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SEMINAR TEROKAI PASARAN CHINA “PACING ENORMOUS OPPORTUNITIES IN CHINA” 1 JUNE 2011 MITI PUTRAJAYA. OUTLINE. Map of China. Facts and Figures 2009. Source: MITI. Malaysia’s trade with china. Malaysia’s Bilateral Trade with China.

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OUTLINE

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  1. SEMINAR TEROKAI PASARAN CHINA “PACING ENORMOUS OPPORTUNITIES IN CHINA” 1 JUNE 2011 MITI PUTRAJAYA

  2. OUTLINE

  3. Map of China

  4. Facts and Figures 2009 Source: MITI

  5. Malaysia’s trade with china

  6. Malaysia’s Bilateral Trade with China Average Growth Rate of Malaysia-China Total Trade = 22.42%

  7. Malaysia Major Exports to China in 2010 Total Exports: RM 80,595.1 million

  8. Malaysia Major Imports from China in 2010 Total Imports: RM 66,432.9 million

  9. China is: Malaysia’s largest global trading partner in 2010 with total trade amounting to RM 147.0 billion. As of January 2011, total trade with the China has reached RM 12.0 billion. Malaysia’s largest source of imports in 2010 with the value of RM66.43 billion Malaysia’s second largest export destination after Singapore. Despite the global economic crisis, Malaysia’s export to China registered double digit growth of 14.5 percent valued at RM80.60 billion in 2010. Malaysia is: China’s largest trading partner among ASEAN countries since 2008. China’s 8th largest import source in 2010. Malaysia’s Bilateral Trade with China

  10. MALAYSIA’S MAJOR EXPORTS TO CHINA 2010

  11. MALAYSIA’S MAJOR IMPORTS FROM CHINA 2010

  12. OVERVIEW OF the CHINA MARKET

  13. 1.3 billion provides a huge market to the world at a different level:-

  14. Not a single homogeneous market Maturity and saturation as well as high cost in first-tier cities Emergence of second-tier cities Diversity in China market

  15. Doing Business in China

  16. Doing Business in China

  17. WHY CHINA? "We are keen to import more frozen durian from Malaysia and more rubber, electronics and palm oil. We also like to encourage increased imports of halal products, automotive parts and consumer electronics items from China," -Premier WenJiaBao said when delivering his keynote address at the Malaysia-China Economic Trade and Investment Cooperation Forum on 28 April 2011

  18. The full implementation of CAFTA on 1 January 2010 led to elimination of more than 90 percent of product tariffs by China and ASEAN-6 • The removal of trade barriers between ASEAN and China will lower costs, increase intra-regional trade and strengthen the attractiveness of Malaysia and the region as a preferred investment destination. • Strong people to people and government to government as well as business to business ties • Largestmarket in terms of population and the second largest economy in the world • Our largest trading partner and key export market Why China?

  19. Food and Beverages (three in one coffee, bird nest, confectionary, organic products, chocolates and chocolates based products, seasoning, fresh fruits) • Pewter and gift items • Disposable medical items • Rubber based products • Automotive parts and components (rubber and plastic based) • High end furniture (leather, upholstery, garden furniture) Potential products from Malaysia into the Chinese market includes:-

  20. Food Products including Halal certified • sauces and seasonings • frozen pastries • frozen seafood • snack food, confectionery • Processed food POTENTIAL EXPORTS TO CHINA

  21. Rubber Products • rubber/latex surgical gloves • medical products • automotive parts and components • high-tech building materials POTENTIAL EXPORTS TO CHINA

  22. Automotive Products & Car Maintenance • accessories and spare parts • electrical fittings • lubricating oil • repair and maintenance equipment POTENTIAL EXPORTS TO CHINA

  23. Environmental protection and green technology • Oil and gas services • Healthcare • Halal • franchising • outsourcing • ICT (animation, mobile content, games etc) POTENTIAL EXPORTS OF SERVICES TO CHINA

  24. Chemicals • pharmaceutical products • petrochemical products i.e. synthetic resin, synthetic fiber and synthetic rubber and engineering plastics • Palm oil and Palm Oil Products • oleo-chemicals • palm kernel cake (for animal feed) • palm kernel oil (for confectionery & bakery) • oil palm fiber for mattress • Bio-diesel (diesel fuel) POTENTIAL EXPORTS TO CHINA

  25. Higher Education & Professional Training • MBA • Accounting • Computer Science & Application • Management (of enterprises) • Professional and Service-related Courses (languages, hospitality, banking, nursing, tourism, insurance) POTENTIAL EXPORTS OF SERVICES TO CHINA

  26. Architecture, Construction Engineering and Consultancy • infrastructure projects/construction (highways, bridges, ports, airports, transportation system, residential, commercial and public buildings) • power generation • oil and gas exploration • project management POTENTIAL EXPORTS OF SERVICES TO CHINA

  27. Environmental Protection & Conservation • waste water • water management and supply • waste management • preservation of water & soil • recycle industry POTENTIAL EXPORTS OF SERVICES TO CHINA

  28. CULTURE OF DOING BUSINESS IN CHINA

  29. CHINESE NEGOTIATING STYLE • “Only ever reveal a third of what you know” • Tough negotiations –“Your floor is my ceiling” • Good preparation is essential • Pace of negotiations slow • negotiations often extended past deadline to gain • advantage –just be patient • fast action once decision made • Be firm, be polite, be creative … be prepared to • say no • Legal advice “behind the scenes”

  30. Language • You’ll never do the deal if you can’t communicate • Learn a few basic expressions to break the ice • Small talk is very important to start meetings • –avoid politics • English better spoken than understood • Use professional interpreters and translators • Have your own interpreter – always ! • Chinese is the language of law

  31. Beware of strangers bearing “Guanxi” • Guanxi= relationships, networks, contacts, obligations • one of the most overused expressions in China • only valuable if it’s useful to your business purpose • only valuable when the guanxi is current • so build relationships - at all levels • don’t be afraid to test the guanxi

  32. A presence in the market ? • A critical factor for success in the market • What’s best for you and your business ? • Agent, partner, JV • Thoroughly understand partner’s objectives & • monitor them • Visit the market regularly !! • Research, research, research…..

  33. HOW TO START DOING BUSINESS WITH CHINA information? • Secondary Research• Primary Research• Make Use Matrade’s Offices In China… - Beijing - Shanghai - Guangzhou - Chengdu

  34. SECONDARY RESEARCH • MATRADE Business Library• Malaysia Chambers of Commerce and Industry in China (MAYCHAM), www.maycham.com• Attend MATRADE’s Seminars/Events• Surf Internet/Websites (All these are for background information, including rules & regulations, how to do business in China)

  35. USEFUL WEBSITES (selected)

  36. PRIMARY RESEARCHVisit China? • Participate / visit trade event(s) in Chinese market(s) trade fairs / exhibitions conferences / seminars • Stay extra days to undertake market study / survey • Meet relevant contacts while in China:potential importers, relevant trade and industry associations, i.e. CCPIT, BoFTEC • Must visit MATRADE’s offices, Embassy inBeijing, Consulate Offices in Shanghai, Guangzhou & Kunming

  37. 2011 Programmes in China

  38. 2011 Programmes in China

  39. MALAYSIA PAVILION: 1. Malaysia – Country of Honour 2. Commodities Pavilion at Hall 5 – Led by MATRADE ( 2,900 sq.m) • Government Cluster - Government agencies present in China • Industry Clusters: • Food & Beverages • Health & Wellness • Property Development • Lifestyle including furniture • Services (such as but not limited to Healthcare, ICT, Facility Management, Education, Environmental Services, Financial Services etc) 3. Pavilion “City of Charm” (270 sq.m): • Focusing on tourism to be led by Tourism Malaysia 8th CAEXPO 2011

  40. ENQUIRE WITH MATRADE’S OFFICE’S IN CHINA • Provide your contact details (e-mail, fax, contact person, • address), specific products’ 8-digit HS Code, product • details • Inform your needs / Interest (importers, agents, wholesaler, • retailer, etc.)• Indicate your willingness / level of commitment • (e.g. for JV)• State area(s) / market(s) of interest • Vital to work closely with MATRADE’s overseas offices

  41. MARKET DEVELOPMENT GRANT (MDG) FOR SMEs

  42. MDG FUND OVERVIEW

  43. ELIGIBLE ACTIVITIES Eligible activities are participation in: 1. International Trade Fairs, International Trade Events for Fashion Designers 2. Trade and Investment Missions (TIM) 3. Specialized Marketing Missions (SMM) 4. Industry Related International Conferences 5. Malaysia Export Exhibition Centre (MEEC) Eligible activities for trade related associations are: Organize International Trade Fair, Trade and Investment Mission (TIM) & Specialized Marketing Mission (SMM); and 2. Participation in International Trade Fair, Trade and Investment Mission (TIM) & Specialized Marketing Mission (SMM).

  44. CHANGING BUSINESS LANDSCAPE IN CHINA • China is moving toward aligning its processes with those in developed countries • Rapid and dramatic shifts in market • Rapid Rise of Central and Western China as new growth epicenter • The need to collaborate and compete together • Strategic alliances with domestic companies • The need to re-strategize and change business model

  45. FUTURE TRENDS • Large investment in western China's economic development over the next 10 years • China to keep on developing at a high pace • China – Threat or opportunity • Improvement in transportation links with high speed rail networks linking Guangzhou to Beijing good • By 2012, total of 42 high speed rail links to be completed • USD15 billion China-ASEAN Railway link (Singapore-Kunming)

  46. CONCLUSION • China is a large, diversified and complex market • Essential for a business plan and long term outlook • Patience is essential and need to do more research • Market visits vital – contacts and Guangxi Building • Promotion and collaboration with importers/distributors/wholesalers • Need to work closely with Malaysia China Business Council, Malaysia China Chamber of Commerce and Malaysia China International Trade Link Association • Most important, work closely with MATRADE’s offices in China • Increase engagement with China

  47. MATRADE’s Upcoming Events in June By Exporters’ Development Unit • Workshop on "Key Steps to Export Success", 15 June 2011, Theatrette Hall, MECC, MATRADE • Workshop on "Business Law in Today's Globalised Internet Era", 23 June 2011, Paris Room, MECC, MATRADE • Seminar on "Export Opportunities in Post-Tsunami Japan", 29 June 2011, MATRADE Hall, MECC. • Briefing on "Doing Business in Japan", 30 June 2011, The Pacific Sutera, Kota Kinabalu, Sabah

  48. THANK YOU GOOD LUCK

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