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Competing in the the New China
Russell A. Meade CEO China Business Network
CBN - Who We Are
CBN - Who We Are
Founded in China 1978
US-owned Shanghai-basedEngineering Company
We manage sales, marketing and manufacturing operations for western manufacturers
CBN - Partner Operations
CBN - Partner Operations
Identify, qualify, due diligence on Chinese manufacturing partners
Manage day-to-day operations of manufacturing projects
Direct sales and marketing to China-based Western & Global OEM’s and major Chinese customers
Assist in salvaging failed or underperforming China projects
Perform pre-investment planning for large-scale manufacturing, sales and distribution operations
Provide on-site Process and Quality Control
CBN - How we do it
CBN - How we do itEnglish-speaking project managers and engineers
“Boots-on-the-ground”
Strong relations with Western-Global OEM’s in China
Develop long-term mutually beneficial partnerships between Western and Chinese manufacturers
Develop non-capital intensive SMA’s
China: Economic Overview
US - China GDP 1960-2010
Source: World Bank 2011
China: New Economy
Infrastructure
Government Growth Plans
RMB
Inflation
Labor Costs
Manufacturing Moving Inland
Everything is NOTcheaper in China
Everything is NOTcheaper in China
Food: McD, KFC, Starbucks
World’s largest luxury consumer goods market
Real Estate
Material Increases-Fluctuations
China: Gear Industry
Chinese Gear Manufacturers: At-a-glance
Over 1000 manufacturers
55 with annual revenues over $16m
2005 - world 4th largest gear producer2009 - world 3rd largest gear producer 2010 - world 2nd largest gear producer
2010 - world’s largest automotive manufacturer
Source: China Gear Manufacturers Association
Motor Vehicle Production by Country
Chinese Gear Manufacturers:
- numerous manufacturers
Local Gear Industry:
- generally low-grade product and technology
- targets customers with low-grade requirements
Majority of high-grade gears are imported into China
- import value and size increases dramatically each year
- only a small % of Chinese manufacturers compete in the high-grade segment of the market
Source: China Gear Manufacturers Association
Chinese Gear Manufacturers:By region
6.6%
12.4%
41.9%
19.6%
16.5%
3%
Chinese Gear Manufacturers:10 fastest growing industry segments
1. Automotive: Annual growth 25%. 2. Wind energy: estimated $2bn by 2020 3. Nuclear energy: 40 Mkw plants next 10 years 4. High-speed rail: 300 new train units per year5. Coal mining: equipment for 3.8 bn tons output6. Heavy-duty agricultural equipment7. Engineering equipment8. Large metallurgical machinery 9. Advanced CNC machinery
10. Chemical and oil refining equipmentSource: China Gear Manufacturers Association
Chinese Gear Revenues:(including import volume)
Source: China Gear Manufacturers Association
Chinese Gear Revenues:(including import volume)
Source: China Gear Manufacturers Association
Chinese Gear Revenues:Imports vs. Exports
Source: China Gear Manufacturers Association
Chinese Gear Revenues:% Imports by country 2008 vs. 2010
Chinese Gear Revenues:Auto & Industrial - Imports vs. Exports
ExportsImports
Chinese Gear Exports:(by country destination)
Source: China Gear Manufacturers Association
Chinese Gear Manufacturers:% Analysis by ownership
Source: China Gear Manufacturers Association
Chinese Gear Manufacturers:CGMA Gear Industry 5 Year Growth Projections
Source: China Gear Manufacturers Association
Chinese Market Challenges:
Chinese Market Challenges:
Communications
Working with the RIGHT partners
Quality Control
Intellectual Property
Negotiating “Best” Pricing
Personnel Turnover
Chinese Market Opportunities:
Selling Into China
- “Boots-on-the-ground”
Key Success Factors
- Contingencies
- A long-term strategy
Price Advantage exporting to the West?
Why Your Customers Need You More in China Than in the US
CBN China Manufacturing Report
-Every 2 Weeks
-Key Economic Indicators:Shipping vs. Currency
-Weekly Material Cost Updates
-RSS newsfeed - Article Archive
Q & A
