Shu Consulting wishes all clients, friends and business partners a happy and prosperous Chinese New Year of the Pig!
China will reduce restrictions on foreign investment and would allow full foreign ownership of companies in more areas of the economy and would reduce the number of industries in which foreign investment was restricted or barred. The Chinese market has huge potential and it is steadily marching towards the largest country of goods consumption.
Today I am attending a very interesting Smart City seminar in Gothenburg to learn how will testbed for e-mobility and connected and autonomous vehicles will affect the cities for the future. There are many opportunities to collaborate between Sweden and China on innovation and make it commercial.
Impressive with these magnificent engineering projects in China.
Source: by Tom McGregor at https://www.quora.com
There are variety of factors, not just cultural values but a combination of other indicators including regional prosperity, Chinese government’s reform and opening up, large population, rapid industrialization and urbanization that makes China to be an economic miracle in the past few decades.
China’s economic miracle can be attributed to a variety of factors, not just cultural values but a combination of other indicators including regional prosperity, Chinese government’s reform and opening up, large population, rapid industrialization and urbanization that had also led to strong GDP (gross domestic product) growth rates in the past few decades.
To explain in detail China’s economic success story would require me to write a book, but let’s try to answer the Quora question with a brief review over how China has risen from overwhelming poverty in the late 1970s’ to emerge as the the world’s second largest economy as of today’s date of writing – May 28, 2018.
The most crucial factor for China success story would be when the late leader Deng Xiaoping had announced opening up and reform for the nation, urging all Chinese to embark on a path of prosperity by allowing for more free market measures and building free trade zones that gave priority to constructing more factories and ports that sparked a manufacturing and exports boom.
This year, China is celebrating the 40th anniversary of the nation’s opening up and reform policies. China Plus highlights its major achievements in a link here:
According to China Plus:
“This reform process has also brought enormous benefits to China and its people. Seven hundred million people have been lifted out of poverty. China’s GDP has grown by 32.3 times in 1978-2016, ranking it the second biggest economy in the world since 2010. Its foreign trade in goods has grown by 178 times, making China the world’s biggest trader since 2013. In two days China now trades more than it did in the year of 1978. On foreign direct investment (FDI), it was not until 1980 that the first ever industrial joint venture was established in China, by Swiss company Schindler. Since 1992, the country has been the biggest investment destination among all developing countries.”
Other Asian nations had enjoyed remarkable and rapid development over the past few decades as well. In the aftermath of major wars in the 20th Century, the nations – Japan and South Korea – stood in rubble, but had risen to glory with their own economic miracles respectively.
The late South Korean leader in the 1960s and 70s – Park Chung-hee – was considered the foremost power player in igniting the nation’s economic rise. The Chosun Ilbo provides some details with a link here:
As reported by the Chosun Ilbo:
“Korea was then one of the poorest countries in the world, with gross national income per capita of a mere US$79 in 1960, and a trade deficit of $300 million, 16 percent of GNP. Park felt a deep-seated resentment of his country’s poverty, which he believed was due to nothing but laziness on the part of the Korean people, and made economic development his top priority.
On July 22, 1961, two months after the coup that brought him to power, Park established the Economic Planning Board and bestowed on it mighty powers to design economic development plans and policies, set the budget, and control other ministries.”
Japan’s economic prosperity should be duly noted, since the nation relied on promoting innovations in the science & hi-tech fields while the emergence of huge Japanese conglomerates instilled stability in the domestic economic structure.
The Smithsonian takes a closer look at Japan’s hi-tech big business miracle. The link is here:
The Smithsonian reports that:
“They’re called keiretsu, monolithic conglomerates unlike any other. Unique to Japan, each keiretsu can have as many as 30 companies spread out across a huge range of industries. Food companies, paper mills, car companies, camera makers, movie studios, mining companies, real estate, pharmaceuticals, breweries, distilleries, ironworks, railways, shipping lines, retail stores, nuclear power plants, clothing makers, television broadcasters, computer parts, life insurance, construction, oil companies, video games, jet fighters and airliners, all loosely interwoven to benefit each other indefinitely. The U.S. sees keiretsu and keiretsu-like relationships within corporate Japan as obstacles to free trade between the countries.”
The economic miracles of Japan and South Korea serve as models for the success and failures of both countries. Tokyo and Seoul supported a big business model, but there were some flaws with the strategy, since major corporations were more likely to protect their own corporate assets above all else, even if that incurs slower domestic economic expansion.
Japan and South Korea are also limited in land space, where China still has large swathes of territory in the western regions that remain under-populated and under-developed. Hence, there’s still room for rapid urbanization and industrialization for the western half of China.
According to 央视网 Panview:
“China’s west offers much potential for economic development, but it will take time for the region to catch up with the east. Fortunately, Beijing is seeking solutions.
Regional authorities are making plans to revamp the education system to revitalize rural areas and usher in a more optimistic spirit.
Better education would enhance the job skills of working adults. It’s also essential to develop more extensive vocational technical training programs that add impetus to the manufacturing and construction sectors.
Meanwhile, foreign companies opening up offices in western China have to recruit talent and offer incentives to retain employees. Such additional measures can help the western region bask in the benefits of economic expansion.”
We have plenty of good reasons for explaining China’s economic miracle, but we can’t ignore culture as well.
The Chinese have demonstrated close links to Confucianism that supports hard work ethic for the greater good of the community while maintaining close family ties that spur social stability.
Taoist philosophical principles seek a balance of harmony and cooperation that have inspired many Chinese to move forward together for more long-lasting and prosperous economic development.
We anticipate that China’s future will continue to shine bright on the horizon, despite obstacles that may come its way. The rise of China remains inevitable for the time being.
Today I had the pleasure to listen to the very interesting and informative presentation by Mr. Gang Wei (Deputy CEO at CEVT) and Mr. Niklas Wahlberg (Lindholmen CEO) on their successful story of CEVT and the innovative cluster Lindholmen’s Science park in Stockholm. “Think big, find a way and take action” is a deep aspect and crucial part of entrepreneurship.
What I have learned today is to believe your vision and continue the journey even you will encounter difficulties.
Exports of passenger cars contributed to the net trade in China turning from negative to positive last year according to Peter Warda, analyst at Business Region Göteborg.
Yesterday I had several interesting meetings in Gothenburg to discuss with my clients about collaboration, exchanged ideas and explored new possibilities. I am so grateful for this wonderful day with new experiences and inspiration. Have a nice weekend to all of you!
Yesterday I attended an fantastic lecture in Jönköping by Fredrik Reinfeldt about globalization, China’s impact on global economy, digitialization and what we should think about in the coming 20 and 30 years ahead to cope with the future developments. A rewarding day ended by a successful meeting.
Today I had the honour to meet the delegation from CCPIT in Fujian province (39 million inhabitants) accompanied by the Chinese Embassy’s Commercial Counselor in Stockholm of Mr. Han Xiaodong.
During the meeting we discussed about how we could overcome challenges and obstacles that could arise in terms of trade and bilateral cooperation, but with a positive attitude, good communication and the mutual interest of trade can lead us to a prosperas collaboration in the future.
I was honored to give my support during the delegation’s visit from Zhangjiakou and be the interpreter for the mutual discussion of a deeper collaboration between Skövde and Zhangjiakou. To contribute a successful bilateral cooperation within environment, industry and education between these two cities is my great passion and vision. I look forward to further challenges in these areas.
Photo: Linus Hellman (Source: SLA)
Recently I conducted an exciting interpreting assignment for a major manufacturing company with their important Chinese customer in Sweden. It is always positive to support our client with help and also have the great pleasure of contributing to a successful business that leads to a signed agreement for commissioning.
It is particularly important by making decisions that both partners understand each other without any misunderstanding. That’s the reason even an apparently simple discussion can end in distortion without the help from an interpreter. Especially when English is not always enough to reach everybody, an interpreter is almost an emergency to achieve success.
I wish them all the best and success of their cooperation with China!
Recently I have organized a workshop about the Chinese meeting technique for a well known company. It was a fantastic experience to share my knowledge to my client and see the development of the positiv collaboration with their Chinese partner. Workshop about the Chinese meeting technique creates new business opportunities. Please contact firstname.lastname@example.org for further information.
It was my great pleasure to be the interpreter for the start meeting of student exchange project between Västerhöjd in Skövde and Dayu High school in Beijing. Really exciting to see the positive development of this project that enables the students from both schools to have culture and knowledge exchange!
Photo: Petra Lundgren (Source: SLA)
Our Chinese clients are searching business partners in the chemical and petrochemical industry, aerospace industry, medical technology, genetic engineering and environmental technology. If your company are interested please send an email to: email@example.com and we are looking forward to hearing from you!
It’s no surprise for anyone that the economic growth in China makes the country to become the world’s largest economy according to the IMF (International Monetary Fund) in September 2014 measured in purchasing power. That moves the country into the ranks of middle income countries and will have a profound effect worldwide.
But recently since last year, China’s economy grew at its slowest pace in 24 years as property prices dropped, companies and local governments struggled under heavy debt burdens, keeping pressure on central government to take serious steps to avoid a sharper downturn according to Reuters.
After roughly 30 years of GDP growth by 10%, now China’s GDP grew by 6.9% and the added-value industrial output grew by 6.2% in November 2015. China’s Foreign Direct Investment increased by 7.9 percent to USD 114.04 billion in the first eleven months of the year.
Exports from China declined by 6.8 percent to USD197.24 billion in November of 2015, the fifth straight month of fall, while imports to China dropped 8.7 percent to USD143.14 billion, following a 18.8 percent decline in October. It is the 13th straight month of decline, as a result of declining commodity prices and weak demand. Exports and Imports in China is reported by the General Administration of Customs.
How will the slower growth of China’s economy influence the European market and especially the Swedish companies’ investment in China?
This question is relevant for many Swedish organisations who are interested in the Chinese market. Recently I held a lecture for a Swedish bank in Skövde, the topic of the lecture was about the Chinese current economic situation and its impact for the Swedish companies and organizations who are going to trade or invest in China.
“The country’s period of miraculous break-neck growth is over, but let’s get over it,” said a commentary on the official Xinhua news service, referring to a long string of double-digit expansion.
China’s economic reforms must be implemented even if it becomes painful, stated Premier Minister Li Keqiang after the People’s Congress meeting in March. At the same time, it seems a new wave of cutbacks in state-owned enterprises will be on the way. Swedish companies have increased their use of RMB in their business with China in the last two years. Globally, the Chinese currency, standing before a breakthrough this year, according to the experts from Commercial Bank. Major changes in the regulatory framework is underway for foreign investment in China. It will be easier to establish companies in non-sensitive sectors of the economy while the control tightened in sectors such as telecommunications, energy and agriculture. The example of the free trade zone in Shanghai spread. Three new free trade zones should be set up in Guangdong, Fujian and Tianjin. It could increase with time. Most northern European and German companies expect higher sales in China this year, according to SEB’s latest survey.
China’s economic growth will probably continue for some time and, if it does, it is going to have a profound impact on the world’s economy.
Source: China Internet Watch
According to “China Internet Watch”, Chinese online shoppers prefer to take advantage of the occasional promotions to buy imported goods; and, they also prefer imported goods at promotions, accounting for 65% of online FMCG (fast-moving consumer goods) sales according to Bain & Company and Kantar Worldpanel research.
Online shoppers are very interested in imported goods and goods on sales, which is one of the biggest features of China online shopping. About 38% of online sales come from big online activities such as Double 11 and Double 12. Alibaba revenues reached 57.1 billion yuan (US$8.98 billion) on Double 11 2014, which set a record in history of online shopping. Imported products are also very popular on the internet, which accounts for about 40% of total online sales while offline only for about 10%.
China FMCG market grew by 5.4% in 2014; the growth three years ago was 11.8%. However, online FMCG sales grew by 34% in 2014. 60% of online retail sales came from newly created demand while 40% as replacement of offline sales.
The variety of FMCG goods Chinese consumers buy online are limited. Skin care products, baby formula milk powder and baby diapers, health-related, and easy delivered goods sell best online. Top ten popular online FMCG sales categories account for 77% of the total online sales while the offline only 43%.
Chinese consumers are likely to purchase overseas goods and luxury or upscale goods although sometimes that prices online are much higher than those offline. For example, the average price of toothbrushes online is 102% higher than that of offline, as well as beer and hair conditioner.
Source: China Internet Watch
We always want to find people who can inspire us. Being able to share your story with others and having the strength and courage to be honest with yourself can give inspiration to those around you. Today I had the opportunity to tell my life’s journey from China to Sweden for students from different countries at the Folkuniversitet of Skövde. When I saw the students I reminded myself when I came to Sweden for around 17 years ago, who could not so much Swedish and everything was new for me. In the beginning my greatest desire was to master the language and find a job. My story made me think about what I had gone through in my life, from my study and career in China to my professional life in Sweden and how I became an entrepreneur. It was a long journey with lots of challenges, joy and learning. By showing them that I was comfortable with myself and confident about whom I am, and at the same time being passionate about my work can hopefully provide an example for them. My greatest wish to them is to believe in themselves and determine a plan to achieve in their life while maintaining a positive outlook.
I really hope that my story inspired the students at the Folkuniversitet of Skövde. What I took with me today is a great joy and a good time to being with them. I am convinced that they will succeed in their new country for any challenges that may arise. It was a fantastic day!
I was so pleased and honored to meet the delegation from South China yesterday in Stockholm. During the meeting we received information about the different sectors that our chinese counterpart are interested for collaboration with Swedish companies. We hope that this meeting is the begining of a sustainable cooperation between our Chinese partner with Swedish companies who will show the great interest. It is also my passion to provide assistance which will lead to a successful business journey.
Recently, I have just completed a Chinese Culture Awareness Training at a large company in Skovde. All participants showed great interest in this program. Evaluation and feedbacks I received was very positive which increased my interest to support Swedish companies to understand more about the Chinese business culture, mentality and their leadership. This can facilitate their cooperation with their Chinese partners.
Over the past two weeks, I held a Chinese cultural training at a large company in Skövde. After the training I received positive reviews and feedback from all of the participants. My cultural training highlighted issues about Chinese business culture, leadership and collaboration which was of great interest to this company. I hope that this cultural training will contribute positively to their cooperation with China.
An article published on 14th January on TECHINASIA that China’s Ministry of Industry and Information Technology (MIIT) announced, that the country is loosening regulations in its Shanghai Free Trade Zone, and will now permit wholly-foreign-owned companies to operate within that zone in the “online data processing” and “transaction handling” industries. The announcement specifically states that this includes ecommerce companies.
Until now, Chinese regulations have restricted foreign access to many technology-related industries, requiring foreign tech companies to form joint ventures with local partners to release their products in China. Even in the Shanghai Free Trade Zone, those rules have persisted – they’re the reason Microsoft and Sony were both forced to choose local partners to launch their game consoles, for example. But today’s announcement opens the door completely for foreign ecommerce firms that would rather go it alone.
Of course, this new freedom is still just a trial run. MIIT’s announcement also asks Shanghai’s government to take care in guiding and overseeing foreign-owned companies taking advantage of the new rules. If things go poorly, MIIT might well shut the experiment down. And of course, there are often good reasons for foreign companies to choose a local partner even if it isn’t required by law: China’s ecommerce market is different from many others, and foreign companies that tried to go it alone in the internet’s early days failed pretty miserably.
Still, the change represents a pretty exciting opportunity for foreign ecommerce companies, even if China’s ecommerce market is already dominated by some pretty powerful players.
Today I have just finished a culture training by a company in Skövde. The feeling I gained from my client was fantastic. I really hope that this opportunity can give them useful information and insight about the Chinese business culture.
When we talk about doing business with China, most of us can relate this subject to the culture difference and how we should handle correctly in different business situations. In Sweden we are used to do business on purely commercial ground while Chinese focus mostly on the personal relationship which is called Guanxi. Without a well-established Guanxi with your Chinese counterpart, it is almost impossible to continue a business relationship. When a company’s goal is to succeed their business with their Chinese partner, it is crucial to understand the Chinese culture, history, mentality, the business background in the Chinese market.
China should be regarded more like a large continent than a country. Its business culture and history can differently explicate business concepts and systems which seem apparently similar or even identical to Western ideas. But in many areas, China has its distinctive traditions that affect every section of an enterprise, from complicated legal issues to the way that things should be done according to the Chinese tradition. Therefore to understand the uniqueness of China can avoid mistakes of misunderstanding the culture differences.
China is a fascinating nation and an attractive place to do business. The country provides the opportunity of a dynamic market with huge potential that allows companies and entrepreneurs freedom in establishing business from scratch. With its rapid development into a global economic and political power the world has ever seen, there are plenty business opportunities in this huge market, but it can also indicate a big challenge for the Swedish companies to enter.
I believe it is essential for business success to adapt the Swedish business strategy to the Chinese reality while carefully maintaining your own integrity.
According to CCTV News, Shanghai’s Pilot Free Trade Zone confirmed new international finance regulations on 1st August that are expected to be a significant boost to companies in the zone.
The Shanghai Free Trade Zone encourages cross-boarder cash flows. Because in the FTZ, companies are able to borrow RMB from the international marketplace, and that gives them lower costs and simpler operations.
The new FTZ regulations taking effect on 1st August allow businesses within the zone to finance offshore after simply filing out one document. They may borrow RMB in Hongkong, for example, at the Hong Kong interest rate of around 3%, which is about HALF the rate in the Chinese Mainland. It’s a big step for cross-border finance in China.
“The Regulations allow companies in the zone to borrow RMB overseas and use the money in the Free Trade Zone. Once these companies have registered Free Trade Accounts, the RMB they borrowed from other countries may even be used to supplement other businesses, even if they’re not in the Free Trade Zone.” Said professor He Xiaoyong, associate Director of Institute of China FTZ Law.Continue reading