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Business CHINA SPECIAL: Part 1 Meeting the Dragon, an introduction of China By Anouk Binkhuysen Harbin Urumqi Hami Kashgar (Kashi) Tulufan Changchun Dunhuang Hohot Beijing Jilin Datong Yingchuan H Tianjin Dalian Yantai Xining Yanan Taiyuan Jinan Qindao Lanzhou Luoyang Kaifeng Xi’an Zhenzhou Nanjing Chengdu Lahsa Yichang Suzhou Hefei Wuhan Shanghai Chongqing Changsha Hangzhou Shangri-La Guiyang Nanchang Dali Kaili Fuzhou Xiamen Kunming Guilin Guangzhou Taibei Nanning Shenzhen Macao Hongkong Gaoxiong Beihai Haikou Source: www.gogx.net Sanya Since adopting market reforms in 1978, China has been among the world’s fastest growing economies. China is a magnet for foreign investors, with its economy growing at 10% for four years running and to become the fourth economic power in the world. Although the Chinese government has opened its markets to a certain extent to attract foreign investors by adopting a pro-business environment in selected economic zones of the country, doing business in China is still easier said than done. In this issue and the next two issues (except for the December-January Special), we will give you an overview of several Dutch companies from different type of industries that have entered the Chinese market and their experience of doing business in China. In this edition, we start with an introduction with the facts and figures of China. Picture source: www.travel. nationalgeographic.com China fact file Area 9,560,900 sq km Capital Beijing People Population (millions) 1,314.48 Population over 65% 7.9% Urban population 2007 45% Urban population 1995 29% Economy GDP (RMB billions) 20,940.68 GDP (US$ billions) 2626.30 GDP per capita (RMB) 15,973 GDP per capita (US$) 2,040 Employment Total workforce (millions) 753.60 Unemployment (% of workforce) 4.1 Society Number of households 539.10 Mobile phones per 100 pop. 152.9 (millions 2005) Average number 3.13 Automobiles per 100 pop. 4.3 per household (2005) Per capita annual income of urban households (RMB) 12,719.2 Per capita annual income of rural households (RMB) 5,025.1 Vol.18 • No. 9 • November 2008
Business Urbanization in China About 600 million Chinese now live in cities, yet that represents only 45 percent of the population, compared with more than 80 percent in the United States, so China’s cities are likely to grow considerably. New research by the McKinsey Global Institute projects that by 2025, an additional 325 million people of which about 230 million migrants will move to China’s cities. Following the current trend, the country’s urban population will reach 926 million by 2025 and top 1 billion by 2030. To read more about urbanization in China, please read the article “Preparing for China’s Urban Billion”, in the McKinsey Quarterly. The role of the state Government ownership is declining rapidly; today only about less than 25% of China’s industrial output is generated by state-owned enterprises. Currently the majority of production is generated by private companies and companies with foreign investment. Except in a few sectors—defense, telecommunications services, and energy, for example—much of the economy is now in private hands. The reason is straightforward: China’s leaders recognize that state enterprises are inefficient and must be stimulated from the outside to compete in the marketplace. Relationships Many executives are convinced that relationships are the key to doing business in China successfully. That was certainly true in the early days of its economic opening to the outside world. Lengthy discussions, often accompanied by extensive socializing, were the norm as the country’s negotiators strove to understand their foreign counterparts. Today, 20 years of investment experience later, the Chinese are looking at the tangible business track records of foreign companies. Those that fail to bring tangible advantages, such as new capabilities, technologies, or business models—as well as a record of success—are unlikely to win the deal, no matter how good their relationships. Nevertheless, a strong government-relations program remains an important factor for success in China, where, as in other emerging markets, the state uses its influence over market access and business rights and set the boundaries on how far foreign companies can go. Highlights GDP growth rates: 1998 2002 2004 2006 7.8% 9.1% 10.1% 10.7% • China’s economy threatens this year to overtake Germany as the world’s third-largest. • In 2006, China’s external trade reached US$ 1,761 bn, ranked the 3 rd in the global economy. • China exports in 1980: 50% primary goods and 50% manufactured goods. In 2006: 5.5% primary and 94.5% manufactured goods. • China’s foreign exchange reserves reached US$1.3 trn by the end of June 2007, the largest in the world. • New highway construction: 140.500 km. • By 2020, 82% of the Chinese people will live within a 90 minutes drive of an airport. • The Chinese save and invest upwards of 40% of their income (Americans save 2%). • Almost 345,000 millionaires in mainland China (counted in US$). • China is the world’s second-largest internet market after the US, with 162 million web users. • In 2006, there were still 21.48 million people living below the poverty line in rural areas. Government ownership is declining rapidly; today only about less than 25% of China’s industrial output is generated by state-owned enterprises. Currently the majority of production is generated by private companies and companies with foreign investment. Sources: Article ‘A guide to doing business in China’, December 2004 Mc Kinsey Quarterly China Business Guide 2008 Vol.18 • No. 9 • November 2008
Page 1 and 2: November 2008 MITA 373/03/2001 Dutc
Page 3 and 4: Prologue Dear Members, Last week I
Page 5 and 6: Review An impression of world-class
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Page 16 and 17: Singapore The threshold to study In
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Page 24 and 25: event agenda Rihanna! DATE : Thursd
Page 26 and 27: Association Info New Members Antoin

Dutch students in Singapore - Association of Dutch Businessmen

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