Right Time to Upgrade the Cooperation Between Chinese & European Enterprises
“We sincerely hope that not only Mercedes Benz can realize an increase in car sales volume in China for 35 months in line, but also Geely will get popular in Europe; not only can we go to Carrefour after work, but also these Europeans can shop in a Wangfujing Department Store nearby,” said Jiang Zengwei, Chairman of China Council for the Promotion of International Trade (CCPIT), at the symposium for entrepreneurs from China and Europe on March 15th.
Jiang Zengwei also expressed the wish that European and Chinese enterprises would take the opportunities brou ght by Ch ina’s e c onomic development, to achieve measurable improvement in both quantity and quality of pragmatic economic and trade cooperation, especially the quality.
Opportunities for service trade cooperation
Yin Zonghua, vice chairman of the CCPIT, said at the symposium: “I was in Europe for many years, and I have a deep feeling that China and the Europe have great opportunities for cooperation, as they have their respective
European and Chinese enterprises would take the opportunities brought by China’s economic development.
In recent years, “service trade” was mentioned frequently, and the government work report of this year made it a clear target that the ratio of modern service industry should have a great increase during the 13th Five-year period, so it is expected to see a rapid development in producer and life service, and the modern service industry as a whole, too. Last year, service industry witnessed a growth rate of 3%, 2.2 percentage points higher than that of the industry (above-scale enterprises).
For the 11th consecutive year, the EU has been the largest trade partner of China, while China has held the second position for 12 consecutive years among the EU’S major trading partners. According to the statistic data from China’s Ministry of Commerce, bilateral trade between China and the EU amounted to 564.85 billion US dollars in 2015. Meanwhile, 28 EU member countries established 1,772 new enterprises in China through investments, an increase of 11.9% from a year earlier, with the actual amount of foreign investment totaled 7.11 billion US dollars, up by 3.8%. As of the end of January 2016, China had a cumulative direct investment in EU of 62.15 US dollars, while that from EU in China came to 103.96 billion US dollars.
Two- way investment between China and Europe increased quickly in recent years, and the role of service trade became increasingly important. At this year’s NPC and CPPCC, it was made clear that China would boost and broaden the opening-up policy. Yin Zonghua said: “Strengthening the opening up policy would add new driving forces for development, and it will certainly bring more opportunities for service trade.”
The service industry in China and Europe are different and has its own comparative advantages. For example, China has a broad market, a rich and high quality labor source, and a continually improving consumption level and economic structure, making China a powerful impetus for the development of the service industry; while the European countries started service industry earlier, and they are rich in experiences and human capital and established brands
and competitiveness.sides servicecan take enterprises comparative Enterprises advantageswith from strong both in capital, market, brand and management, etc., and grasp the opportunities for cooperation in industries like telecom, finance, insurance, consulting and so on, to boost the upgrade of Sino-europe economic and trade cooperation. Under the background of “Internet Plus”, both sides can also widely apply modern sciences and technologies, and promote the integration of science and technology with industries, to cultivate emerging industries, for the transformation of traditional mode of manufacturing and service industries.
CBBC, China-britain Business Council, is an organization supported by the British government and the business community, aiming at promoting bilateral trade and cooperation in economy and sicience and technology between UK and China. Lord Sassoon, Kt, chairman of CBBC, said, the cooperation in service industry between China and the Europe grew quickly in recent years. From 2012 to 2014, the total service trade volume between China and Europe grew by 25%, and China is one of the most interesting destinations to UK service companies.
The “Belt and Road” Initiative
With the further opening up and the “Belt and Road Initiative”, more and more Chinese enterprises choose to “go abroad”, while lots of European companies come to China, too. They cooperate and establish partnership with Chinese enterprises. According to Lord Sassoon, CBBC hopes that the enterprise cooperation between China and the Europe can bring better services and products to Chinese consumers, join Chinese and European companies together, and introduce more Chinese products to Europe and other countries.
This “Belt and Road” Initiative also brings opportunities for service trade. China will speed up the structural reform, relax strictions on service industry, boost the openning up of financial, medical and other services, strengthen the protection of intellectual property rights, and provide secure and legal invironment for foreign investors. As to this, Jiang Zengwei said, the further reform and opening up policy means broader opportunities for both sides, resulting in higher level of opening up, accelerated construction of the “Belt and Road” Initiative and international cooperation, and chances for cooperation upgrade and deepening.
In addition, President of Maersk (China) Co. Ltd., Jens Eskelund said, the experiences of Chinese economic development can benefit many other developing countries in the world, and can inspire and contribute to the successful implementation of the Belt and Road Initiative, such as opening the market to foreign companies, and allowing foreign companies to set up agencies in China. It is hoped that the further opening-up of the market will be helpful to improve the operating efficiency and interoperability of Chinese enterprises.
As t he t r ade re l at ion a nd cooperation between China and the Europe gets deeper and broader, Chinese or European companies are facing more opportunities and competition. Dong Jiasheng, director president of Beijing Wangfujing Group, considered trade as one important factor to revive economy. For a business, operating capacity refers to the ability to develop unique approach and methodology for enterprise development in both upturn and downturn trend. Dong Jiasheng also focused on the progress of negotiations on Free Trade Agreement between China and European countries, since
With the further opening up and the “Belt and Road Initiative”, more and more Chinese enterprises choose to “go abroad”, while lots of European companies come to China, too.
import and export trade can promote service trade, and also improvement in finance and legal system.
Now there are many information enterprises focusing on China, helping multinational enterprises to promote business, and Chinese enterprises to “go abroad”. Vermilion Partners Ltd is one of them. Chairman Peter Batey said, entrepreneurs of financial service industry pay attentions to various fields, but there are still many restrictions on foreign investments in China. He hoped that foreign companies can have same chances in China as these Chinese enterprises do businesses in overseas markets.
“In this year’s NPC and CPPCC report, Premier Li Keqiang put forward a clear target that the service industry added value should account for 51% of GDP. However, there is still a certain distance from that of developed countries, which means great potential for development. Especially we should focus on two markets, as to the relations between Chinese cultural industry and service trade and the Silk Road,” said Lv Jianzhong, board chairman of Tang West Market Group. With the support from the CCPIT, and jointly initiated by 36 countries and areas, Silk Road International Chamber of Commerce was registered in Hong Kong last year, with “our joint declaration is to build an online Silk Road”.
China and the European Union set a target that the bilateral trade volume should reach 1 trillion US dollars by 2020. With the deepening economic cooperation and trade, the suggestions are more pragmatic.
Li jie, executive vice prisident of foreign affairs and public policy department of Daimler Greater China Ltd. ( DGRC), told China’s Foreign Trade, last year the auto industry in China grew by more than 30%, against global backdrop trend, surprising the industry. “Enterprises have to take part in the supply side reform, and the market mechanism must play a leading role in the allocation of resources. This is the core of the supply side reform. We are glad to see the future of deepening market economy,” said Li Jie.
Gregoire Ollivier, executive vice president of France’s PSA Peugeot Citroen Group, president of China and Southeast Asia Area, said, China should vigorously develop the automobile finance, including increasing car sales volume by renting, exploiting used-car market, and innovating car financing and sales model, and so on.
Keswick Adam, executive vice president of Jardine Matheson Holdings Co., Ltd., attached great importance to the partnership when talking of capital market reform, which is also key to China’s supply side reform. In addition, he suggested that, focusing on small and medium- sized enterprises, and creating a good environment for their
As the trade relation and cooperation between China and the Europe gets deeper and broader, Chinese or European companies are facing more opportunities and competition.
operation, will be the key to China’s capital market reform, and the key to Sino-british relations.
Greater China chief executive officer of Inter Continental Hotels Group, Kenneth Macpherson also talked of the importance of cooperation partners. He mentioned that, the operation of hotels required the integration of resources of different regions and brands, and a good partnership with local proprietors. He said: “China has rich tourism resources. We know that there are a lot of Chinese companies have interests, and I believe there are opportunities.”
Ding Changfeng, senior vice president of China Vanke Co., Ltd., told us, aiming at 2020 Winter Olympic Games, Vanke now is collaborating with European companies on the development of ski market, while strengthening the cooperation in operation planning and training.
China and the Europe also have great opportunities in the retail industry. As Dong Jiasheng pointed out, China has a huge consumer market, while European goods, especially consumer goods, are famous for the quality and fashion, which means opportunities for win-win cooperation.
How to innovate busisness model with Internet is a hot topic. According to Wang Tingge, president of Zhongda Yuantong Group Co., Ltd., 2015 witnessed a year- on- year increase of 2.3% in export trade of Zhejiang Province, but declines in both volume and value in China’s exports. He said: “The main reason lies in the service platform ‘ Yiwu Tong’, which combines logistics, financing, shipping, customs clearance and other services. The platform is operated by importers and exporters, which helps lower costs, and wins a competitive advantage.”
Xu Sheng, general manager of transaction banking department of Standard Chartered Bank (China) Co., Ltd., believes that the emerging Internet banking will change the traditional banking model, meaning banks need to do more to facilitate customers, such as confirming the receipts, recording the changes in the account, streaming and informing the customer of the information.
In addition to traditional service industry, e-business and other emerging service enterprises also seek to promote their business through Sino-european cooperation. Gong Zhenyu, vice president for marketing of Suning Corporation and president of Suning International, said: “E-commerce for imports brings a new choice for overseas enterprises to enter China. We are glad to have in-depth cooperation with overseas enterprises.”
According to vice president of Jingdong Group, Ma Jianrong, besides direct purchase from overseas, “Jingdong Global Buy” can provides a platform for foreign merchants. By now, you can easily buy through Jingdong goods from France, South Korea, Japan, USA and Canada, Austrilia and New Zealand, Germany and other countries and areas, and the list is getting longer quickly.
In addition to traditional service industry, e-business and other emerging service enterprises also seek to promote their business through Sino-european cooperation.