Climbing the Wall! (Winning Business in China) . CHRIS LOWSLEY CHINA BUSINESS ADVISER UKTI SOUTHEAST Agenda вЂў вЂў вЂў вЂў вЂў вЂў The market, trends and developments New 5 year plan Success factors and exporting considerations UKTI/CBBC support for China business Market visit this November Summary Orientation вЂў Now 2nd largest world economy вЂў дё centre of the earth вЂў 22 Provinces (34 province-level administrative units) вЂў 200 million new consumers вЂў 500 million out of poverty in 20 years Market growth вЂў UK exports ВЈ6billion = 1% of China imports вЂў ВЈ17billion investment in China вЂў 400 Chinese companies now established in the UK вЂў New self confidence вЂў Weak western demand vs high domestic growth вЂў 10m + pa вЂ“ Expected urban shift Shanghai 1990 Shanghai 2010 Future focus in China вЂў 10% GDP growth in 2010 (over 15% in areas) вЂў 8% forecast for 2011 вЂў Domestic engine of Growth in next 20 years: - Automobiles /transport - Services - Urban Housing and Infrastructure - Environment - Health and social support - Higher value added manufacturing The 12th 5 -Year Plan 2011-2015 Highlights of plan : 1. Urban dwellers will reach 51% of population 2. Foreign investment focus on modern agriculture, High tech and Environmental industries 3. Nuclear power to be developed with safety as precondition. 4. Large scale hydro-electric plants to be built 5. A new airport in Beijing to be completed 6. Plus вЂ¦вЂ¦вЂ¦ Building 36 million low cost homes 45,000km of high speed rail track 83,000km of highway networks 10 Day traffic Jam вЂ“ Aug 2010 New Media Growth (Under 30s) вЂў вЂў вЂў вЂў вЂў 900m mobile phones 550m netizens (300m using mobile access) 68m - G3 users e-shopping and e-banking growing at 30% pa 150m regular e-shoppers Trends for China engagement Besides conventional exporting UK companies are expanding in:вЂў Designing, licensing, creating products and ideas for production in China for global markets. вЂў Using the creative base in China to enhance products and services in the UK вЂў Establishing own China base to serve China and regional markets. The winning recipe вЂў вЂў вЂў вЂў 1 2 3 4 A viable business first. As a viable export business As a business with growth potential in China Has the drive to learn and capacity to succeed Your Company вЂў Why are you looking at the China Market (your business reasons) вЂў Do you understand what your USPs are? вЂў Are you competitive in other world markets вЂў Have you evidence to show that a market exists in China for your Goods/service ( ie market research) вЂў Do you have a budget and resources committed. вЂў How do you propose to sell in China. Your customers in China вЂў Do you understand the geographic size of the market and know where to start. вЂў Who are the customers you wish to target (consumers, local companies, Foreign companies in China , or official bodies) вЂў (many SMEs enter China selling to, and encouraged by, foreign firms operating there and this is a more risk free option. вЂў Do you know how to carry out due diligence on customers/suppliers/partners Financial considerations вЂў Internationally experience in managing financial exposure. вЂў Are you prepared to accept lower margins (as China is one of the most competitive world markets) вЂў For internal sales in China payment will be made in RMB вЂ“ How are to be paid? вЂў Do you in-house credit controllers. вЂў Do you understand INCO terms and the logistics cost structure to land products in China. A China Market View Three distinct market segments:1. 2. 3. State controlled activities (business and Education) Chinese companies / Consumer market Foreign invested/owned businesses Routes to Market вЂў Appoint an Agent or Distributor вЂў Establish a local presence - Representative office - Wholly owned enterprise (WFOE) - Licensee - JV - Sell direct (internet presence) - Other UKTI вЂ“ CBBC China Network вЂў We have 4 UKTI trade offices in China + 11 CBBC offices offering local support to British companies. вЂў Subsidised tailored market and company information, guidance and advice and help to exhibit or visit the market. 21 UKTI Impartial advice focus вЂў Strategic and export business advice вЂў Market information and research вЂў Identifying partners вЂў How to promote/exhibit company products вЂў Support to visit markets and potential customers вЂў Support in market 22 Chongqing вЂ“ the heart of China Chongqing - Autonomous municipality Annual Business visit HK China Japan вЂў вЂў вЂў вЂў вЂў Date 20th -30 November 2011 Hong Kong, Chongqing, Shanghai and Tokyo. Assistance and economic briefings in each city Tailored visits to local and foreign businesses (optional) Flexibility to vary to own agenda or include other cities in China or the region вЂў Up to ВЈ900 grant towards costs for eligible South East companies вЂў 100% report clarity of next steps into China вЂ“ 60% plus report orders or inquiries as a direct result. вЂў Any interest let me know today! Easy Access to UKTI SE support вЂў вЂў вЂў вЂў National website вЂ“ www.ukti.gov.uk Local website вЂ“ www.uktisoutheast.com Export Talk Forum вЂ“ online advice Local customer services - 08452 789 600 Chris Lowsley China Business Adviser UKTI SE Tel : 07768067746 Email: email@example.com 26 Summary for success вЂў вЂў вЂў вЂў вЂў вЂў вЂў вЂў Not a single market be selective Very competitive вЂ“ expect lower margins Do your research carefully вЂ“ network others Take time and effort to find the right partners Show commitment Use UKTI/CBBC impartial support services. Do you have a China strategy/What if Plan? China is bringing fundamental change to all our lives вЂ“ be prepared!