Post on 22-Dec-2015
China in 2011: Navigating the “New” China
David Edmiston 邓大为 , International Trade SpecialistU.S. Commercial Service MinneapolisChina Business Information Center
www.export.gov/china
1.
•The “New” China
2.
•Market Drivers
3.
• What this Means for Alaska Companies
4.
•How We Can Help
Presentation Outline
www.export.gov
THE “NEW” CHINA
CHINA NOW
• Historical GDP Growth: Value chain shifting w/ 48% industry, 40% service, and 12% agriculture
• Economic Size: World’s 2rd largest economy
• Consumes 33–50% of world’s coal, cement, steel, iron ore
• China: US.’ #3 Foreign Export Market – 2010 Trade Surplus $273 B– 2010 U.S. Exports to China $91 B
• Foreign Exchange Reserves =$2.622 T
Income Disparity
• Urban Disposable Income $2,895 • Rural Disposable Income $897
CHINA NOW
2007 2008 2009 20100
5001,0001,5002,0002,5003,0003,5004,000
Urban per capitaRural per capita
Healthcare• 200 M uninsured• 1/10 of population
carrying hepatitis BEducation • State schools-no funding for migrant students
A More Realistic Picture…
Unemployment• Official 4.3% • Unofficial 9% • 39th in the world
Pollution• 70% Electricity from coal• #1 Emitter of fossil fuels• 10,000 deaths per year HK, Macau and So
China caused by air pollution• price of pollution $968 million/yr in health
and productivity loss
Urbanization2005 43%2010 47%
2025 Migration 400 M
Newly Emerging Markets
Top 14 = 50% US exports
Middle Class Surge2009 5% of population 2020 40% of population
Market Drivers
Second TierGrowth Markets
Highest growth: ‘06-’09Zhengzhou, Chongqing,Hefei, Kunming
ReutersXinhuaXinhuaXinhua
Lifestyle Indicators• Mobile Phones: 800 million subscribers• Internet Usage: 457 million users• Private Vehicles: 26 million cars• Outbound Travel: 40 million tourists
Driver: Emerging Consumer Culture
China’s 12th Five-Year Plan
“New Magic 7” • New energy • Energy-saving and environment
protection• Biotechnology• New materials• Clean-energy vehicles• High-end manufacturing• Next generation info tech
Environment & Clean Energyo Environmental Protection RMB up 10 %o Energy consumption cut by 16 %o Energy Consumption from Non-fossil fuel =
11.4 %o Carbon dioxide emission cut 17 %o Water consumption/unit value-added output cut
30 %
12th Five-Year Plan
WHAT THIS MEANS FOR ALASKA COMPANIES
Alaska Global Exports
• Alaska Global Exports in 2010: $4,154,626,473
• Export Growth: Exports in 2010 were up 27% from 2009 figures and 15% from 2005
• Top 5 Export Markets in 2010: – Japan– China– South Korea– Canada– Switzerland
Foreign Trade Division, U.S. Census Bureau
Alaska Exports to China
• Alaska 2010 Exports to China: $921,276,201
• China Export Growth: Exports in 2010 were up 57% from 2009 figures and 173% from 2005
Foreign Trade Division, U.S. Census Bureau
Top 5 challenges for the Coming Years
Bureaucracy
Human Resource Constraints
Unclear Laws & Regulations
Unclear Regulatory Interpretations
IP Rights Infringement
Positive Business Outlook
Companies in China• 71% expect increase revenue
• 90% are “optimistic” for the futureAmCham Shanghai 2010- 2011 China Business
Report
• 85% will increase investment in 2011
China Business Climate Survey 2011
Performance Improving• 87% companies reported
revenue growth
• 79% companies “very profitable”
• 61% increase market share for China products/services
AmCham Shanghai 2010-2011 China Business
Report
Xi’anElectrical Machinery (118%)
TianjinRailway(634%)
China’s Imports From U.S. 2009
Guangzhou Aircraft; Spacecraft (404.2%)
WuhanChemicals(110%)
Emerging Markets
Sector Specific Opportunities (a few examples….) Healthcare: 122 Billion USD to provide basic medical
coverage Transportation: Goal to build 13,000 km high-speed rail
by 2012, reaching 170 cities by 2025 Smart Grid: $7.3 billion invested in 2010 vs. $7.1 billion in
U.S., $590 billion total planned investment Environment: China will invest $303 billion in water
projects in the next 5 years. $11 bil for wastewater treatment in 12th 5-year plan
Travel & Tourism: U.S. is 4th largest market, up 40% in 2010, average tourist spending $6,000, 100 million tourists projected for 2015
Education: Chinese graduate applications up 19% in 2009 (up 7% worldwide); 98,000 Chinese students in the US in 2009, up 21%
Why Green Tech is Growing Water 20% unusable for industry
$303 B through 2016 Rural wells/ Urban Wastewater/
Key Water Body Pollution
$11.5 B to curb heavy metal pollution (over next 5 years)
.
Air pollution Deaths/year 400,000
Oil Consumption
Renewable Energy OpportunitiesWind
• Largest Producer
• 2009 33% World Investment
• 2010 Install Capacity 10 GW
• 2020 Target 150 GW
Solar Power
• PV Production 90% exported
• 2009 Capacity 8 GW
• 2020 Target 20 GW
Clean Transportation
Automobile Market •2009 13.5 M vehicles•2030 200 M vehicles
New Energy Vehicle Program •2012 Goal 60,000 electric
vehicles
HOW WE CAN HELP
Are You China Ready?
Take a “China Ready” Assessment
Survey :
www.export.gov/china
Export Experience
Senior Level Commitment
Financial Resources
Due Diligence
Regulatory Issues
IP Strategy
Practical Tips
Understa
nd the Market
•View China as many different markets
•Consider Regulations and Standards
•Visit often – “mind the shop”
Protect
Your Interests
•Due diligence
•Register IP
•Seek legal counsel
•Exit strategy
Realistic
Expectations
•Avoid “Chinaforia”
•Overnight success is uncommon
•If it sounds too good….
19 Cities ◦5 CS Offices◦14 Secondary Markets
140+ Officers & Trade Specialists
Commercial Service in China
Core Market Services
Business Facilitation• International Partner
Search• International Company
Profile• Gold Key Matching
Service• Single Company
Promotion
Trade Promotion Events• International Buyer
Programs• Trade Shows & US
Pavilions• Trade Missions
Customized Programs• Platinum Key Service• Advocacy & Trade
Disputes• Market Research
Market Research• Market Research Library• Country Commercial
Guide (CCG)• Customized Market
Research
Gold Key Matching Service
• Pre-screened appointment schedule arranged for you before you travel overseas
• Customized market and industry briefings with our local trade specialists
• Timely and relevant market research
• Post-meeting debriefing with our trade specialists and assistance in developing appropriate follow-up strategies
• Help with travel, accommodations, interpreter service, and clerical support
SME: $700 first day, $300 each additional day; Large Company: $2,300 first day, $1,000 each
additional day
International Company Profile (ICP)
• Determine whether an overseas company or individual is a suitable partner:
Management details
Business activities
Product/service lines
Financial condition
Credit-worthiness
Trading experience
Market coverage
Business connections in the target country
* SME: $600; Large Company: $900
Single Company Promotion
• The Single Company Promotion service offers support and event facilities which will allow you to engage your target audience through:– Product launches
– Sales seminars
– Staff training
– Networking receptions
Facilities available include: exhibition halls, auditoriums, meeting rooms, hotels and even the residences of some US Ambassadors.
Trade Events
* Cost vary depending on event and market
Trade Shows/Trade Missions
• International Trade Shows– U.S. pavilions put you in the best int’l trade shows with access to
thousands of buyers. – Our team of Commercial Specialists arrange one-on-one meetings
with potential buyers.
• International Buyer Program (IBP)– U.S. Department of Commerce selects leading domestic trade
shows to promote through its global network of offices and contacts.
– U.S. Commercial Service staff in our Embassies and Consulates abroad recruit and bring delegations of qualified buyers, prospective representatives and distributors to domestic trade shows. U.S. Commercial Service staff then facilitates meetings between buyers and exhibitors.
• International Trade Missions*– Opportunity to meet with distributors, government and industry
officials, prospective customers, and U.S. Embassy officials.* Costs vary depending on the mission
• Country Commercial Guides (CCG)
Leverage reports, prepared annually by U.S. Embassy staff, containing information on the business and economic situation of foreign countries and the political climate as it affects U.S. business and investments.
• Trade Data and Analysis
Obtain the latest annual and quarterly trade data by country, state, commodity, and year.
Find industry-specific trade data and analysis.
Get country-specific tariff and trade agreement information.
• Customized Market Research*
Get specific answers to your specific international business questions.
Market Intelligence
* Cost vary depending on research preformed
Advocacy Center
• Exporting today means more than just selling a good product at competitive prices, it can also mean dealing with foreign governments and complex regulations. The Advocacy center helps companies by putting the resources and authority of 19 U.S. government agencies behind your company to help resolve problems such as:
– Contracts pursued by foreign firms who receive assistance from their own governments to pressure a customer into buying their product or service
– Unfair treatment by government decision makers, preventing a U.S. company from competing for a project
– Tenders tied up with bureaucratic red tape, resulting in lost opportunities and unfair advantage to other competitors
http://export.gov/advocacy/
Consulting and Advocacy
Trade Compliance Center
• Ensures that:
Trade agreements entered into by the U.S. are properly monitored
Compliance issues are addressed promptly
U.S. exporters are provided access to information on the opportunities created by U.S. government market opening initiatives
• Two Main Functions:
Data Systems Management - Use the information superhighway to provide data and government assistance directly to businesses
Compliance Analysis - Analyzes foreign compliance with trade agreements by reviewing legal, economic and policy issues
http://www.tcc.mac.doc.gov
IPR and Trade Compliance AssistanceThe US Embassy IPR Toolkit
http://www.beijing.usembassy-china.org.cn/ipr.html
China IPR Advisory Program - 1 hr free consultation
http://www.abanet.org/intlaw/china_program2.html
USPTO: free China conferences (www.stopfakes.gov)
IP webinar series http://www.stopfakes.gov/events/china_webinar_series.asp
National Institute of Standards and Technology http://www.nist.gov/notifyus
Case Example: Client Video
Contact Us:
Alaska U.S. Export Assistance Center
www.export.gov/alaska
907-271-6237
CHINA China Business Information Center at
chinabic@trade.gov
export.gov/china
Contact me at: david.edmiston@trade.gov