1 / 27

Neil Blakeman Associates Ltd 9th November 2010

Business, Economics Politics & Culture. Neil Blakeman Associates Ltd 9th November 2010. CHINA. ssssssss. Bohai Rim. Yangtze Delta. Pearl River Delta. Three Main Centres of Economic Gravity. [Source CBBC, Leeds University, UKTI]. Economic Highlights.

csingleton
Download Presentation

Neil Blakeman Associates Ltd 9th November 2010

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Business, Economics Politics & Culture Neil Blakeman Associates Ltd 9th November 2010

  2. CHINA ssssssss Bohai Rim Yangtze Delta Pearl River Delta Three Main Centres of Economic Gravity

  3. [Source CBBC, Leeds University, UKTI]

  4. Economic Highlights • World’s 2nd largest economy • Annual growth c.10%for 25 years [forecast 8% to 2015] • World’s largest exporter & manufacturer • GDP growth: 2000-09 = 80% of US : 2010-19F = 2 x US • Inflation: 3% [rising to 4%] • Per capita GDP (at PPP) c.$7,800 [rising to $13k] • Of 1.3bn, 200m+ (?) live on < $2 / day • Overtake US in GDP (PPP) terms by 2030? [Source: EIU, Goldman Sachs, various]

  5. 833m mobile phone users, 420m internet • Huge investment in Motorways, Airports, Metro, Rail • 89 million cars. By 2020, 140 million? • 1998: 1 million university places. Now: 6 million+ • 200 - 600,000? engineering graduates a year • 16 of world’s 20 most polluted cities are in China • 50% of Chinese GDP: savings • Saw the world’s largest ever IPO

  6. Asia's Share (%) In World GDP (at PPP)

  7. POLITICS • 4th generation leadership –> 5th in 2012… • Harmonious, balanced, sustainable development (Party legitimacy) • Domestic challenges; demonstrations, human rights? unemployment • Foreign Policy; N. Korea --, Taiwan ++, US(+), Japan -G20+, [G2?] • Democracy?

  8. Economically, three transformations: Planned Economy Market Economy Other factors: • WTO (Distribution, Financial Services & Retail) – but recently? • Olympics, EXPO 2010, Asian & Student Games 2010-11 • Foreign Exchange Reserves >$2.5 trillion • FDI $100 bn in 2010 ?; $120bn+ 2015? Closed Economy Open Economy RURAAL Rural Urban

  9. Soft landing? Will high growth be sustainable? • What about the currency? • Protectionism (US, EU, China)? • Energy usage, security, efficiency, shortages • Environmental impact • Growth drivers; exports, investment … consumption

  10. Short-term impacts: global economy, credit crunch & recent trends? Global Economy exports (& imports) China: slowed in 2009, bounced back in 2010 cost (& domestic pressures) : competitiveness ? protectionism ? : is a concern (e.g. use of anti-monopoly laws in China) product safety, reputation for quality & consistency (?) UK exports to China are more competitive Consumer / Business confidence (stock market, property market) Consumption ? : retail sales are up ‘Indigenous innovation’ : = more technology transfer ? Huge fiscal stimulus ($586bn) …how effective / over-stimulus? Infrastructure, ’Pillar’ industries, science, health, education Effect on Chinese Banks : limited Outward Investment (FDI & sovereign wealth fund(s)?); Outward direct investment $44bn in 2009, rising to $137bn in 2015? >>> Fundamentals good (but, inflation (recent interest rate increase), unemployment?)

  11. UK China Trade 2001-2009 [Source: UKtradeinfo, British Embassy Beijing]

  12. Britain’s Main Trading Partners in2009 (Avg. Annual Growth 2002-09) [Source: UK trade info]

  13. UK Exports of Goods to China :£5.1 billion in 2009, up 5%. YTD Aug 45% (HMRC) UK Exports of Services to China : £2.5 billion in 2008, up 60% : UK is 2nd largest China = UK’s 2ndlargest non-EU export market China = 3rdlargest source of UK imports UK is China’s 15th largest trading partner (8th largest importer) UK No. 1= EU Investor in China 6639 projects US$16.9 billion realised 580 + Chinese Companies Invested in UK (400 Mainland, 180 Hong Kong) UK is no. 1= destination for Chinese investment into EU UK China Trade & Investment Key Facts [Source: British Embassy, Beijing]

  14. Impact on Global Economy • Impact on shipping costs • Drawing in raw materials and energy: oil, cement, steel, construction….(and retaining rare minerals?) • Fuelled Japanese & Korean economic recoveries • Following ‘Asian Tiger’ model of moving up value chain • Huge pool of skilled and unskilled labour (some upward pressure on wages – as low as 10% of Europe) • Innovation • IPR

  15. Key Challenges in doing business with China • IPR protection • HR issues • Regulations, and dealing with Chinese government • Legal, tax, accounting, certification (and resolving disputes) • Partner selection, relationships • Corruption • Handling people / relationships (‘Face’, ‘Guanxi’, hierarchy) • Official trade & investment limitations • Route to market, physical distribution • Risk management (company, personal) • Size, diversity, cultural ‘distance’, language • Sales, marketing, branding • Negotiating, pricing • Remitting funds, getting paid • Scarcity: power, water etc

  16. Practicalities: Mandarin v's Cantonese, business cards, interpreters, banquets, design / promotion, gifts, hotel cards etc. Acknowledgement: input from Eugene Chang (formerly at CBBC) Behaviours (business context) Patient Group orientation Hierarchy ‘Guanxi’ (networks/relationships) Bonding Modest Decision-making - Simplicity v’s complexity - Employment, technology Contract (only the beginning) ‘Face’ Personal relationships Intercultural Communication & Understanding • Influences • Long history • Confucius, Daoism, Buddhism • Women (father, husband, child) • Elders • Pictographic language • Study / education • Family ties • Zhongguo (middle kingdom) • Patriotism

  17. Business Challenges • Regulatory, market and operational challenges • Some issues are more acute in regional cities [Source: CBBC, Leeds University, UKTI]

  18. Creative Industries: Chinese government engagement • Beware sensitivities: film, media, content etc… • Discuss with UK Trade & Investment • Important to understand & potentially engage: • Ministry of Culture • MOFCOM (Ministry of Commerce) • SARFT (State Administration of Radio, Film & TV) • MII (Ministry of Industry and Information Technology • GAPP (General Administration of Press & Publications) • Other (SIPO, SAIC etc.)

  19. Areas of Opportunity • Exporting - Agent or Distributor • Establishing a local presence (Rep, JV, WOFE, FICE) • Sourcing, Outsourcing (goods, business processes) • China going global • Consumer spending • Infrastructure development • Increased manufacturing output

  20. Areas of Opportunity • Energy, including efficiency • Environmental protection • Financial Services • Information & Communications technology • Creative Industries/Design • Enhanced public services - health & education • Innovator, R&D • World Student Games 2011, other major events

  21. Market Entry Drivers • Build your own market-entry strategy • Focus on business objective and priorities [Source: CBBC, Leeds University, UKTI]

  22. Doing Business in China • Leave your preconceptions at home • Keep hold of your business sense as tightly as you would anywhere else • Do your homework on the market and on potential partners • Patience is a virtue; need commitment and open mindedness • Take a long-term approach, but do not stick rigidly to your plans • Obtaining good quality independent legal and professional advice is essential • Protect your IPR • Carry out due diligence • Importance of personal relationships

  23. Depends on your sector, stage of development, strategy …. Must factor China fully into your strategy Exports, investment, partnering Sourcing, outsourcing Design, science/ research, marketing, branding Services, solutions (eg. BPO) CHINA THREATS? OPPORTUNITIES? • IPR, Tech. Transfer • Energy, raw materials • Manufacturing • Pace & extent of change • Complexity • Source of competitors • Innovation, R&D • Labour, skills • Environment

  24. www.neilblakeman.com

  25. A management consulting firm specialising in international business, trade and investment • we advise clients on the development of their international strategy and practical implementation, to deliver growth • our main focus is on China, complemented by extensive commercial experience in Central Europe and a range of emerging and developed markets • we have an exceptional group of highly experienced Associates, who are acknowledged experts • our clients are world-class companies, public-sectors agencies & academia. We have built a strong reputation by working closely with them, to achieve measurable results • we have a unique blend of commercial and public-sector experience at senior levels, particularly in China and the UK • our knowledge and skills are combined with an exceptional network of contacts within the commercial world, government, and higher education To contact us: UK: +44 (0)1647 2772777 info@neilblakeman.com www.neilblakeman.com

More Related