brief china to customer
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Charmer Business Consulting & Marketing Research Brief China to Person Who Cares about It : Economy, Society, Diplomatism, CustomerTRANSCRIPT
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An overview of Chinese
Prepared by: WallyDate : 03/02/08
Charmer Business Consulting
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China has 56 ethnic groups, including Han and 55 minorities.
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Battik
Wood mask
SculptureShadow stone carving
Minorities own rich artistic culture.
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Minorities culture also offers business opportunity. (an example of room decoration)
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Bright side: Some examples of Chinese active abroad
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Bright side: Achievements gained by Chinese.
Tianqiao Chen, one of the richest Chinese at 32, is credited with creating China's online game industry.
Liwei Yang, the first Chinese blasted into space.
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Bright side: Prosperous metropolitan life
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Summary
We are proud of our enriched multinational culture.
Like any other country, China is not perfect.
China is entering into the international stage with a dynamic power.
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Beijing and Shanghai at a Glance
-What you may not know yet
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The Origins
Beijing (北京)Date: 770 BC to 476 BCName: (蓟, ji )
Shanghai (上海)Date: Around the 5th centuryName: (沪,扈, hu )
What happened in West at that time?The first recorded Olympic game – 776 BCFall of Western Roman Empire – 5th century
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Food – Beijing
Beijing Duck
Beijing Noodle (with meat sauce) Beijing Noodle (with meat sauce)
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Food - Shanghai
Shanghai Crab
Shanghai WontonShanghai Wonton
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Housing - Beijing
Beijing Courtyard
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Housing - Shanghai
Shanghai Shikumen
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Bars - Beijing
Hou Hai
San Li Tun
Chao YangChao Yang
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Bars - Shanghai
Xin Tian Di
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What are happening
Beijing 2008 Olympic Games
Shanghai 2010 World Expo
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Q&A
Fish Antelope
Flame
Panda Swallow
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China’s Economy
An emerging power
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A Mixed View
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Quickening Pace
0.00%
5.00%
10.00%
15.00%
20.00%
2000 2002 2004 2006
Percentage Change in GDP
China
U.S.
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Facts
China’s GDP increased from $1.1 trillion to $1. 82 trillion from 2000 to 2006China's foreign-exchange reserves jumped more than $200 billion in 2006 to reach $1066.3 billion China has about $1 trillion in personal savings and a saving rate of close to 50%. China has 10 billionaires, up from 3 last year. The 40-richest people are worth a collective $26 billion, up from $18 billion last year.
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Regional Development
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Economic Powerhouse Regions
Three Delta Regions
Bohai Sea Economical Circle
Yangtze River Delta
Pearl River Delta
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Northeast and Northwest China
• Northeast China Revitalization
• West China Development 12 provinces
participation
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Business Opportunities in China
-Vertical Industries
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Purchasing power is growing
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Common Infrastructure Investment Demand
Highlights Key Int’l Players Roles Market ($Billion)
Energy Crude Oil, Coal, LNG, Electricity
Exxon, Shell, BP Exploitation,Gas Stations, Chemicals, Investor
150
Telecom GSM/CDMA, 3G, Cell Phone, Internet
Motorola, Nokia, Cisco, Ericsson, Qualcomm, Siemens
Equipment Provider, Local ManufacturerInvestor
80
Transportation Airlines, Railway, Super Highway, Automobile
Boeing, Airbus, GM, Chrysler, Toyota, Honda, Volkswagen, Siemens
Manufacturer, Investor
100
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Investing in China is profitable
Workforce: local and returnees
Environment:• WTO and government policies• Stable business environment
Result:
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Foreign VCs: 70% fundingmore early stateMain sector: IT with semi-conductor (400M)Main regions
Venture Capital in ChinaVenture Capital in China
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Huge Market:
Niche / Emulating
high growth / best management
Clear exit route
Market leaders - IPO, followers - acquired
24 VC-backed IPO in 2004, 4.3 billions
Ctrip.com; Baidu; Shanda; Linktone
VC: Invest and Exit
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Financial Market in China
Banking
system
Foreign investment
New opportunities: Electronic / data / credit system
Financial IT: 3.3 billion
Securities market, QFII
- Goldman, Citi, JPM, CSFB, UBS, ML
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Practical Tips
Understand the market
Visit China
Know and sell the demands
Localize your products
Conduct due diligence and research
Find a strong and experienced partner
Manage realistic expectations
Have a long-term strategy
Have an “exit” plan
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Negotiating with Chinese Company
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Decision Making Procedure
A typical Chinese company can have very different organizing structure, positions and titles from a western company
Not always the one with higher title holds real power
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Pace of Decision making
Western companies: deadline-driven; rapid decision
Chinese companies: the pace can be fast and slow simultaneously
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When “Yes” Means “No”
Chinese people and western people have different ways to express opinion
Negative replies are considered impolite. “No big problem” usually means “there are still problems”
American Way Chinese Way
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The Role of Guanxi
Guanxi=“Network” in Chinese way
Guanxi can help you to get more opportunity to present your company and your products.
Guanxi=“Network” in Chinese way
Guanxi can help you to get more opportunity to present your company and your products.
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Business courtesy
Greeting:
- Handshaking (formal)
- Nod and smile (informal)
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Business Courtesy
Addressing - Family name + Given name - Only family members or close friends use first names - A married Chinese woman usually retains her maiden name
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Business Courtesy
Business card: two hands
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Summary
China has different culture background and different economic system
Do in Rome as Rome does
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China and U.S. mutually beneficial partners
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Two countries behind numbers
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Two countries behind numbers (continued)
• China has $1 trillion in personal saving and a saving rate close to 50%. The US has about $158 billion and saving rate of 2%
• Shanghai has 4,000 skyscrapers-double the number in NYC. Still 17% of the entire Chinese live on $1 a day.
• China has 100 million internet users (second to U.S.’s 135 million) and 300 million cell phone subscribers.
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China as the word’s workshop
2/3 of all photocopiers, microwaves, DVD players and shoes½ of all digital cameras2/5 of all personal computers1/5 of all clothing
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Apex Company was founded in 1997 when a DVD player sold for around $1000.I bought my Apex® DVD player at Wal-Mart in Wisconsin in 2001 for $50.You bet they made every unit in China.DVD becomes household product because of such players.
Myth: =+
Support: China to Wal-Mart: $18 billion/year. $60 per person in U.S.
A True Example:
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The Google guy in China
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The 100 million dollar man
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Happily ever after for in China
11/12/1987, first ever western fast food restaurant was opened in mainland China. In 2002, KFC opened the first-ever drive-thru restaurant in China. In 2004, operating profits for the China Division were more than $200 million and up over 20 percent.
Store numbers2000
Store number2005 5 year growth
U.S. 5,364 5,525 1%
China 400 1400 350%
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Summary
China is now the third-largest trading partner for the United States (after Canada and Mexico). A Rising China provides challenges and endless opportunities for China and U.S., economically and politically.The best is yet to come.
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Welcome to China