BID Consulting Group

“Entrepreneurship, A Choice” in University of Oulu

BID Consulting Group — Tue, 06 Dec 2011 20:50:21 +0000

Do you have an idea you feel worth pursuing, but do not know where to go or who to share it with? Come join in this continuing seminar directed especially for foreigners in Finland and the Oulu Region.

This session will go through the characteristics of an entrepreneur, the early stages of entrepreneurship and show what services different government institutions offer. This session will be held in Chinese.

Organised byHomelike Oulu project together with BID Consulting Group
Speaker Consultant: Dan Wang

Topics:
– What is entrepreneurship?
– Requirements of entrepreneurship
– Characteristics of entrepreneurships
– Idea to business
– Financing your company
– Start-up grants
– Entrepreneur training
– Where to find help to set up

Location:
University of Oulu, Linnanmaa, lecture room TA101
Linnanmaa_TA 101 on Map of Uni.

13：00——17：00
07.12.2011

Registration:
Register by 01.12.2011 to Heini Rosqvist
E-mail: heini.rosqvist@ouka.fi

Entrepreneurship, a choice

BID Consulting Group — Tue, 06 Sep 2011 07:36:09 +0000

Organised by Business Oulu, Homelike Oulu project together with BID Consulting Group, consultant Dan Wang.

Location:
Business Oulu
Elektroniikkatie 3

12：00——16：00
30.9.2011

Registration:
Register by 27.09.2011 to Henry Koivukangas
henry.koivukangas@businessoulu.com

Understand the risk of entering China market

BID Consulting Group — Mon, 29 Aug 2011 15:01:09 +0000

China market is indeed a growing pool of investments, trade and production. Many have termed China as the world’s factory where lots and companies around the world are entering into China to further expand their business. As China continues to progress in recent years, many foreign companies in China are benefiting as well. Today, China has attracted the most number of foreign investors compared to other developing countries.
China is a good opportunity for companies to embark on if they want to expand their business in Asia and the world around. However, SMEs (small and medium enterprises) may be worried that they do not have the required or enough resources to enter into China market. However, it is not just about having the capital but applying the correct approach when doing business in China.
China market is a complicated field by which only those who are familiar with the Chinese culture would be able to move around in the market. Many may not realize that China is a country whereby the Chinese are deal with business according to their social and cultural values.
The Chinese have been passing down a set of values since history and the Chinese companies have been carrying out their business and trade according to those values and beliefs. Thus it takes more than just being able to speak the language.
To survive in the China market, one must have good relationships in the market. The Chinese uses the term, “guan xi” to refer to any kind of relationships; personally or bureaucratically. Chinese companies tend to want to work with people whom they are familiar with as they would be able to develop a trust between them.
Furthermore with “guan xi”, newly established companies would know the knitty gritty paperwork and having a good relationship with the government officials would reduce any unnecessary procedures and delays.
However, a number of foreign companies do not a good network in China and thus they are unable to find relevant or reliable business partners in China market and meet a lot bureaucratic problems as they are unfamiliar with the laws of China.
The Chinese consumers have a very strong national pride and they like to be associated with their nationality and country. Hence, the Chinese consumers are very supportive of their local products. Hence, foreign investors sometimes have a hard time trying to market their products to the Chinese consumers because their products may seem too unfamiliar and foreign.
Foreign companies need to familiarize themselves with the China market laws and culture before entering it. The China laws may be frustrating as they seem to be very complicated. However, if foreign companies are familiar with the Chinese culture, they will be able to understand the Chinese laws better. Interacting with the locals would also allow a deeper understanding of the Chinese culture. Hence, a lot of foreign companies would undertake a local company as a partner to help them with the registration process and negotiation with the Chinese.
In addition, most of the foreigners are not exposed to the Chinese culture, thus they do not know what are the preferences and needs of the Chinese consumers. Carrying out a consumer research may not be very useful as the information collected may not truly reflect the true responses as the Chinese may not be comfortable giving out information to foreign researches. Hence, very often, foreign companies engage a local research company to carry out market analysis research as the data collected may be more reliable.

China to boost offshore wind power

BID Consulting Group — Sat, 13 Aug 2011 22:29:40 +0000

NANJING — China will increase its offshore wind power installed capacity to 5 gigawatts (GW) by 2015 and 30GW by 2020, the National Energy Administration said Wednesday.

The public tender for the second round of offshore wind power concession projects with a total installed capacity of 1.5GW to 2GW will be completed during the first half of 2012, the administration said at a meeting held in the city of Nantong, Jiangsu province.

Liu Qi, deputy director of the administration, said that relevant departments should recognize the importance and urgency of developing offshore wind power.
The country often faces severe power shortages in summers, with power generation and transmission systems unable to cope with rising demand.

China faces a 30GW power shortfall this summer, according to data from the China Electricity Council.

Liu said the country should expedite the establishment of an advanced and fully-equipped offshore wind power industry to boost its large-scale development.

In June 2010, Shanghai’s East Sea Bridge’s 100MW offshore wind farm project was complete

From XinHua

Bright future for biomass power in China

BID Consulting Group — Sat, 13 Aug 2011 22:25:24 +0000

China plans to expand its installed generation capacity of biomass power to 13 million kilowatts by the end of 2015, China Business News reported on Monday.
The figure doubled the former goal proposed by the China Electricity Council, and is even higher than the planned installed capacity of solar power, which will grow to 10 million kilowatts by the end of the 12th Five-Year Plan period (2011-2015), according to Liu Tienan, the head of the National Energy Administration, who made these remarks at the national rural energy conference.
China’s present installed capacity for biomass power, of which marsh gas generation and garbage incineration are project examples, is about 5.5 million kilowatts. Wu Youqing, a professor with the East China University of Science and Technology, said at the conference that China should produce 5 billion tons of biomass power every year theoretically, which equals 10 percent of the country’s total coal production.
The on-grid price of biomass power is now set at 0.75 yuan ($0.12) per kilowatt-hour. Analysts said that biomass power stations may make profits due to recently released policies.

From: China Daily

Bamboo treecycle

BID Consulting Group — Sat, 13 Aug 2011 22:22:00 +0000

The Bamboo treecycle developed by MGT Engineering Ltd is on dispay at the 21th China Int’l Bicycle and Motor Fair.

China may tighten approval of wind projects

BID Consulting Group — Sat, 13 Aug 2011 22:20:49 +0000

A wind farm in Inner Mongolia autonomous region in the file photo taken in 2007. [Photo / Xinhua]

China’s National Energy Administration may reinstate its control over onshore wind-power projects with less than 50,000 kilowatts of capacity, the China Securities Journal said, citing an unidentified person.
Currently, wind power farms of less than 50,000 kilowatts are approved by provincial governments and only larger facilities need approval from the central-government agency, the Beijing-based newspaper said Wednesday.

2011-07-20

‘Green seeds’ chewing gum bottle

BID Consulting Group — Sat, 13 Aug 2011 21:53:28 +0000

The “Green Seeds” chewing gum bottle designed by Jiang Gonglue makes it easier for you to deal with gum residue.

The bottle features a perforated paper-tape dispenser at the bottom plus a temporary storage space for used gum.

To dispose of the chewed gum, you just need pull off the paper stub, wrap the used gum and shove it into the bottom.

The design won Jiang the Gold Prize of Zhenhai Cup Design Competition in 2009.

Problems that foreign companies may encounter when entering China market

BID Consulting Group — Sat, 13 Aug 2011 21:30:23 +0000

Every market has its own risks and gains but with a clear understanding of what they are, companies can actually enter and establish a presence in the market. Presently, the fastest growing market in the world is China’s with an average real annual GDP growth of 11.2% in 2006-2010. Furthermore, China’s gross domestic product reached RMB 39.8 trillion in 2010.
With this rapid economic growth, many foreign companies are hoping to enter into China to expand their enterprise. Comparing to other developing nations, China has the highest foreign investment today. China received a total of 622.4 billion U.S. dollars in foreign direct investment from 1979 to 2005
If China continues to progress at this rate, many believe that China will soon be the largest world economy. China’s huge natural resources are attracting lots of developments and investments.
However, as China is still considered a new market compared to the West, many overseas companies are unsure about the China market. Basically, the China market may seem complicating and frustrating to foreign companies, but once a good understanding is established, doing business in China may not seem to be that difficult.
First and foremost, China has a different culture from the US and Europe. The way the Chinese carry out their business tends to differ from the foreigners. Hence, cultural differences are always the root of conflicts and disagreements between the overseas companies and the locals.
Language barrier is a huge issue for many foreign companies when they want to enter into the China market. Most of the locals in China are unable to communicate in English and many foreigners are unable to speak the Chinese language. One must be able to understand what the other party wants before conducting a business. Thus, more foreign companies would need the help of interpreters and translators to communicate with the locals.
However, being able to speak the language does not mean that the party will be able to converse effectively. The Chinese may work using the Chinese language but they also inculcate their values in their business. An effective translator would not only be able to speak the language but must also be familiar with both the Chinese culture and that of the foreign companies as well.
The Chinese culture may seem to be full of complexities but as long as one is familiar with it, one can understand the essence of those values. For example, the Chinese value respect and trust and thus, those values are very important when the locals carry out their business.
As the Chinese are very respectful of others, they would tend to seek others’ opinions and advices before making a decision. Thus, a normal business meeting in China may take longer than a meeting in another country. If the foreign investors do not understand this, they would think that the Chinese’s decision making process takes up a long time. However, the Chinese are not indecisive but rather respecting the view of others.
Next, the Chinese are very particular about having a good relationship with others. The way to move around in China is through “Guanxi”, network. The Chinese would put in a lot of effort in socializing and building up relationships with others as they believe that “Guanxi” is the foundation of a successful business. The advantages of “Guanxi” in China allow them to develop trust with their business partners and prevent any hiccups with the higher authorities.
At times, foreign investors may think that socializing too much is a waste of time but to the Chinese, it is actually all part of doing business. Thus, foreign investors would need to develop their network if they would want to expand in China.
The Chinese business culture is very different from the norm that foreign companies are familiar with. However, once they start to appreciate and understand the Chinese culture, the foreign investors can have a good collaboration with the locals and develop their enterprise at least in Asia.

China market entry – Investment

BID Consulting Group — Sat, 13 Aug 2011 21:29:31 +0000

Direct investment is always referred to as Foreign Direct Investment (FDI), which is sufficiently large to affect a company’s subsequent decisions, this is sometimes a majority ownership, but sometimes it’s just a significant minority ownership. There are three main types of direct investment: equity joint venture, contractual joint venture and wholly foreign-owned enterprise.

Equity joint venture

An equity joint venture is a partnership between an overseas and a Chinese individual, company/enterprise or financial organizations approved by the China government. Companies in an equity joint venture share both mutual rewards and risks. This is one of the most preferred manners for cooperation where the Chinese government and Chinese businesses are concerned.
However, overseas parties are only allowed to invest at least 25% of the entire registered capital in the form of cash or trade property rights etc. The parties to the joint venture shall share the rewards, risks and losses according to the ratio of investment.
Cooperation among the partners is imperative for a noteworthy joint venture. However, cooperation does not mean the need to always use the same strategies. Each equity joint venture partner plays supplementary and complementary roles with the other thus different strategies are frequently adopted by each partner. The Chinese partners’ strategies must be in compliance with the State economic development programmers.

Contractual joint venture

As the name goes, this type of joint venture is rather similar to a equity joint venture but in a contractual form. Before the joint venture, all liabilities, rights and responsibilities are agreed upon a contract thus the parties involve will negotiate the form of administration and profit division. Contractual is different from equity joint venture because profit sharing is not based on ratio of investment but according to form of investment as per contract.
The major difference between an equity joint venture and a contractual joint venture as means in China market entry is that the latter neither necessarily calculates the shares in the form of currency nor distributes profit in proportion to their share, but share profit according to the form of investment and the ration of profit sharing as per the contract.
Joint venture is the most common method in China market entry, there are many advantages of joint venture:
• it provides great flexibility to arrange business relationship in a way that benefits both parties. This applies to the management of the joint venture and its financing
• comparing joint venture with wholly foreign-owned enterprise, joint venture investing reduces capital expenditure as well as manpower. With joint venture, its easier to obtain the capital, the technology as well as local society and government support
• joint ventures allow the firms to enjoy a higher degree of marketing control which would shorten the time taken to obtain local market information
• a foreign investor does not need to set up a new corporation in China under joint venture structures. The foreign investor and Chinese partner participate in the joint venture by doing business using the Chinese business license under a co-operative and contractual arrangement. This would allow each partner to focus on their own specialty
However, there are also some disadvantages of joint venture as means in China market entry:
• comparing with license and contract manufacturing in China, joint venture requires the foreign enterprise to pump in more funds which results in higher risks
• due to culture differences and profit sharing issues, valuable time would have been wasted after settling an agreement. Therefore, correct communication techniques are important
• undesirable income tax and liability implications if joint venture is construed as a partnership
• parties involved do not have the autonomy of a sole proprietorship in the decision making process

Wholly foreign-owned enterprise

Wholly foreign-owned enterprises refer to enterprises established in China by foreign investors, exclusively with their own capital, according to Wholly Foreign Owned Enterprise Law of the People Republic of China (PRC). It does not include branches set up in China by foreign enterprises and other foreign economic organizations. Therefore, the formation of a wholly foreign-owned enterprise must be with capital coming only from outside China and without any co-investment by Chinese entities.
The advantages of establishing a wholly foreign-owned enterprise as means in China market entry include:
• autonomy and independence to carry out worldwide strategies of its parent company without having to consult their Chinese partners
• full control over management and production quality and profit distribution provided that the legal limitations are fulfilled
• able to issue invoices to customers in Chinese currency, RenMinBi (RMB), receiving revenues in RMB, and converting RMB profits into US dollars for remittance to their parent company overseas
• safeguard their technical intelligence and the chemistry of their equipment
• increase its operations and management efficiency and advance further in development
The disadvantages of establishing a wholly foreign-owned enterprise as means to do business in China include:
• lack of Chinese partner and local contacts. A Chinese party may have the necessary relationship (“Guan Xi”) to secure authorization of certain projects or the expertise to handle strict bureaucracy. The Chinese party may further obtain land-use rights for a particular site or may have particular know-how, technology, assets or resources which would not otherwise be available
• spending more time and effort to hire trained professionals and to create a sales network
• unable to obtain cheaper alternatives of land acquisition (for joint ventures)
• huge investment involved will result in higher risks. At the same time, it is also tougher to obtain the production resources and obtain Chinese government support