The Flanders-China Chamber of Commerce (FCCC) and VOKA West-Flanders organized a lunch session “New trends in China sourcing: Evolution and Practical Tips” on October 21 at Voka in Kortrijk. Guest speaker was Mr Etienne Charlier, Managing Director, procurAsia.

The China industrial context has drastically changed over the last 10 years. The combination of higher manufacturing costs and a more developed industry has serious impact on sourcing.
In his presentation, Etienne Charlier presented this main evolution and highlighted the new strength of the country for companies looking for outsourcing manufacturing or sourcing parts and systems. He also gave practical advice and tips for people who want to learn more about how to evaluate Chinese partners, what product to source from China, and how to manage suppliers you buy from.

Financial innovation advanced in Shanghai in the first half of the year. The indicator that measures the development of the financial industry rose 8.4% from the end of last year to 3,076 points by the end of June, according to a joint report by the Shanghai Financial Association and Munich-based consultants Roland Berger The indicator for the growth of Shanghai’s financial industry, however, fell 3.2% from the end of 2012 to 1,084 points by the end of June. The total assets of foreign banks in Shanghai accounted for 11.3% of the total assets of the local banking industry, down from 17.9% in 2012. Premium income of foreign insurers accounted for 14.6% of the local insurance market in the first half, up from 12.9% by the end of last year. The premium income of all foreign insurance companies accounted for only 1.2% of the industry’s total in the same period nationwide. Shanghai’s cross-border yuan trade settlement soared to CNY377 billion in the first half compared with CNY359 billion for the whole of 2012.

China’s overall debt level is in a safe and controllable range, Premier Li Keqiang said in a speech at the opening ceremony of the 21st International Congress of Supreme Audit Institutions, pledging to continually strengthen the auditing of loans by local governments to limit potential risks. The fiscal deficit-to-GDP ratio in China is 2.1% so far this year, lower than the internationally accepted alarm level of 3%. The National Audit Office (NAO) is now carrying out a survey of local government debt, and its results are due to be released in the next few weeks. The International Congress of the Supreme Audit Institutes is held every three years and is the highest authority of the International Organization of Supreme Audit Institutions, which was founded in 1953 and consists of the top auditing bodies of United Nations’ member states. A total of 686 representatives from 160 countries participated in the international congress.

China started publishing loan rates based on quotes from banks as it takes a further step toward establishing a market-based interest rate system. Nine banks, including China’s five largest state-owned commercial banks, submit the lending rates they charge their best clients on a daily basis, and the country’s interbank funding center will calculate and publish a weighted average rate based on the submissions, the People’s Bank of China (PBOC) said. The rate, known as the Loan Prime Rate, can be used as a reference for banks to set lending rates and will gradually replace the current benchmark set by the PBOC. The first reading was 5.71% for one-year lending, lower than the benchmark rate of 6%. The biggest banks will have the most clout in deciding the prime rates. The five biggest state lenders had combined assets of CNY63.8 trillion at the end of June, accounting for 44% of the industry’s total. The central bank said it would continue to publish benchmark lending rates to guide banks in setting reasonable rates during the transition period.

Coca-Cola Company opened a new bottling plant in north China as part of a USD4 billion investment plan to underscore its confidence in the growth of the Chinese beverage market. The USD106 million plant, Coca-Cola’s 43rd in China, is the company’s first facility in Shijiazhuang, Hebei province. With a population of more than 72 million and a per capita GDP of USD5,259, it is one of the most important growth markets in the country for the company, Coca-Cola said in a statement. The company’s volume sales in China grew 9% in the third quarter, led by an 8% increase in sparkling beverages. The beverage maker now has five plants, including the new one, in all five provinces in north China. The 170,000-square-meter new plant began bottling with both sparkling and still beverage lines producing Coca Cola, Sprite, Fanta, and Minute Maid. Three additional lines will be added to the facility over the next few years. The new plant in Hebei provides 2,000 jobs and generates 20,000 indirect job opportunities in the local community, Coca-Cola said. It is the largest of the 12 bottling plants in China operated by the joint-venture COFCO Coca-Cola. In the past five years, Coca-Cola has built eight bottling plants in China, including facilities in Urumqi, Nanchang, Wuhan, Luohe, Hohhot, Sanshui, Yingkou and Shijiazhuang.