Transcript China’s Business Environment in the Coming Years Dr. Qiwei Chen Asia Business Consulting Co., Ltd Oct,2004

China’s Business Environment
in
the Coming Years
Dr. Qiwei Chen
Asia Business Consulting Co., Ltd
Oct,2004
Key Points
• The growth momentum could be kept
• Restructuring of the economy is bringing an
unique huge business opportunity
• WTO entrance rushes the changes of and
challenges to the whole society
• A stable and strong RMB means a rather reliable
business environment
1、The growth momentum could be
kept at an almost same pace in the
years ahead
Some Economic Data
• From Jan. to Sep., GDP totaled 1.13 trillion US
dollars, a 9.5% rise year-on-year, 0.6% higher than
last year
• Agricultural added value reached 152.4 billion US
dollars, up 5.5%, industrial added value rose 10.9%
to 623.9 billion dollars, and that of the service
sector jumped 8.5% to 350.7 billion dollars.
Growth rate %
Quarterly GDP (Adjusted by SARS)
Quarterly GDP (Not Adjusted )
Growth rate %
Industrial added value (monthly)
Macro-adjustment policy is working
• The fixed-asset(capital
goods) investment has
lessened but some
problems still exist and
the curbs on lending and
investment may not be
relaxed in the near future.
%
Fixed-asset investment
The growth momentum
• The past two decades’ reform in China injects huge vigor
to the economy.
• Domestic consumption demand is going up.
• Overseas direct investments keep on rising.
• Private sector is playing a more and more important role
in the economy.
• 2008 Olympic Games and 2010 World Expo are keeping
forces driving forward China's economy.
More potentials
• "Great Development in the Western Areas of China" and
"Reinvigorating the Old Industrial Base“.
• The rising farmers' income will be favorable to spur the
domestic demand as a whole.
• Stressing the need to develop science and technology
will spur innovation and growth.
• As a more important participant, China will be a more
positive player in the growth of the world economy.
2、Restructure of the economy and the
opportunities
Tremendous support on agriculture
• To balance the economy, the government carried out a series of
policies to support agriculture and raise farmers’ income.
• The so called “shortage of migrant workers" reflects shrinking labor
supply. This is partly caused by the central government's policy effect
to increase farmers' income which gives incentives to farms to stay at
the land instead of working at sweatshops in urban areas.
Shifting to market-based systems
• Focus on the improvement of corporate
governance, the promotion of the non-state
sector and the protection of property rights.
• Building up further a market oriented behavior
and credit system by regulation and law.
• Private ownership will be or is becoming a
fundamental building block of the economy.
SOEs’ strategic adjustments
• The diversification of the ownership structure.
• Focusing on core competency, restructure the
SOE sector through spin-off,mergers and
acquisitions with market power and
administrative means, which bring in huge M&A
opportunities.
3. WTO Entrance Effects
Enjoying and suffering
• Since entering WTO, China has been increasingly involved in the
world economy and society.
• To meet the commitments in WTO, China has speeded up reforms
in a lots of fields such as finance and services.
Finance System
• Access to WTO has led to a significant opening of
industies to foreign participation. For example, in some
major cities, foreign funded insurers have more than
30% market share.
• Foreign investors have been already participating in
some Chinese major banks.
• China has pledged to expand the scope of RMB loan
business gradually and to eliminate all geographical
restrictions at the end of this year.
Manufacture
• Chinese businesses are adjusting to the game rules in the
world markets.
• Chinese color TVs are a typical example. They are the
focus of anti-dumping cases. Chinese manufacturers
begin to learn to make and promote products with high
quality, high technology content and high value added.
And this proves to be right and successful. In China
market, digital TVs have a promising prospect as digital
TV programs will dominant the screen by 2010
Retail and tourism
• Competition among foreign retailers in China has heated up.
Foreign-funded firms now account for about 30 percent of the largesized supermarkets. Such multi-national retailers as Wal-Mart and
Carrefour have already earned a solid market and growth potential
in China.
• New channels of distribution and sales such as licensing,
franchising and direct selling have been introducing in or releasing
in China.
• With fast growth in international tourism, China has an ambitions to
become, by 2020, the fourth largest source of tourists in the world
and the top tourist destination.
4、RMB will keep stable and strong
USD nominal rate (NEER,1973-03-100) (left)
RMB 12 month NDF (right)
RMB/USD
RMB nominal rate (NEER) (left)
China CPI (right)
Growth rate %
Stable system contributed to the economy
• China is seeking a gradual and evolutionary reform of
China's exchange rate system.
• China's exchange rate system is appropriate to the
country's financial situation. The stable currency policy
enabled China to successfully stabilize the currency
(RMB) and withstand the impact of the Asian financial
crisis in 1997.
• The stability of the exchange rate safeguarded the
country's daily financial operations.
RMB will keep stable
• Chinese financial sectors is still not ready for the
risks if RMB floats freely. China is speeding up
the establishment of risk management
mechanism within the banking system but it
takes time.
• A stable exchange rate does not necessarily
mean a fixed one, but still has no clear timetable
of change
RMB will keep strong
• If RMB would get stronger gradually it would be
because of the strong economy and the change
of the exchange rate pegging system itself
instead of purely outside impacts.
谢谢！
Thank You
Attachment：
Introduction of ABC Corporate
Oct, 2004
2004年5月
Asia Business Corporation Profile
• Asia Business Corporation has a diversified stakeholder base,
distinctive specialties and outstanding competence. As one of
the best capital-operating groups, we specialize in strategic
operation of industrial & financial capital. Our business scope
includes management consulting, private equity, industrial
investment and some investment banking business.
• The Group consists of several specialized corporations, each
has it’s own advantages. The registered capital of the group is
1.07 billion RMB, total asset is about 3 billion and net asset is
about 1.8 billion.
The core assets and competence of ABC
The core assets of ABC:
• Excellent employees
• Professional teams
• Capital Accessibility
• The core competence of ABC: high efficiency
in resources synergy
The advantages of ABC
• The capability of professional planning and
efficient implementation in the fields of strategy,
management and marketing.
• Effective communication channels with the
government and a wide client network.
• Global resources and vision.
The companies belonged to the ABC
The companies belonged
上海亚创投资发展有限公司
Shanghai Asiabiz Assets Management Co.
to the ABC are all
managed by excellent
professional teams in
盈泰证券有限公司
WINTECH SECURITIES
respective areas under
mature models.
Leading company:Asia Business Consulting Co.,Ltd
• As one of the most famous management consulting companies, Asia
Business Consulting Co., Ltd. is widely respected for its efficient strategic
executive competence. The registered capital is 50 million RMB. Since
1993, the Company has provided consulting services, including planning
and executing of strategy management to more than 200 companies. These
companies include private companies, listed companies, large state-owned
corporation groups and companies that are directly operated by
government. The company has successfully organized the ‘Top 50 Listed
Companies’ ranking activity in cooperation with China Securities since 1999.
The ranking earned highly attention and helped establish a broad clients
meshwork.
Core company:Shanghai Asiabiz Holdings Co.,Ltd
上海亚创控股有限公司
Shanghai Asiabiz Assets Management Co.
Shanghai Asiabiz Holdings Co., Ltd is a large professional investment corporation,
involving in financial asset management, industrial investment and consolidation,
industrial park development, infrastructure investment, property development,
strategic investment, etc. Based on internationally competitive management
structure, Asiabiz has been making outstanding investment performance since it was
established. The current registered capital reaches RMB 450 Million.
The recent projects Asiabiz involves in are: Chengdu Southwest Automobile Service
City, Ningbo Electronic and IT Industrial Park, Shanghai International Lidu Serviced
Apartments, Chongqing Sports Centre, etc. The amount of overall investments is
more than RMB 3 billions.
Main company:PanAsia Strategy Investment Co., Ltd
•
PanAsia Strategy Investment Co., Ltd. is the first professional
private equity investor in China with the current registered capital of
RMB 150 Million. PanAsia focuses on the enterprises that have the
potential for high-rate growth, helps them promote their value by
inputting capital, management capacity and other external resources
to optimize corporative ownership structure, industrial value chain,
etc., and finally realize the added value through capital market.
Main company:
Chengdu SunRising Venture Capital Co., Ltd
•
Chengdu SunRising Venture Capital Co., Ltd., partially owned and
managed by PanAsia, is the platform of PanAsia to engage in venture
& private equity concentrated on hi-tech enterprises in certain regions.
The registered capital of SRVC achieves 100 million. The companies
it
invested
include
Chengdu
Yaoyou
technology、Chengdu
Weishitong Software etc. They are all well performed. Two of them are
ready for listing, one in Hong Kong Venture Band and the other in
domestic main board.
Overseas leading affiliated enterprise:
Hong Kong Wintech Global Holding Co.,Ltd.
盈泰证券有限公司
WINTECH SECURITIES
•
The Hong Kong Wintech Global Holding Co.,Ltd,is a powerhouse
of oversea financing and industrial investment in mainland China. It
owns a HESK member Wintech Securities, which provides listing
services for Chinese enterprises in Hong Kong and other oversea
markets, as well as investment banking services, such as financial
advisory services, underwriting services, for transnational M&A.
Important Research center:
China Venture Capital Research Center
• The CVCRC is a substantial research organization founded by ABC
and Shanghai Jiaotong University; focus on research, academic
exchange, training and consulting. The advisory committee and
academic committee consists of many nationwide well-known
economists. The center has strong research capability and keeps
close cooperation with several worldwide famous research
organizations. Since founded, the center has successfully held
several capital research forums and intercommunion activities.
The strategic partners
• ABC dedicates to elevate our partners’ values in the
procedure of resources organization by establishing
strategic cooperation.
Some of our clients
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COSCO Development Co., Ltd.
Inner Mongolia Yili Industrial
Group Co., Ltd.
Beijing Tongrentang Co., Ltd.
Sichuan Changhong Electric Co.,
Ltd.
Shandong Dong-E-Ejiao Co., Ltd.
Fuyao Glass Group Industries Co.,
Ltd.
Qingdao Haier Refrigerator Co.,
Ltd.
Gemdale Corporation
Guangzhou Development Industry
(Holdings) Co. Ltd.
Jiangsu Telecom Co., Ltd.
Harbin Pharmaceutical Group Co.,
Ltd.
Shanghai Automotive Co., Ltd.
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Shanghai Join Buy Co., Ltd.
SVA Information Industy Co., Ltd.
Oriental Pearl Co., Ltd
Kaikai Industrial Co., Ltd.
Shanghai Jinfeng Investment Co.,
Ltd.
Shanghai Fortune Industrial JointStock Co., Ltd.
Baosteel Group Corporation
China United Telecommunications
Co., Ltd.
VANKE Co., Ltd.
Chang Ling (Group) Co., Ltd.
China Enterprise Co., Ltd.
China National Software & Service
Co., Ltd.
Bank Of Shanghai
Some strategic partners
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National Development and Reform
Commission, China Society of Economic
Reform
Development Research Center of the
State Of Council
State Owned Assets Supervision and
Administration of the State Council
State Owned Assets Supervision and
Administration of Shanghai Municipal
Government
Shanxi Provincial Government
Chongqing Municipal Government
Chengdu Municipal Government
The Administrative Committee of
Chengdu Hi-Tech Zone
The Administrative Committee of
Ningbo Hi-Tech University Park
Shanghai University of Finance &
Economics
•China International Capital Co., Ltd.
•China Overseas Holdings Ltd.
•Shanghai Jiaotong University
•East China Normal University
•University of Southern California
•Merrill Lynch Investment Banking GroupShanghai Branch
•Goldman Sachs
•Shenyin & Wanguo Securities Co., Ltd.
•Guotai Junan Securities Co., Ltd.
•China Galaxy Securities Co., Ltd.
•Hong Kong & Shanghai Banking Co., Ltd.
•Credit Suisse First Boston
•China Construction Bank
•Bank of Communications
Contact Us
ADD: NO.8 Building 2558 Yan An Road
Shanghai 201103
P.R.China
TEL: (8621)-62959001
FAX: (8621)-62958055
Http://www.abc.sh.cn
EMAIL:[email protected]
William Pu
谢谢！
Thank You