Ventures Dialogue

China replaces the US as the leading investor in renewable energy technology.  This is according to Pew Charitable Trusts’ new study that ranks China investing $34.6 billion in 2009.  This is almost two times the investment amount as US.  Rounding off the top five spots for clean tech investment include the UK, Spain and Brazil, respectively.  Pew does note that even despite the global recession, global investment in renewable technology has more than doubled over the last five years.  South Korea alone posted a 250 per cent increase in this period. 

An article from BBC news quotes Phyllis Cuttino, director of Pew’s climate change movement as saying,   “They know that investing in clean energy can renew manufacturing bases, and create export opportunities, jobs and businesses.” 

To read more about China’s energy diversification needs/aims head over to the article. 

Photo by Sebastiano Pitruzzello (aka gorillaradio)

International companies, including those in Canada, engaging in the field of architecture, planning and engineering, as well as general public, are invited to submit their innovative ideas and concepts for the design and construction of the Hong Kong Boundary Crossing Facilities (HKBCF) of the Hong Kong-Zhuhai-Macao Bridge (HZMB).

At the launching ceremony on the commencement of detailed ground investigation works for the HKBCF of the HZMB held recently, Secretary for Transport and Housing of the Hong Kong Special Administrative Region (HKSAR) Government, Ms Eva Cheng, said the HKBCF was a very important part of the HZMB’s construction works within Hong Kong territory – it will fit in with the Hong Kong Link Road, Tuen Mun-Chek Lap Kok Link and Tuen Mun Western Bypass to form a strategic road network, which would further enhance Hong Kong’s status as an international transportation and aviation hub.

To cope with the schedule of the HZMB project and allow detailed design of the HKBCF to begin next year, a design ideas competition was launched.  Interested parties are invited to submit their innovative designs to either the Professional Group or the Open Group. 

Headed by renowned architect Mr Richard Hawkins of Foster + Partners, the jury comprises six other professionals and celebrities from the Mainland China, Hong Kong and overseas. The jury will assess the entries based on five criteria, which are:  innovation and creativity; aesthetics and identity/icon; environmental friendliness; functionality, effectiveness and buildability; and harmony with the neighbourhood.

The competition is now open for entries.  Closing date for registration is February 8, 2010. 

Details of the competition are available on the website.  The winning list will be announced in May 2010 and the winning design ideas will be the reference for the future detailed design of the HKBCF.

Question: What retailer in China has over 250 stores in 90 cities and is considered a trusted and upscale retailer?

Answer: Walmart

Surprised?  While Walmart China may not be your first thought, check out this podcast from the Economist as Ed Chan, head of Walmart’s operations in China, discusses how Walmart is viewed in China, the role of the emerging middle class is playing in redifining the chain, and much more. 

Photo by Str1ke

Could China become the next big car manufacturer?  Well, quite possibly if you ask Geely, China’s biggest privately owned car manufacturer.  It is currently developing six model platforms, dedicated to launching nine new cars over the next year and a half, and by 2015, the company cites 42 new models will be on the market.   In the recent article, The ambition of Geely, from The Economist, it highlights Geely’s aspirations, but also raises some concerns.  Namely, its dependence on government tax breaks, which is likely to be a main reason of its increased sales in the first half of the year.  There are also concerns surrounding the safety of its cars and not being on par with Western levels.  In a crash test by a Russian car magazine of the Geely CK, the driver and passenger were given a 10 percent survival rate.

Nevertheless, this is not stopping Geely.  The company aims at selling 1.3 million cars abroad by 2015 (30,000 foreign cars were sold in 2008).  Geely has not only increased employment levels, but has created its own university, the Zhejiang Automotive Engineering Institute, and has assets abroad as well.  It also plans to build factories in South Africa and Mexico.  And, according to the article, Geely might be in the game to buy a European car company. 

So Geely has big plans, we’ll just have to wait and see what develops.

Click here to read the full article from The Economist.

You might also want to visit Geely’s website and view some of their videos.

Last week I wrote a post on Coca-Cola’s efforts to gain a stronger presence in China with its bid for the 17 year-old China Huiyuan Juice Group (CHJG), the country’s largest juice company.  Coke is interested in CHJG because while Coke has captured a sizable portion of the carbonated beverage market, its fruit juice line is not as strong.  Last Wednesday, Chinese officials rejected Coke’s offer under its anti-monopoly law.  In a statement (in Chinese), the Ministry of Commerce cited the need to protect consumers and preserve competition as reasons for rejecting the bid.  Some are saying however, the new law allows the government to protect national brands.  It has been estimated, but not confirmed, that the two companies together would control around 20 per cent of the juice market. 

While the Ministry’s decision did come to some as a shock, the decision could have longer lasting effects on China.   The day after the deal’s rejection was announced and reports that Coke might abandon efforts all together, shares of CHJG dropped almost 23 per cent before trading was eventually halted.  The shares fell 42.2 per cent in total before regaining some ground, and ended the day at pre-offer, September 2008, levels. Continue reading ‘Coca-Cola’s deal falls flat as Chinese government rejects offer to buy China Huiyuan Juice Group’

With the opening of its $90 million (USD) technology center in Shanghai on March 6, The Coca-Cola Company (Coke) also announced it will invest $2 billion in China over the next three years on bottling plants and distribution infrastructure, sales and marketing, and research and development. 

Over the past 30 years, Coke has invested $1.6 billion in the Chinese Market and has good reasons for doing so.  China is Coca-Cola’s fastest growth market and its third biggest market (after the US and Mexico) says Muthar Kent, Coca-Cola’s chief executive officer in the article “Coca-Cola to invest more than $2 bln in China over next three years” from SINA English.  The article noted globally, Coke posted a five per cent growth in the fourth quarter of 2008 with both sparkling and still beverages, but in China, it posted a 29 per cent gain (19 per cent for the year as a whole).  This represents the largest percentage increase in more than five years (21 consecutive quarters).  Compared to Coke’s North American market, their annual report showed that sales declined by 1 per cent in 2008.  

This $2 billion investment is not the only big move Coke is pursuing in China.  Last September, Coke announced its intention to purchase China Huiyuan Juice Group Ltd, China’s leading pure juice maker. China Huiyuan captures about 42 per cent of China’s fruit juice market. The offer is not final, as according to Anti-Monopoly laws, the deal has to be approved by the Ministry of Commerce.  While there are some tensions rising due to nationalistic pride, because if this deal goes through, it would be the largest acquisition of a domestic company by a foreign firm, a decision is expected by the end of the month.

Coke is not the only beverage giant to show an interest in China. Continue reading ‘Chinese drinks market a big draw for Coke, Pepsi and other foreign firms’

It was imperative in this era of globalisation for Hong Kong to reach out to other countries  to collaborate in education and in nurturing of talent, according to the Secretary for Education, Mr Michael Suen.

Speaking earlier this month at a breakfast seminar, entitled “Nurturing Talent in a Globalised world – Hong Kong’s Game Plan and Opportunities for Canada”, jointly organised by the Asian Institute of the University of Toronto and the Hong Kong-Canada Business Association in Toronto, Mr Suen said Hong Kong and Canada already enjoy sound educational ties, but as an important international partner, Canada had a significant part to play and “we can do even better”. 

Hong Kong’s education institutions have student exchange arrangements with more than 30 of their counterparts in Canada. “Of the 2,900 incoming exchange students this academic year, 231 are from Canada, while 289 Hong Kong students went to Canada,” Mr Suen said, while calling for more exchanges.

He said an exciting area for international collaboration was research and development. “There are more than 200 research projects conducted between institutions in Canada and Hong Kong’s high education sector covering areas such as biological sciences, physical sciences, engineering, IT and computer science and technology.”

Education takes up the largest share of Hong Kong government’s spending. The Special Administrative Region has set aside in this year’s budget about $18 billion (CAD$2.3 billion) for a research endowment fund to support research and development activities at its tertiary institutions. “I believe this will open up new areas for co-operation in research between Hong Kong and Canada,” he said.

Mr Suen said Hong Kong was so reliant on strong education because “one of our biggest challenges will be coping with the combination of an ageing population and low birth rate, resulting in a shrinking workforce.” And, “in a small externally-oriented economy such as ours, it is the vitality, entrepreneurship and hard work of our people that keeps us competitive in an increasingly competitive word.”

He highlighted the Government’s various measures to help raise the quality of its human capital in a globalised world, and stressed that opportunities were opening up in Hong Kong for overseas students, including those from Canada.

“We are opening the door wider to overseas talent including students, business people, investors and those with special talents such as musicians, sports people and creative talent,” Mr Suen said.

The Secretary for Education cited programmes such as the “Quality Migrant Admission Scheme (QMAS)”, “Entry for Employment as Professionals Scheme”, “Admission Scheme for Mainland Talents and Professionals”, and “Capital Investment Entrant Scheme”, as well as the newly-introduced “Immigration Arrangements for Non-local Graduates” scheme, as examples.

The Vancouver-born former NHL (National Hockey League) star Barry Beck is one of the 500 people who have been admitted to Hong Kong under the QMAS since its launch in June, 2006.  Other high-profile names include world-renowned pianists Lang Lang and Li Yundi, and actress Zhang Ziyi.

The “Entry for Employment as Professional Scheme” has also brought in more than 210,000 high quality people from different fields over the past decade. And, under the “Capital Investment Entrant Scheme”, with a minimum investment of about CAD$830,000, overseas citizens can settle in Hong Kong.

The seminar was attended by about 80 representatives from the academic, education, business and political sectors in Toronto.

China promises "a shopping spree of historic proportions," Janet De Silva

China’s growing middle class is expected to transform the global consumer marketplace as we know it, according to the CEO of a Hong Kong based company called retailChina.

Speaking to The Hong Kong Canada Business Association, Janet De Silva, explained that by 2009, the number of middle-income consumer class households in China is expected to triple to 105 million and to reach 520 million by 2025.

In China, these households are much more youthful than other developed countries. According to De Silva, many of China’s emerging middle class consumers are young professionals between the ages of 25 and 40, with significant, discretionary spending power. More importantly to Canadians, they’re first generation consumers with no brand loyalty, and they value goods produced outside of China.

De Silva, a Canadian who was previously the Chairman and CEO of Sun Life Financial (Hong Kong) Limited, says China is unlike any other market. In order to successfully sell to China, companies must understand the geographic diversity and differences in consumer tastes and attitudes.

De Silva describes dramatic differences between consumer preferences in China’s largest four or Tier 1 cities, and the 11 cities labeled as Tier 2. In Beijing, Shanghai, Guangzhou and Shenzhen, consumers are looking for items that demonstrate their rising status; whereas in tier 2 cities like Nanjing and Xi’an, consumers focus more so on safety and hygiene. Successful companies adapt their marketing strategies accordingly.

Of course price point is vital. Retailers must be able to drive down costs in order to succeed in the market. And for retailers, the biggest barrier, according to De Silva is getting experienced people and keeping them.

Working directly with the property developers of international malls in China (200 new malls in the next 3-5 years), retailChina is looking to acquire international brands to market to this burgeoning middle class. Already the company is marketing Fruits & Passion in 12 stores in China and plans to grow that network to 80 stores by 2010.

China promises “a shopping spree of historic proportions,” says De Silva, with all international brands equal in the eyes of the Chinese consumers. While “Made in Canada” has no particular brand, Canadian retailers have an equally tremendous opportunity to sell to what will someday be, the world’s largest middle class consumer market.