show for thirteen former winners, including Liu Wei, Zou You, Gu Yi, Liu Yang, Zhang Yichao, Wu Xuewei/Wu Xuekai, Li Xiaoyan, Shi Jie, Ji Wenbo, He Guozheng, Wang Art Committee and China Bentley Yutao and Lu Shengqian. The seven- Culture Development Co, Ltd. year efforts and persistence has provided The theme of Gioia Pan’s works a more broad development space for show “Cracking” is inspired by the the winners, but elevated itself to the instability of our environment. The stage for demonstrating the high level high frequency of natural disasters, of China fashion designers, which is a economic depression and upheavals milestone to the development of China’s upset people. The self preservation domestic fashion designers. instinct will seek other ways to This is a collision of knitting release the disturbing feeling at its technology and environmental fabric, critical point. The designer hopes a creativity show to promote awareness to convey the spirit from cracking of environmental protection and green to reorganizing by the elements concept into fashion catwalks, and a like conf lict and harmony, physics beautiful encounter. It is a call to follow and feeling, and economy and Gioia Pan to seek the release in “cracking” environmental protection, showing a and find balance in “release”!
“Asahi Kasei·China Fashion Designer Creative awards” 2014/2015 A/W collection was held in Beijing recently, which showed the works from the famous designer Ms. Gioia Pan. It was directly hosted by China International Fashion Week Committee, Asahi Kasei Corporation and Asahi Kasei Textile Corporation and Hong Kong Fashion Designers Association and jointly organized by the China Fashion Designers Association Fashion
65 Jiuzhaigou, the Most Beautiful Water in China
By Sun Huijie urray~ Summer vocation is still here. Want to go out another time for a bigger adventure and exploration? Go and see the most beautiful water in China, Jiuzhaigou (九寨沟) in Sichuan province, to enjoy a cool summer. There, you can find the best of the deservedly famous Jiuzhaigou National Park — waterfalls, forests, and the amazing colours of calcified stone covered by limpid pools. HBeijing Hikers, a professional English-speaking hiking organizer based in Beijing, suggests the visit to the deservedly famous Jiuzhaigou National Park, also the nearby Huanglong (黄龙), an equally beautiful scenic but less well-known area of still ponds and coloured rocks. As well as taking in all the natural beauty, you can pay visits to ancient towns, temples, and monasteries, making sure to sample the spicy Sichuan specialty snacks and food. Let’s see all the highlights of the trip. Ngawa Tibetan and Qiang Autonomous Prefecture Jiuzhaigou and Huanglong National Parks are hidden in the mountains of the Ngawa Tibetan and Qiang Autonomous Prefecture, in the north of Sichuan Province. The main ethic group in this prefecture is Tibetan, with the Han and Qiang ethic groups making up the majority of the remainder.
66 THIS IS HINA
The area was largely unknown to outsiders until 1975, and, after a bit of exploitation by loggers, was declared a protected national park in 1982. Since 1992 both Jiuzhaigou and Huanglong have been UNESCO World Heritage sites. Before the Huanglong Airport was built reaching the parks involved a long drive along twisting mountain roads. Flying in to Huanglong Airport allows us to cut down on the travel time to the parks. Jiuzhaigou National Park The name Jiuzhaigou translates as The Valley of Nine Villages. Seven of the villages are still populated, and as at 2003 there was a permanent population of around 1,000. Previously residents worked in farms and fields, but now the focus is on tourism. Many of the residents are of the mountain-dwelling Qiang ethnic group, who carry on the old traditions for styles of clothing and hair. An interesting fact: some of the Qiang trace their line of descent through the female side, instead of the male side. Nearly half of the 720 square kilometers of Jiuzhaigou is covered by virgin mixed forest, an amazing sight when covered by autumn colours. Even more amazing would be to spot one of the Giant Pandas or Golden Snub-nosed Monkeys, two endangered species Links that are said to inhabit the forests in tiny numbers. Health warning! However, the most well-known The Jiuzhaigou and Huanglong features, and the focus of the visit, National Parks cover altitudes of are the greens and blues of the many between 2,000 and 3,500 metres lakes in the valleys. The colours of above sea level. That’s high enough the lakes depend on the depth of that you might feel the effects of the water and the concentration of altitude sickness. For most people, different minerals in the water. this means sluggishness and perhaps a headache, but if you’ve had altitude sickness before you may feel the effects more strongly.
67 Tips Weather On this trip we’ll be at altitudes between 2,000-3,500m, making it necessary to bring warm clothes. There’s quite a difference in temperatures at day and night. Five Flowers Lake Shaded areas may be quite cold. There’s a chance of rain, so bring a “Five Flowers” is a shallow lake surrounded by stunning scenery, with waterproof. At the time of year can ancient fallen tree trunks and branches clearly visible in the water. expect temperatures of 10-15°C Panda Lake and Waterfalls during the day, with temperatures nearing 0°C at night. Named for allegedly being a favourite drinking spot of Giant Pandas, Panda Lake feeds the multi-level, multi-stream Panda Waterfalls, said to be the oldest in the valley. Pearl Waterfall Atop the Pearl Waterfall are the Pearl Shoals, a broad expanse of rocks covered by brightly-coloured algae and plants. The water flows over a broad, rocky cliff, dropping from heights of up to 40 metres. Huanglong National Park Huanglong translates as “Yellow Dragon”, a name given to the 3.6km long gully filled with pools and ponds of clear water covering colourful mineral deposits and concentrations of algae. Yellow Dragon Gully itself is surrounded by scenery worth a mention: forests of spruce trees at the lower altitudes, and alpine meadows and permanently snow-capped peaks further up. Huanglong Temple In the heights of Huanglong is the Huanglong Temple, a Buddhist temple at the head of the main body of water in the gully. Ponds, waterfalls, and caves A 3-4 hour hike down the boardwalks of the Snow Peak area will make you pass all the key sights there: the Colourful Calcification Pond, the Yucui Colourful Pond, the Golden Sand Beach, and the travertine pools known as the Dragon’s Scales.
68 THIS IS HINA
Tips Things to bring Aside from a few changes of clothes and regular hiking gear, the following equipment and clothes will make hiking Travertine landscapes much more comfortable, especially if it Travertine is a type of limestone gets cold at the higher altitudes: formed by the buildup of minerals from * Hat with wide brim spring water. It’s usually porous, which * Sunglasses and sun-cream makes it easy for colourful plants and algae * Warm clothes in case it is chilly in to grow in and on top of it. Buildups of the evenings travertine often take the shape of terraces, * Waterproof jacket and trousers which Huanglong is famous for. Other places * Warm thermal/fleece jacket that are well-known for travertine terraces are * Warm hat Yellowstone National Park and Mammoth Springs in the U.S., and Pammukale in Turkey.
Munigou Park Also in the area, and also very scenic, is the Munigou Park. A little further off the tourist trail, Munigou is quieter than both Jiuzhaigou and Huanglong. You can walk up into the park to get a good look at the tall waterfall and take another path back down to the bottom, passing through forests and walking by small ponds, pools, streams, and more waterfalls. Ancient cities and towns In the area, two ancient towns are recommended to explore: Songpan, and Huanglong Xi. Songpan is an ancient walled city, first built during the Tang Dynasty (618-907), and fortified with thick walls during the Ming Dynasty (1368-1644). It’s currently inhabited by around 70,000 people — an interesting mixture of Tibeten, Qiang, Hui, and Han ethnic groups. Huanglong Xi contains temples, archways, ancient houses and trees, split by a waterway that made it a regional center of trade in times gone by. The exploring of the alleys and lanes will be fun, and see if you can pick up a few trinkets from the streetside souvenir sellers. Also, Chengdu city, the capital of Sichuan Province is a city which you can’t miss. While in town, you can investigate the Temple of Great Compassion, and the Wuhou Temple before taking a stroll down the Jinli Snacks Street — a good way to get a look at the different culture and tastes of Sichuan Province.
69 Catering for Foreign Tastes
By Lewis McCarthy
hina has long had also the growing awareness a rich network of within Britain of China’s diaspora.Areas different cuisines. named China Town, What’s more, businesses are for their concentration of beginning to adapt to Chinese Coverseas Chinese, have become spending habits. Union Pay debit a fixture of most large cities cards are becoming a payment across the world and even option in shops in key tourist become tourist attractions in destinations – encouraging their own right in cities such Chinese spenders to purchase as London and New York. in ren min bi while abroad. Now, increasing numbers of Meanwhile Link automated There is still great a new generation of Chinese teller machines accept the card are beginning to live abroad, allowing users to withdraw from opportunity to taking up study and work their home bank accounts with address the needs of opportunities across the globe. ease. the Chinese tourists Chinese students have Yet, Chinese tourists and student tourism. swelled or even created and “student tourism” have communities in university towns become one of the most key and with them businesses have demographics in the travel sprung up around them. Karaoke industry and there is still great bars, Chinese restaurants, opportunity to address their mahjong clubs and bubble- needs. Although trying local tea shops are all becoming delicacies is of course part of the fixtures next to campus’s and joy of being abroad, more hotels student dwellings rather than could offer Chinese food as part in the China Town’s that have of their restaurant menus. It is traditionally housed them. common in China for a foreign In Britain, many restau- hotel to cater for Western tastes, rants are also beginning to but unusual for Western hotels specialize to differentiate to adapt for Asian palates. The themselves to the new inf lux inclusion of a water boiler, of customers. No longer are packets of instant noodles and restaurants advertising as a selection of Chinese teas are Chinese restaurants, but instead all simple ideas that could be as Sichuan, Beijing or Hunan easily implemented as additions cuisine restaurants (among the to the welcome pack or mini many other types). This reflects bar. After all, sometimes it is not only the desires of Chinese the small home comforts that to taste more authentic style are most appreciated when in dishes while living abroad, but foreign climes.
70 Relationships between Young People
By Margaux Schreurs
oving to China, making make them express their love for each other Chinese friends and entering in different ways. the Chinese dating world has When I go to Houhai (a lake area been a great experience, but in Beijing), or places that have a certain also puzzling at times. I have witnessed so romantic atmosphere at night, I often run Mmany differences between Chinese dating into young Chinese couples kissing in a and western dating, as well as differences corner in the dark, or sitting on each other’s in perspectives on marriage, that make it lap looking out over the lake. However, they hard to be in a relationship with a Chinese always seem to be hidden in a corner, acting partner, and discuss marriage with Chinese secretively. These behaviorisms demonstrate friends. that maybe Chinese society is not quite ready Young Chinese couples have some for the younger generation to be openly many behaviors they demonstrate in public affectionate with each other at a younger age that are viewed as different by westerners, than they are used to. Perhaps this is also and that some westerners may not even why Chinese relationships seem more set in understand. For instance, I am thinking of the traditional defined gender roles, with the the way that many Chinese boyfriends carry man often carrying the woman’s bag. their girlfriends’ handbags. Personally, I will There are also crucial differences in never get over this, as it looks hilarious and marriage, and the age of marriage. Recently, I do not understand the point. Most girls’ the phenomenon of “left-over women” has bags aren’t that big nor are they very heavy, arisen in China, these are women who but somehow the boyfriends are all fine with choose their career and education over carrying small pink and sparkly handbags. marriage, and end up without a partner In a way, I suppose these boyfriends are a lot and “older”. However, when compared to more gentlemanly than the boyfriends we their western counterparts, these “left-over have in the west, who would never carry a women” are actually quite similar to the small girls’ handbag throughout the day. average western woman in age and in profile. On top of that, we have the Chinese The average age of marriage in Europe has in Europe’s more liberal matching clothes trend, which has been actually been on the rise. countries as it is in China, visible throughout the country. Boyfriends In fact, within my family in Europe, and there is definitely not and girlfriends will wear the exact same many couples aren’t even married, but do that pressure on women to outfits while they are out and about. Seeing have children and have been together for a marry younger. Some of them makes me wonder where they buy long time, without there being any issues my older Chinese friends these outfits! This is also something that you or prejudices against them. They feel like will ask me if I am married would never see in the west. It always makes they didn’t need to be married to prove yet, or when I plan to get me wonder whether it was the boyfriend, their dedication to each other. My mother married. This pressure makes or the girlfriend who thought of the idea always says that she didn’t actually want to me feel a bit uncomfortable and who went and bought the clothes. get married, as she believes it is a bit of an sometimes as I do not plan Either way, it is incredibly cute to see young unnecessary traditional constitution, but had to get married anytime soon, couples wearing the same outfits, and I to do so for the paperwork reasons and for because I believe education wonder whether it is the fact that they are them to more easily move abroad with my and a career is much more not allowed to be as open and affectionate in father’s work. important and marriage can public as their western counterparts are that In that sense, marriage is not as popular get in the way of this.
71 Member List of Council of China’s Foreign Trade
Honorary Chairmen: Angela A. Chao Vice President of Foremost Group
Annie Wu Suk-ching Chairman of Hong Kong Sub-Association, World Trade. Cen- Wan Jifei Chairman of China’s Council for the Promotion of Interna- ter Association / Vice Chairman of Beijing Air Catering Ltd. tional Trade Banthoon Lamsam Chief Executive Officer of The KASIKORNBANK Public He Guangwei Former Director General of China National Tourism Ad- Company Limited ministration Chau Pui Yin Director of Accordion Troupe Hong Kong Li Kenong Vice Minister of General Administration of China Customs Chen Jinlong Senior Director of Far East Holding Group Co., Ltd. Consultants: Chen Renai Chairman of Jinghua Trade Company, Italy Chen Xiaoping General Manager of Zhejiang Hongyang Group Chen Zhiling Operating Chairman of Wynn Macau Shi Guangsheng Vice Director of Financial and Economic Committee of Dato’ Lim Hock San Managing Director of LBS BINA Group Berhad, Malaysia NPC’s Standing Committee Duan Jing General Manager of Beijing Glory Glamor International Former Minister of the Administration of Foreign Economic Commerce & Exhibition Co., Ltd. and Trade Cooperation Gallant Y.T. Hong Kong Philanthropist Gan Ziyu Vice Director of Financial and Economic Committee of Gao Kecheng Chairman of Jibao Enterprise Development (Singapore) Co., Ltd. NPC’s Standing Committee Gong Xiaohua Chairman of Edward Enterprise International Group INC Former Vice Director of National Development and Reform He Chaoqiong Managing Director of Shun Tak Holdings Limited Commission He Jinsheng President of e-Phone Group (USA) Yu Xiaosong Consultant of China’s Council for the Promotion of Interna- tional Trade Hu Anhua Chairman of Neonlite Electronic & Lighting (HK) Ltd. Former Chairman of China’s Council for the Promotion of Huang Guoyu Founder and Chairman of 4th World Chinese Entrepreneurs International Trade Convention and of Canada Founding & Development Society Hu Yunming Executive Director of King Wong Development Co., Ltd. Chairman of the Council: Huang Yizong President of United Overseas Bank (China) Ltd. Ip Sio Man Managing Director of Vang Kei Hong Trading Co. Ltd.
Zhang Wei Vice Chairman of China’s Council for the Promotion of In- Jacky Chen Chairman of Thailand Council for the Promotion of Econo- ternational Trade my and Trade of Small and Medium-Sized Enterprises Jia Baojun General Manager of Sinosteel Corporation Standing Vice Chairmen: Jorge Mora Asia-Pacific President of Veolia water John Gong Chairman of ICP DAS USA, Inc. Benjamin Fok Board Member of Fok Ying Tung Group Co., Ltd . Judy Yu President of the Carsac Story Ltd. Huang Xuesheng President of Eurasia Group Kampol Srethbhakdi President of The Thai Malleable Iron and Steel Co.,Ltd. Guo Kongcheng Chairman of Kerry Group Co., Ltd. Kong Lingfa President and General Manager of Tianxiang Group (Anhui) Lin Zhuoyan Chairman of the Board of Director and Chief Executive Of- Co., Ltd. ficer of Outlet (China) Ltd. Lei Yayun Chairman of East West Croup William Chiu Chairman of Beijing Badaling Cableway Ltd. Li Hexun President of Tetra Pak China Ltd. Huang Zhida CEO of Far East Organization Li Jinyou Managing Director of County Height Holdings, Malaysia Mimy Mock de Fung Chairman of General Committee of Sino-Venezuela Trade, Li Songzhi Chairman of Myanmar International Business Promotion Centre. Industry, Agriculture, and Tourism Li Jinyuan Chairman & President of Tianjin TIENS Group Co., Ltd. Chairman of Orinoco Energy Resources Corporation Li Jiaxiang Dirctor of Jebsen & Co., Ltd. Yan Qiming General Manager of Sumitomo Chemical Investment (China) Co., Ltd. Li Lei Senior Vice President of Saudi Basic Industries Corporation Nakashima takashi General Manager of OJI Paper China Business Div Lin Dexiang Chairman of GITI Tire (China) Investment Co., Ltd. Wong Kam Hong Chairman of Traffic light Co., Ltd. Lin Hailin President of China National Automotive Industry Interna- Chu Jiwang Chairman of Ningbo Ruyi Joint Stock Co.,Ltd. tional Corp. Lim Chee Oun Executive Chairman of Keppei Corporation Ltd., Vice Chairmen: (Names in Alphabetical Order) Singapore Ma Renlin General Manager of Shanghai Meiheng Investment Co., Ltd. Alexandru Ioan Executive Chairman of China Town Group, Romania Ouyang Riping Chairman of the board of DaTong Group (West Africa) Qiu Dachang Vice Chariman & Executive President of Far East Develop- Zhu Shanyi Chariman of Jiangsu Mingda Mining Investment Co. Ltd. ment Co., Ltd. Zhuang Yaozhi Honorary Chairman of Global Petrolum Industry Ren Zhijie President of Beijing Century Boai International Medicine Development Co. Ltd. Technology Development Ltd. Zheng Wanchun President of China Great Wall Asset Management Corporation Shen Yaozhang Chairman of Shanghai Baoyao Minmetals Import & Export Zou Weimin Chairman and General Manager of Metallurgical Trade Co., Ltd. Corporation of China Overseas Ltd. Sun Ziyu Managing Director of China Harbor Engineering Zou Yong Chairman of New East Imp&Exp Co., Ltd, Greece Company Ltd. Teo Cheng Keng Chairman of Bride of the World Pte Ltd. Executive Directors: Tian Li Chairman of Bestridgergroup Co., Ltd. Tian Wentao Chairman of Xukuan Group Co., Ltd. Chen Mingzong Chairman of Intan Group Indonesia Wang Yanping Chairman of Fujian Guohang Ocean Group Holdings Ltd. Hong Guiren Wijayakusuma Group Coal Mining and Power Station Wang Shousong Chairman of Wang’s Corporate Group, Holland Indonasia-China Cooperative Investment Wang Qinghai General Manager of Shougang Group Council of China’s Misha Lu Marketing Director of TÜV SÜD in Mainland China, Foreign Wang Shufang Hongkong and Taiwan Chairman of Chinese Committee of Golden Coast, Australia Thura Lwin Chairman of Tah More Hnye Chan Tnar Comneroe Wang Yingwei Executive Vice Chairman and Executive President of Hsin Co., Ltd. William Kuan Executive Director of Victory Real Estate Development Yang Zongde (Lin) Managing Director of GLENCAIRN International Co., Ltd. Group Wu Yingmei Chong Construction Group Co., Ltd. Yu Mingquan Chairman of Juhai Group, Russia Xiao Dexiong Chairman of Tw Fok Holding Co., Ltd. Zhao Shukai Chairman of the Health Maintenance Medical Practice Xie Bingzhen Chairman of Strategic Decision Committee of China Machi Co., Ltd. Group Xie Mingcheng Chairman of China Win-Win Group Limited Directors: Xu Li Chairman of the board of Nankai Transport International (HK) Co. Ltd. Cai Zhipeng Chairman of Shantou Diming Trade Co., Ltd. Xu Zhiming Chairman of Yuemei Group Dato’ Yan Mengjie Executive Chairman of VIBRANTWAVES S.D.H.BHD, Xue Baojin President of Beijing Smart Garments Co., Ltd. Malaysia Yang Jinhua Chairman of King Far B.V., Holand Huang Jianlong Vice President of SANY Group Co., Ltd. Yang Luming Managing Director of Australian Chen Enxi Group Huang Yi Chairman of Dunfeng Holdings Inc. Co., Ltd. Huang Liming General Manager and Executive Director of Cannon Far You Kaicheng Chairman & General Manager of Binhtien Imex Co., East Co., Ltd. PTE. Ltd. Luo Meiling Executive President of Life Enlightenment Charity Zhao Hui Manager of Wuhu Cigarette Factory, Anhui Province Foundation Co., Limited Zhang Xiqing Chairman of Union of Overseas Chinese Greece Lei Zhenyu General Manager of State Production Base of China Film Zhang Jianwei President of Sino-trans Limited Group Co., Ltd. Zhang Xiquan President of US Mart Chain Supermarket Co., Ltd. Jiang Min Executive Director of the Aoyana Project Management and Zhang Jingjing Director of Beijing Jindian International Forwarding Co., Ltd. Consulting (Shanghai) Co., Ltd. Zhang Qian Executive President of MM Marketing Communications Ouyang Chenxi Managing Director of the Wuhan Yangsen Biotechnology Consulting Co., Ltd. Co., Ltd. Zhang Weizhi Chairman of Macau-Portugal Chamber of Commerce Qian Juncan Chairman of the Pinghu Shenping Material Trading Co., Zhang Guixing Operating Chairman of Maybank in Greater China and Northeast Asia Ltd. Zhang Jianwei President of Bombardier China Xin Weihua Chairman of Shandong Wanbao Group Co., Ltd. Zhang Xiquan President of US Mart Chain Supermarket Co., Ltd. Xu Ping Genral Manager of Henan Imported Materials Public Zhang Jingjing Director of Beijing Jindian International Forwarding Co., Ltd. Bonded Center Co., Ltd. Zheng Weiguang Chairman of Ji Tong Thai Long-Bis Science Croup Co., Ltd. Yang Chuanli Chairman of Jingu Jewellery Ltd. Zhou Jinhui Chairman of Legendale Constructive Co., Ltd, Macau Yang Nan Chairman of Luistone Group