Doing Business in ChinaDoing Business in China

July, 2012

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AgendaAgenda

• The power of Asia • The promising China

economy• Be where the

opportunities are! – Dynamic job market

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Ivy Yang

Senior Marketing Manager,

CEIBS

The Power of AsiaThe Power of Asia

1. Source: “The Rise of Developing Asia and the New World Order," Journal of Policy Modeling, September-October 20112. Source: "The World's Billionaires". Forbes. 20113. Source: Statistical Yearbook for Asia and the Pacific 2011, United Nations ESCAP

China

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● APAC represents 55% of global GDP & 44% of world trade● Developing Asia will overtake G7 by 20181

● Wealth Shifting from the Europe to Asia2 ● Asia-Pacific counts for 64 % of world employment 3

The Promising China EconomyThe Promising China Economy

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　 1980 1990 2000 2005 2010

Agriculture & Mining 30% 27% 15% 12.2% 10.2%

Manufacturing & Industry 48% 41% 46% 47.7% 46.9%

Service 22% 32% 39% 40.1% 42.9%

Sector GDP

Source: China Statistical Yearbook, 2011

• GDP in China in 2010 approximately USD6 trillion• Focused on key industries, e.g. Steel, automobiles, electronics, energy, communications• Developing high value added manufacturing and the service economy• Building infrastructure including railways, highways, airports, waterways and pipelines

Seven Priority IndustriesSeven Priority Industries

• New energy• Energy conservation and environmental protection• Biotechnology• New materials• IT/Telecom• High-end equipment manufacturing• Clean energy vehicles

Source: KPMG China, 2011

• Promising Career Opportunities• Over 70% of Fortune 500 have operations in China • The Fortune 500 list for 2012, released July 9, names 79

Chinese companies (including 4 in HK and 6 in Taiwan), 10 more than in 2011 and the ninth consecutive year the figure has risen. (192 US companies in 2002)

• 24 Fortune 500 companies’ Asia headquarters move to mainland China from HK/Singapore

• Ideal Place for Entrepreneurs• USD 4.6 billion venture capital investment in China with

42.2% from overseas VC

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Dynamic Job Market

Dynamic Job Market Dynamic Job Market

Source: MBA2009 career report

Industries that talents are in big demand

Dynamic Job Market Dynamic Job Market Function that talents are in big demand

Job Location –Pre-CEIBS VS Post-CEIBSJob Location –Pre-CEIBS VS Post-CEIBS Overseas Students

Annual Guaranteed IncomeAnnual Guaranteed Income

Annual Guaranteed Income Range Annual Guaranteed Income Range

Annual Guaranteed Income – Industry Annual Guaranteed Income – Industry ComparisonComparison

Both Change41%

Both No change29%

Only Change Function

16%

Only Change Industry

14%

• Total 71% of the students changed either industry, function or both. This year 80%.

Job Industry / Function ChangeJob Industry / Function Change

Why Talents Come to China ?Why Talents Come to China ?

• Greater understanding of Asian business• Kick-off a career in Asia, the new “Land of Opportunities”• Enrich CV & create competition edge by bridging East and West• Build network with alumni and corporations in Asia• Asia: New Innovation Powerhouse

Natalia Gerasimenko Deputy General Manager,

Shanghai KuibyshevAzot Trading Co.

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““The taller the bamboo grows, The taller the bamboo grows, the lower it bends”the lower it bends”

CHINESE PROVERB

BUISNESS IN CHINA WITH LESS FRUSTRATION

KUIBYSHEVAZOT – BRIEF KUIBYSHEVAZOT – BRIEF INTRODUCTIONINTRODUCTION

• The company is placed in 1000 km south-east of Moscow, the Russian capital, in Togliatti, Samara Region, on the bank of the Volga, the largest European river.

• The plant was founded in 1966.• The area of the company is 3 000 000 sq. m (300 hectare). Number of personnel is 5500

people.• "JSC KuibyhevAzot" today:• one of ten largest world producers and the biggest in CIS countries in Caprolactam

production; • is a leader in PA-6 production in Russia, CIS countries and Eastern Europe; • one of first ten domestic nitrogen and nitrogen fertilizer producers; • is the only company in Russia that produces of tire cord fabric on high tenacity industrial

yarns basis; • has an integrated management system, certified in accordance with the requirements of

Russian and International Standards ISO 9001:2008; ISO 14001:2004; OHSAS 18001:2007 .

Source: http://www.kuazot.ru/

KUIBYSHEVAZOT – KUIBYSHEVAZOT – HISTORY IN CHINA HISTORY IN CHINA

PULLED BY THE MARKET

• FORGET EVERYTHING YOU LEARNT, STICK TO YOUR CORE VALUE ONLY.

• DO NOT EXPECT ANYTHING- WILL NOT BE DISSAPPOINTED

• YOU COME TO CHINA BECAUSE YOU NEED CHINA

“Notice that the stiffest tree is most easily cracked, while the bamboo or willow survives by bending with the wind” Bruce Lee

RESOURCES

• LABOR - FIGHT FOR THE TALENT!!!– SHORTAGE – “1-CHILD POLICY” SINCE

1979– LOW OR INADEQUATE PROFESSIONAL

EDUCATION

• ENERGY – SCARCE• RAW MATERIAL-CLEAR GOV’T

STRATEGY ON SELF-SUFFICIENCY

RESOURCESRESOURCES

• LABOR - FIGHT FOR THE TALENT!!!– SHORTAGE – “1-CHILD POLICY” SINCE

1979– LOW OR INADEQUATE PROFESSIONAL

EDUCATION• ENERGY – SCARCE• RAW MATERIAL-CLEAR GOV’T

STRATEGY ON SELF-SUFFICIENCY

INFRASTRUCTUREINFRASTRUCTURE

• LOGISTICS – EXCELLENT!– ONLY CARGO RAIL IS LAGGING BEHIND

• CUSTOMS – WELL-DEFINED (WITH SOME SMALL PECULARITIES)

• FINANCING – – HEAVILY-REGULATED, BUT – EAGER TO GROW– GOVERNMENT SUPPORT FOR FUNDING

• TAXATION AND INCENTIVES– EQUAL TREATMENT – SPECIAL INDUSTRIAL AND TECHNO PARKS– SPECIAL INCENTIVE FOR INNOVATION AND

NATURE CONSERVATION

MARKETMARKET

• ALREADY 2ND BIGGEST ECONOMY IN THE WORLD

• STIMULATION OF DOMESTIC CONSUMPTION

• FIERCE COMPETITION WITH DOMESTIC PLAYERS INTENSIFIES EVEN MORE FOR THE 2ND- AND 3RD- TIER CITIES

MY EXPERIENCE – MY EXPERIENCE – CEIBS MBA 2007CEIBS MBA 2007

• COME TO CHINA AS A STUDENT– MORE FUN– MORE CONTACTS – REAL FRIENDS – MORE SUPPORT!!!– LESS CULTURAL SHOCK

• SHANGHAI IS A GREAT CITY– TRANSPARENT AND STRUCTURED– BIGGER POOL OF TALENT– CENTER OF COMMERCE AND BUSINESS

• LEARN AT LEAST BASIC CHINESE