+ All Categories
Home > Business > USCBC UNC GLOBE Presentation - October 2011

USCBC UNC GLOBE Presentation - October 2011

Date post: 09-May-2015
Category:
Upload: marc-ross
View: 499 times
Download: 0 times
Share this document with a friend
Description:
US-China commercial relations
62
US-China Commercial Relations UNC GLOBE October 24, 2011
Transcript
Page 1: USCBC UNC GLOBE Presentation - October 2011

US-China Commercial RelationsUNC GLOBEOctober 24, 2011

Page 2: USCBC UNC GLOBE Presentation - October 2011

Pop Quiz

Page 3: USCBC UNC GLOBE Presentation - October 2011
Page 4: USCBC UNC GLOBE Presentation - October 2011
Page 5: USCBC UNC GLOBE Presentation - October 2011
Page 6: USCBC UNC GLOBE Presentation - October 2011
Page 7: USCBC UNC GLOBE Presentation - October 2011
Page 8: USCBC UNC GLOBE Presentation - October 2011
Page 9: USCBC UNC GLOBE Presentation - October 2011
Page 10: USCBC UNC GLOBE Presentation - October 2011
Page 11: USCBC UNC GLOBE Presentation - October 2011
Page 12: USCBC UNC GLOBE Presentation - October 2011

US-China Business Council

Page 13: USCBC UNC GLOBE Presentation - October 2011
Page 14: USCBC UNC GLOBE Presentation - October 2011
Page 15: USCBC UNC GLOBE Presentation - October 2011
Page 16: USCBC UNC GLOBE Presentation - October 2011
Page 17: USCBC UNC GLOBE Presentation - October 2011
Page 18: USCBC UNC GLOBE Presentation - October 2011
Page 19: USCBC UNC GLOBE Presentation - October 2011
Page 20: USCBC UNC GLOBE Presentation - October 2011

Maps

Page 21: USCBC UNC GLOBE Presentation - October 2011
Page 22: USCBC UNC GLOBE Presentation - October 2011
Page 23: USCBC UNC GLOBE Presentation - October 2011
Page 24: USCBC UNC GLOBE Presentation - October 2011
Page 25: USCBC UNC GLOBE Presentation - October 2011

Stats + Data

Page 26: USCBC UNC GLOBE Presentation - October 2011

Cities with a population over 1 million

160

9

Page 27: USCBC UNC GLOBE Presentation - October 2011

Labor force

780 million

155 million

Page 28: USCBC UNC GLOBE Presentation - October 2011

Number of time zones

1

6

Page 29: USCBC UNC GLOBE Presentation - October 2011

Number of movie theatres

7,000

39,000

Page 30: USCBC UNC GLOBE Presentation - October 2011

GDP composition by sector

9.6% Agriculture46.8% Industry43.6% Services

1.2% Agriculture22.2% Industry76.7% Services

Page 31: USCBC UNC GLOBE Presentation - October 2011

Exports

$1.51 trillion

US 20%Hong Kong 12%Japan 8%S. Korea 5%Germany 4%

$1.27 trillion

Canada 19%Mexico 12%China 7%Japan 5%UK 4%Germany 4%

Page 32: USCBC UNC GLOBE Presentation - October 2011

GDP

$5.745 trillion

$14.62 trillion

Page 33: USCBC UNC GLOBE Presentation - October 2011

Per capita GDP

$7,400

$47,000

Page 34: USCBC UNC GLOBE Presentation - October 2011
Page 35: USCBC UNC GLOBE Presentation - October 2011
Page 36: USCBC UNC GLOBE Presentation - October 2011
Page 37: USCBC UNC GLOBE Presentation - October 2011

Trends

Page 38: USCBC UNC GLOBE Presentation - October 2011

Demographics:Baby boomers (born after 1980) 50%+ of population by 2015,

45% of workforce by 2020Aging to quadruple total real wage

Source: Morgan Stanley Research (E) estimates.

Page 39: USCBC UNC GLOBE Presentation - October 2011

Urbanization:47% to 65% in the long-term, adding

300 million urban residents

Source: Morgan Stanley Research (E) estimates.

Page 40: USCBC UNC GLOBE Presentation - October 2011

Zhengzhou

Xining

Shijiazhuang

Taiyuan

Hohhot

Nanchang

Nanning Zhanjia

ngHaikou

Macau

Kunming

Guiyang

Dalian

QingdaoLianyung

ang

Hangzhou

Fuzhou

Xiamen

Hong Kong

ShantouZhuh

ai

Xian

Yinchuan

Lhasa

Urumqi

Yumen

BeijingTianj

in

Shanghai

Shenyang

Changchun

Harbin

YantaiJin

an

Changsha

Guangzhou

Hefei

Chengdu

Chongqing

Lanzhou

Wuhan

Shenzhen

Nanjing

Super HubsEmerging HSR Hubs

Infrastructure:

China to have the longest + fastest high speed rail grid in the world by 2015

Road capacity to outpace US by 2015Source: Morgan Stanley Research (E) estimates.

Page 41: USCBC UNC GLOBE Presentation - October 2011

Consumer financing:Credit consumption as % of total:

10% to 40%Source: Morgan Stanley Research (E) estimates.

Page 42: USCBC UNC GLOBE Presentation - October 2011

China college education coverage ratio

Education:College degree of workforce:

from 10% to 35%

Source: Morgan Stanley Research (E) estimates.

Page 43: USCBC UNC GLOBE Presentation - October 2011

Business Environment

Page 44: USCBC UNC GLOBE Presentation - October 2011

Five-Year Outlook for Business in China

Optimistic 57%

Somewhat optimistic 37%

Neutral 4% Somewhat pessimistic 2%

USCBC 2010 Survey

Page 45: USCBC UNC GLOBE Presentation - October 2011

View of Current Business Climate Compared with Three Years Ago

More optimistic 26%

Less optimistic 39%

No change 35%

USCBC 2010 Survey

Page 46: USCBC UNC GLOBE Presentation - October 2011

China's Prominence in Overall Company Strategy

Top priority 18%

Among top five priorities 74%

One of many non-key priorities 6%

Not a priority 2%

USCBC 2010 Survey

Page 47: USCBC UNC GLOBE Presentation - October 2011

Will accelerate compared to last

year 66%

Remain unchanged 34%

Company Resource Commitment to China over Next 12 Months

USCBC 2010 Survey

Page 48: USCBC UNC GLOBE Presentation - October 2011

Company Objectives in China

Access or serve the China market

Export platform to servemarkets other

than the US

Export platform to serve the US

Other

96%

40%

22%

6%

USCBC 2010 Survey

Page 49: USCBC UNC GLOBE Presentation - October 2011

Are China Operations Profitable?

Yes 87%

No 13%

USCBC 2010 Survey

Page 50: USCBC UNC GLOBE Presentation - October 2011

USCBC 2010 Survey

Primary Restraint on Profitability

27%

24%

21%

17%

8%

1%

16%

Page 51: USCBC UNC GLOBE Presentation - October 2011

USCBC 2010 Survey: Top 10 Challenges

1. Human resources: Talent recruitment and retention 1. Administrative licensing1. Competition with PRC state-owned enterprises4. IPR: Enforcement5. Cost increases6. Market access in services7. Transparency8. Protectionism risks in China9. Government procurement10. Standards and conformity assessment

USCBC 2010 Survey

Page 52: USCBC UNC GLOBE Presentation - October 2011

USCBC 2010 Survey: Top 10 Challenges

1. Human resources: Recruitment & retention 1. Administrative licensing1. Competition with PRC state-owned enterprises4. IPR: Enforcement5. Cost increases

USCBC 2010 Survey

Operating Costs

Page 53: USCBC UNC GLOBE Presentation - October 2011

USCBC 2010 Survey

Rising Costs of Most Concern

Labor 58%

Land 9%

Utilities 5%

Materials 11%

Taxes 17%

Page 54: USCBC UNC GLOBE Presentation - October 2011

Human Resources

Increased costs….. Increased competition…..

2011 Minimum Wage Increases

Beijing 20%Tianjin 16%Chongqing 32%Shandong 26%Jiangsu 17%Guangdong 18%

Among ChinaHR’s 2010 survey of top 50 employers in China, only 4 were foreign companies, down from 21 in 2009. SOEs made up 66% of the list.

ManPower’s 2010 Employee survey, 59% of job seekers prefer Chinese private companies because of better long-term career development opportunities.

Page 55: USCBC UNC GLOBE Presentation - October 2011

USCBC 2010 Survey

Impact of Rising Costs on Long-term Planning

Rising costs in

China 57%

Market access restric-

tions 14%

Better prospects for capital

deploy-ment 5%

Other 24%

Reasons Company Considers Moving operations from China to other Asian/East Asian country

No impact 21%

Some impact 75%

Considerable impact 4%

Page 56: USCBC UNC GLOBE Presentation - October 2011

USCBC 2010 Survey: Top 10 Challenges

6. Market access in services7. Transparency8. Protectionism risks in China9. Government procurement10. Standards and conformity assessment

USCBC 2010 Survey

Policy and Regulatory Costs

Page 57: USCBC UNC GLOBE Presentation - October 2011

Seeing Signs of Protectionism in…..

Standards setting

Market access barrie

rs

Government procurement/b

uy local

Administrativ

e licensing

Pressure to fa

vor Chinese fir

ms

Tighter enforcement

Difficulty

in bidding on certa

in contracts

M&A review/approvals

Subsidies/external financing

Other

47%44%

42% 42% 41%39%

32%

28%

23%

1%

32%

23%

28%

19%

14%11%

16% 14%

6%

20102009

USCBC 2010 Survey

Page 58: USCBC UNC GLOBE Presentation - October 2011

Selected Industrial Issues and Advocacy Map

Key Commercial Policies Spread Across Agencies, Not Always Well-Coordinated;Effective Advocacy Targets All Key Stakeholders … And Senior Leadership

Key Commercial Policies Spread Across Agencies, Not Always Well-Coordinated;Effective Advocacy Targets All Key Stakeholders … And Senior Leadership

Zhang DejiangVice Premier

Li KeqiangVice Premier

Wang QishanVice Premier

Liu YandongState Councilor

Wen JiabaoPremier

Agencies

SelectedResponsibilities

NDRC, MOHURD, MOF, MLR, MOH, MEP, SAT

MIIT, MHRSS, MOT, MOR, SASAC, SAWS

MOFCOM, PBOC, SAIC, Customs, AQSIQ, SIPO,

CSRC, CBRC, CIRC

MOE, MOST, SARFT, Min of Culture, GAPP

Economic planningCommodity pricesPublic finance/taxHealthcare reform

Climate /energy policy

Financial sectorTrade & investmentQuality inspectionBusiness licensingCompetition policy

S&ED, JCCT

Industrial reformTelecom, IT, transportation

Labor, social securityProduction safety

State-owned enterprises

Science & technologyEducation

CultureSports

HK & MacaoIssues

Govt procurement

Tax/HNTE

Standards

Indig Innovation

IPR

M&A

Industrial policy

MOF, NDRC MOFCOM

MOF, SAT MOST

AQSIQ MIIT

MOF, NDRC MOST

SIPO, SAIC GAPP

MIIT

NDRC MIIT

NDRC MOFCOM, SAIC SASAC, MIIT

MOST

AQSIQ = Quality & Inspection AdminCS/B/IRC = Securities, Bank, Insurance regulatorsGAPP = Gen Admin of Press & PubsMEP = Min of Envir ProtectionMIIT = Min of Industry & Info Tech

MLR = Min of Land & ResourcesMOE = Min of EducationMOF = Min of FinanceMOFCOM = Min of CommerceMOH = Min of Health

MOHURD = Min of Housing, Urb/Rural DevMHRSS = Min of Hum Resources & Soc SecMOR = Min of RailwaysMOST = Min of Science & TechnologyMOT = Min of Transportation

NDRC = Nat. Devel & Reform CommPBOC = People’s Bank of ChinaSAIC = State Admin of Ind & CommerceSARFT = Radio, Film, TV AdministrationSASAC = State Assets Commission

SAT = State Tax AdminSAWS = State Admin of Workplace SafetySIPO = State Intellectual Property Office

Energy Efficiency NDRC, MEP, MOF SASAC, MIIT AQSIQ MOST

Page 59: USCBC UNC GLOBE Presentation - October 2011

Advocacy Strategies Pursued

Direct e

ngagement

Foreign-based org.

Professional service firm

China-based org.

US government

Informal coalitio

n of companies

Affiliated PRC company

Other

74%

62%

46% 46% 46%

36%31%

2%

USCBC 2010 Survey

Page 60: USCBC UNC GLOBE Presentation - October 2011

What Keeps CentralPlanners Awake?

What Keeps AverageCitizens Awake?

#1 - Social (in)stabilityNext Issues:• Inflation, inflation,

inflation• Resource allocation• Control over local

governments• “Imbalances”• Corruption

• Social security• Justice• Anti-corruption• Personal income• Housing prices• Healthcare reform• Commodity price

control• Environment

pollution• Food safety• Education reform

Policy Environment

Page 61: USCBC UNC GLOBE Presentation - October 2011

12th FYP

Key Goals

Encourage domestic consumption

Improve social safety net

Industrial “upgrading” (Strategic Emerging Industries plan)

Regional development – Central & Western China

Energy efficiency and environmental sustainability

Taxation and financial systems reform

Urbanization

Page 62: USCBC UNC GLOBE Presentation - October 2011

Marc [email protected]

+1 202 429 0340+1 703 598 3242

@marcaross@USChinaBuisness

Joe [email protected]

+1 202 429 0340+1 202 615 9921

@lukkyjoe@CBR_Magazine


Recommended