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Dear Friends:
WILL THE AMERICAN BUSINESSES AND INVESTMENT
HOUSES MISS OUT ON THE CHINA BANDWAGON???
After almost six years of doing business in China, I have
come to the conclusion that America may well lose out
on the China boom. Certainly, many large American
multi-national companies have gone to China -
Motorola, Amway, KFC, Boeing, Anheiser-Busch, etc.
The critical mass of small to medium enterprises have
not, and the investment community seems oblivious to
the opportunities. During my years in China, I have
seen U.S. investors pass up on extraordinary
opportunities because of biases, ignorance and fear.
This was not the result of careful consideration and
due diligence, but more the knee jerk reaction to China
as they perceived it. To some extent it was
arrogance. Other Asian nations and East Europe have
not been so foolish. I have seen those nations swoop
up one hot deal after another, while the Americans
stood on the side lines - not even caring to watch the
game. In a few years, these other nations will be part
of a world supply chain that will leave America at an
enormous competitive disadvantage in many business
sectors. These other nations will be accessing the
growing China market, while the American will be seeing
their "local" investment dollars producing inferior
returns. It seems that what America responds to China
out of anachronistic perceptions, not realities. The
future will belong to those who know . . . not those
who think they know.
Having gotten that off my chest, let me move to a
kinder and gentler subject. My associate and I just
returned from Harbin. This time we were able to
participate in the amazing Ice and Snow Festival. I
suggest you check out our website for some more
photos of that event. It was even more amazing in
person. Our trip also coincided with the Chinese New
Year. It was quite a time to be in China. Of course,
we were still doing business. Our major mission was
working toward the launching of a unique restaurant
concept . . . one the could have us setting up fast-
casual food courts in several Chinese major cities. We
also reviewed some other excellent investment
opportunities . . . a very much 5-star boutique hotel for
sale or management, a national cosmetic company
looking for a joint venture partner or investment
capital. Another restaurant to be incorporated into a
dynamic nightclub district. A chain of miniature golf
courses. A number of excellent ski developments.
Power plants and generators. The common message in
the two topics of today's epistle is my hope we
Americans still have a sufficient level of that old
entrepreneurial spirit to venture to the leading edge of
business development. Have a productive week. Larry
Horist - President HBE
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| Retail Markets Up For Grabs | | | Many overseas retail giants (such as Carrefour, Wal-
Mart, Parkson) are on the path of expansion now that
they are allowed to operate wholly owned stores. The
restriction was lifted on December 11. The twist is
that the focus is not just on metropolises and cities in
affluent provinces. Second-tier and smaller cities are
now the center of focus for many foreign enterprises.
Yu Shuhua, vice-director of the Zhongshang
Commercial Economy Research Centre, says foreign
retailers' moves to expand into second-tier cities were
based in part on the limitations in first-tier cities, where
the markets are becoming saturated after a decade of
frenzied growth. Operational, land and labor costs are
also lower in second-tier cities. Yan Ligang, spokesman for the Beijing Commerce
Bureau, said that given the characteristics of the
Chinese market -- a large population base, vast
territory, different income levels and various cultural
backgrounds -- joint ventures might still be the most
practical and efficient model for overseas retailers' long-
term development in smaller cities. "China is a
collection of markets, not just a single market. So, I
don't think foreigners will just go it alone, especially
when they want to penetrate the second- and even
third-tier cities." | | |
| Beefing Up Coal | | | The Heilongjiang Longmei Mining (Group) Co Ltd, a
conglomerate of four major State-owned coal-mining
companies in the province, was recently launched in
Harbin, the provincial capital. The new group is
composed of Jixi, Hegang, Shuangyashan and Qitaihe
coal companies, all giants of the province's coal
industry. With proven coal reserves of 22.4 billion tons,
Heilongjiang is one of China's provinces rich in the
resource. The province's annual coal output has
exceeded 80 million tons. The four coal companies
account for more than 60 per cent of this figure. This
strategic restructuring of the four coal companies
marked the province's first step in building itself into
one of the major coal production bases in China, Hu
Xiangding, director of the Heilongjiang State Assets
Regulatory and Management Commission, said at the
group's inauguration. | | |
| Snow Lantern for the Tsunami Victims | | | Artists add the finishing touches to the snow
sculpture "Lanterns" at Sun Island Park in Harbin,
capital of Northeast China's Heilongjiang Province, on
Tuesday. The carvings have been made to
commemorate the victims of the disastrous Asian
tsunami. Drifting small lanterns on flowing water is a
traditional Chinese way of expressing wishes. (Source:
China Daily) | | |
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