CCPIT & CCOIC Newsletter

NO. 144, Issue 2019-04-16

Canton Fair opens with strong Belt and Road presence

Source:China Daily | 2019-04-16

The 125th China Import and Export Fair, also known as the Canton Fair, opened Monday in

Guangzhou, capital of South China's Guangdong province, with over half of companies at-

tending its import fair hailing from Belt and Road countries and regions.

The spring session of the biannual fair holds import exhibitions in its first and third phases,

with 1,000 booths booked by 650 enterprises from 38 countries and regions.

These include 383 companies from 21 countries and regions involved in the Belt and Road

Initiative, including Russia, Poland, the Philippines and Israel, said Xu Bing, spokesperson

for the fair.

Large buyers such as Vip, a Chinese online discount retailer, and global retail giants Carre-

four and Wal-Mart will attend the import exhibition.

The fair, which will be held from April 15 to May 5, is widely seen as a barometer of China's

foreign trade.

US, Chinese business leaders: Chinese market enjoys abundant opportunities Source: China Daily | 2019-04-15

At a forum concluded here Sunday, multiple US and Chinese business leaders expressed opti-

mism about the Chinese economy and said opportunities are abundant in the Chinese market.

"I think the opportunities in China are going to continue to be outstanding," Pete Walker, for-

mer senior partner with consulting firm McKinsey & Company, told a panel at the Harvard

China Forum (HCF).

The sentiment was shared by Larry Culp, chief executive of General Electrics, who said of

international companies at the forum's closing ceremony that "you know if you are active

globally, you need to be in China."

Urbanization, innovation and the unique features of the Chinese economy all feed into the po-

tential for future growth, according to the speakers.

"Urbanization has been an enormous lift to the economy in China," Walker said, citing statis-

tics indicating that a person's productivity increases five or six times when the person moves

from rural areas to urban ones.

"There's still a lot of lift to be had from urbanization," Walker said as he pointed to the gap

between the urbanization rate of China and mature economies such as Japan and Germany.

The emphasis on innovation in China was also noted by the speakers. Andrew Yan, a veteran

venture investor, pointed out that in the past five years, China churned out unicorn companies

faster than any other country in the world, in part thanks to China's innovative tech industry.

"Even though the West likes to think China is not innovative, they are innovative in a differ-

ent way, much more market-driven, more application-driven," Walker said.

The United States has a historical advantage in making "game-changing" innovations, while

China has developed more adaptive technologies, creating whole businesses by catering to

different consumer segments, said Walker.

"I think the scale of that innovation is even bigger than the monolithic breakthroughs," he

said.

Han Weiwen, managing partner of consulting firm Bain & Company's Greater China offices,

told Xinhua on the sidelines of the forum that innovation has pushed China's retail industry to

be world-leading.

"In terms of its ecosystem, technology and business model, China's retail industry is absolute-

ly in the forefront among other countries," he said.

Han said the Chinese economy enjoys a unique set of features that paved the foundation for a

thriving retail industry in the internet age, including a relatively young demographic that is

eager to embrace a new lifestyle, high smartphone penetration that makes e-commerce more

accessible, high population density and low logistics costs that enable affordable shipping

costs for online purchases.

Yan, the investor, said that in the age of mobile internet, countries with a larger population

will have an advantage over countries with smaller populations. Young Chinese companies

such as the e-commerce platform Pinduoduo and the car-hailing company Didi are all benefi-

ciaries, he said.

Han cautioned that not all factors play into retailers' favor, some also pose challenges.

The yearly large-scale migration of migrant workers from urban centers to rural regions to

celebrate the Chinese New Year is one such challenge, Han said.

"This phenomenon greatly impacts the retail industry, as it poses a two-fold challenge, how

can retailers provide good service to the customers in urban centers during normal times, and

whether the retailers have the necessary network to extend its services to rural areas when the

migrant workers return home for the spring festival," Han said.

The HCF, which kicked off Friday, featured panels covering a wide range of topics including

finance, technology, entrepreneurship, arts, culture, entertainment, international relations and

development, philanthropy, consumers and retail, music and pharmaceuticals.

Wuhan-Lyon train heralds trade boom Source: Xinhua | 2019-04-15

After traveling about 10,000 kilometers across the Eurasian continent in about 18 days, a

freight train from Central China's Wuhan city arrived on a March morning at a rail terminal in

Venissieux, south of the French city of Lyon, with its containers full of sports clothes, elec-

tronic goods and items for a cultural exposition.

Back in the 16th century, Lyon was the terminus in Western Europe of the ancient Silk Road,

a path connecting the East and the West and facilitating the exchange of products, innovative tech-

niques, doctrines and cultures.

Today, dubbed the "caravans of steel camels", the China-Europe Railway Express carries new op-

portunities to Europe and injects new impetus into Sino-French trade, whose volume exceeded $60

billion in 2018.

Marcel Stein, chief of German firm DBO Bahnoperator, which runs transit freight trains from the

German city of Duisburg to Lyon, believes that the China-Europe Railway Express offers new im-

port and export opportunities to merchandisers.

"It takes around 15 days for freight trains from China to France, right between the transit time of

maritime freight (around 40 days) and air freight (a few days), but the cost is only a fraction of that

of the air shipping and close to maritime transport," said Stein.

"The China-Europe Railway Express is an ideal choice, for example, for those who want to

transport their merchandise from Europe to China. In this case, the rail route connecting Lyon with

Wuhan has no rival in the market," he said.

Official figures from China clearly showed the China-Europe Railway Express' leap since its

launch in 2011. As an artery of international trade, the freight trains now link 59 cities in China

with 50 cities in 15 European countries, with the cumulative number of shipments having so far

exceeded 14,000.

In France, the first freight route linking Lyon and Wuhan was put into service in April 2016. One-

and-a-half years later, a "tailor-made" route from Wuhan to France's Dourges was launched at the

request of Decathlon, a French retail and sports distribution group.

Brigitte Bernard, a terminal manager at Venissieux, said that she has never seen containers from

China before 2016, but now Chinese containers arrive in this terminal every week. "Despite a cur-

rently low proportion of Chinese containers in our terminal, I expect an increase in the future and

hope to receive more containers coming from China," she said.

As to the future development of the China-Europe Railway Express, Alain Labat, vice-president of

the New Franco-Chinese Institute, said it depends essentially on two factors. "First is the necessary

improvement of France's export capacities to re-balance all of its foreign trade, and the second

concerns the growth of Chinese imports from France," he said.

France participated in the first China International Import Exhibition held in Shanghai last Novem-

ber, which gives hope for favorable developments, said Labat, calling on French decision-makers

to have a better understanding of the Belt and Road Initiative.

Wang Lijun, CEO of Wuhan Asia-Europe Logistics, operator of the Wuhan-Lyon route, said that

there are two freight trains heading to Lyon every week, where cargoes are distributed and deliv-

ered to Paris, Bordeaux and Dourges.

Attracted by brisk Sino-French trade and the BRI, more and more large French firms, including

Peugeot, Citroen and Decathlon, as well as some small and medium-sized enterprises, are showing

interest in the service, which reduces transit time while saving money. At the same time, the cate-

gories of cargo are diversified, ranging from automobile parts and aeronautical parts to medical

products and French wines, Wang said.

Thanks to the upgrading of equipment on trains, the China-Europe Railway Express will be able to

satisfy more diversified demands of customers, like refrigerated transport of agri-food products,

said Wang.

WAE is currently negotiating with winemakers in Bordeaux to introduce this region's famous wine

to an e-commerce platform in China, where Chinese consumers can place their orders and wait for

their wines to be carried back to China by trains, said Wang.

"Local winemakers are very interested in our project. Once the service is launched, Silk Road will

become Wine Road," said Wang.