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China’s energy transition 2020-2050.

China’s energy transition 2020-2050.

Decades of rapid economic growth have dramatically expanded China’s energy needs. China is now the world’s largest consumer of energy, the largest producer and consumer of coal, and the largest emitter of carbon dioxide. However strong growth of renewable power is currently the key driver of China’s energy transition.

 

 

Projections for 2050

2% to 14% Increase in primary energy between 2018 and 2050

-44% to -94% Decline in coal consumption between 2018 and 2050

34% to 55% Share of renewables in power generation by 2050

 

 

Projections Summary

  • China's economy grows at 3.5% p.a. between 2018 and 2050, down from 9.6% p.a. between 1990 and 2018.
  • Primary energy consumption in China increases slightly, in all three scenarios. With the economy size nearly tripling from 2018 to 2050, China’s energy intensity declines by over 60% in all scenarios.
  • China’s share in global energy demand drops from 24% in 2018 to 23% in Rapid, 22% in Net Zero and 21% in BAU by 2050. Nonetheless, China remains the world’s largest consumer.
  • Renewables expand rapidly, with an annual growth rate >5.5% p.a. in all scenarios. Renewables’ share of the energy mix increases sharply, reaching 48%, 55% and 23% in Rapid, Net Zero and BAU, respectively.
  • Coal’s share of the China power generation mix declines sharply under all scenarios, falling to 4% in Rapid, 1% in Net Zero and 31% in 2050 in BAU.
  • Production of coal declines in China, dropping by nearly 90% in Rapid, and 57% under BAU.
  • Nuclear power grows quickly in all scenarios, increasing its share of primary energy demand from 2% in 2018, to 11%, 12% or 9% in Rapid, Net Zero and BAU scenarios respectively.
  • Production of natural gas greatly increases in China, by 76% in Rapid and 114% in BAU scenario. Conversely, production of oil declines by 73% in Rapid and 21% in BAU.
  • Under all three scenarios liquids demand in China peaks in the next 5 years, driven by increased efficiency and fuel substitution in industry and mobility.
  • Net CO2 emissions from energy use drop by 99% in the Net Zero scenario, 84% under Rapid and 35% under BAU.

 

 

Powering China’s Future

China is increasingly looking toward securing its future energy needs with sustainable alternatives. In accordance with the 2016 Paris Agreement, China has committed to make non-fossil fuel energy 20 percent of its energy supply by 2030.

 

 

China is the world’s largest investor in clean energy. Between 2013 and 2018, the country’s investments in renewables grew from $53.3 billion to an impressive peak of $125 billion. This figure has fallen in recent years, but in 2019 China’s investments still stood at $83.4 billion – roughly 23 percent of global renewable energy investment.

 

 

China is also becoming the largest market in the world for renewable energy. It is estimated that 1 in every 4 gigawatts of global renewable energy will be generated by China through 2040.

 

 

Due to large-scale investments in massive infrastructure projects, hydroelectric power has become China’s main source of renewable energy production. The controversial Three Gorges Dam, completed in 2012 at a cost of over $37 billion, is the largest hydroelectric dam in the world and boasts a generation capacity of 22,500 MW. The dam generates 60 percent more electricity than the second-largest hydropower dam, the Itaipu dam in Brazil and Paraguay.

 

 

Including the Three Gorges Dam, China has constructed 4 of the top 10 largest energy-producing hydroelectric dams in the world. From 2000 to 2017, China more than quintupled its generation of hydroelectricity, from 220.2 billion Kilowatt Hours (kWh) to 1,145.5 kWh. As a result of the Three Gorges Dam and other projects, China became the world leader in hydropower in 2014.

 

 

Over the past decade, China has also emerged as a global leader in wind and solar photovoltaic (PV) energy. China’s electricity generated by wind power accounted for just 2.1 percent of its total consumption in 2012, compared to 3.7 in the United States and 9.4 percent in Germany. By 2017, China’s wind-energy generation surged to 304.6 billion kWh, a 28.5 percent increase from the previous year. As a result, China accounted for over a quarter of global wind-energy generation in 2017.

 

 

In solar PV, China is both the leading supplier and consumer. Due to rapidly decreasing costs, aggressive policy incentives, and low-interest loans from local governments, China has dramatically increased its production of solar panels. In 2014, China became the world’s largest producer of solar panels, and a year later it surpassed Germany’s solar power generation capacity.

 

 

China is now home to two-thirds of the world’s solar-production capacity. The future development of China’s solar industry, however, has been called into question. Due to an over-saturated domestic market, Beijing halted all new solar projects and lowered tariffs on imported clean energy in June 2018. Additionally, the ongoing trade dispute between the US and China could further disrupt China’s solar panel industry. In January 2018, President Donald Trump announced a 30 percent tariff on solar panel imports from China.

 

 

 

How does China currently secure its energy needs?

Much of China’s foreign energy supply comes from politically unstable regions and must travel through narrow straits and contested waterways before reaching China. Securing guaranteed access to foreign sources of energy is vital for China’s ongoing growth and development.

 

 

China holds the third largest coal reserves in the world, which it has historically leaned on to satisfy its domestic energy needs. Yet as its economy has grown, China has increasingly relied on imported coal. In 1990, China produced 1.02 billion tons of coal for consumption, needing just 2 million tons of additional imports. By 2009, China’s rising demand drove it to become a net importer of coal, importing 125.8 million tons of coal to meet domestic consumption demand.

 

 

China fulfills its demand for coal by purchasing it from regional neighbours. In 2017, its coal imports primarily came from Australia (79.9 million tons), Indonesia (35.2 million tons), Mongolia (33.5 million tons), and Russia (25.3 million tons). Prior to 2017, North Korea was China’s fourth largest coal supplier, ahead of Indonesia and Mongolia. Due to the implementation of UN sanctions on North Korea, China has suspended all coal imports from the regime. As a result, China has shifted to rely more on Russia and Mongolia to fulfill its coal needs.

 

 

China’s demand for crude oil similarly outpaces its domestic production. Since 1993, China has been a net importer of crude oil, and in 2017 it surpassed the United States as the largest importer in the world. According to China National Petroleum, more than 70 percent of China’s crude oil supply in 2018 will come from imports. This dependence on foreign energy is likely to increase. Some estimates have suggested that by 2040 around 80 percent of China’s oil needs will be sourced from elsewhere. While China has taken steps to diversify its oil portfolio, it still must confront potential bottlenecks to access.

 

 

Given its political instability, the Middle East represents an important energy security concern for China, as roughly half of China’s oil imports come from the troubled region. China’s reliance on Middle Eastern oil is only likely to increase in the future. The International Energy Agency predicts that China will double its Middle East imports by 2035.

 

 

China’s oil trade with Iran is especially illustrative of this uncertainty. While sanctions against Iran had for years restricted Chinese access to Iranian oil, this quickly changed once a preliminary agreement on Iran’s weapons program was reached in November 2013. Chinese imports of Iranian oil in 2014 surged by 28 percent compared to 2013. In 2017, China imported 7.5 percent of its crude oil from Iran, just behind Oman at 7.7 percent and Iraq at 8.6 percent. The withdrawal of the US from the Iran nuclear deal in May 2018 has had seemingly little effect on this exchange, as China remains the top destination for Iranian oil.

 

 

China has diversified its oil portfolio by investing heavily in Africa. Africa only possesses around 9 percent of global proven petroleum reserves (compared to 62 percent in the Middle East), but there is considerable potential for gaining access to untapped resources. China has pursued a strategy of offering economic development loans to African states, such as Angola, in exchange for favorable access to oil reserves. Additionally, in 2015 China sent troops to support UN peacekeeping operations in South Sudan, where China has considerable oil investments. While South Sudan’s oil represents a miniscule amount of China’s total imports, 96 percent of its oil exports were sent to China in 2017.

 

 

Securing maritime energy shipments is another critical energy-security priority for China. Over 80 percent of Chinese maritime oil imports by sea pass through the Strait of Malacca. Therefore, this strategic waterway represents a potential risk to China should it be unable to protect its shipping interests in the narrow strait.

 

 

Another means through which China is seeking to mitigate its dependence on foreign oil is by building a strategic petroleum reserve (SPR), which is designed to insulate China from external market shocks. In November 2014, China’s Bureau of Statistics announced for the first time the size of China’s SPR, claiming to have 91 million barrels, or around nine days of reserves. China’s most recent update on SPR levels came in December 2017, when it reported a volume of 276.6 million barrels. China aims to accumulate 600 million barrels of oil, which would meet the OECD standard of 90 days of import reserves.

 

 

Although China holds the world’s largest shale gas reserves, the amount of natural gas readily available for extraction is much lower due to geographical complexities. Some deposits are buried as deep as 3,500 meters underground, making extraction difficult. In 2017, 38.4 percent (95.5 billion cubic meters) of China’s natural gas needs were met by foreign sources, a 27 percent increase from 2016.

 

 

With over 60 percent of its trade in value traveling by sea, China’s economic security is closely tied to the South China Sea.China currently relies on foreign natural gas delivered via land pipelines and carriers in the form of liquefied natural gas (LNG). Two existing pipelines supplied 46 percent of China’s natural gas imports in 2017, with three-quarters of this coming from Turkmenistan. The share of overland energy sources is likely to increase in the coming years. In 2014, China and Russia signed a 30-year, $400 billion deal to deliver Russian natural gas to China, and in December 2019, the $55 billion Power of Siberia pipeline sent its first shipments of natural gas from Russia to China.

 

 

However, China also imports LNG from several other countries, including Australia (47 percent), Qatar (21 percent), and Malaysia (11 percent) in 2017. The International Energy Agency predicts that in 2030, over 60 percent of China’s natural gas demands will have to be met through imports. In late 2019, China became the world’s top importer of LNG, overtaking Japan for two consecutive months. While monthly imports fluctuate significantly, China is expected to replace Japan as the world’s top LNG importer annually by 2022.

 

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Source: BP Insights, International Energy Statistics

China-UAE Trade Corridor: New MoUs and...

China-UAE Trade Corridor: New MoUs and agreements to boost BRI.

The UAE has set its sights on boosting trade and investment ties with the world's second largest economy – China. While the economic powerhouse of Asia has been a strong market for UAE oil exports, the relationship between the two countries has deepened over the past few years as they find synergies and areas of co-operation in a wide range of sectors that go beyond hydrocarbons. China and the UAE launched a US$ 10 billion fund in late 2015, which focuses on sectors of strategic importance to them.

 

 

"This fund will also play a critical role in supporting the One Belt, One Road initiative, as we work towards improving connectivity and co-operation with our regional partners across Eurasia," Chinese president Xi Jinping said at the time. The relationship was further cemented in 2018 when Xi visited the UAE and signed a raft of deals to deepen China's ties with the Arab world's most diverse economy.

 

 

''UAE-China strategic partnerships constitute an important model in the international economic relations. Agreements signed during president Xi Jinping's state visit to the UAE will definitely catapult this partnership to new heights,'' said Sultan bin Saeed Al Mansouri, minister of economy. The two countries said they are building on their strategic partnership, which was launched in 2012, and expanding their co-operation to develop China's 'Belt and Road Initiative', while establishing sustainable trade and investment ties to achieve their common interests. The two sides are also working together to organise conferences and forums under the 'Belt and Road' banner. In November, for example, UAE was one of more than 130 countries that took part in the China International Import Expo (CIIE) in Shanghai. During the event, president Xi reiterated China's commitment to global free trade. In addition, the UAE is a founding member of the Asian Infrastructure Investment Bank (AIIB), a Chinese initiative, which aims to support development efforts in Asia.

 

 

Collaborative Projects

Another area of collaboration is the expansion of co-operation in e-commerce specialised training, developing cross-border e-commerce, and supporting the development of bilateral trade via e-commerce. The UAE and China are also considering a 'framework agreement' to work on various projects. They intend to collaborate in fields involving innovation, technology transfer, and economic diversification, as well as leverage the UAE-China Business Committee to co-operate in the areas of logistics, transport, industry, technology, artificial intelligence and energy, renewable and food security fields, and training for small and medium enterprises (SMEs).

 

 

The two sides are exploring partnerships in the free trade zones through ports and by building special export-oriented economic zones, establishing industrial projects, including fourth generation and other advanced industries. A testament to this initiative was the decision in 2016 of China's COSCO Shipping Limited, the world's largest container operator, to choose Khalifa Port as hub for its operations in the Middle East. It also has plans to expand the annual capacity to 6 million TEUs at the facilities – making it the largest container freighter station in the region. The move will make the Abu Dhabi-based Khalifa Port attractive to investors in Eastern Asia.

 

 

And since 2017, more than 15 Chinese companies have set up base in the Khalifa Industrial Zone Abu Dhabi (Kizad) to build various industries with a total investment of US$ 1 billion, according to Mohamed Juma al Shamsi, chief executive of Abu Dhabi Ports.

 

 

Cross-Border Deals

The two countries also plan to take their partnership across the border with joint investments in the African continent and Pacific Islands. UAE and China are keen to boost financial services ties by enabling bank branches in each other's countries to facilitate support for trade and bilateral investment, by strengthening co-operation between the UAE international financial centres and Shanghai Stock Exchange.

 

 

In 2018, the Abu Dhabi Global Market (ADGM), an international financial centre signed a memorandum of understanding with Shanghai Stock Exchange, China's largest securities exchange, to establish a “Belt and Road" Exchange in ADGM. When created, the “Belt and Road" Exchange in Abu Dhabi will serve as a key international capital-raising platform supporting Chinese enterprises, foreign companies and global organisations to finance their investments, including along the Silk Road Economic Belt network, the companies said. ADGM followed up the deal by opening its first overseas representative office in Beijing, to strengthen Abu Dhabi's ongoing collaborations with the Chinese government and financial and business community. Meanwhile, ADGM and the Hong Kong Securities and Futures Commission recently agreed to jointly promote and support financial services innovation in Hong Kong and the UAE. Together, the two regulators aim to develop financial technology (fintech) ecosystems and bolster the financial industries in their respective markets.

 

 

Other areas of co-operation outlined in the memorandum of understanding include education, science and technology under the "Partnership Programme between China and Arab countries in Science and Technology". Under the programme, young Emirati scientists will be facilitated to conduct short-term scientific research in China and learn new technologies.

 

 

Finally, the two countries will work on developing crude oil trade; exploration and development of oil and natural gas resources and engineering construction services for oil fields and for networking of strategic storage facilities; refining derivatives and petrochemicals domains; and other industries and related business activities. The agreements should help enhance the UAE's role as a regional gateway for China, as about 60 per cent of exports from the Asian country pass through UAE ports. China has been the UAE's top trading partner for the past three years, with trade between the two partners likely to cross US$ 70 billion by 2020, according to a UAE official.

 

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Source: HSBC Insight & Research

China’s Infrastructure investments...

China’s Infrastructure investments to sustain copper rally.

Despite a precipitous plunge in March, the price of copper has risen 7.6% since the start of 2020 and looks set to maintain momentum in the coming months and beyond as China's economic recovery gathers steam.

Copper prices plummeted from a high of US$6,270 per tonne in mid-January to a low of US$4,617.50/t in late March after the World Health Organization declared the spread of COVID-19 to be a pandemic but has since recovered to levels last seen in 2018.

China's appetite for industrial metals returned swiftly as the world's leading copper consumer shook off the pandemic with a sustained recovery thus far. Despite dipping month over month in August due to seasonal factors, China's unwrought copper imports remained higher than a year ago, which suggests that manufacturing activity in the country is still rebounding, BCS Global Markets said in a Sept. 8 note.

While the pandemic is expected to wipe US$630 billion off China's GDP in 2020, the Asian powerhouse's GDP is still expected to rise by 1.2%, down from S&P Global Ratings' previous forecast of a 5.7% increase, even as the world economy contracts by 3.8% overall.

China's recovery is being driven by three things: stimulus-related infrastructure investment, the electronics sector, and sales and new investment in property, S&P Global Ratings' Asia-Pacific chief economist, Shaun Roache, told Market Intelligence. "This mix of demand is certainly boosting demand for coal, iron ore, and a range of other commodities, including copper. As Chinese consumers start to spend again, we would expect stimulus to wane but this is more likely to affect 2021."

 

 

Infrastructure investments driving up prices

"Infrastructure investment is significant to copper demand, as the metal is heavily used in a wide range of the end-uses impacted such as building materials all the way through to consumer durables," Market Intelligence commodity analyst Thomas Rutland said in an interview.

In the wake of the global financial crisis, copper prices crashed to as low as US$2,809.50/t in December 2008 but rebounded quickly to a peak of US$10,179.50/t in February 2011 after China funneled funds into infrastructure such as railways, roads, and airports.

"China's Ministry of Transport has recently committed to huge investments in its transport systems, which combined with the government's stimulus measures could be behind the reported stockpiling of metal in the country," Rutland said.

The price of the metal has averaged US$5,790/t so far this year, according to Fitch Solutions, which recently raised its 2020 price forecast for the base metal to US$6,000/t in 2020 from US$5,900/t.

Bernstein Research is more bullish than most on the metal and predicts the price to reach US$6,400/t in 2021 and US$6,900/t in 2022, versus analysts' consensus of US$5,478/t and US$6,261/t, respectively, according to a Sept. 14 note.

While Fitch expects the Chinese government's stimulus as well as recovery in global economic activity to sustain demand, prices are likely to remain volatile as the pandemic evolves. The analytics provider sees downside risks to its updated price forecast of should widespread lockdowns reappear, according to a September report.

"A couple of the key questions are: just how far will the Chinese recovery and stockpiling take copper prices? Will copper prices continue to be pushed higher into 2021 or will prices start to fall off as refined output increases during the third and fourth quarters?" Rutland said.

 

 

Copper shortage seen as push for decarbonization intensifies

The closure of some mines, particularly in South America, due to the coronavirus pandemic has offset reduced demand, keeping the market tight. As of late September, 2.9% of annual supply remained disrupted by the pandemic, with Chile and Peru accounting for more than half of the missing 702,000 tonnes per year of output, VTB Capital said in a Sept. 21 note.

The brokerage highlights the transition to renewable energy stoking demand for the metal. Renewable energy assets require as much as 15 times more copper per unit of installed capacity than conventional power sources, according to Bernstein's analysts, and the transition to a low-carbon energy mix will result in a copper shortage as demand outstrips supply.

BHP Group, whose copper segment contribute an average of 24% to group revenue, expects demand for the metal to more than triple over the next 30 years, under the 1.5-degree-C scenario of the Paris Agreement on climate change, versus the past three decades as global efforts to decarbonize gain momentum, according to a September presentation.

The ICSG estimated the apparent deficit of refined copper in the first half of 2020 at 235,000 tonnes, and analysts expect it to grow over the coming years. Fitch estimated the shortfall to reach as much as 510,000 tonnes in 2027 as power, vehicle, and infrastructure usage increases.

 

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Source: S&P Global Market Intelligence

China’s EV Startup Xpeng Motors Export...

China’s EV Startup Xpeng Motors Exports its First Vehicles to Norway.

Chinese electric vehicle startup and Tesla challenger Xpeng Motors has exported its first batch of vehicles to Europe, expanding its global presence. It's the first time the automaker is selling its electric vehicles outside of its home country.

 

 

Xpeng loaded 100 of its G3i fully electric SUVs on a cargo ship which will be shipped to Norway, which has the highest EV adoption rate. Roughly 75% of all new vehicles sold in Norway are plug-in hybrids of fully-electric models.

 

 

With Xpeng's expansion to Norway, the EV startup will give Tesla some additional competition in both China and in Europe. The Tesla Model 3 has sold briskly in the Scandinavian country, but so have Tesla's in general. Tesla was the second best selling car brand in Norway in 2019, selling roughly 18.8 thousand cars last year, according to data from Statista.

 

 

Xpeng is shipping the latest version of its G3 to Norway, which first went on sale in 2019. The newest version offers a longer range and other technology improvements from the previous model. The upgraded G3i is available with an extended NEDC driving range of 323 miles (520 km). It was launched at this year's Chengdu Motor Show.

 

 

"The first European-spec super-long-range Xpeng G3 intelligent SUVs formally left for Norway today, which made us so proud. It indicates that Xpeng Motors has made headway in various links such as product R&D, intelligent manufacturing and market expansion, and its products started to be tested by overseas consumers," said Xia Heng, co-founder and president of Xpeng Motors.

 

 

The Guangzhou-based EV manufacturer will partner with Zero Emission Mobility AS (ZEM), a Norway's automobile dealer. ZEM will be responsible for marketing after-sale service to local consumers, according to China's news outlet Gasgoo.

 

 

Xpeng had to make some minor changes to the vehicles to meet local regulations and standards of the European market. The European-spec version however will include Xpeng's popular autonomous valet parking feature. The automated parking feature is supported by a suite of 20 sensors including ultrasonic radars, high-definition cameras and millimeter-wave radars.

 

 

 

Xpeng alos modified its AI-powered Xmart OS in-car Intelligent System which supports voice commands for many of the vehicle's controls. The system will now be able to recognize words in English.

 

 

Xpeng is a strong competitor to Tesla in China, but now Tesla too is planning to ship its electric vehicles built at its Shanghai factory to Europe. Tesla's Shanghai factory is its first overseas plant.

 

 

Two weeks ago, Bloomberg reported that Tesla also plans to export its Model 3s built in China to Europe in an effort to boost profitability. The California company began delivering the first Model 3's built in China in December of last year.

 

 

The China-built Model 3s for delivery outside the country likely will start mass production in the fourth quarter of this year, the people said, asking not to be identified because the details are private. 

 

 

"Exporting Model 3s to Europe would take advantage of China's lower production cost base in a bid to improve profitability," said Michael Dean, a Bloomberg Intelligence analyst.

 

 

Xpeng Motors was founded in 2014 and its electric vehicles are viewed as a popular alternative to Tesla models in China.

 

 

Xpeng's second electric model is the P7 smart sedan which went on sale in April. The electric sedan comes loaded with advanced technology, including self-parking like the G3. It's billed as a lower priced alternative to the Tesla Model S in China, costing less than half the price.

 

 

The automaker says it's offering the same level of technology, connectivity features and performance for around $50,000 less than Tesla's flagship Model S sedan. Xpeng's P7 also achieves an NEDC Range of 439 Miles, the longest of all EVs sold in China, including the Model S. The car features an all-wheel-drive setup with dual electric motors.

 

 

 

Xpeng Motors is backed by China's e-commerce giant Alibaba, which is China's equivalent of Amazon.

 

 

The company raised $1.5 billion in its U.S. IPO in August becoming a public company. Xpeng's stock now trades on the New York Stock Exchange under the stock symbol "XPEV."

 

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Source: FutureCar

Aldi integrating into neighbourhoods...

Aldi integrating into neighbourhoods.

Aldi has become the latest overseas supermarket operator to open stores in China, the 8th was recently opened in Shanghai,  but the German company faces a battle to win over customers in a fragmented market in which foreign operators have traditionally struggled: Tesco and Spain’s Dia abandoned operations in the country and Germany’s Metro is selling its China unit. Walmart and Carrefour have struggled to gain more than a single-digit market share.

 

 

Overseas companies have been hampered by remote decision making and difficulties adapting to Chinese shoppers’ preference for making regular small purchases of fresh vegetables to cook at home rather than weekly shops, according to analysts. However Aldi is taking a different approach, opting for smaller, smarter retail stores that are equipped with WeChat technology and offer speedy delivery options. The small size lets ALDI integrate the store deep in neighbourhoods and communities while offering around 1,000 products ranging from Ready-to-Eat meals to body care products.  It plans to launch over 100 of these stores going forward.

 

 

Where WeChat Fits In

Aldi’s scan-and-go WeChat mini-program indicates its commitment to creating a localized Chinese shopping experience, negating the need for checkouts. Home delivery is offered within a 3km range. They take a page out of Alibaba's smart Hema/Freshippo stores:  smaller, more centrally-located supermarkets selling quality imported grocery items. It is estimated that e-commerce sales account for 60% of total sales at Freshippo, indicating that all the money invested in smart retail technology is worth it.

 

 

Tmall Global as a Launchpad

Aldi first tested the China market in April 2017 by launching a flagship store on Tmall Global – what many to consider to be a brand’s official presence in China.

 

 

Tmall Global sells imported cross-border e-commerce items that don’t have to be formally imported in China, skipping over lengthy product registration and approval processes. Aldi sells cheap, high-quality private-label items such as dried apricots, Knoppers chocolate wafers, and Farmdale milk powder.

 

 

But what's more is that Aldi opened a sourcing office in Hong Kong long ago in 2015, enabling it to build out a robust supply chain for its Asia operations (including Australia). This means that it has been preparing for the China market for quite some time. Aldi's Tmall store gave it a channel to test new products and customers' reaction to them, without having to export them in bulk and incur inventory risk.

 

 

The three main channels through which customers can buy Aldi products: offline retail, WeChat delivery, and Tmall.

 

  • Offline retail gives customers the chance to discover and try new products in the store, which is important for categories such as fresh groceries.

 

 

  • The delivery services give customers the option of ordering food when they don't feel like going to the store, or if they forgot to purchase an item, or even if they just don't feel like carrying all those heavy groceries home.

 

 

  • And lastly, Tmall Global gives customers the option of purchasing imported cross-border e-commerce items that may be more difficult to find in offline retail stores in China. For Aldi, it also gives management the ability to test new products online and customers' reaction to them before exporting them in bulk to China.


 

Why Hasn’t Apple Pay Replicated Alipa...

Why Hasn’t Apple Pay Replicated Alipay’s Success?

Even before Covid-19, mobile payment platforms were experiencing a boom in the U.S. and China. Apple Pay (U.S.) and Alipay (China) have radically changed the way people transact, offering secure, contactless payment options through mobile phones. Though both platforms are growing, Alipay is outperforming its U.S. peer: As of late 2019, Bain & Company found that only 9% of American consumers had adopted Apple Pay while 81% of Chinese consumers used Alipay. Given the size difference between the two countries, the difference between the number of Alipay users in China and Apple Pay users in the U.S. is staggeringly large. What are some of the factors driving this stark contrast?

 

 

Based on our extensive financial services industry experience and work with platform companies, we found two key strategic drivers for successful platform adoption: 1) Create value for all parties and 2) Monetize the ecosystem, not just the product. So far, Apple Pay has only marginally accomplished the first while Alipay has mastered both. Other platform leaders can learn from their examples.

 

 

Apple Pay focused on the consumer.

The Steve Jobs-driven culture of focusing relentlessly on customer experience was core to Apple’s development of Apple Pay, which launched in 2014. The premise was simple: Apple Pay relied on encrypted near-field communication (NFC) signals from point of sale devices that would allow users to pay with their iPhones instead of a credit card. Apple Pay seemed to offer a genuinely futuristic consumer experience that was secure, seamless, and fast: NFC technology is extremely quick, and consumers can use their fingerprint to authenticate the transaction, significantly reducing fraud. But for the average U.S. consumer, paying with Apple Pay only saved a few seconds during in-store transactions and thus was only marginally more convenient than paying with a debit or credit card.

 

 

Apple was less focused on mutually beneficial partnerships with banks and merchants. Assuming customers would adopt their platform quickly, Apple attempted to monetize it from the very beginning and charged banks and issuers around 0.15% per transaction for Apple Pay — on top of regular credit card processing fees, which range from 1.15% + $0.05 to 3.15% + $0.10 per transaction. This meant that there was little incentive to adopt the new technology — especially given implementation costs for new NFC-equipped point of sale terminals, which could cost between $1,000 and $2,000 when accounting for necessary software and training for employees. Around the time of Apple Pay’s launch, only around 10% of all point of sale terminals were NFC enabled, and the cost challenge to merchants and limited benefit to consumers hampered adoption.

 

 

In 2019, five years after its launch, Apple Pay’s domestic growth remained slow: Only around 6% of people who could use Apple Pay at a physical point of sale were doing so, despite the fact that almost all point-of-sale terminals that are shipped in North America today are NFC enabled. There’s good reason to believe the number of users has grown significantly during the pandemic, but it would require years of exponential growth in adoption to even begin to match Alipay’s dominance in China.

 

   

 

Alipay focused on creating value for all parties, not just for consumers.

Alipay, which was spun off from Alibaba in 2011 and became Ant Financial (now Ant Group) in 2014, grew from a consumer need for a trusted, verified way to pay for goods purchased from parent company Alibaba’s massive e-commerce sites. Alipay was the solution, but the strategy behind it went beyond payments.

 

 

Alipay charges around a 0.6% transaction fee to merchants to process a transaction, roughly half of the fee for processing local credit cards. While the fee is more expensive than allowing customers to use cash, merchants could often expect a lift in sales that came from accepting Alipay. Further, for merchants, the implementation cost to accept Alipay in stores is extremely low, as Alipay doesn’t rely on NFC or any specialized point-of-sale system, but relies on QR codes, which require little more than a camera and an internet connection to make a purchase.

 

 

Alipay took a different approach to creating value and monetizing the platform than Apple Pay. It shared many types of consumer insights with merchants, so they could offer new services to clients and launch accurate promotions for free. Ant Group worked with merchants and consumers who used Alipay to improve security protection and reduce losses, helping merchants make more money and decrease their risk. Small to medium-sized businesses flocked to Alipay to capture new business with minimal investment. From 2014 to 2018, the number of merchants that accepted Alipay went from approximately 1 million to 30 million, meaning roughly 70% of all merchants in China accepted the platform.

 

 

As Alipay grew, Ant Group was also able to use the data to build new partnerships and offer new services, which they monetized. Trillions of dollars of transactions flow through Alipay versus billions on Apple Pay. Based on the payment data that Ant Group receives, the company can offer a host of high-margin products to both consumers and merchants. For young and lower-class consumers, Ant Group offers credit cards and wealth management services. For small to medium-sized merchants, Ant offers small, short-term loans. These products are not traditionally available to these segments and are hugely valuable. The success of these products has prompted Ant Group’s valuation to go from $75 billion in 2016 to $200 billion just four years later.

 

 

What aspiring platform leaders can learn.

To be sure, there are caveats to the story. First, there are important differences between the U.S. and Chinese mobile payments space. Among them, China is jumping from cash to mobile payments while the U.S. is transitioning from credit cards to contactless payments, which include mobile payments and “tap to pay” credit and debit cards. The mobile internet also evolved much more rapidly in China than the U.S., and mobile payments were a logical part of that evolution. Additionally, the Chinese economy has grown very rapidly, giving Chinese payments players — including Alipay’s main competitor, WeChat Pay — strong tailwinds.

 

 

Consumer preferences are also changing. Prior to Covid-19, many U.S. consumers and merchants were concerned with speed, convenience and security when transacting. Now, these same parties are focused on health and safety and are adopting contactless payments in greater numbers. In this context, Apple Pay has emerged as a solution to a different problem than the one it originally meant to solve.

 

 

This shift in preferences, already clearly underway, may require that payment companies think about value differently than before. The lesson for platform leaders, therefore, has two parts. First, leaders must provide value for all parties on the platform by addressing high-priority pain points, which may change over time. Second, platform leaders must monetize the ecosystem and not just the product, ensuring that they do not burden customers on one side of platform and hamper overall adoption in the process. By learning from mobile payments and considering the strategic drivers of adoption, platform leaders in other industries can ensure they are thought of as more Alipay than Apple Pay.

 

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Source: Harvard Business Review: Ian Gross, Kristofer “Kriffy” Perez and Bee-Lian Quah

European Business in China, Position...

European Business in China, Position Paper 2020-21

The European Union Chamber of Commerce in China has released its European Business in China – Position Paper 2020/2021 (Position Paper). This annual publication delivers to the Chinese Government over 800 detailed recommendations for improving the business environment, spread across 34 industry sectors and horizontal issues. The Position Paper details how persistent issues, such as limited market access and a complex regulatory environment, prevent European businesses from contributing fully to China’s sustainable development.

 

 

This significant amount of untapped market potential could help to not only boost economic growth, but also stave off serious problems that have for some time threatened China’s development, like its burgeoning debt situation and rapidly ageing population. While the European Chamber has been advocating for increased market access and a level playing field for its members for the past two decades, it is now critical for China to enact meaningful reforms due to the economic devastation wreaked by the COVID-19 pandemic and the looming threat of decoupling.

 

 

Although European companies remain committed to the market, a number of ‘dichotomies’ that have emerged in recent years raise questions over which direction China will eventually decide to move in:

 

 

  • The ‘one economy, two systems’ model, which divides the private and state-owned economies
  • The country’s economic potential versus its market access regime
  • The persistent divide between China’s rhetoric and the reality on the ground
  • The clash of China’s charm offensive towards European business and its ‘wolf warriors’ in Europe

 

 

These issues are further compounded by the increased politicisation of doing business in China. This is a serious factor that threatens business operations in ways that companies can neither predict nor control. European leaders currently still have the appetite for engagement, but public opinion in the Old Continent is souring on China: voters are voicing their concerns over the unbalanced economic relationship, allegations of forced labour in Xinjiang and the autonomy of Hong Kong. These issues present a real challenge for the EU and China to find an effective way forward before the window of opportunity closes.

 

 

It is therefore imperative that the EU and China strive for a political agreement on the Comprehensive Agreement on Investment (CAI) by the end of 2020. A half-baked deal that leaves the most critical issues unaddressed would be unwelcome and futile. Instead, it must deliver tangible results and secure open and fair markets on both sides to bolster the relationship and lay the groundwork for further productive engagement.

 

 

“Having inked bold economic agreements with numerous diverse partners in recent years, it is not revolutionary that the EU should expect a market that is as open and fair as its own when entering into such an agreement with China,” said Joerg Wuttke, president of the European Union Chamber of Commerce in China. “After more than 30 painful rounds of CAI negotiations, there’s a real sense that this is now or never.”

 

 

Please click here to download the report (registration witth an email required).

Substantial changes in China’s protect...

Substantial changes in China’s protection of IPR.

The country is making the transition from net importer of ideas to net innovator, and as it does, it is finding that good patent laws matter. Whilst addressing the recent Global Trade in Services Summit, President Xi Jinping stated ‘China will work with all countries in enhancing the protection of intellectual property rights (IPR) and actively promote the development of the digital economy and sharing economy’. At the end of 2019 the general offices of the Communist Party of China (CPC) Central Committee and the State Council have jointly issued a directive calling for intensified protection of IPR:  ‘Strengthening IPR protection is the most important content of improving the IPR protection system and also the biggest incentive to boost China's economic competitiveness.  By 2022, China will strive to effectively curb IPR infringement, and largely overcome challenges including high costs, low compensation and difficulties in providing evidence for safeguarding intellectual property rights’.

 

 

A case of this policy in action was demonstrated in September this year when nine people in Shanghai were sentenced up to six years in prison on for infringing on the copyright of Danish toymaker LEGO. The toys the group designed, produced and sold were under the brand name LEPIN, similar to LEGO. LEPIN's packaging, design and colour were all similar to that used by LEGO. The gang produced and sold nearly 4.25 million boxes of their copycat products worth over 300 million yuan, including 634 different models, from September 11, 2017 to April 23, 2019.

 

 

IPR infringement is a particularly worrying issue for new foreign business, and the policy document calls for China to make greater efforts to stepping up international cooperation in IPR protection, facilitating communication between domestic and foreign rights holders, and providing support in overseas IPR disputes.

 

 

Overall, China’s IP regime has made significant strides in the past few decades. For instance, China’s world leadership in patent quantity—though not in quality—signals its commitment to develop a robust innovation ecosystem at home. Minimum damage payouts for violations have continually increased, as have durations of patent protection. China even became the most litigious country in terms of the number of IP-related cases as early as 2005, and the number of cases has increased at a rate of over 40 percent per year for the past two years. In 2014, China debuted three specialized IP courts, and there are as many as 19 more in the pipeline. And contrary to popular expectations, foreign plaintiffs have actually fared better in patent litigation in these courts than their Chinese counterparts.

 

 

China now ranks second globally (excluding tax haven countries) in annual spending on acquisition of foreign IP as well as in gross research and development expenditure. In short, IP infringement remains a significant problem in China and the country’s IP protection regime still has shortcomings but robust change is occurring at China’s own initiative.

 

 

China IPR Procedures.

Patent registration procedure for inventions

  • File the patent application, submit relevant documents, and pay the filing costs (RMB 900 or US$128);
  • CNIPA accepts the application and conducts a preliminary examination (within 18 months from the filing date);
  • CNIPA conducts substantive examination (on the applicant’s request); and
  • CNIPA registers the designated patent and grants a standard patent for the invention.

 

 

Patent registration procedure for utility models or designs

  • File the patent application, submit relevant documents, and pay the filing costs (RMB 500 or US$71);
  • CNIPA accepts the application and conducts a preliminary examination; and
  • CNIPA register the designated patent and grant a standard patent for the utility models or designs.

 

 

Trademark registration procedure

  • Check whether the trademark is already registered and the category of the trademark;
  • Submit an application form and other relevant documents to the TMO;
  • TMO accepts the application;
  • TMO conducts preliminary and substantive examination (within nine to twelve months of the filing date);
  • TMO publishes a notification (followed by a three-month period to consider any objections); and
  • TMO issues a trademark registration certificate.

 

 

The procedure generally takes about 14 to 18 months. Within three months from the date of publication, any person can file an opposition against the trademark. A trademark in China is valid for 10 years and renewal of registration must be filed within 12 months before the date of expiration.

 

 

Copyright registration procedure

  • Apply with a sample of the work;
  • CNAC/CPCC accepts the application and conducts an examination; and
  • CNAC/CPCC issues the certificate.

 

 

For further information on China IPR issues, we suggest you visit the EU IPR SME Helpdesk: https://www.china-iprhelpdesk.eu which has the most up to date information on all IPR issues and gives free guidance on procedures and best practices.

 

 

 

Confucianism, consumerism and the pursui...

Confucianism, consumerism and the pursuit of wealth in a changing China.
Studying and understanding how ancient China viewed consumerism and the pursuit of wealth through the lens of Confucian thought and traditions, and how they impacted modern Chinese society, helps develop a deeper understanding of modern China.
 
 

In 2017 at the 19th National Congress meeting for the Chinese Communist Party, Xi Jing Pin recognized the influences of his vision for China, saying: the party has been guided by Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory.1  Based on the words and deeds of Xi, Zhang Jucheng, an academic from Yunnan University in Kunming, Yunnan Province, reinforces Xi’s views saying Marx, Mao and Confucius have been Xi’s greatest influences.2  Zhang believes Xi stresses the need to strictly enforce the party’s discipline, safeguard the unity of the party and the authority of the Central Committee, and ensure the unity of thought and action of the whole Communist Party. 

 

 

 Xi has popularized his own “China Dream” (中国梦, zhongguo meng).  In comparison with the stereotypical “American Dream,” which usually focuses primarily on the prosperity and happiness of the individual, “China Dream” refers to Xi’s vision for achieving rejuvenation of the Chinese nation as a whole.  Xi’s” dream” includes sustainable development, economic and political reform, encouraging entrepreneurial spirit and the pursuit of individuals dreams, but done with Chinese characteristics and rooted in traditional Confucian beliefs.

 

 

The Chinese Communist Party held a committee meeting in 2014 to discuss how to govern and develop socialism with Chinese characteristics going forward.  Xi was quoted: “We must realize the Chinese dream of the great rejuvenation of the Chinese nation, deepen reform, improve and develop the socialist system with Chinese characteristics in an all-round way, and improve the party's ability and level of governance…. we must strengthen and improve the centralization of power, and have a unified, powerful Party Central Committee.”

 

 

In Xi’s 2014 speech, centralization of power and the unification of thought were main themes.  However, these Maoist and traditional Chinese philosophies were amended with Xi’s Deng-like approach to the free-market.  Included in his proposal was the broadening of personal property and basic human political rights as long as they do not infringe on the interests of the party.

 

 

Here we see a fusion of multiple philosophies in how Xi envisions the modernization of China can be most effectively executed while maintaining central power and a Chinese version of modern socialism.  Where the U.S. political system may lack the ability to maintain political direction owing to shifts in the executive branch’s power (typically every 4-8 years), Xi and the Communist Party find strength in China’s unity and their long-term political vision and capabilities.  This may continue to be a central theme in the persistent difficulty to come to mutually beneficial Sino-U.S. relations.

 

 

In January 2019, Xi introduced an app called Xuexi Qiangguo (学习强国, studying a great nation).  With feelings of Mao-like nostalgia, Xi’s campaign to encourage the masses to study “Xi Jinping thought” on mobile devices was compared to Mao’s “Little Red Book” in unifying political and philosophical consensus in China.

 

 

China’s economic growth and modernization.

Since the reform and opening up of the Chinese economy and Xi’s rise to power over the past decade, China has explored several ways to boost growth through un-organic methods, including the use of state-owned enterprises (SOEs), manipulation of the global financial markets4, and injecting large amounts of debt into their economy to finance projects such as infrastructure, real estate, and other centrally organized investments.  Considering the Chinese economy’s current non-financial sector debt is 254 percent of its’ GDP (U.S. ratio is roughly 1 to 1), the Chinese economy may be excessively searching for economic growth.  Some macroeconomists believe China may be living beyond their means by financing investments like the “One Belt, One Road Initiative” and other infrastructure expansions with excessive amounts debt.6  As a result of these initiatives, people in China have more money in their pockets than ever before in history, which has led to unprecedented levels of consumption.

 

 

These examples pose the question of whether or not Confucian fundamentals like the dao (the morally upright way) and traditional Chinese views towards the pursuit of profit are still relevant in a modern era, or if these values are being shelved for the time being, in pursuit of economic development, progress, and the pursuit of modernization.

 

 

Confucianism and the pursuit of wealth in a changing China.

Although Confucianism, which is often considered the foundation of philosophical thought and development for China, there has always been disagreement on how these values should be implemented.  We see in the Zhou and Han dynasties that Confucius is unclear on his views towards the individual’s pursuit of profits.  Historians Sima Qian and Ban Gu try to clarify but do so in criticism of each other.  In modern history, Mao, Deng, and Xi all agree that the unification of China and a strong central power is important to the leadership of China.  However, there is disagreement on how the country should pursue economic and consumption growth.  It is evident that these discussions are as relevant today as they were 2,000 years ago and are worth our efforts trying to understand.

 

 

Looking forward, based on the literature and individuals we have examined, Xi’s political and economic philosophies include characteristics from a wide range of sources, including Confucius, Deng and Mao.  Although there is no doubt China’s leadership over the past century has used many traditional Chinese ideas in developing their modern ideology, the current economic policies pursued by the Communist Party of China are likely more in line with Sima Qian and Deng Xiaoping’s style of open markets and less similar to Ban Gu or Mao Zedong.  In this way, from an economic perspective, China has gradually strayed away from a pure Confucian philosophy.  However, the ideas of centralization of power and the unity of China still remain.

 

 

To conclude, a well-rounded perspective on the connection between Confucianism and the pursuit of wealth in a changing China helps one better analyze and understand recent developments in China.  Furthermore, these understandings will give readers a more comprehensive perspective on recent developments such as China’s response to the Covid-19 pandemic, the recent rise of stock market prices in China despite the lingering economic effects of Covid-19 and slowing economic growth.  The truth as to what extent traditional Confucian virtues should be prioritized over the pursuit of economic growth and profit is unknown, but the answer will likely reside in the health of the Chinese economy and the longevity of the Chinese Communist Party in the coming years.

 

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By Jackson Venjohn, Chinainsight.info

 

Chinese Investment in Myanmar: a perspec...

Chinese Investment in Myanmar: a perspective.

Myanmar’s pushback against China, which is trying to widen its influence through the China Myanmar Economic Corridor (CMEC), among other issues has been influenced by Pakistan’s experience in China Pakistan Economic Corridor (CPEC) and Sri Lanka's Hambantota Port project. Myanmar’s all-powerful generals have drawn lessons from these experiences and highlighted reservations against the Chinese investment.

 

 

The CPEC model, which has led to Pakistan’s structural dependence on China, is now being felt in the CMEC, according to an opinion piece ‘Rescuing Myanmar From the Chinese Debt Trap’ recently published in Myanmar’s leading English media outlet The Irrawaddy.

 

 

In terms of geography, the Chinese have proposed that the CMEC (part of BRI) would start from China’s pivotal Yunnan province, which shares borders with Myanmar, Laos and Vietnam. From Ruili city on the China-Myanmar border, the corridor would head towards Mandalay, Myanmar’s former royal capital on the banks of the Irrawaddy River in the northern part of the country. From there, it could extend towards the east and west to Yangon New City and the Kyaukphyu Special Economic Zone, in the western Rakhine province. During Chinese President Xi Jinping’s state visit to Myanmar in January, two agreements were signed - establishing the Kyaukphyu Deep Sea Port (KDSP) and setting up the Special Economic Zone (SEZ). By setting up the KDSP, the Chinese are hoping to lower their dependence on the Straits of Malacca, which is China’s main trade artery, linking the Indian and the Pacific oceans: an over-reliance on which leaves China vulnerable to geo-political outside factors.

 

 

The Kyaukphyu Deep Sea Port is also critical for China’s energy security. The port houses an oil and gas pipeline, supplying energy to Yunnan. It is estimated that under an elaborate plan, China is targeting a massive investment of around $100 billion in Myanmar’s economy—a figure is over and above $62 billion funding for CPEC. China has proposed 38 projects under CMEC but Myanmar so far has approved only nine (six are outlined below). Since last year Myanmar has decided that it will only implement the projects that will be mutually beneficial.

 

Looking back at the last three decades, Chinese investment in Myanmar reached its peak during the 2010-2011 fiscal years after President Thein Sein’s government took office. In the 2011-2012 fiscal years, Chinese investment began a rapid decline after the controversial $3.6 billion China-backed Myitsone hydropower project was suspended amid public outcry over the dam’s social and environmental impacts. Myanmar continues to suspend the construction of Myitsone Dam. The dam is one of seven hydropower projects planned for the upper reaches of the Irrawaddy River as well as the Mali and N’Mai rivers, at whose confluence the Irrawaddy begins.

 

 

It is certain that China will remain to be a decisive economic influence for Myanmar which is also a potentially crucial partner in its BRI and other economic plans. In terms of foreign investment figures, China is now Myanmar’s largest investor as well as biggest trade partner.

 

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Source: The Irriawaddy, The Economic Times.

China How To: Design a website for China

China How To: Design a website for China

Given the capital and time-intensive process of establishing a physical office in China, online channels are a popular option for international retailers and especially SME’s to reach Chinese     consumers. E-commerce platforms such as Tmall are a popular entry point for international consumer brands to test market demand, develop brand penetration and outsource operations, including online payment and customer delivery. Listing on a Chinese e-commerce platform offers   enormous market potential for overseas brands. Meanwhile, given that low barriers to entry (in comparison to offline retail) and growing competition, brand trust  and reputation are  becoming  increasingly more important than country of origin in determining long-term success. Chinese consumers pay a considerable amount of attention to product quality, safety and brand reputation.  As a result, new customers typically crosscheck and browse multiple touch points before buying a   product or service. Popular touch points include online forums, social media channels, online   question and answer platforms, family and friends, and of course the brands’ official website.

 

 

Having a company website optimized for China is a vital touch point to build trust and improve   online and offline conversions. As Chinese customers are thousands of miles away from your production facilities or offices, having a China-friendly website is one way to validate that your business is legitimate and to communicate your brands credentials. Remember it’s not uncommon for potential clients to want to visit your offices, simply to check you really exist and have a business licence.

 

 

What is a China-ready website?

 

A China-ready website is a dedicated online portal with localized content for Chinese consumers to access information about your business or brand. Your China website should ideally be a stand-alone   website with a China (.cn) domain name, integrated with  at least one Chinese social media account   and hosted on a China-based hosting server (or Hong Kong server is you don’t have a legal presence in China) for optimal performance. At China Web Designers, we can arrange the optimal set up to get your business or brand in front of your potential clients.

 

 Can I just add a few pages translated into Chinese to my current website?

 

This is an alternative option and works as a quick fix from a content perspective.  However you will run into a series of compatibility and design issues. Firstly, many foreign website use technology that is simply incompatible with China, namely the Google API.  Secondly, websites which are integrated with Facebook, Instagram, YouTube, Google Fonts etc. will experience delayed load speed as these elements are inaccessible in China. This can have an adverse effect on the user experience and aesthetics of your website. Thirdly, your website load speed in China will be delayed if your website is hosted outside of China, and especially if hosted outside of Asia. Finally, website design fundamentals differ widely between western and Chinese websites: clean minimalistic design, is not the norm, Chinese users expect very detailed orientated websites, focusing on content. Take a look at what we did for London Designer Outlets as an example of this:  

 

 

Website platforms.

 

Popular international website building platforms such as Wordpress, Drupal, WooCommerce, are all accessible in China. However if you want to use a website builder such as WIX with integrated web hosting, you will run into trouble. These days, Wordpress and WooCommerce are the two best   international options to create an expandable China business or e-commerce site. Strikingly has a   strong emphasis on mobile design and offers the option of integrated China hosting. Wordpress can also be used as a website builder but hosted on a third-party web hosting platform in China.   Magento, Strikingly and Wordpress are our suggested platforms for building an e-commerce integrated website. However, for all of these you will need to ensure that you disable the Google API. English Heritage and SAM Labs China are a couple of examples of optimised Wordpress sites for China.

 

                             

 

Website design

 

Website design priorities are somewhat different when catering to a Chinese audience. Chinese   corporate websites tend to veer from minimalistic website design found in the West, and instead  focus on content-heavy designs, as well as vibrant colours with traditional significance and Flash  promotional banners. We at China Web Designers, generally try to find a middle ground, focusing on content but maintaining Western design principles. James Cropper Paper is a site we particularly like for this, also Brand Energies.

 

 

Chinese consumers tend to trust corporate websites based on the depth and authority of the content provided rather than on navigational and aesthetic design. As an international business your main focus should be building a website that    communicates your brand credentials and values to potential customers.  Important features to highlight via text, images and video include your business registration, compliance certificates, awards, government relationships, customer testimonies, strategic partners and memberships of industry-based organizations.

 

Translations

When translating content into Chinese characters it is important that you use a quality translation service to translate and localize your content. Machine translations are simply not good enough yet to provide fluid and colloquial/formal texts. 

 

Localising your website design and content for a Chinese audience may seem daunting and time-consuming, but it all adds up to a competitive edge over rival brands in China. As mentioned,     Chinese consumers are extremely street-smart  and detail orientated when it comes to brand and company research, skipping corners on your online presence can cost your company potential   business. In order to build trust and generate enquiries from your website, it pays to employ a professional service provider to assist with design, content editing, translations, social media integration and SEO optimization.

 

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By Saurav Bhattacharyya

Managing Director, China Web Designers.

contact@chinawebdesigners.com

3 Trees Group, an Olympic Sponsor

3 Trees Group, an Olympic Sponsor

Sankeshu Paint will serve as the official exclusive paint supplier of the Beijing 2022 Olympic and Paralympic Winter Games. Established in 2003 Sankeshu is part of the Three Trees Group.

 

 

Chairman and President of Three Trees Hong Jie, says his company's mission of “making homes healthier and cities more beautiful” connects with Beijing 2022’s concept of “delivering a green Olympic Winter Games”. Sankeshu becomes the seventh official exclusive supplier for Beijing 2022. We have a look at company below:

 

 

SKSHU Paint Co., Ltd. (“3TREES”) has been committed to building healthy homes by providing an integrated 6-in-1 one-stop system of green construction materials and services, encompassing interior and exterior wall coatings, waterproofing products, insulation materials, auxiliary materials, floor coatings and construction. 3TREES went public on the A-share Main Board of Shanghai Stock Exchange in 2016, being the first national paint company that issued stocks. The brand value was worth 23.985 billion yuan in 2019 and became a coating enterprise among the "Top 500 Private Enterprises in China". Headquartered in Putian, Fujian Province, has a center in Shanghai and has or is constructing 9 production bases in Sichuan, Henan, Tianjin, Anhui, Hebei, Guangdong, Hubei and other places, 3TREES is now an enterprise group with 20 wholly owned or controlling companies.

 

 

Company Snapshot for SKSHU Paint Co., Ltd.

  • EMPLOYEES (All Sites): 3,899
  • ASSETS (MIL USD): 807
  • REVENUE (MIL USD): 848.84
  • TICKER SYMBOL: 603737
  • FISCAL YEAR END: DEC
  • SALES GROWTH %: 66.64%
  • NET INCOME GROWTH: 82.55%
  • ADDRESS: 518 Liyuan North Avenue Licheng District Putian, 351100. China

 

 

Key Company personel

  • Jie Hong, Chairperson
  • Dedian Lin, Director
  • Guoqin Fang, Director
  • Lizhong Lin, Director

 

 

Its international website is found at https://www.3treespaint.com and China website at https://www.skshu.com.cn

As one of the top 30 paint manufacturing enterprises in the world, the company heavily promotes its  ecological culture, green brand and healthy products from a modern eco-friendly plant.

Who is funding the China Start Ups?

Who is funding the China Start Ups?

In 2019, 8 internet giants newly invested in over 400 startups in China and overseas. They have become more conservative about investing in B2C & startups since 2018. They eye on the next blue ocean market, i.e. B2B business.

 



Baidu - invested mainly on enterprise services, and medical & health
Alibaba - invested mainly on enterprise services, finance, IT, and media & entertainment
Tencent - invested mainly on enterprise services, finance, transport, and media & entertainment
Xiaomi - IT, and lifestyle services

 

The very detailed full reprort is avaialble from the Fung Business Intelligence website here:  https://lnkd.in/grkRuy9

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