china business environment - cewp files/05112019_ams... · •have strategies to protect your ipr....

CHINABUSINESSENVIRONMENT

November 2019Amsterdam

©EU SME Centre

About THE EU SME CENTRE

About The EU SME Centre

• A project funded by the European Union in 2010 to help European small and medium-sized enterprises (SMEs) get ready to do business in China

• Implemented by 6 chambers of commerce

• An official member of European Enterprise Network (EEN)

• Partnered with over 270 government agencies and business support organisations in Europe and China

• Has a network of over 170 China experts worldwide

• Local office in Beijing

• In-house experts - Market Access, Business Development, Legal, HR and Standards & Conformity

Implemented by

Our Services

KNOWLEDGECENTRE

ADVICECENTRE

TRAININGCENTRE

SME ADVOCACYPLATFORM

HOT-DESK &MEETING ROOMS

Over 170

comprehensive

market reports,

guidelines and case

studies

Practical and

confidential advices

on business

development,

market access,

legal issues and HR

Face to face and

online training

program raise EU

SMEs’ awareness

of China related

business issues

Providing coherent,

consistent and

consolidated voice

for EU SMEs via the

Inter-chamber SME

Working Group at

the EUCCC

Ready-to-go

workspace available

for EU SMEs in

central Beijing

▪ 177 Publications

▪ 100k+ Downloads

▪ 4264 Enquiries

▪ 28 Member States

▪ 183 Webinar

▪ 9,376 Participants

▪ 45k+ YouTube Views

▪ 560 Trainings

▪ 23k+ Participants

Key Achievements (2019)

Green tech marketGreen building sector

Water sector Air pollution treatment

Green Energy

Agricultural sustainability

Resources

Speaker Bio Contact:

[email protected]

LinkedIn: Liam Z. Jia

www.eusmecentre.org.cn

About the Speaker: Liam Z. Jia

• Business Development Advisor at EU SME Centre

• For the past 6 years advising European businesses on market access and business entry strategies for China.

• Fields of knowledge:▪ Market access:

✓ E-commerce in China✓ Water Sector in China✓ Digital Marketing✓ F&B Distribution in China

▪ China Investment Policies:✓ China’s Outgoing Strategies ✓ Chinese Overseas Investment Vehicles

mailto:[email protected]

http://www.eusmecentre.org.cn/

Doing Business in China

China today

A CONNECTED UNIVERSE Economic Restructuring

Modern Chinese Consumer

Global Outreach

Environmental Sustainability

New Growth DriversChina

Network

Belt and Road Initiative

Rebalancing of the economy

Upgrade of industrial sector

Innovation

Technology

Consumption

Seeks qualityof life

Urban middle class

Energy supply

TransportationInfrastructure

Tech savvyUltra connected

Entering a new phase

THE NEW NORMAL

13TH FIVE YEAR PLAN INTERNET+

The Trends

MADE IN CHINA 2025

NEWNORMAL

The Policies

ECONOMICRESTRUCTURING

NEWGROWTH DRIVERS

ENVIRONMENTALSUSTAINABILITY

MODERN CONSUMER

GLOBALOUTREACH

- Rebalancing of the economy

- Upgrade of Industrial sector

- Consumption and Innovation

- Less reliance on export

- Rebalancing of the energy mix

- Clean up the environment

- Growth of Chinese urban middle class

- Millennials (17-35) driving consumption

- Belt and Road Initiative- China OFDI

BRI

EU Companies in China

ACCESS CHALLENGES

data source http://www.doingbusiness.org/data/exploreeconomies/china/

EU SMEs accessing the marketLIMITED INTERNATIONALIZATION

• 39% of SMEs in EU have imported from another

country (inside or outside the Internal Market) in

the past three years.

• 33% of SMEs in EU have been involved in

exports to another country inside or outside the

Internal Market.

• 80% of all exporting SMEs are oriented towards

markets in other EU Member States.

• Relations with emerging markets -such as the

BRIC - are generally still limited.

• 10% of EU SMEs export to China. 19% imports

from China.


ACCESS CHALLENGESEU SME Centre

Business Service

Survey 2014

EUCCC

Business Confidence

Survey 2018

German Chamber

Business Confidence

Survey 2018

French Chamber

Business Climate

Survey 2015

CBBC

Business Environment

and Market Access

2018

Language and cultureChinese economic

slowdownIncreasing labor costs Raising labour costs Ability to protect IPR

Attracting and retaining

talent

Ambiguous rules and

regulationsFinding qualified staff Skilled staff shortage

Compliance and business

ethics issues

Market access barriers Global economic slowdown Rising operational staffChinese economic

slowdown

Restriction on licensing and

certification

Ambiguous rules and

regulationsIncreasing labor costs

Chinese economic

slowdown Global economic slowdown Finance and taxation

Financing Market access barriersCompetition from non-

compliant competitors RMB Volatility Hiring local resources


ACCESS CHALLENGESC

hin

ese

Eco

no

mic

Slo

wd

ow

n • Chinese economic slowdown is now regarded as the primary challenge to business in the short-term

• Downturn in the Real Estate sector is the main responsible for the deceleration of China economic growth

HR

rel

ated

Issu

es •Rising labour costs

•Talent shortage

•High stuff tornover

•Difficulty in convincing good candidates to join

•Difficulty in hire local human resources

Acc

ess

to F

inan

cin

g • Access to leading policies supporting industries

• Access to government procurement

• Access to subsidies

• Short-term bank overdrafts granting

Reg

ula

tory

an

d M

arke

t A

cces

s B

arri

ers • Unpredictable legislative

environment

• Discretionary enforcement of regulations

• Administrative issues

• Licensing requirement

• Discrimination against FIEs in public procurement

• IPR protection

• Restrictions on accessing to financing


ACCESS CHALLENGES

data source EUCCC Business Confidence Survey, 2018.

EU SMEs in China

MORE EXCLUDED – REGULATORY BARRIERS


EU SMEs in China

MORE EXCLUDED - FINANCING



EU SMEs in China

MORE PESSIMISTIC

Over 4000 enquiries and consultations so far

• Looking for Chinese partners (26%)• Market information (18%)• Different ways to sell products (14%)

• Due diligence (25%)• Ways to enter the market (22%)• Business model feasibility (14%)

• Customs clearance (19%)• Wine standard (14%)• Textile standard (12%)

• Salary (40%)• Termination (18%)• Recruitment (12%)

Our point of view

FREQUENT QUESTIONS

35%

5%

25%

35%

BUSINESSDEVELOPMENT

LEGAL

STANDARD &CONFORMITY

HUMANRESOURCES

Enquiries Overview – Phase I, Phase II

0

50

100

150

200

250

300

350

400

450

500

Total Enquiries 4264

European Businesses Performance in China

• Despite fiercer competition and other challenges such as rising labourand living costs, European businesses delivered Strong financial results in 2017, with y-o-y revenues improving for 66% of respondents of the EUCCC Business Confidence Survey 2017/2018.

• Among them, the medical devices, pharmaceuticals and automotive sectors reported particularly robust sales.

• According to the result of the same survey, this year marked the highest percentage of companies reporting positive earnings before interest and tax (EBIT) since 2005.

• Industries such as automotive, transportation, logistics and distribution, and chemicals and petroleum did particularly well.

Opportunities – Improvements on IPR Protection

• From January to July, foreign applicants in

China filed 92,000 invention patent

applications, with a year-on-year growth of

8.3 percent, and 149,000 trademark

registration applications, up 13.1 percent

compared with the same period last year.

• The European Union Chamber of Commerce

in China polled 585 EU companies in China

on business confidence this year, and the

result indicated that 60 percent of them

think China’s administrative and judicial

protection of IPR has significantly improved.www.iprhelpdesk.eu/china-helpdesk

AGENDAChina’s Outgoing Strategies & Overseas Investment

VehiclesRationale vs. Targets

Take-aways

Ways of

WHERE THE OPPORTUNITES LIE

Economic

Restructuring

New Growth Drivers

We expect opportunities in

Service sectorAgricultural machinery and

technology

Automation Aviation and aerospace equipment

Artificial IntelligenceBiopharma and high-end medical

equipment

R&D and InnovationIntegrated circuits and new IT

technology

New and advanced materials High-end electronic equipment

Advanced marine equipment and

high-tech vessels

High-end manufacturing control

machinery and robotics

Advanced rail and equipment Low and new-energy vehicles

• Understand the market and the procurement processes.

• Match to the needs and expectations of the clients.

• Map the revenue streams of the clients and the supply chain.

• Best chances of successful entry are in niche, emerging or high-risk areas.

• Keep the product simple.

• Comply with local standards and market prices.

• Define a premium product that still offers good value.

• Express yourself in simple terms.

• Have strategies to protect your IPR.

• Acquire knowledge of the financing options.

• Understand the reforms to the procurement regulations and the actions now available.

• Invest in building relationships with technical, business and financial partners and exercise duediligence.

Key Success Factors

Understood Market

Adapted Products

Identified Right

Partner

Made Strategy for

IPR

• Understood regulations and licensing requirements

• Differences in perception of their product

• Understood local needs

• Adapted product or service

• Adapted their business model

• Identified a complementary partner

• Identified their valuable IPR

• And registered it.

Time

Entering the Chinese MarketSuccess factors

www.eusmecentre.org.cn

Thank you!

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china business environment - cewp files/05112019_ams... · •have strategies to protect your ipr....

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