Right Time to Up­grade the Co­op­er­a­tion Be­tween Chi­nese & Euro­pean En­ter­prises

China's Foreign Trade (English) - - Contents - By Wang Lili, trainee jour­nal­ist Wang Shiyu

“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.

ad­van­tages.”

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”.

Prag­matic In­no­va­tion

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.

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