Doing Business in China - 2011

Issues related to doing business 2011

Tarun (DM-162) Vishal (DM-176) Saurabh (FN-102) Srikanth (FN-109) Tushar (FN-115) Nikhil (FN-121)
INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Source CBBC, Leeds University, UKTI

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Doing Business Report - 2011

Source: IFC report, doing business 2011

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

BRIC Nations Comparative Rankings 2010

Source: Bizshift blog

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Market Indicators

Automobile, Education Sectors*

Source: PRC, Ministry of Commerce

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Reforms Driving Business in China

Source: Doing Business in 2011, by IFC

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Leading Sectors

Source: Doing Business in 2011, by IFC

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Why managers need to know about China?

Planned Economy Closed Economy RURAAL Rural Market Economy Open Economy Urban

Major player in the world politics

This extraordinary process feed directly into the details of your business
Source: Jonathan Story INSEAD, 2010 report of China
INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

India China Bilateral Trade

Planned Economy Closed Economy RURAAL Rural Market Economy Open Economy Urban

Major player in the world politics

This extraordinary process feed directly into the details of your business
Source: 2point6billion.com
INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Factories must relocate or remodel

Source: China-Briefing.com
INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Where 2011 investments are heading?

RURAAL

Source: 2point6billion.com, 2011 China briefing report

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Concerns over Brand China

Source: 2point6billion.com, 2011 China briefing report

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

New Markets
In terms of per capita GDP and disposable income

Most popularly purchased items in rural areas

Product offering should consider ageing, lifestyle, population & sports

Source: 2point6billion.com, 2011 China briefing report

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Legal aspects
Right to Private Ownership and Establishment Protection of tangible Property Rights

Click to edit Master subtitle style

Dispute Settlement

LEGAL CONSTR AINTS

Protection of Intellectual Property Rights

Transparency of Regulatory System

4/14/12

Source: 2011 country commercial guide for US companies

INTERNATIONAL BUSINESS PROJECT

Source: 2011 country commercial guide for US companies

Doing Business in China - 2011

Socio-Economic Factors

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

China Imports & Joined WTO in 2001 Exports

Major trade partners are US, Japan, South Korea, Taiwan, Germany Major export goods are Electrical & other machinery, apparel, data processing, optical & medical equipment Major import goods are Oil & Mineral fuel, metal ores, plastics, organic chemicals, Electrical & other machinery

Source: Wikipedia
INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Wholly Foreign Owned Enterprises (WFOE)

Main Forms of Business Establishment Joint Ventures Foreign Investment

Companies Companies Limited by Shares

Purchase of shares in Chinese Share Companies

Equity JV Companies (EJV)

Contractual JV Companies (CJV)

Representative Office (RO)

Market entry as supplier/contractor

Source: Niel Blakeman Associates report 2010
INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Foreign investments restricted in sectors:

1) where China seeks to develop domestic firms into globally competitive multinational corporations; 2) that have benefited historically from stateauthorized monopolies or from a legacy of state investment; Click to edit Master subtitle and 3) deemed key to socialstyle environmental stability.

4/14/12

Source: Niel Blakeman Associates report 2010

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Foreign Direct Investment Flows for 2009 (Top 10 Sources of Origin) Country/Economy of Origin Millions of U.S. Dollars

4/14/12

Hong Kong British Virgin Islands Japan Singapore South Korea Master subtitle style Click to edit Cayman Islands United States Samoa Taiwan Germany

46,075 11,299 4,105 3,605 2,700 2,582 2,555 2,020 1,881 1,217

Source: IFC Report, doing business 2011

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011 Flow of Outbound Direct Investment for 2009 (Top 10) Destination Millions of U.S. Dollars Hong Kong Cayman Islands Australia Luxembourg British Virgin Islands Click to Singaporeedit Master subtitle style United States Canada Macau Russia
4/14/12

35,600 5,366 2,436 2,270 1,612 1,414 908 613 456 348
Source: IFC Report, doing business 2011
INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Selected Major Foreign Direct Investments by U.S. Companies Company Current Value in Billions of U.S. Dollars

Intel 4.7 ExxonMobil 4.5 Motorola 3.6 Ford 3.0 Carlyle Group 2.5 Click to Coca-Cola edit Master subtitle style 2.0 P&G 1.5 DuPont 1.0 Microsoft 1.0 Alcoa 0.7 Source: Cummins 0.3 IFC Report, doing business 2011 4/14/12
INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Three Main Centres of Economic ssssssss Gravity

Bohai Rim Yangtze Delta

Pearl River Delta

Source: Niel Blakeman Associates report 2010

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Cultural aspects

Source: Kwintessential site

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Chinas Promising Regions for Trade

City Hangzhou Characteristics

opportunities

Good infrastructure Low cost labor Easy access to seaport Good infrastructure Low cost labour

Banking Construction Energy Electronic and IT Tourist Urban regenration construction

Suzhou

Concentration of multinational manufacturing Shanghai Very good infrastructure including largest seaport and two airports

Automative industry Electronics and IT Metallurgy construction

INTERNATIONAL BUSINESS PROJECT

Skilled labour availability

Concentration of high technology development zone

Source: Jonathan Story INSEAD, 2010 report of China

Doing Business in China - 2011

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

CHINA

THREATS?
IPR, Tech. Transfer Energy, raw materials Manufacturing Pace & extent of change Complexity Source of competitors

OPPORTUNITIES?

Innovation, R&D Labour, skills Environment

Exports, investment, partnering Sourcing, outsourcing Design, science/ research, marketing, branding Services, solutions (eg. BPO)

Source: Niel Blakeman Associates report 2010

INTERNATIONAL BUSINESS PROJECT

Doing Business in China - 2011

Thank You

INTERNATIONAL BUSINESS PROJECT