CHINA SHOPPING FOR RESOURCES

CHINA SHOPPING FOR RESOURCESA Publication of the ACRC - The University of Hong Kong Spring 2008

The roots of China’s 21st century economic strength can be traced back to its recent economic reforms of 1978. It is sometimes hard to comprehend China’s rapid emergence as a world economic giant. What makes this an extraordinary concept is China’s limited international trade prior to the reforms and its relatively recent membership of the World Trade Organization (WTO) in 2001. But it is not all good news—as the Chinese economy continues to grow from strength to strength, its appetite for natural resources becomes increasingly harder to satisfy. Modern economic policies have driven up the consumption of oil, metals, food and water. The geographical shift of the population from rural to urban communities has compounded the demand for consumer commodities such as cars, electrical goods and perhaps the worst domestic consumer of natural resources—housing.

This fertile economic environment was perfect for the rebirth of heavy industry which led to a proliferation of steel mills and smelters. Even though these modern mills and smelters should adhere to new environmental regulations, increased output has outdone environmental reforms. Domestic and industrial demand has created a huge surge in oil imports, placing China’s levels of consumption only slightly behind that of the US. It is no surprise that with this unabated intensity of energy consumption, global commodity markets are feeling the strain and oil prices hover at record levels.

With increased wealth comes an appetite for meat products. The meat industry requires large imports of soy and maize to feed livestock. Additionally, farmers are switching from traditional crops to fuel production in the form of ethanol (from maize) to cash in on the lucrative energy market, further adding to the food price woes.

The Chinese government is concerned about price fluctuations in the commodities market and burgeoning inflation. The priority is to secure supplies of much needed natural resources to sustain economic growth. Logistics complicate the issue further as migration to the coastal regions by China’s more affluent have put demands on the delivery of energy; most of China’s coal resources are inland and it has become easier to import coal to the coastal provinces than distribute domestic reserves using indigenous transport channels. Scarcity of natural resources is not just a problem for China; it is a fundamental trend in society today. International food prices are soaring and disparity in incomes continues to grow. The threat of inflation, the demands of the economy and the logistics of distribution are forcing China to look over its borders in search of natural resources.

The timing of this quest is less than perfect. The previous decade has highlighted the sensitivities of global opinion towards powerful nations meddling in the affairs of resource-rich countries. Harvesting another nation’s natural resources, albeit with the host nation’s consent, can seldom be seen as anything but exploitation in the eyes of the world. Even so, China is well prepared for this journey into unexplored political territory. Free from the encumbrance of the democratic decision-making process and the pressure of domestic public opinion, China is in a position to act coherently and quickly to secure lucrative trade deals. Furthermore, China is a nation rich in capital, where lending is cheap for state-owned companies willing to invest in overseas resources.

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China’s hunger for raw materials and energy is, however, causing concern around the world. China is seen by some to be strategically placing itself in an advantageous position to benefit from developing countries rich in minerals, leaving little for others and harming the planet in the process. Western countries in particular fear a Chinese domination in oil-rich developing countries. Although critics are quick to see the negative aspects of China’s influence, poorer countries are benefiting from China’s involvement. For example, Latin America and Africa are enjoying competition for their exports. With a wider audience for their products, prices are rising and this is bringing with it increased investment, strengthening the economies of both continents.

China is actively courting the governments of Africa, Latin American and Asia for trade partnerships. It is no surprise that these nations are forthcoming in entering into agreements since they give them a chance to export their raw materials while at the same time importing cheap Chinese commodities. So what is the trade impact of China on these developing nations? Low labour costs, strong competition, a risk for other economies? Some analysts suggest a negative impact: others see it as an opportunity to be exploited by all concerned. Either way this integration into the world economy has secured China’s place as a front-runner in global trade.

CONGO

The Democratic Republic of Congo has attracted considerable Chinese investment. Ranked by the World Bank as the worst place in which to do business, the Congo boasts rich deposits of cobalt, copper, uranium, zinc, and of course gold and diamonds. Despite this, its inhabitants remain amongst the poorest on the planet. Despite the poverty, corruption, bureaucracy and the aftermath of civil war, China is undeterred in its quest for natural resources.

The Congo’s newly-elected government looked to the World Bank, International Monetary Fund (IMF) and African Development Bank for a post-conflict restructure plan, which was not forthcoming. The promise from China of major infrastructure improvements against a backdrop of restrictive aid packages from Western nations, namely the IMF, was too good an opportunity for the Congo to miss. Mineral reserves have served as security for US$5 billion in funds for the Democratic Republic of the Congo to improve its infrastructure and mines. The Congolese leaders have also engaged China in talks aimed at providing aid, fighting poverty and tackling economic development. China is planning to fund Congo’s rebirth through construction of links to the Atlantic using its mineral regions. In turn, China is currently set to gain 3.5 million tons of the Congo’s copper reserves1.

1 The Economist – 17March, 2008.

However, the West has serious reservations about China’s dealings. Their hopes for democracy and transparency in Congo are replaced by a fear of being disadvantaged and of political unrest. Rumours of colonialism abound as the country’s natural resources are mercilessly stripped. However, China is not seen as the only perpetrator; the United Nations reported that African and European companies were also responsible. To a lesser degree, tensions have been eased by China’s collaboration with the World Bank to formulate a plan to develop aid in Africa.

Sentiment towards China in other African nations has not been so welcoming, with protests that cheap imported labour is aggravating unemployment. SINOPEC, a major Chinese petroleum company, came unstuck in its venture in Gabon when the government failed to produce environmental permits. More recently, a refusal by South African transport workers to carry a Chinese-made arms shipment into Zimbabwe has indicated that China will not get everything on its own terms. Regardless, China remains committed to its activities in Africa even though it comes with considerable financial and political risk.

SUDAN AND MYANMAR

Sudan and Myanmar have also been keen to do business with China. Sudan, rich in oil deposits, was the subject of US-imposed sanctions in 1997. Undeterred, China, through the state-owned China National Petroleum Corporation (CNPC), has invested billions of dollars and imports 10% of its oil from the war-ravaged country. The West has been outwardly critical of China’s presence in Sudan, but China is not the only investor—India is also involved in a similar venture in Sudan.

Myanmar has also been a venue for Chinese prospecting. Not only rich in liquid natural gas (LNG), timber, food and gemstones, Myanmar could also serve China as an important trading channel to the Indian sub-continent. Here, too, the global community has expressed concerns regarding human rights and sustainability. China is quick to counter this with its claim that it is improving the infrastructure of these countries, albeit for its own means.

BRAZIL, PERU AND VENEZUELA

Latin America has been the beneficiary of China’s biggest overseas investment. This was in the form of Baosteel, China’s biggest steel maker, investing US$1.5 billion into Brazilian aluminium mining. Minerals, steel, wood and soybeans are among some of the commodities exported to China from Brazil, which constituted 75% of the nation’s entire export for 2002. Growing demand from Asia (especially for copper and soybean) has brought with it competition and resulting rises in market values which has been of benefit to the region. Latin America has also been quick to take advantage of imports of cheap textiles and machinery from China. Of course, the trade balance is heavily weighted in China’s favour but it is expected that this imbalance will eventually right itself.

RUSSIA

Russia as China’s neighbour is very aware of China’s needs but also keen not to leave itself disadvantaged in the relationship. Raw timber exports have largely been replaced by cut timber, which is processed within Russian mills. Russia is one example of countries that are no longer content with selling their raw assets and importing cheap Chinese goods in exchange; instead, they are making their own demands.

A Publication of the ACRC Spring 2008

AUSTRALIA

Australia is a diverse source of minerals, agricultural produce and energy, which makes it a key target for the Chinese in their quest for economic sustenance. In addition, Australia is seen as a preferred investment opportunity as China certainly benefits from negotiations under the free trade agreements and from sound transparent trading policies. In turn, the Australians see the economic growth of China as a good opportunity to boost their own economy albeit at the cost of some of their natural assets. Australian exported aluminium, coal, copper, gold, iron ore, diamonds, lead, nickel, manganese, zinc and LNG are all in high demand in China. Australian farmers export vast quantities of beef, lamb, wheat and dairy products to China making China Australia’s second-biggest market for agricultural products. The Australian and Chinese governments are currently in the process of creating a free trade agreement that would give Australia a significant market advantage in China. It would also make it the only country that has full trade agreements with China and the United States.

But once again it has not all been plain sailing for cash-rich China as there are rising tensions behind China’s investments in Australia’s resource companies to extract iron ore, uranium, aluminium and bauxite. Sensing they may lose out to BHP Billiton—which recently launched a US$160 billion takeover bid for its competitor, the massive mining conglomerate Rio Tinto—China launched its own bid. Chinese government-backed Chinalco teamed up with Alcoa of the US for a 12% stake in Rio Tinto.2 As it turned out, the BHP Billiton bid was rejected on grounds of value since supply cannot match demand.3

The new Australian government is becoming increasingly concerned over the influx of Chinese sovereign funds (investors funded by government money). This has led to a rejection of bids under the rules of the Foreign Investment Review Board. These restrictions are put in place to protect the national interests of Australia. It was reported that Shougang Concord International Enterprises, a mainland steel maker, scrapped its takeover bid for 19.73% share of Australian iron ore mining company Mount Gibson. Australian regulatory authorities determined that the takeover was in contravention of Australia’s corporate code. “The rejection marks another set-back for aggressive mainland steel firms in Australia as they rush to secure overseas metal and energy reserves”.4 It appears that whilst the reserves and quality of Australia’s natural resources would satisfy the Chinese demands, the priority placed on sustainability, environmental issues and Australian interests make the antipodes a demanding marketplace.

2 www.chinaview.cn3 Reuters – 7 April, 20084 South China Morning Post – 14 April, 2008

CONCLUSION

The success of China’s domestic policy regarding the use of its natural resources hangs in the balance. Fuel standards are now set to improve the energy efficiency of domestic vehicles and taxes have been raised on heavy industries. Alternative energies are under development including hydro, solar, wind and nuclear power. Environmental monitoring and economic policies have been introduced but difficulties with implementation remain. The net result is that pollution levels are still rising, but so is awareness. The wealthy Chinese middle-class is the new protestor demanding a cleaner environment. Sick of breathing in pollutants, they are pressuring the government to curb pollution and listen to their concerns and those of the global community regarding the effects of climate change.

Global opinion about Chinese overseas investment is divided. The US views Chinese investment with suspicion whereas Australia is positive and is nurturing trade partnerships. Analysts generally feel that developing countries trading with China will most likely benefit in the long term. Despite imported labour from Asia threatening employment levels of nationals, the bilateral trade payoff is evident. In general, China’s, and to a large extent India’s, growing presence in world trade has been good news for Latin America and Africa ever though some of the potential benefits remain to be seen. Conversely, money is flooding into China directly from foreign investment into commercial and residential property and across all areas of industry. A capital-rich, booming economy is luring investors globally. This will in turn increase the cash reserves available for China to further invest overseas into natural resources and commodities.

Faced with a slowing of the world economy, now would be the time for China to take stock and review its needs. To gain awareness of international natural resource markets, Chinese investors face inexperience and risk political damage. No industry is more prone to the boom and bust nature of modern economy than that relying on diminishing, naturally-occurring materials. Whilst the party is intense, the hangover can be severe. The desire for instant prosperity can cloud the necessity for prudent long term management of natural resources. China expounds fairness in its relationship with its overseas trading partners. Only time will tell if this will produce well-managed, sustainable resources or derelict boom towns serviced by crumbling six-lane Chinese-built highways. Sustainable development will be at the forefront of the world’s policy makers in the years to come and although commodity prices are driven by supply and demand, they will need coherent global solutions. The international quest for natural resources will inevitably expose China to political risk and strained relationship with the international community over climate change. Rather than increase its imports of natural resources, China needs a long-term plan to cut back on its consumption and in doing so, conserve our earth’s precious resources and reduce man’s carbon footprint on the planet.

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BHP: Negotiating Iron Ore Prices with ChinaIvan Png, Zhigang Tao, Carola Ramon-Berjano

The Transformation of China'sSteel IndustryMichael J. Enright, Xiaohong Wu, Shao Ping

Baoshan Iron & Steel Co., Ltd.: Crafting a Three-way Cross-border, Cross-shareholding AllianceZhigang Tao, Mary Ho

Oil Refining in ChinaKa-Fu Wong, Mark Stimson

Long Lines, Lost Profits: China's Regulated Fuels MarketKa-Fu Wong, Mark Stimson

PetroChina: International Corporate Governance with Chinese CharacteristicsJohn Child, Mary Ho, Sang Xu

The Philippines' Rising Bioethanol IndustryAri Luis C. Halos

Strategic Management at Zhujiang Iron and Steel CompanyXueli Huang

Unocal Corporation: China's Unwelcome BidKa-Fu Wong, Mark Stimson

Safety Regulation and the Rise of Towngas in Hong KongKa-Fu Wong, Richard Wong, Andrew Lee

A Cost for Cleaner Air: Hong Kong's LPG Vehicle SchemeChester Chan, Ka-Fu Wong, Mark Stimson

Rent Seeking Behaviour in the Power MarketKa-Fu Wong, Pun Lee Lam, Alexandra Yiu,

Carola Ramon-Berjano

Business Competition in China: Beer, PCs, Steel, TV SetsMichael J. Enright, Vincent Mak

Cases on resources by the ACRC

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The Educator’s PerspectiveDr. Pietro Guj is an Associate Professor in mineral economics at Curtin University of Technology’s Western Australia School of Mines. Dr. Guj joined Curtin University following a distinguished career in the mining industry and in the Government of Western Australia. He held the roles of Deputy Director General of the Department of Minerals and Energy, Director of the Geological Survey and Manager Financial Planning and Revenue of the Water Authority of Western Australia. These roles were preceded by over 20 years of professional experience in the fields of geology, exploration and mining in Asia, Africa and Australia.

Dr. Guj has a PhD in Geology from the University of Cape Town and a MBA from the University of Western Australia.

ACRC: To start off, could you give us an idea of the size of Western Australia’s mineral industry?

Dr. Guj: Western Australia is a major mineral economy. Minerals represent about 88% of the exports of the state and dominate our economy accounting for around 30% of gross state product. In Western Australia, there are 67 producing oil and gas fields, and around 550 commercial mineral projects operating over 1200 individual mining sites. Last year the value of mineral production was A$53.1 billion. When we look at the breakup of those A$53 billion, we find that petroleum and iron ore are more of less on par—A$16.7 billion for petroleum and A$16.1 billion for iron ore, followed by nickel at A$7 billion and alumina and gold at A$ 4.7 and 4.9 billion respectively.

ACRC: How would West Australia’s mineral production compare to the rest of the world?

Dr. Guj: We are not a major player in oil but we are a significant gas producer and exporter. In terms of traded iron ore, we are neck to neck with Brazil. Of course, a lot of iron ore is produced and used domestically in other countries including China, which has a large number of mines in operation. However, their iron ore tends to be of a lower quality and grade than the iron ore from Brazil and Australia which dominate the high-grade (greater than 60% Fe) iron ore market. In nickel, Australia is the second or third largest producer. Similarly, we’re a large player in uranium, gold, mineral sands, base metals and industrial diamonds and significant in alumina.

ACRC: What could you tell us about the sustainability of mining in the region? Are there any long term concerns?

Dr. Guj: Sustainability is composed of three-dimensions: the environmental dimension, the socio-economic dimension and a dimension that relates to resource management and conservation.

As for resource management and conservation, Western Australia is still a relatively frontier nation. Exploration has not reached the point of absolute maturity, there tends to be a degree of discovery that compensates for resource depletion in the operating mines. Some areas will probably start to show a little bit of imbalance, for instance, our gold resources are buckling to keep up with depletion. However, there is a note of caution here as the very definition of resource and reserve relates to the price of the commodity. It’s not a static concept, what happens is that with significant increases in commodity prices, the resource base enlarges.

At the moment, the mineral industry is considering what it should do in the light of recent increases in commodity prices. Much will depend on whether the rise in prices continues or whether prices will gradually revert to some lower level. For example, if we look at iron ore, reserves at current levels of exploitation would last for at least 50 years. If we take a broader view of the resources, they would last in excess of 100 years. One also needs to consider that the bulk of these resources are very high grade hematite and goetite based resources. We have yet to evaluate the extent of Western Australia’s lower–grade, magnetite-based resources. It’s only now that some magnetite-based iron ore projects are appearing on the design table. Interestingly, China’s has got significant expertise in this field because most of its deposits are actually magnetite-based deposits. For this reason, it’s not surprising that many of the upcoming companies that focus on magnetite-based resources have been partnering with Chinese firms.

Presumably, our oil and gas resources will also start to deplete. Nonetheless, we still got very significant opportunities off-shore in very deep waters which have yet to be fully explored and exploited. Although the economic cost of exploiting gas resources in excess of 1,000 metres of water are prohibitive, in the end all depends on prices. So, while we cannot escape the fact that we’re in a depleting industry, at this stage we are still quite secure.


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ACRC: Could you give us some background on the socio-economic dimension you mentioned earlier?

Dr. Guj: In Western Australia, we’re blessed because our population is only around 2 million with the bulk of them, about 1.3 million, living in Perth. The second largest towns such as Geraldton and Kalgoorlie only have 30,000 or 40,000 residents. To some degree, mining doesn’t directly affect the community at large, which in many ways is a blessing. But there are some aspects that do create problems, with the first one being the indigenous population and their rights to land. The mining industry needs to deal with a very complex system of legislation relating to access to land, that ensures that aboriginal communities retain some rights to their ancestral land. Another social aspect has to do with the way the resources itself are mined. In the old days, when a large ore deposit was found, the miner would establish a company town and a significant proportion of the work force would be living in the town right next to the operation. These days, the cost of establishing a company town in a remote, deserted locality and putting up the required infrastructure has become such that mining towns are no longer used. Today, the workforce operates on a fly-in, fly-out roster system. What happens is that staff spends at least 2 weeks on the mining site and works continuously in 12-hour shifts. Then they come back to Perth or wherever they like to live and have a week of leave. Now this sounds practical, even attractive, but in reality what happens is that it causes a number of problems such as: dislocation, community gender imbalance, and problems related to alcohol and drug abuse. Many of these social issues are being addressed but they are not easy to overcome. Mining companies now take a very dim view for instance of excessive alcohol consumption and of the use of drugs. However, when companies try to monitor substance abuse, industrial relation issues of privacy pop up.

ACRC: Could you tell us something about the environmental dimension?

Dr. Guj: Australia is an affluent country. With such a degree of wealth there is an expectation that the environment should be looked after. In this respect, the industry is well regulated. For instance in Western Australia, there are three acts of parliament—the Environmental Protection Act 1968, the Mining Act 1978 and the Contaminated Sites Act 2006 that ensure the mining industry behaves in an environmentally responsible manner. Our regulators require mining companies to rehabilitate the land and back their commitment by means of a bank guarantee. If the mine inspectors conclude that a company is not rehabilitating the land as required, they can call the guarantee and appoint contractors to do the necessary rehabilitation work.

The state of Western Australia also reports on the state of the environment. For the mining industry, environmental performance is measured by four indicators. The first one is the area of land disturbed by mining. At this stage, about 162,000 hectares are under disturbance from mining and that represents 0.07% of Australia’s land mass. The state also keeps a record of how much land is being rehabilitated, which is about 24,000 hectares per annum. The second indicator is the percentage of compliance with the environmental conditions that were imposed in the Notice of Intent (NoI) to mine. Another indicator relates to the green house emission for the sector. Incidentally, the sector is performing reasonably well is this area even though the rapid expansion of production is driving up the cost of running clean operations. The fourth indicator relates to the quality and quantity of water used by the sector. The differentiation between quantity and quality is made because much of our mining uses very low quality water, as in the interior of Australia, the bulk of ground water is saltier than sea water.

ACRC: How much does it cost mining companies to comply with the three environmental protection acts you just mentioned?

Dr. Guj: It is very expensive. In the past, these costs were not taken into account or borne by the mining companies. This meant the community had to shoulder them. Now they are progressively identified, quantified and internalised by the mining industry.

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ACRC: You just mentioned China, could you give us a brief overview of the areas are attracting most Chinese interest in Western Australia that?

Dr. Guj: There are several areas that are particularly sought after by Chinese investors. These are primarily iron ore, gas and nickel. Among those, iron ore is really the area where we have seen very significant involvement in recent times. At the moment, China is the major importer of iron ore from Australia. China’s involvement is changing from just being a buyer to becoming an iron ore industry participant.

ACRC: Could you tell us about Australia’s iron ore producers and how Chinese investors are trying to participate in the industry?

Dr. Guj: BHP Billiton and Rio Tinto dominate iron ore exports from Australia. In recent years, in response to the very high prices of iron ore, we have witnessed the emergence of quite a number of small producers. These tend to be relatively small operations—one to seven million tons of iron ore per annum. Chinese buyers have focused very much on these smaller producers as they provide strategic learning and a point of entry into Western Australia’s iron ore industry at the moment.

China started primarily as a buyer of Australian commodities, with direct investment limited to the Baosteel-Rio Channar deposit joint venture in the Pilbara region of Western Australia. However, in recent years, it has taken equity positions in some Australian exploration companies — particularly companies at the point of developing a deposit, such as Mineralogy (CITIC Pacific), Gindalbie (Ansteel) and Cape Lambert Iron Ore (China Metallurgical).

We can say that the Chinese are becoming more adept at playing the market. They have a preference for negotiated and agreeable involvement while not hesitating to use takeover tactics if it is in their interest. For instance, Sinosteel is involved in a A$1.2 billion hostile takeover of Midwest Corporation, an upcoming lower-ranking iron ore producer. We have also seen Chinalco in cooperation with Alcoa buying A$14 billion worth of shares in Rio Tinto presumably to interfere with the current takeover activity by BHP Billiton to protect their iron ore supplies.

The result of this is an exponential increase in the amount of money China has invested into our economy. In 2006, China invested around A$7.3 billion, more than double the A$3.5 billion it invested in 2005.

ACRC: In the late 70s and early 80s, and again during the Asian financial crisis, the price of commodities such as iron ore dropped significantely and mining companies had to lay off a lot of workers. What kind of impacts did this have on Western Australia? Do current projections take into account the possible global slowdown which some people say is happening as we speak?

Dr. Guj: I have seen a number of commodity cycles in my lifetime. The question is whether this particular period of increase in demand and price is part of a traditional cycle. In Australia, we haven’t had a recession for a long time. So there are two camps. There are people who say there is nothing new under the sun, sooner or later the suppliers’ response to such high commodity prices will bring new resources to market to overcome constraints, which in turn will result in a drop in prices. And if the past is a good predictor of the future, then prices should moderate. However, this doesn’t really mean that demand for various commodities will moderate or fall. When you look back in time, you’ll find that commodity prices follow a cyclical pattern, but the absolute amount of mineral commodities demanded has continued to grow on trend. When we ask ourselves if we are in a cyclical situation or not, we need to look carefully at projected demand from what some journalists have called the BRIC countries, Brazil, Russia India and China. Now my view is that these countries will continue to grow in a fairly unabated way because their growth is really due to their process of industrialisation and urbanisation. It’s a transition from essentially agrarian communities to industrial communities. The process is structural rather than cyclical and it implies significant demand for materials, particularly steel. Steel demand is one of the greatest indicators of economic growth and this demand will continue to

grow for residential and commercial construction. If we take developed countries, like North America and Europe, the use of steel is about 475 kg per person. In China, at the moment, we have around 271 kg per person and in emerging economies, that figure is about 89 kg per person. Another issue is that I don’t think that we can really constrain the expectation of large populous countries for higher living standards. I

mean, China has created a middle-class, which has developed the perception of there being a gap between their standard of living and that of, say, North America and they’re going to strive to close that gap. When I look at China, back in 2001 it used about 150 million tonnes of steel. This year, it is expected to use around 520 to 540 million tonnes. In 2001, China was using 14% of the steel produced globally. Now it is using about 36%. If we look at India, in 2006, its population was more or less comparable to China. And India consumed 45 million tons of steel, a long way from China’s 540. Is there any reason why we should assume that Indian people’s expectations will not follow the Chinese’s footsteps? If we actually look at the process of industrialisation that took place in Japan, it took about 30 years to develop into a fully-developed industrial nation. So what we are really looking at is a series of regionalized industrialisation and urbanisation processes which will or can overlap. Thus China may take another 20 to 30 years from now to bring their per-capita consumption of mineral commodities on par with North America or Europe. India is lagging behind it by may be 10 years and so on.


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The ACRC is proud to announce the airing of six episodes of our FocusAsia Business Leaders case study and video series on BBC World. From 11 July through 17 August, six volumes of the series will be aired every Friday, Saturday and Sunday.

In recent years, emerging economies in Asia have been captivating the attention of Western multinationals with a hunger for new markets. But what appear to be promising new landscapes have held a few surprises, not least of which is competition from Asian companies which themselves are high performers on their home turf. Increasingly, Asian companies and their executives are also making their mark on the globe in virtually every sector. From property development and manufacturing to biotechnology and transportation, FocusAsia brings to you valuable insights into how these companies are leveraging their entrenched competitive positions back home and expanding into the global market.

The FocusAsia series is jointly created by the ACRC and the Journalism and Media Studies Centre (JMSC) at the University of Hong Kong. Under the direction of Jim Laurie, director of JMSC and Emmy Award winning journalist and broadcaster, and Professor Ali Farhoomand, founder and director of ACRC, FocusAsia profiles some of the most successful companies in Hong Kong, China, Japan and other parts of Asia, and features their senior executives discussing their companies’ operations, culture and strategic outlooks.

BBC World to Air FocusAsia Business Leaders

Time Zone

Friday

Saturday

Sunday

China / Hong Kong

16:30

22:30

04:30

14:30

India

14:00

20:00

02:00

Japan

17:30

23:30

05:30

15:30

GMT

03:30

08:30

14:30

20:30

22:30

ContinentalEurope

05:30

10:30

16:30

22:30

00:30

US(ET)

04:30

10:30

16:30

18:30

02:30

The schedule is taken from: http://www.bbcworld.com/pages/Schedules.aspx

FEATURED CORPORATIONS

ALSO AVAILABLE FROM THE ACRC

For more information about the FocusAsia Business Leaders case study and video series, please visithttp://www.acrc.org.hk/focusasia

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On 28 May 2008, the ACRC held the inaugural McKinsey/HSBC Business Case Competition.

The competition was a huge success—students impressed judges with their ability to solve complicated business challenges. In the final round of the day, the team from the University of Hong Kong faced the team from the Chinese University of Hong Kong for the championship. The University of Hong Kong team prevailed and went on to win highly coveted internships at McKinsey & Company and HSBC.

Judges and faculty pose for a picture at lunch time

Judy Lau from the University of Hong Kong presents the e-Choupal case

The case method of teaching provides insight into the daily operations and specific issues faced by companies in real-life situations. It also helps students expand their practical knowledge and analytical skills, and hones their business acumen. Through the case competition, ACRC hopes to give students an opportunity to stretch and apply their quantitative, qualitative, presentation and communication skills beyond classroom learning. It also allows these future leaders to network with Hong Kong’s elite business community.

The day-long competition was open to full-time undergraduate students from Hong Kong. A total of eight universities participated, with each participating team consisting of four students.

Participating teams competed one-on-one for the championship, with the winning team moving on to the next round. For each round, each team had two hours to prepare an unpublished ACRC case. This case had to be presented to a panel of judges who were senior executives from companies such as McKinsey & Company, HSBC, Sun Hung Kai Properties and Shell. The presentation was followed by a 10 minute Q&A session. Through this arrangement, judges were able to assess students’ ability to identify and analyse complex key issues faced by companies in Asia and to devise feasible strategies in practical business settings.

For more information about the McKinsey/HSBC Business Case Competition, as well as pictures and videos, please visit http://www.acrc.org.hk/casecompetition

I am impressed with the effort, creativity, presentation and ideas of the students. The business cases are unconventional and that involves critical and analytical thinking. This competition is a platform for exchange of ideas and business intelligence among students and faculty. I see a great success in today’s competition and would like to organise the upcoming competitions regionally.

- Professor Ali Farhoomand, founder and director of ACRC

The students' performance at the question and answer session, during which they solved major business challenges within a short period of time, particularly impressed me. McKinsey & Company is looking forward to seeing winning team members develop further during their internships.

- Dr. Allen Fung, managing partner, McKinsey & Company and chairman of the ACRC advisory board


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Newly Released CasesFor full case summaries, please visit our website www.acrc.org.hk

Goldlion: Winning over Hong Kong’s Hip GenerationKevin Zhou, Isabella Chan

In 2007, Goldlion, one of Hong Kong’s oldest menswear brands, opens the first Goldlion Accessories store in the city as part of its plan to rejuvenate its brand image. The company aims to promote Goldlion as a youthful and trendy brand by creating a fresh, chic and elegant appearance while maintaining its sophisticated image. By rejuvenating its brand image, Goldlion hopes to regain its Hong Kong market, especially the younger segment.

This case illustrates the rise and fall of a Hong Kong-born apparel brand. It can be used to teach students to identify the types of marketing information needed to help a company answer its doubts and devise a viable strategy in order to achieve its goals. The case can also be used as a learning tool for designing an appropriate ad-hoc market research plan. Marketing

Danone V Wahaha (A): Who is Having the Last Laugh?Jiangyong Lu, Shangjin Wei, Zhigang Tao, Isabella Chan

In April 2007, Zong Qinghou, founder of Hangzhou Wahaha Group and chairman of all its joint ventures formed with Danone, divulges details about Danone’s plan to buy a 51% interest in Wahaha’s non-joint venture subsidiaries and related entities that are owned or managed by Zong’s family interests. The disclosure of what is supposed to be a trade secret sparks off a series of public accusations, followed by lawsuits by each partner against the other. On the one hand, Danone indignantly retorts that its takeover plan is grounded in a breach of its contractual interest by Zong. Danone alleges that Zong has been making many of the same products as the joint ventures have under the same “Wahaha” trademark through a parallel network of production facilities that he or his family own or manage. He also uses the joint ventures’ distribution channels for selling them. On the other hand, Zong argues that the “Wahaha” trademark has never officially been transferred to the joint ventures and complains of Danone’s lack of effort throughout. He also accuses Danone of attempting to monopolise China’s beverage market by driving out national brands like Wahaha, which are part of China’s cultural heritage and thus are the heart and soul of Chinese people. As a way of protesting, Zong resigns from his post as chairman at the joint ventures. Danone then appoints Emmanuel Faber, chairman of Danone Asia Pacific, as the new chairman, but the legitimacy of this appointment is denied by Wahaha.

This case illustrates the conflicts in interests, practices and cultural values that foreign investors may encounter with their local partners when doing business in China. It also examines the dynamics of revenue sharing, control rights and contract enforcement between foreign and local partners.

Strategy and General Management

China’s Renminbi: “Our Currency, Your Problem”?K.C. Fung, Ka-Fu Wong, Ricky Lai

The Chinese currency, the renminbi, has been a subject of controversy between China and its trade partners (especially the US), which accuse China of manipulating its exchange rate to make its exports artificially cheaper. They perceive the renminbi as an unfair weapon in international competition. Chinese officials responded that these attacks were groundless: the renminbi was not undervalued, at least not significantly. The peg contributed to maintaining a stable economic environment, which benefited all economic partners. They also said that if the US was running a large trade and budget deficit, it was partly attributable to capital inflow from China. The US should focus on the weaknesses of its own economy that generated these deficits, instead of treating China as a scapegoat. Officials also said that China was a sovereign country with the right to choose its exchange rate policy.

Throughout 2005 to 2007, the debate was regularly in the news and it was likely that arguments would become tougher if US and European trade deficits with China continued to increase. This case is about economics and business, introducing the basics of monetary economics and demonstrating practical applications of monetary policies and exchange rates that pertain to business decisions.

Economics and Business Policy

Bernard Watch Company: Unravelling the Cost of Voluntary Employee TurnoverNeale G. O’connor, Paul Hempel, Isabella Chan

Since 1963, Bernard Watch Company has been manufacturing watches for widely known brands, such as Dolce & Gabbana and Roamer. The company is headquartered in Denmark and has a branch office in Hong Kong and an assembly plant in Shenzhen, China. Anson Leung, chief financial officer, has conducted a series of audits on the various cost aspects of running the assembly plant. This is to ensure efficient management of the plant’s human capital, which is a vital resource for the company due to the need for stable production quality with just-in-time delivery at competitive prices—a common goal for the watch-making industry. Leung is alarmed by findings that reveal a high voluntary turnover rate of 39.3% among assembly-line workers during 2006, costing Bernard as much as Rmb 718,188.9. She is concerned that this may jeopardise the company’s longstanding market position in watch-making.

This case examines the different types of costs that may occur from voluntary turnover, including both direct and intangible costs such as those that are related to separation of leaving employees, recruitment of new staff and loss in productivity. It can be used to teach the concept of human resources accounting and to introduce how human resources management practices may help reduce voluntary turnover costs.

Accounting and Control

Manfold Toy Company: Corporate Governance and Ethics for Directors and ProfessionalsSay Goo, Jeroen van den Berg

This case was written for the “Ethics—The Core Value of Leadership” forum (2007) organised by Hong Kong’s Independent Commission Against Corruption. Attended by over 200 directors of listed companies, the forum aimed to educate directors of listed companies on issues of ethics and corporate governance.

Set on the eve of a friendly takeover, the Manfold case introduces a wide variety of ethical and corporate governance issues faced by the (independent) directors, accountant, company secretary and management of the company.

Social Enterprises and Ethics

World Co. Ltd, Japan: Why Go Private?Mitsuru Misawa

Early 2005 saw the first hostile takeover in Japan. Financed by foreign capital, the takeover startled Japan’s traditional business establishments who now feared that the threat of hostile takeovers had finally become a reality in Japan. Meanwhile, Japan also went through numerous accounting scandals involving public companies and was seeing dramatic changes in disclosure and corporate governance rules and regulations in regards to issuers of publicly traded securities and their officers and directors.

Concurrently, Mr Hidezo Terai, president of World Co. Ltd, Japan, a publicly traded apparel company on the Tokyo and Osaka Stock Exchanges, considered returning the company to its private limited status and de-listing it from both the stock exchanges. The company believed doing so would allow them to introduce a management system for quick and flexible responses in the ever-changing fashion business. The market, on the other hand, suspected that such a move was driven by a need to seek relief from the new disclosure and corporate governance rules and regulations, and to protect World Co. from possible hostile takeovers.

Finance and Investments

Huella Online Travel: Gaining Market Insight into Hong Kong ConsumersKevin Zhou, Isabella Chan

In April 2007, Huella Online Travel Ltd, a Malaysian-based online travel portal targeting Asia, including Greater China, announced its results for the financial year 2006. Its market share for Hong Kong had been hovering at just under 5% since the launch of its local site in 2000 and it was performing worse in this than in other markets. The company’s goals were to devise a viable marketing strategy to ease Hong Kong consumers’ concerns towards online travel purchases and ultimately to increase its market share in the city. This case illustrates the types of information needed by an online travel agent for its specific marketing objectives of increasing Hong Kong consumers’ awareness of its brand, educating consumers on the security measures used by its website, and encouraging consumers to purchase travel products and services from its website. The case also examines how different types of market research can help it attain its goals.

Marketing

10

PORTS: China’s Walk on the Global Luxury Fashion BoulevardGerald Yong Gao, Jiangyong Lu, Hung-gay Fung, Claudia Woo

As a luxury fashion goods producer and marketer, what made PORTS different from other high-end European and American labels was its distinctive background as a China-based company with a Canadian history. The company and the brand, PORTS International, were originally founded in Toronto in 1961 and later acquired by a Chinese immigrant entrepreneur, Alfred Chan, in 1989. Despite being made famous in North America and UK during the 1970s and early 1980s, the brand lost its glory in the early 1990s because of a global recession and poor management.

In 1993, Chan decided to rebuild the brand by moving to Xiamen, China where he established the new headquarters and factories. After that, the brand continued to be ranked as one of the top most desirable fashion labels in China. In 2003, the company went public on the Hong Kong Stock Exchange and started slowly entering the Western market. A new label, PORTS 1961, was created for the comeback and to target more high-end consumers. Although China was one of the world’s biggest manufacturers of apparel products, China-made products were often associated with cheap, low quality and counterfeit products. Since image is paramount in the world of luxury goods, how would PORTS overcome this perception of its goods, as well as other challenges, and further expand its presence in the local and global market?

Marketing, Strategy and General Management

Mattel in China (A), (B) and (C)Graham Jackson, Yu Xiubao

This three-part case study relates to the 2007 product recalls of toys manufactured in China for Mattel Inc., the world’s biggest toy maker. Part (A) focuses on the recall of toys on 1 August, coated with lead paint. Part (B) focuses on a subsequent double recall involving production problems and product design errors. Part (C) focuses on the reactions of the Chinese authorities and Mattel’s subsequent apology to China.

Strategy and General Management, Marketing, Production and Operations

Big City, Small Pay: Minimum Wage for Hong Kong? Ka-Fu Wong, Ricky Lai

Unlike most developed economies around the world, Hong Kong did not have a minimum wage law to protect workers’ livelihoods. Attempts by the Legislative Council to motion for legislation governing minimum wage and standard working hours had ultimately been unsuccessful. A major reason was considerable opposition from the business community, which feared that deviating from a purely market-dictated wage regime would hurt Hong Kong’s position as the world’s freest economy and aggravate unemployment.

In late 2006, the Hong Kong government launched the Wage Protection Movement, a program designed to protect the wage level of cleaners and security guards through voluntary and non-legislative means. It was, however, met with vicious attacks from members of the Legislative Council who advocated a minimum wage, accusing the government of not heeding the plight of low-income earners and instead allowing the issue to drag on without legislation.

This case is about economics and business, introducing the topics of minimum wage legislation, Hong Kong’s unique economic situation and the probable effects of a minimum wage on the world’s freest economy.

Economics and Business Policy

Alibaba.com Ali Farhoomand, Ricky Lai

On 6 November 2007, Alibaba.com debuted on the Hong Kong Stock Exchange, raising US$1.5 billion to become the world’s biggest internet offering since Google’s initial public offering in 2004. A frenzied purchase of the stock pushed prices up by 193% on the first trading day, making it the fourth-largest first-day gain in Hong Kong’s stock exchange in three years. The closing price of US$5.09 per share valued Alibaba.com at about US$25.6 billion and made it the fifth-largest among global internet companies and the largest in Asia outside Japan. It also made the company one of the most expensive stocks in Hong Kong, trading at 306 times the company’s projected 2007 earnings. In contrast, globally recognised brand names such as Yahoo and Japan’s Softbank, both major stockholders of Alibaba.com, were trading at only 60 times their projected earnings. Shareholders were therefore displaying extreme optimism towards Alibaba.com’s earning prospect by paying a significant premium to own the company’s shares.

As observers and venture capitalists have remarked, China is becoming a centre of technology and a major pole for innovation. Many successful dotcom strategies in the West have been copied and refined by Chinese technological gurus who have honed their technical and entrepreneurial skills in the West. These “sea turtles” are beating international giants like Google and eBay in the burgeoning Chinese market and have their sights set on global domination.

Armed with proceeds from a record-breaking IPO, Alibaba.com is poised to stay ahead in the increasingly competitive online B2B market in China. What strategies can the company pursue and what pitfalls must it avoid?

Strategy and General Management

Minsheng Bank: Penetrating the US Market through AcquisitionGerald Yong Gao, Jiangyong Lu, Hung-gay Fung, Ricky Lai

Founded in 1996, China Minsheng Banking Corporation Limited (Minsheng) was the first private commercial bank in China. By 2006, Minsheng had acquired almost US$130 billion in total assets and established almost 330 banking offices across the nation. The Banker magazine consistently praised Minsheng’s development, ranking it number 310 in its top 1,000 business banks in the world in 2004, number 287 in 2005, and number 247 in 2006.

In early March 2008, Minsheng obtained the green light from the China Banking Regulatory Commission to buy a 4.9% stake in US-based banking holding company, UCBH Holdings, Inc. (UCBH) for US$95.7 million. The deal would eventually take Minsheng’s stake in UCBH to 9.9%, totalling around US$200 million. The acquisition not only distinguished Minsheng as the first Chinese mainland institution to invest in a US bank, but was also viewed as a milestone for Chinese banks entering the US and international markets. On the flip side, UCBH would soon use this opportunity to make its own moves into China, leveraging its affiliation with Minsheng to acquire other Chinese banks.

This case examines the process of international expansion through acquisitions in the banking industry and the positioning of a growing bank in the global market, covering issues such as value creation, impact of government regulation and international barriers, the Chinese banking industry and its development, and the associated risks.

Finance and Investments, Strategy and General Management

Haier: Management Control on a Tactical LevelAmy Lau, Jun Han, Emily Ho, Ricky Lai

Haier Group was China’s largest white goods manufacturer and one of the world’s fastest growing white goods companies. The company started out as a nearly bankrupt refrigerator plant in Qingdao, China, equipped with a group of low-skilled and undisciplined workers, low productivity, inferior product quality and a loss making business. Its current CEO, Zhang Ruimin, first took over the company in 1984 and established corporate rules and culture, revamped business strategy and set up an incentive-based management control system. All of these transformed Haier into a global player in less than two decades. This case study examines the establishment of Haier’s management control system and how it was adapted into the company’s internationalisation strategies, how it motivated employees to reach high performance goals and how it structured the business units to obtain optimal operational efficiency.

Accounting and Control

The Era of Corporate Citizenship: Perodua’s Advertising with a Social DimensionKen Peattie, Claudia Woo

As a home-grown compact car maker in Malaysia, Perodua has integrated social messages into its corporate advertisements since 1999, seeking to enlighten the local audience about various social issues and values. With the growing concern of corporate social responsibility (CSR) globally, company advertising with a social dimension (CASD) seemed to be an effective way for Perodua to portray its good corporate citizen image. However, the impact of the ads on direct and tangible returns in the form of sales was hard to determine. Since 2005, trade liberalisation in South-East Asia resulted in reduced government protection for Malaysia’s indigenous automotive industry and there was more emphasis on corporate differentiation strategies. In response to the escalating competitiveness and the increasing interest in CSR, Perodua’s corporate leaders and its management had to rethink how corporate advertisements emphasising social aspects could sustain the company’s profitability and reputation in the long run. Besides, controversies easily arose when social issues such as race-related topics were not handled with sensitivity, given the diverse cultural context of Malaysia. Set in the context of an industry characterised by intensifying competitiveness and in a multicultural environment in which the social impact of advertising is emphasised, Perodua’s strategy of CASD becomes very interesting.

Marketing, Social Enterprises and Ethics


11

Wang’s Fortune Tea from China: Competing for a New Arena of the Beverage Market (A)Gerald Yong Gao, Jiangyong Lu, Hung-gay Fung, Linda Suen

Wang’s Fortune Tea, marketed as Wanglaoji in mainland China and considered to be the founder of Chinese herbal tea, grew from a strong regional brand in China with limited national market penetration to becoming China’s top soft drink giant with 90% market share of the country’s herbal tea industry. This case explores how Wang’s Fortune Tea became China’s top selling herbal tea brand. The case asks students to analyse the company’s growth strategies and to consider if it can continue to sustain its competitive advantage while facing intense competition from domestic and international companies.


Wang’s Fortune Tea from China: Competing for a New Arena of the Beverage Market (B)Gerald Yong Gao, Jiangyong Lu, Hung-gay Fung, Linda Suen

This case examines China’s top selling herbal tea brand, Wang’s Fortune Tea (marketed as Wanglaoji in mainland China), and explores the international functional soft drinks market and factors influencing the company’s strategy for expanding to the international market. The case asks students to evaluate Wang’s Fortune Tea’s global competitive position and to suggest actions for international adaptation.


SK-II: Damage Control in ChinaKineta Hung, Richard Farmer

In 2006, SK-II, a skin care brand, was close to becoming a billion-dollar brand for Proctor and Gamble (P&G) and China was seen as a key source of future growth and was soon to be the largest market in the world. On 14 September 2006, Chinese authorities banned the sale of some of P&G’s skin care products in the SK-II line. P&G feared that public protests against these products could spread and infect the brand equity of its other products in the country. Everything that P&G tried to resolve the scandal failed, leaving the media, consumers and government feeling enraged. P&G pronounced confidence in its SK-II products in China, saying it would work with government agencies to resolve the problems, but repeatedly botched public relations and was accused of “arrogance” towards consumers. Although P&G had experience in defending its SK-II products in court due to a lawsuit the previous year, the company seemed to have learnt nothing about preparing for a future crisis. P&G, one of the most trusted corporate brands in the world, was close to losing Chinese consumers’ faith in SK-II and perhaps in P&G as well just by the poor way it handled the crisis.

Many analysts claim that doing business in China is significantly different from doing business in developed markets. When it comes to public relations, how can the rules be so different that even experienced country managers repeatedly get it wrong? The case allows for discussion on how to respond to a public relations crisis, salvage brand equity after a disastrous incident, react to a situation and pre-empt damaging information in the media.


J-COM: Share-Trade Irregularities on the Day of IPOMitsuru Misawa

8 December 2005 was a very special day for J-Com Co. Ltd (J-Com) as this was the day the company would be listed on the Tokyo Stock Exchange. However, when a sell order for more than 40 times the firm’s outstanding shares was placed by Mizuho Securities the exchange was thrown into turmoil. Before the end of the day, Mizuho Securities suffered losses of at least ¥27 billion following an input order for the sale of one share for ¥610,000 which was accidentally entered as 610,000 shares for ¥1 each.

What steps should J-Com president, Yasuhiko Okamoto, take in light of the events? How should the Tokyo Stock Exchange, Mizuho Securities and the other brokerages react? The real crux of this case is managerial decision making and the value of good leadership when something unexpected happens.

Finance and Investment

Banyan Tree: Sustainability of a Brand during Rapid Global ExpansionCathy Enz, Ali Farhoomand, Pauline Ng

Following a successful IPO in June 2006, Banyan Tree Holdings Ltd planned to use parts of the proceeds to finance an ambitious expansion plan. At the core of this business development plan was an ambitious proposal to open 28 new resorts over four years which would span non-Asian territories from Greece to Mexico. The Asian Financial Crisis of 1997, the SARS crisis of 2003 and the Indian Ocean tsunami of 2004 had taken their toll on the travel and tourism industry in the region where Banyan Tree’s resorts and spas were concentrated. Although recovery was on the horizon, those events left haunting memories and CEO Ho Kwon Ping understood the need to diversify risks across geographic regions. This case considers how a company with an experiential brand should manage its global expansion without losing the core values associated with its brand.

Strategy and General Management, Marketing

ITC e-Choupal: Corporate Social Responsibility in Rural IndiaAli Farhoomand, Saurabh Bhatnagar

Business decisions need not be intentionally altruistic, but empowering the community eventually creates both notional wealth (in the form of brand recognition) and actual wealth (in the form of profits) for companies. Set against the backdrop of under-served, over-exploited rural India, this case highlights how the use of technology by the Indian conglomerate ITC transformed the lives of many rural Indians at the same time that it was benefiting the company.

Continually plagued by an inefficient supply chain in rural agriculture, ITC implemented the e-Choupal initiative in 2000. Under the initiative, ITC set up small internet kiosks in villages that allowed farmers access to an efficient and transparent alternative to the traditional mandi for marketing their produce. By establishing a direct channel between the farmer and ITC, e-Choupal significantly marginalised the role of middlemen, thereby ensuring farmers more money for their produce. In doing so, e-Choupal not only mitigated ITC’s agrarian supply chain concerns but also achieved a greater good—the economic uplift and empowerment of the Indian farmer.

Although e-Choupal was conceived as ITC’s answer to their supply chain woes, ITC was quick to realise that they had discovered the delicate balance between achieving corporate profitability and making a social contribution. Aware of the multitude of challenges faced by impoverished rural Indians, ITC extended its e-Choupal framework to deliver core services, such as access to healthcare, education and information. They even liaised with other companies, including fast-moving consumer goods companies and finance companies, to deliver products and services to rural Indians that had previously commanded huge premiums or were simply unavailable.

Evolving into a platform for community development, e-Choupal was both eradicating poverty and chipping away at rural isolation, even while ITC continued to enjoy the benefits of functional procurement and distribution value chains.

Social Enterprises and Ethics, Human Resource Management

12

Does IT Payoff? Strategies of Two Banking Giants Ali Farhoomand, Minyi Huang

Dell: Selling Directly, Globally (2007) Ali Farhoomand, Iris Wang, Pauline Ng

Wal-Mart Stores: "Everyday Low Prices" in China Ali Farhoomand, Iris Wang

Dell: Overcoming Roadblocks to Growth Ali Farhoomand, Mary Ho

L'Oreal: Expansion in ChinaZhigang Tao, Li Dongya

SAP's Platform Strategy in 2006Ali Farhoomand, Samuel Tsang

Motorola in China: Failure of Success? (MNC)Ali Farhoomand, Kavita Sethi

IBM’s “On Demand Business” Strategy Ali Farhoomand, Samuel Tsang

HP at a Strategic Crossroad: 2005Ali Farhoomand, Kavita Sethi

Anheuser-Busch Versus SABMiller: Bidding War in China’s Beer Industry Zhigang Tao, Li Dongya

Shanghai General Motors: The Rise of a Late-Comer (MNC)Zhigang Tao, Emily Ho

Shanghai Volkswagen: Time for a Radical Shift of Gears (MNC)Ali Farhoomand, Zhigang Tao, Iris Wang, Lu yi

Louis Vuitton Moët Hennessy: Expanding Brand Dominance in Asia (MNC)Pan Yigang, Marissa McCauley

TAL Apparel Limited: Stepping up the Value Chain Ali Farhoomand, Phoebe Ho

Lenovo: Countering the Dell ChallengePan Yigang, Kavita Sethi

Buyer-Supplier RelationshipsMichael J. Enright, Vincent Mak

ASIMCO: Developing Human Capital in ChinaGilbert Wong, Nailene Chou Wiest, Mary Ho

Constructing an e-Supply Chain at Eastman Chemical Company Ali Farhoomand, Benjamin Yen, Pauline Ng

PetroChina: International Corporate Governance with Chinese Characteristics John Child, Mary Ho, Sang Xu

Airport PrivatisationMichael J. Enright, Flash Ng

Grey Worldwide: Strategic Repositioning through CRMAli Farhoomand, Julie Yu, Marissa McCauley, Shamza Khan

Phuket Beach Hotel: Valuing Mutually Exclusive Capital ProjectsKo Wang, Su Han Chan, Mary Ho

Establishing an ECL Culture in China: Organisational Difference or National Difference?Gilbert Wong, Scarlet Chan, Mary Ho

Hong Kong Disneyland(A): The Walt Disney PerspectiveKo Wang, Su Han Chan, Mary Ho

FedEx Corp: Structural Transformation through e-BusinessAli Farhoomand, Pauline Ng

Hostile Takeover Battle in Japan: Fuji TV vs Livedoor for NBS Mitsuru Misawa

Unocal Corporation: China's Unwelcome Bid Ka-Fu Wong, Mark Stimson

Jewellworld.com: A Jewellery Industry B2B Portal Bennett Yim, Andrew Lee

Real Estate and Capital Structure Decisions -Lease-Versus-Buy Analysis Frederik Pretorius, Mary Ho

Tecnovate: Challenges of Business Process Outsourcing Vanita Yadav, Sangeeta S. Bharadwaj, K. B. C. Saxena

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