flanders-china chamber of commerce

Group Business Trip West-China (FIT) – 9-13 September 2013 – Chongqing and Chengdu; and FCCC Breakfast Seminar – 11 September 2013 – Chongqing

agx — Wed, 22 May 2013 13:28:25 +0000

Flanders Investment and Trade (FIT) is organizing a group business trip to West-China, an enormous market. Minister-President Kris Peeters is leading the trip from 9 till 13 September 2013 to Chongqing and Chengdu.

On September 11, the Flanders-China Chamber of Commerce will organize a breakfast seminar in Chongqing.

Following the East, West China is now also starting to develop economically. Chongqing is under the direct authority of Beijing and is China’s most populous (30 million inhabitants) and biggest (82,000 sq km, 2.5x Belgium) city. Chengdu (14 million inhabitants) is the capital of Sichuan province and as Chongqing an important economic center in West-China.

Opportunities for Flemish companies: Thanks to the economic development of West-China, there are several nice opportunities for Flemish companies. Important industries in the area are: foodstuffs, automotive, textiles, machinery, electronics, steel, pharmaceuticals, IT and the services sector.

FIT will organize an individual tailor-made meeting program (B2B), high-level business contacts, and official networking receptions.

Full trip: €800, per city: €400. Registration before June 14 on the FIT website.
http://www.flandersinvestmentandtrade.be/acties/2013/09/09/Groepszakenreis-Multisectoraal-China?opendocument

FCCC publishes “FCCC Members’ Portraits in China Vol.2”

agx — Tue, 21 May 2013 09:46:11 +0000

The Flanders-China Chamber of Commerce (FCCC) has published the second volume of “FCCC Members’ Portraits in China”. The booklet includes 17 portraits of member companies active in China. The China-based managers of those companies talk about how their firms became active in the country and the difficulties and pitfalls they faced to become successful in the largest and most challenging market on earth. They offer valuable insights and lessons about how to do business in China. Each manager interviewed makes a list of “do’s and don’ts” based on their own hard-won experience. “All of them, without a single exception, enjoy their work and stay in China, despite less pleasant phenomena such as the worsening air pollution,” says FCCC Chairman Bert De Graeve in his introduction.

Some of the companies presented in “FCCC Members’ Portraits in China” are well known, such as Volvo Car, which is now part of Geely Holdings. But the story of how the company is building two car plants in China has never been told as extensively before. Other companies, such as Huiyin Group, which is active in the solar power industry, and Klako Group, which is guiding its clients to become successful in China, are not so famous, but have an equally fascinating story to tell.

Trying to write a write a book “Doing Business in China for Dummies” is futile, one of the managers told the Flanders-China Chamber of Commerce. More fundamental than that is an underlying attitude. Respect the Chinese you come into contact with and be interested in their culture. Remember, he added, that you are and will always remain a guest in their country. Above and beyond the usual tips and tricks, the managers telling their story in this booklet show the right attitude to become successful in China.

“The growth of the Chinese economy is slowing down a bit,” says Chairman Bert De Graeve in the introduction, “but at 7.8% last year, it is still growing strong to offer a myriad of opportunities.” For those companies which have not yet taken the step to open a representative office, set up a subsidiary or form a joint venture, it is probably not too late yet to enter the Chinese market. “Do your homework” is one of the most frequently tendered pieces of advice for companies contemplating their first steps on the China market. One might as well start with “FCCC Members’ Portraits in China, Volume 2”.

FCCC members can receive one copy free of charge.

List of interviews (companies in alphabetical order):
ACEA (Dominik Declercq), De Wolf & Partners (Philippe Snel), Eurbridge (Jan Van der Borght), Huiyin Group (Juha Ven), Jones Day (Sébastien Evrard), Klako Group (Kristina Koehler), LMS (Luc Pluym), Moore Stephens (Andries Verschelden), Neuhaus (Frédéric Linkens), Orientas (Dirk Laeremans), procurAsia (Etienne Charlier), Proviron (Vanessa Doms), Soudal (Eddy Vloeberghen), Urban Stream (Sébastien Goethals), Volvo Car (Koen Sonck and Benoit Demeunynck), White Pavilion (Raf Vermeire), and Wyatt & Wang (Jacques Borremans).

Income from fees and commissions rises

agx — Tue, 21 May 2013 09:45:24 +0000

Chinese banks’ income from fees and commissions increased by 24% in the first three months of 2013 compared with the same period in 2012, a significant improvement on the 17% rise between 2011 and 2012, according to Geoffrey Choi, Financial Services Partner at Ernst & Young Hua Ming. “Such income from intermediary business accounted for only 23% among Chinese lenders, suggesting huge room for further development if compared with international counterparts,” he said. In 2012, net profit growth of Chinese listed banks was 17%, down 12 percentage points from 2011. In the first quarter of 2013, profit growth fell to 13%, compared with 25% during the same period last year, Choi said. Affected by the ongoing interest rate liberalization process, the net interest margin continued to fall. “Banks must continue to optimize their international capital allocation, alter the development mode which seeks profits based on consumption of capital and improve their capacity to accumulate capital,” Choi said. Liu Shiyu, Vice Governor of the People’s Bank of China (PBOC), said earlier this month that the major Chinese banks might see a capital shortage of CNY40.5 billion in 2014 if they kept growth and internal financing at current levels. The Ernst & Young report found that the listed banks had increased client numbers and online/mobile banking transactions substantially last year. By the end of 2012, Industrial and Commercial Bank of China (ICBC) had 315 million
electronic banking customers. The proportion of its online business to total transactions has reached 75.1%, while its mobile banking business has increased 54.5% compared with the year earlier, with transaction values jumping nearly 16 times. Online transactions at Bank of China (BOC) rose nearly 33% year-on-year, while the number of mobile banking clients at China Merchants Bank (CMB) surged 115%, the China Daily reports.

Hong Kong Mercantile Exchange suspends operations

agx — Tue, 21 May 2013 09:44:40 +0000

The Hong Kong Mercantile Exchange (HKMEx) has suspended activities and handed back its trading license to regulators two years after opening as it had no sufficient cash to cover nine months of operations, a requirement set by the Hong Kong Securities and Futures Commission. The Exchange will however go ahead with a planned USD100 million rights issue and be ready within months to reapply for the trading license. HKMEx Chairman Barry Cheung said the closure would have no impact on investors and that client contracts would be honored. HKMEx was working with LCH.Clearnet to arrange settlement pricing on the exchange’s roughly 200 outstanding contracts. Chairman Cheung said the rights issue would solve the Exchange’s financial problems. “This exercise will raise USD100 million. It will be sufficient to meet the SFC’s requirements as well as to support the exchange’s operations for the next three to four years,” Cheung said. The next few months would be spent redefining strategy, finalizing the rights issue and closing negotiations with potential strategic shareholders in a bid to reapply for the license. The Hong Kong Mercantile Exchange’s failure to come up with a viable gold futures business proved to be its undoing as it wilted under competition from more established domestic and international exchanges, market participants say. Originally designed to be a platform for fuel oil futures, the HKMEx ended up being an exchange for gold contracts. HKMEx’s daily transaction volume amounted to about USD19.5 million, only a fraction of the daily turnover of USD7.7 billion to USD10.3 billion on its rival, the 103 year-old Chinese Gold & Silver Exchange.

Goldman Sachs earns USD7.72 billion from ICBC partnership

agx — Tue, 21 May 2013 09:44:06 +0000

Goldman Sachs is set to raise USD1.1 billion with the sale of its remaining stake in the Industrial and Commercial Bank of China (ICBC), the world’s largest bank by assets. Goldman earned net profit of USD7.72 billion on its seven-year investment. The move is the sixth disposal of ICBC shares by Goldman, bringing to an end the strategic partnership the two banks had established. New York-based Goldman bought a 4.9% stake in ICBC for USD2.58 billion before the Chinese bank’s initial public offering in 2006. The disposal could ease the capital pressures on Goldman. It also lets the bank lock in its gains at a time when Chinese lenders are set to report slower growth in net earnings as bad loans build up and interest rate deregulation sets in. ICBC’s first quarter net profit climbed 12% year-on-year. The sale by Goldman, despite repeated assurances over the past few years that it was a long-term investor in ICBC, was expected to affect confidence in the shares of Chinese banks, analysts said.

New guidelines for investment in West China

agx — Tue, 21 May 2013 09:43:24 +0000

The National Development and Reform Commission (NDRC) has revised its policy guidelines to encourage more foreign investment in the industrial upgrade of the country’s central and western regions. The new guidelines, which will become effective on June 10, include details of favorable policies and incentives being offered in mostly labor-intensive industries and service sectors. The guidelines expand the type of eligible foreign investment being encouraged, and added another 173 key target sectors. They now cover a total of 500 types of sectors, across 22 provinces and regions. The vehicle-assembly sector, which was removed in the previous version of the guidelines, has been re-included. However, the new list strictly prohibits any investment into the industrial transfer of highly polluting and high energy-consuming projects in central and western areas. The new set of guidelines replaces a previous version issued at the end of 2008, and is the third version since first being introduced in 2000. In the first four months of this year, the use of foreign funds in central and western areas rose 5.7% and 25.7% respectively, while it fell 1.1% in eastern regions, although the absolute amount was still relatively small. Combined foreign investment in central and western provinces totaled USD19.2 billion in 2012, around 17.2% of total investment, a significant increase on the 4.2% in 2008. Chengdu has become a bridgehead for foreign investors entering the market. According to a survey of 420 U.S. companies operating in China, conducted by AmCham Shanghai, Chengdu is the most popular second-tier investment destination for U.S. companies, the China Daily reports.

Mengniu and Cofco to set up joint ventures with Danone

agx — Tue, 21 May 2013 09:42:43 +0000

China Mengniu and Danone agreed to set up a yogurt joint venture. Mengniu, based in Inner Mongolia, is expected to benefit from its new European partner’s management experience and product innovation capability, as it seeks to leave food safety scandals behind. For Danone, the investment in Mengniu is its latest effort to expand in China after its decade-long cooperation with Hangzhou Wahaha Group, the largest soft drink manufacturer in China, ended in 2009. Mengniu’s share price rose the most in four years after the announcement of the deal. Danone will own an indirect interest of about 4% in Mengniu through forming a joint venture with Cofco, Mengniu’s largest single shareholder, and may increase the stake in the future. Danone will own 49% of the joint venture and Cofco the remaining 51%. Danone will also take a 20% stake in a venture with Mengniu for the production and sale of chilled yogurt products. Danone will assign senior executives to assist Mengniu to improve management. It is investing about €325 million in the two projects. Danone is the second overseas partner introduced by Mengniu in the past year. Last June, it signed an agreement to sell a 6% stake to the Danish-Swedish Arla Food and establish a plant with Arla. Mengniu has been involved in several food safety scandals in recent years, the latest being in December 2011, when the cancer-causing aflatoxin M1 was found in some milk products, the South China Morning Post reports.

Dispute arises between China’s three arbitration bodies

agx — Tue, 21 May 2013 09:42:12 +0000

The dispute between, on the one hand, CIETAC (China’s oldest arbitration body established in 1956) and, on the other, SHIAC (the new Shanghai International Arbitration Center) and SCIA (the new Shenzhen Court of International Arbitration), has recently come to a head. The two new international institutional arbitration bodies appear to have evolved out of CIETAC’s representative offices in those cities but are now trying to gain their independence. CIETAC adopted new arbitration rules which said CIETAC Beijing would have jurisdiction over arbitrations, unless the parties specifically provided for one of CIETAC’s representative offices to arbitrate. But CIETAC’s offices in Shanghai and Shenzhen refused to apply the new rules. The dispute also reflects competing financial interests and issues of independence in Shanghai and Shenzhen. During the course of 2012-13, CIETAC Beijing purportedly suspended CIETAC Shanghai and CIETAC Shenzhen and established new secretariats in the two cities. CIETAC Shanghai and CIETAC Shenzhen declared their independence. Both have their own websites, logos and branding, having been forbidden from using CIETAC’s. SHIAC adopted its own arbitration rules and panel of arbitrators, effective from May 1. SCIA adopted its own rules in December last year. CIETAC has refused to accept the legality of SHIAC and SCIA or their authority to determine arbitrations. CIETAC arbitration awards have generally received widespread recognition in the courts of China and overseas as a result of CIETAC’s reputation and China being a party to the New York Convention (Recognition and Enforcement of Foreign Arbitral Awards). It is not yet entirely clear whether arbitral awards arising out of SHIAC or SCIA will receive the same degree of recognition. Much may depend on whether the courts in Shanghai and Shenzhen recognize orders and awards arising out of arbitrations conducted by SHIAC or SCIA, the South China Morning Post reports.

Grand 10-year development plan for Pudong approved

agx — Tue, 21 May 2013 09:41:33 +0000

A 10-year plan for Pudong, or the eastern part of Shanghai, that is grander and bolder than anything that has ever been conceived before, has been approved. The plan encompasses an area of 28 square kilometers, including the Waigaoqiao Free Trade Zone, Yangshan Free Trade Port Area and Pudong Airport Comprehensive Free Trade Zone. The area is almost the same size as Macao, and its trade volume topped USD100 billion last year. The Shanghai free trade zone is expected to have a bigger impact than development zones in Shenzhen or Tianjin. The project, mapped out at the beginning of this year and approved last week, is the first of its kind in China. It will be submitted to the central government later this month for final approval. The free trade zone plan is one of the Shanghai municipal government’s major tasks for 2013. Shanghai’s free trade zone is not expected to pose a threat to Hong Kong, which has still more open policies. Zheng Weimin, Researcher with the Chinese Academy of Social Sciences (CASS), said that Shanghai and Hong Kong play different roles in the Chinese economy and their functions are complementary.

China’s rice imports expected to surge

agx — Tue, 21 May 2013 09:40:50 +0000

Despite its efforts to boost grain yields for the 10th consecutive year, China is expected to become also the largest rice importer this year, overtaking Nigeria. Rice imports this year will surge to 3 million metric tons from 2.34 million tons a year ago, according to a report by the United States Department of Agriculture. Since 2012, “consumption demand for rice in China has exceeded supply”, the report said. China’s rice imports hovered around 450,000 tons per year over the five-year period that ended in 2011. Analysts said that the country has no shortage of rice supplies and blamed the expected surge in imports on the price discrepancy between the domestic and global markets. The discrepancy is a result of the government’s minimum grain purchase price, which aims to shore up domestic grain prices after they declined in the global market due to weak demand and increased rice yields in recent years, analysts added. “The government should allow the purchase price to have some flexibility, so that it fluctuates according to the international market,” said Ma Wenfeng, Senior Analyst at Beijing Orient Agribusiness Consultant, one of the industry’s largest specialist consultancies. Lured by low global prices, “Chinese companies are very willing to import”, Ma added. During the first three months of the year, China’s rice imports jumped 192% from a year earlier to 690,000 tons, Chinese official trade data showed. Imports of other agricultural commodities are also expected to increase. The country’s soybean imports are expected to rise by 10 million tons from a year ago to 69 million tons, according to the USDA forecast. China’s grain output reached 589 million tons in 2012, the ninth consecutive year of increased harvests, the China Daily reports.