Resources

Beijing`s satellite townships are now in the spotlight in view of the Governments aim for the integrated development of Beijing, Tianjing and Hebei provinces, know as Jing-Jin-Ji. Over the next 15 years it is planed to transfer non-essential functions out of Beijing to the new townships.

Tongzhou

A 40 minute metro ride east of Beijing`s CBD area is Tongzhou (pop.1.3 million est.), where construction of a new CBD area and Universal studios theme park are well under way: built at the intersection of the Beijing & Hangzhou Grand Canals, the new town is expected to cover over 80 square kilometers. Tongzhou will also be home to the new Beijing city Municipal Governmental Offices at Lucheng town: some 6km east of the new CBD.  Also expected to relocate are state-owned-enterprises, hospitals and universities. Planners hope the area will draw in a further million people, the first phase of the project due to be opened in 2017.

The local government has agreed to fund 86 key projects in the area, setting aside over 160 Billon RMB. Currently housing prices run in the 30,000-40,000 rmb/sqm range.

Daxing

As part of a move to connect and integrate transport, Beijing is to build its third civil airport, Daxing International Airport, located adjacent to Daxing district in Beijing and Langfang in Hebei province. It is due to be completed by the end of 2017 and operational in 2018 it is expected to carry 120 million passengers by 2050.

The Biomedical base is 60 minutes, via metro, from Bejing`s CBD area with numerous office and residential complexes already completed. As part of the district's growth, a new 391,000 sq m above- and belowground mixed-use development—dubbed the Vanke-Shoukai Mixed-Use Development Daxing—is also under way, scheduled to be completed in 2017.

Key aims and development outline

Beijing will remain the national center of political, cultural, and international exchange activities as well as a technological innovation center.

Tianjin municipality will be a national research and development base for advanced manufacturing industry, a shipping hub for north China, a demonstration area for financial innovation, and an experimental area for further reform and opening up.

Hebei province will be an important national base for trade and logistics, an experimental area for industrial transition and upgrading, a demonstration area of modern urbanization and coordinated development of urban and rural areas, and an ecological buffer zone.

A medium-term aim of the strategy is to control the permanent population of Beijing within 23 million and to relieve air pollution and congestion. Long term, the strategy aims to form an integrated region of Beijing-Tianjin-Hebei, with a better economic structure, a cleaner environment and improved public services.

Industrial Parks in the Jing-Jin-Ji area.

Tongzhou Industrial Park.

Established in 2006, Tongzhou Industrial Park covers two industrial bases: Opto-Mechatronics Industrial Park and Jinqiao Science and Technology Industrial Base. The park has a total planned area of 14.5 square kilometers of which 11.41 square kilometers have already been developed. 360 enterprises have accessed the park, including 30 high and new-tech enterprises at national level and 76 at Zhongguancun park level.

Tongzhou Park prioritizes world-class industries of optic-mechanical integration, environmental protection and new energy, high-end equipment manufacturing. The park features microelectronics, optoelectronics, automotive electronics, avionics, advanced equipment manufacturing, intellectual instruments, laser technology, numerical control machine, printing machinery, medical equipment, semiconductor material, environmental protection equipment and auto parts.

The park project has so far invested 2.2 billion yuan ($346.28 million) to construct essential infrastructure and thus creates a favorable environment for production and R&D,.

Daxing Biomedicine Industrial Base.

Daxing Biomedicine Industrial Base is a biotechnology industrialization base built by the Beijing Municipal Government to revitalize its modern manufacturing industry. Being a bio-industry cluster area for the Bohai Economic Zone and the entire northern region, the base holds industrial functions such as biotechnology indigenous innovation, product R&D, industrialization of technical achievements, R&D and producer services in Beijing.

Situated in Daxing New Town in Beijing, 20 kilometers away from the urban area, 50 minutes' drive to Beijing Capital International Airport. The base is not far from Subway Line No.4 and the new international second capital airport.

The base has four development and support priorities – biopharmaceutical projects centering on vaccine and protein drugs; the import of modernized and internationalized TCM enterprises to drive the growth of medicine, health care products; the introduction of medical instrument programs to consolidate the leading position of Beijing in the field of instrument and diagnosis; and last but not least is to bring in innovative drugs and high-end generic drug industrialization projects to form preparation products that meet international certification standards.

Fengtai

Fengtai Science and Technology Park was established in 1991. It was listed as a national high and new-tech zone in April 1994 and was one of the earliest three sub-parks of the Zhongguancun Science and Technology Park.

Fengtai S&T Park realized a total revenue of 195 billion yuan ($30.69) in 2010, and has obtained strong industrial agglomeration effects. The major industries in the park include: electronic information, biomedicine, new materials, new energy, as well as engineering services, rail transit, military aerospace, cultural and creative industries and producer service industry. With more than ten years of development, the park has gradually formed the headquarters of an economic zone and is playing an increasingly important role in the development of southern Beijing.

Yizhuang Beijing Economic Technological Development Area

The Beijing Economic Technological Development Area (Yizhuang) is the only state-level economic and technological development zone in the city, a core region for high-tech and modern manufacturing industries. It will become a cluster for the high-tech manufacturing and strategic-emerging industries in southern Beijing.

In 2010, the administrative resources of Daxing District and the BDA were integrated to form an industrial development pattern of "one base and six parks" with the BDA as an industrial development main platform to stimulate the planning and construction of six special parks: Daxing Biological Medicine Base, New Media Industrial Park, New-Energy-Vehicle Industrial Park, Military-Civilian Combination Industrial Park, Manufacturing Services Industrial Park and New Airport Industrial Park.

By the end of 2011, more than 4,800 enterprises from more than 30 countries and regions had come to the BDA, along with more than 100 projects invested in by 77 of the global top 500 corporations, along with high quality, domestically funded projects.

The leading industries are electronic information, bio-medicine, equipment manufacturing and automobile production industries; a communications industry cluster led by Nokia, a display industry cluster led by BOE, a microelectronics industry cluster led by SMIC, a medical equipment industry cluster led by GE, a bio-pharmaceutical industry cluster led by Bayer and an automobile industry cluster led by Beijing Mercedes have also been established.

Yanqing.

Yanqing Park, a sub-organization of Zhongguancun Science Park, was founded in October 2010. Located in the northwest of Beijing the park covers an area of 4.91 square kilometers.

Part of the Beijing new energy base, the park has founded a high-end service industry area with the development of high-end equipment manufacturing, general aviation and modern service industries, finance and insurance background services, and research and development training.

Fangshan Park.

Fangshan Park is composed of Beijing Petrochemical New Materials High-Tech Industry Base, Beijing High-end Manufactureing Industry Base, Liangxiang Economic Development Area, Beijing Haiju Foundation and Higher Education Park. It has an area of 15.73 square kilometers.

(1) Beijing Petrochemical New Materials High-tech Tech Industry Base.

It is one of the first 62 new industrialization demonstration bases in China. It is an important carrier of strategic cooperation between the Beijing municipal government and Sinopec and one of five industry bases under planned construction in Fangshan district.

The East District focuses on fine chemistry, petrochemical new materials and crucial projects. The West District is the core area of Yanshan Petrochemical.

(2) Beijing High-End Manufacturing Industry Base.

Changan Automobile, BWI Group, China CNR Corporation Limited, National Energy and Jinpengpa Unmanned Aerial Vehicle have settled here.

The fixed-asset investment of the base is 2.21 billion yuan ($359.2 million). The annual output of the three companies that have been put into operation total around 800 million yuan

(3) Liangxiang Economic Development Area in Beijing

Established in 1992 with an area of 109.5 hectares. The development and assignment have been completed. Currently, 63 companies have settled here

(4) Industrialization base of Haiju Project

Haiju Base is a new effort to adjust the industry structure in the district. It complies with the National Thousands of Talents Plan and Beijing Haiju Project and is a focal point for leaders in the city and district.

Currently, there are eight projects in the base, including Beijing Feihang Jida Aviation Technology, the Environmental Protection of Xishan district project, Ntong Technology Co, Beijing Grish Co and Beijing Dongfang Xupu Technology Co.

(5) Liangxiang Higher Education Park in Beijing

It is one of the two higher education parks approved by the Beijing municipal government. The park is divided into the college park, central landscape area, central device area and allocation area.

There are six colleges and universities in the park. The construction of the graduate school of the Chinese Academy of Social Sciences, Beijing Institute of Technology, Capital Normal University, and Beijing Technology and Business University in the first stage has been completed with over 27,000 students and teachers. Plans are underway to construct Beijing University of Chinese Medicine and Beijing Vocational College of Transportation.

(6) Beijing Liangxiang Logistics Base

Located in Yuan Wutun village, Yancun town, Fangshan district,

Snapshot

Founded in 2000, China`s largest and fastest growing express delivery company, YTO now employs more than 180,000 workers in 20,000 delivery centers across China. YTO delivered 14 billion packages last year. It`s services cover warehousing, distribution and special transport.  In 2014 it launched it`s 90% owned subsidiary YTO Cargo Airlines which initially began operations, out of its Hangzhou hub.

Shanghai Yuan Tong Express Co., Ltd. (YTO Express) is now the largest express delivery business, by market share, in China after taking advantage of the booming domestic e-commerce industry. Yu Weijiao, YTO chairman, has turned the company into a market leader in China. With 84 centers in Beijing alone and 20,000 country-wide, the group is taking advantage of the government's decision to realign the economy from cheap, mass-produced exports toward more sustainable consumer-fuelled domestic growth.

In 2015 the company's revenue reached 204 billion yuan ($37.79 billion), up 42% compared to the same period in 2013, during a time of slowing economic activity, up to 19 billion yuan of which was indirectly generated by express delivery services, and that figure is expected to reach 60 billion yuan by 2020.

During the 2015 Singles' Day on Nov. 11^th, the company received a record-breaking 53.28 million orders across China. The group handled more than 30.59 million packages, or roughly 21 percent of the industry's total.

Key to YTO's success has been expansion: from YTO's humble beginnings in 2000 when it started with a meager investment of 50,000 yuan and employed 17 staff the group now employs 180,000 staff and operates a network that covers about 93 percent of the counties across the country. In 2014, YTO delivered 2.1 billion packages, generating revenue of 24.6 billion yuan. The maximum number of parcels handled in a single day last year hit 25 million.

Outlook

With huge growth potential in the Express delivery sector amid strong competition from competing companies only the strongest companies are expected to survive, while smaller players are likely to link up with the leading companies such as YTO.

As the State Council approved a proposal to promote the development of the express delivery sector, which will be worth 800 billion yuan by 2020, the key is to increase international competitiveness and expanded air delivery capacity facilitating the rapid rise of cross boarder e-commerce.

YTO also plans to expand its air cargo operations as the company completed the maiden flight of its first aircraft in September 2014. It hopes to have a cargo fleet of 50 aircraft by 2020 and 100 in 2025.

Although YTO has plans to take the company public, a timetable has yet to be announced, as the company is aiming at building a highly competitive international network first: last year, the group set up an overseas business department and the company has registered its trademark in more than 100 countries.

They plan to establish about 20 overseas branches in countries including South Korea, Australia, the United States, Thailand, India, Russia and France.

Designed to provide financial support for infrastructure development and regional connectivity in Asia the bank is headquartered in Beijing, China. Its first President, Mr Jin Liqun was elected in January 2016. The purpose of the Bank is twofold: to foster sustainable economic development, create wealth and improve infrastructure connectivity in Asia by investing in infrastructure and other productive sectors; and secondly promote regional cooperation and partnership in addressing development challenges by working in close collaboration with other multilateral and bilateral development institutions.

Under its Articles of Agreement, the AIIB's functions include: (i) promoting public and private investment in the Asia region for development, in particular for infrastructure and other productive sectors; (ii) utilizing the resources at its disposal for financing such development in the region; and (iii) encouraging private investment  that contributes to economic development in the Asia region, in particular in infrastructure and other productive sectors, and supplementing private investment when private capital is not available on reasonable terms and conditions.

As of January 2016 the founding members are: Australia, Austria, Azerbaijan, Bangladesh, Brazil, Brunei Darussalam, Cambodia, China, Denmark, Egypt, Finland, France, Georgia, Germany, Iceland, India, Indonesia, Iran, Israel, Italy, Jordan, Kazakhstan, Korea, Kuwait, Kyrgyz Republic, Lao PDR, Luxembourg, Malaysia, Maldives, Malta, Mongolia, Myanmar, Nepal, Netherlands, New Zealand, Norway, Oman, Pakistan, Philippines, Poland, Portugal, Qatar, Russia, Saudi Arabia, Singapore, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Tajikistan, Thailand, Turkey, the United Arab Emirates, the United Kingdom, Uzbekistan, and Vietnam.

Financing & Operations.

The authorized capital stock of the AIIB will be US$100 billion, divided into 1 million shares having a par value of US$100,000 each. The original authorized capital stock will be divided into 20% paid-in shares and 80% callable shares.

The basic parameter for allocation of capital stock to members is the relative share of the global economy of members (based on GDP) within the regional and non-regional groupings, with the understanding that the GDP share is indicative only for non-regional members.

What are AIIB's key financial instruments?
The AIIB will focus principally on financing specific projects or specific investment programs, equity investments; and guarantees. It may: (i) make, co-finance or participate in direct loans; (ii) invest in the equity capital of an institution or enterprise; (iii) guarantee loans for economic development; (iv) deploy Special Funds resources in accordance with the agreements determining their use; or (vi) provide other types of financing as may be determined by the Board of Governors.  Special Funds would be donor funds that are given to the Bank for use consistent with its purpose and functions.

Future Capital.

In addition to the capital subscribed by members, the AIIB will raise funds primarily through the issuance of bonds in financial markets as well as through the inter-bank market transactions and other financial instruments. The AIIB may raise funds, through borrowing or other means, in member countries or elsewhere, in accordance with relevant legal provisions.

Hainan Airlines is the fourth largest carrier in China in terms of fleet size. However, it is the only airline based in the People’s Republic to earn a five star rating from Skytrax (not counting Hong Kong’s Cathay Pacific).

Much of Hainan’s service is focused on its namesake island, which is becoming a major tourist destination for both domestic and international travelers. In addition to its main base in Hainan’s provincial capital, Haikou, the carrier has a hub in Beijing and a number of focus cities around China (including in economic hotspots like Chongqing and Shanghai).

Building on its five-star reputation

Now, the upstart airline is trying to take its five-star reputation to the bank by continuing to expand its international route offerings. The carrier plans to launch service to both Tel Aviv and Manchester, England starting next year.

Hainan has adopted a strategy that has become rather popular amongst up-and-coming airlines. In Manchester, they have found a market that has yet to be tapped. London residents already have nonstop connections to Beijing, but Manchester does not yet have such a service. Hainan’s goal is to create a new “air bridge” between Northern England and China. This kind of service is often appreciated by people in “secondary” cities because it means they do not have to travel to another hub in order to fly overseas.

Adding more and more international routes

This is not the first long-haul route that the airline has added to Hainan’s map. In fact, the Manchester service, slated for takeoff in June of 2016, will be the sixth major transcontinental route launched in recent times. The airline’s Beijing-San Jose flight is another example of trying to develop service in a new, underserved marketplace. Today, most transpacific flights take off from SFO, requiring a train or taxi trip north for travelers from San Jose and other parts of the Southern Bay Area.

Hainan Airline’s other new long-haul routes are Chongqing-Rome, Shanghai-Boston, Shanghai-Seattle and Beijing-Prague.

According to the carrier, more intercontinental flights are in the works. Hainan is banking on its image as a premium airline to differentiate itself from others in the crowded Chinese marketplace. They claim to have better food, better service and more spacious seating than the competition. These claims are backed up to a certain extent by the Skytrax rating, which is based on flier survey results. Billing itself as a premium airline has always worked quite well for one of Hainan’s main competitors, Cathay Pacific.

Domestic expansion

Hainan has also become a major player on the domestic front. It has snapped up or launched a number of regional carriers including business-oriented Beijing Capital Airlines, Fuzhou Airlines and Kunming-based Lucky Air. They are also a minority stakeholder in Hong Kong Airlines.

Hainan Airlines is obviously focused on leaving its niche behind and becoming one of the major players in China’s long-haul and domestic marketplaces. The strategy of expanding into underserved destinations like Manchester could work in the airline’s favor. At the very least, it is a welcome trend both for Chinese travelers (and East Asian fans of Manchester’s two popular soccer franchises) and for English fliers who are heading to China and don’t want to have to connect through London or another European hub.

Source: Travelpulse.com

There have been countless articles and books about China’s reign as the factory of the world coming to an end. While it is true that wage increases are making some of China’s lower-end industries, such as textiles, less competitive vis-à-vis other low-cost countries such as Viet Nam, Cambodia and Bangladesh, China remains one of the top procurement sources for mid- to high-tier products. For instance, heavy equipment exports from China experienced a growth rate of about 30 percent in the last decade alone. Even as some of the lower-end industries move out, there is more to a country’s competitive supply chain than labor costs. China maintains a set of key factors that will continue to make it a competitive exporter even as the economic landscape shifts. These include:

• High-quality infrastructure (especially export-related infrastructure): China’s rail and road infrastructure, particularly along the coastal cities, are among the most developed globally. With a history of double-digit investment in infrastructure, China’s ports complement the rail/road infrastructure. Shanghai long surpassed Singapore as the world’s busiest port and it will be a while before key competing countries can match China’s current (and continuously developing) infrastructure.

• Increasing qualified labor force: China produces hundreds of thousands of graduate engineers and scientists each year to be absorbed into the local industries. Moreover, China now has the world’s largest student population studying overseas with a sizeable number returning upon completion of their studies. Although there has been renewed attention to quality rather than quantity in the number of graduates, the increasing education level will boost China’s competitiveness vis-à-vis some of the other low-cost sourcing destinations.

• Growing research and development expenditure leading to higher innovation capacity: Despite the reputation for copying, China’s innovation has continued to pick up pace. A report by McKinsey & Company (Greater China) highlights innovation in areas such as renewable energy, consumer electronics, instant messaging and mobile technology. As internal and external competition increases, China is also focusing on price reduction, adaptation of business models and supply chain development. This will lead to the elimination of less efficient firms, both domestically and those focused on the export market.

• Lower costs relative to industrialized countries: Despite double-digit growth in both wages and currency appreciation during the past decade, China’s minimum wage still stands far below that of industrialized countries. Rising wages are correlated with increasing productivity. Therefore countries competing with China for lower costs will have to also compete with increased productivity and vice versa.

• Specialization, not only at sector level, but also at product level: China’s specialization in various products remains unparalleled globally. There are entire towns dedicated to producing a single product. For instance, Shenyang, a city in northeast Liaoning Province, has developed a reputation for its heavy industry, particularly in the manufacture of automobile and light machinery. The Pearl River Delta is known for textiles/electronics industries, whereas Shenzhen has become the IT hub of China. Moreover, the product range available in these agglomerations is diverse, catering for low- to high-end products, resulting in differentiation as a key competitive factor.

• Pro-export policies: It is true that the Chinese authorities have decided to alter the export-led growth model to one focused on domestic consumption. However, the country’s “going out” policy combined with an increasing saturated domestic market, especially in sectors related to fixed assets investment such as steel, cement and heavy equipment, continues to have explicit support (via export rebates or subsidies) or tacit support (high barriers to entry, licensing requirements), especially at local level. This support will continue to boost Chinese exports’ competitiveness – at least in the short term.

A shift inland: As the coastal areas become expensive, investment in areas such as Chengdu, Xining and Chongqing, which are a distance from the coast, continues to see increasing direct investment from both local and foreign firms. As well as taking on relocated industries from the PRD (Pearl River Delta) area, these regions are also leading the way for new industrial development in Hi-Tech fields. This is not to say that the inland does not pose its own problems, but over time it may prove easier to shift inland than abroad.

The business of selling airline tickets and resort vacations to China's holiday-happy middle class is now a battleground for Internet giants, following a deal that brings Ctrip.com International Ltd. to the fore.

Ctrip was already the country's biggest online travel agency before announcing a share-swap agreement on October 27^th that gave it virtual control of traveler services provider Qunar Cayman Islands Ltd., a subsidiary of the Internet search giant Baidu Inc.

In the deal, Baidu transferred 45 percent of its stake in Qunar to Ctrip. In turn, Baidu got a 25 percent stake in Ctrip. The swap strengthened Ctrip's grip on what market research institution iResearch says is China's 270 billion yuan online travel agency market. Ctrip already owns 37 percent of eLong Inc. and 6 percent of Tuniu Corp.

The tie-up of the two Nasdaq-listed companies with a combined market value of US$ 18 billion set the stage for a three-way travel market battle pitting Baidu and its new partner Ctrip against the nation's dominant social media company Tencent Holdings Ltd. as well as e-commerce leader Alibaba Group.

Tencent has an online travel information section on its qq.com platform, an instant messenger. The company has also invested US$ 84 million in travel service provider eLong in 2011 and US$ 78 million in LY.com in 2014.

Alibaba, meanwhile, has had one foot in the travel agency door since 2010 by selling ticket and hotel booking services through its Tmall and Taobao websites. It's also invested millions of U.S. dollars in several online travel sites including qyer.com and baicheng.com. And in October 2014, Alibaba formally launched its own travel service division called Alitrip.

But through their new partnership, Ctrip and Qunar now account for nearly 70 percent of all revenues generated through the country's online travel market.

Alitrip's is pitching it`s service as an open platform through which travelers and qualified service providers can find each other. Future plans call for offering various traveler conveniences, such as hotel room deposit waivers based on a client's credit record with Alibaba. In its first year of operations the company signed up more than 100 million members and averaged more than 10 million daily webpage views. But it's still lags behind Ctrip and Qunar.

And although big brands rule the market, a number of new players have recently joined the online travel services game. One is the group-buying website company Meituan.com, which for the second half of this year reported 5.3 billion yuan worth of hotel bookings as well as 1.8 billion yuan worth of other travel-related deals. Meituan established a new division in July aimed at expanding its services.

China is also seeing traditional, storefront-based travel agencies increasing their online exposure opportunities through a growing number of new websites.

Nevertheless, the country's online travel giants have fortified their market positions in ways that should keep their new rivals at bay for a long time. For several years the market had anticipated a Ctrip-Qunar merger.

Integrating Services

The main focus of the merger is as a way to streamline business and counteract competitive pressure since many domestic companies in this industry are running in the red.

For the second quarter, Qunar reported an 816 million yuan loss. Elong.com registered a 356 million yuan loss and Tuniu said it lost 292 million yuan in the same period.

Ctrip outperformed its rivals by posting a 143 million yuan net profit for the second quarter, a 5.9 percent increase from the same period last year.

Baidu, meanwhile, has been singled out by market analysts as the biggest winner in the deal between Ctrip and Qunar. The search engine had controlled Qunar since buying a 62 percent stake for US$ 306 million in July 2011, just a few months after expanding into what was then a fledgling market for online travel services.

Ctrip and Qunar will likely continue to operate separately yet complement one another. Ctrip will focus on the business traveler, hotel and ticketing operations, while Qunar will function mainly as a platform for a variety of travel services based on packages, search and price comparisons.

But the merger also presents challenges for the companies involved. Baidu, for example, must figure out how to integrate and distribute traffic and resources between Ctrip and Qunar. In the short term Ctrip and other travel booking sites are expected to continue relying on investments to keep their businesses growing whilst being forced by the competitive environment to offer services at discounted rates.

Since mid-2014 Chinese currency reserves have shrunk by about 10 percent. This reduction culminated in August 2015 when the Chinese Central Bank responded to market pressure towards a weaker CNY and let the exchange rate fall by about 4 per cent in several steps. By following market sentiments, the Central Bank underlined its announcements to give market signals larger weight in exchange rate determination rather than to defend exchange rates, in particular not to defend a fixed single currency peg against the dollar.

However, both the timing and the sequencing of the Central Bank’s interventions were negatively perceived by markets in a situation when sizable corrections in Chinese stock markets occurred and when doubts about the sustainability of the medium-term growth path of the Chinese GDP of around seven percent shocked both traders and investors. To contain overshooting in currency markets and stabilize expectations that the Chinese economy is not facing a hard landing, the Chinese authorities leaned against further pressure of capital outflows and CNY exchange rate weakening and sold foreign currency denominated assets.

Source Merics 2015

Overview.

COFCO Corporation is a leading supplier of agri-products, diversified foodstuffs and services in China, integrating agri-trading, logistics, processing, production and sale links, and providing grain and oil products to one quarter of global population. At present, COFCO owns over 180 processing factories domestically with 2.3 million terminal points of sale covering 952 large and medium-size cities, and more than 100 thousands counties, towns and villages.

COFCO boasts a wide range of branded products and service portfolios, including Fortune edible oil, Great Wall wine, Le Conte chocolate, Tunhe tomato products, Joycome meat products, Xiangxue flour, The Cereal Way instant noodle, Lohas fruit juice, Joy City shopping mall, Yalong Bay resorts, China Tea products and COFCO-Aviva Life Insurance, etc

A Global Challenge.

COFCO has more than 10,000 employees in more than 70 nations and regions working in various overseas markets, mainly in Asia, Latin America and Europe. It plans to further improve its capability in maritime transportation and food processing, as well as the entire supply chain services in seed, pesticide and fertilizer businesses over the next five years.

Facing increased food security issues from factors such as extreme weather and dwindling farmland resources, COFCO is increasing becoming a global giant. The company is building grain and other agricultural product supply chains, particularly with countries in the Black Sea regions and South America, the world's two biggest grain-producing areas.

Last year, COFCO invested $1.5 billion for a 51 percent stake in the agribusiness operations of Hong Kong-based Noble Group, and reached an agreement with the Netherlands-based agricultural and commodity trading group Nidera BV to acquire 51 percent of its stock, which will see a fully integrated value chain created between the firms.

The acquisitions mean COFCO now holds more than $70 billion of assets and has a storage capacity of 15 million metric tons in more than 60 nations. Its total food processing capacity has reached 84 million metric tons and it is capable of shipping 44 million tons of agricultural products via various ports around the world.

Subsidiaries

COFCO Agri-Trading & Logistics

COFCO Tunhe

JOY CITY PPT

COFCO Engineering Technology

Mengniu Dairy

China Agri-Industries

COFCO Meat

China Tuhsu

Womai.com

Nidera

China Foods

CPMC

Financial Services Dept.

Huafu Group

Noble Agri

Outlook.

COFCO has committed to deploying resources and manpower along the Belt and Road Initiative routes over the next five years to help guarantee China's food supply at home and to its key markets overseas. Though the initiative is still in its early stages of development, it has strong implications for many nations along the routes that count on agriculture and international agribusiness cooperation. Many countries along the routes are key global grain producers, and COFCO will continue to seek investment and cooperation opportunities with them over the next five years.

In December 2014, the United Nations Development Programme (UNDP) in China, using the services of Futurescaper, launched a public website survey to receive more information on innovations trends in China.

This foresight exercise was meant to examine the climate of Chinese innovation, as reported by Chinese citizens and other experts from the general public residing in China or abroad. The assumption was that although many people think that China is good in copying and adapting products, a great deal of innovation might be going on in China which the world is unaware of. This Futurescaper exercise aims to reveal that products are not only “made in China” but that at the same time are part of “the future is made in China”.

Futurescaper’s tools help organizations uncover and map out the drivers and dynamics that their stakeholders think are most important, understand why they think this is, and explore what their implications are for the future. By combining human insight with analytics together with a great visualization tool, they make this process faster and cheaper than traditional scenario workshops, more insightful and interactive than surveys, and more participatory and empowering than traditional expert analysis.

To download the full report please click here.

The global B2C cross-border e-commerce market will balloon in size to $1 trillion in 2020 from $230 billion in 2014, according to a report from global consulting firm Accenture and AliResearch. With this in mind it would appear to be Alibaba that is taking a lead in opening up new global markets.

In the report, “Cross-border B2C E-commerce Market Trends,” researchers forecast that this increasingly popular form of online shopping will see compound annual growth of 27.4 percent over the next five years. By 2020, more than 900 million people around the world will be international online shoppers, the report says, with their purchases accounting for nearly 30 percent of all global B2C transactions.

Cross-border online shopping is gaining popularity particularly in emerging markets, where consumers can find it hard to find affordable imported products in local shops. In many cases, the only alternative is shopping on websites in other countries or from marketplaces such as Alibaba Group's Tmall.com, a Chinese B2C website that hosts merchants from around the world.

While China is expected to drive much of the growth of cross-border e-commerce in coming years because of the country’s large and growing middle class AliExpress is making headway in selling goods from suppliers in China and other countries to online shoppers in Latin America.

Alibaba sells to consumers internationally through AliExpress.com, a site it launched in 2010, that sells goods in 40 categories directly to consumers in 200 countries, according to Alibaba. While Alibaba does not regularly disclose transaction volume on AliExpress.com, the company did report in advance of going public last September that the value of goods purchased on AliExpress.com exceeded $4.5 billion in the year ended June 30, 2014.

AliExpress has caught on in Russia, where Alibaba claims it’s the top e-retail site, and in Latin America. The company is now taking several steps to localize the site to better appeal to Latin American shoppers where is see good growth over the next few years.

Whilst Alibaba does not disclose its sales in Latin America web analytics company SimilarWeb estimates monthly visits from Brazil to AliExpress.com averaged 110 million during the first five months of 2015. 

Delivery remains the biggest challenge for e-commerce companies in Latin America, consumers must wait anywhere from 30-40 days to receive the products after he or she placed order. While it might take one to two weeks for a parcel to arrive from China to Brazil, the time for passing through Brazilian customs and delivery inside of country could easily double this delivery time.

Why do so many Brazilians shop on AliExpress if they have to wait a month to get their orders?  Providing a large product selection at much lower prices is the main draw.

To speed up delivery, Alibaba has collaborated since last year with the Brazilian postal service Correios to share parcel data. AliExpress also accepts many local payment options in the region, including OXXO in Mexico and Boleto in Brazil.    

Aliexpress.com launched a Spanish-language version of its site in 2014 to boost sales and also rolled out its first country-specific site, a Portuguese-language site targeting Brazilian consumers, at pt.aliexpress.com. The site enables merchants that sell on the web shopping mall to create customized promotions, such as deals based on local holidays.

The Spanish-language AliExpress.com also has sections that highlight suppliers Alibaba has authenticated, such as those from Chile and Peru, to increase consumer confidence in shopping on AliExpress.com. Those sections also enable local merchants to sign up to become authenticated on Alibaba’s sites. Besides Chile and Peru, there are similar sections of AliExpress.com highlighting merchants from Mexico, Colombia, Brazil and Argentina.

Foreigners can indeed buy stocks and shares in both the Chinese mainland and Hong Kong, although it’s not always as straightforward as it might be for them back home. 

Playing the Chinese stock market

The Chinese stock market is divided into three kinds of shares: A Shares, which are restricted to Chinese citizens and Qualified Foreign Institutional Investors; B Shares, which are open to all foreigners, and H Shares, which are Hong-Kong-based shares and also open to foreign investment.

In order to trade in A Shares, which are bought and sold in RMB, foreign companies must first get a bank to submit a Qualified Foreign Institutional Investor application form to the China Securities Regulatory Commission (in order to get a permit allowing them to invest in RMB) and also submit an Investment Quota Application to the State Administration of Foreign Exchange.

Once these have both been done, the company can then approach a Chinese securities company to make the investment. However, there is a high threshold for entry: the company must own at least $500 million (for insurance companies, asset management companies etc) or $5 billion (for foreign securities firms and banks). 

The B Shares use US dollars or HK dollars as denominations and are issued by Chinese companies listed in the Chinese mainland – although ironically they cannot be bought by Chinese citizens. If you want to trade in these shares, take your passport and residence permit to a securities firm to open a B Share account. You will need to deposit at least $1,000.

H Shares are bought in HK dollars, and are issued by Chinese companies listed in Hong Kong. In order to invest in these shares, you must go to Hong Kong and open an investment account in a HK bank, putting in at least 10,000 HK dollars. The account can be opened with your HK visa, your passport and your Chinese mainland residence permit. You must go to Hong Kong in person to open the account, but then you can return to the mainland to make deals online. It is open to anyone, foreign or Chinese.

Foreigners can also buy funds and bonds in China from commercial banks, securities firms and other sales agencies, by opening a fund or bond account at said agencies. 

Security tips for investing in stock market

• To ensure that the bank or securities firm you are opening an account with is trustworthy, make sure that they have the qualifications necessary for trading. You can do so on the website of the China Securities Regulatory Commission (CSRC; no English version).

• If you are signing up to a securities firm online, make sure that the website is legitimate and not a clone or fake. Genuine securities firms do not promise profits or returns, and they will sign printed consulting contracts with you if you use their services. In addition, they are only allowed to receive money via company or business accounts, not personal accounts.

• It is advised to check whether an agency or broker has the qualifications necessary to sell securities, also at the China Securities Regulatory Commission website.

• Do not trust anyone who claims to have insider information on stock market trading.

• Do not trust anyone – even a so-called expert – who claims to be able to give precise predictions of the stock market. Likewise, don’t trust trading software that claims to be able to predict the stock market’s movements.