Preceded by great anticipation and riding the wave of success from the colloquium on Russia, the round table discussion "China: Supplier and Customer – Real Business Opportunities" began at 12:30. Several hundred people attended the Auditorium to learn firsthand about the current situation of the "Asian giant" and the opportunities this market offers.
On this occasion, the debate was moderated by the renowned journalist specializing in foreign trade, José María Triper, who, after thanking the speakers for their presence, made a short introduction in which he stated that "China has confirmed itself as an internal and external stabilizing element in Asia due to its economic level and its sustained growth, which in recent years has averaged over 8% annually, the highest in the world."
He also emphasized that productive diversification and an aggressive export policy, supported by a labor-intensive industry and a currency pegged to the depreciating US dollar, have made China the world's leading recipient of foreign investment. "It receives approximately €60.000 billion annually from abroad," Triper continued, "and is the world's fifth-largest trading power as well as the sixth-largest economy." He added that "in this country, the private sector already contributes 30% of GDP, and there are nearly seven million registered private companies and joint ventures."
Next, the chairman of the panel, Ambassador Qiu Xiao Qi of the Republic of China, took the floor. After outlining the main socioeconomic data that characterize the country, the diplomat emphasized the reforms implemented by the Chinese government in 1978, which fostered rapid development and access to new markets. The ambassador particularly highlighted that "the standard of living of the population has risen considerably. Twenty-five years ago, most citizens had a very low purchasing power; however, today per capita income is one thousand dollars, so, in my opinion, we have already entered the stage of average consumption in the world; most people now have access to a very wide range of products."
Qiu Xiao Qi also commented on the goods that are currently generating the most interest in China, which are housing, automobiles, and household electronics. He added that "large-scale housing construction is underway right now, and Spain is a producer of high-quality ceramics and other building materials, which is precisely what we need."
Furthermore, the Asian diplomatic representative stated that "China is a large consumer market for automobiles and Spain is a major producer in this sector, so it can sell both complete vehicles and assembly and spare parts, and can even consider setting up its factories in the country."
Regarding plans for 2004, Qiu Xiao Qi explained that the second meeting of the China-Spain Forum (the first of which took place in Beijing) would be held between September and October of that year. "This meeting is a new mechanism for political, economic, commercial, cultural, and sporting cooperation between the two countries, and for the second meeting, which will be held in Spain, we will invite 1.000 Chinese businesspeople from various sectors, which will foster new and important business contacts," he noted.
Finally, the Chinese ambassador lamented the lack of Spanish investment in the Asian country, "especially compared to its European neighbors, but I hope they will find the courage to enter this market which, although it may have risks at first, in the long run they will find that they have more security about their investment."
Following the Chinese ambassador's masterful presentation, which included highly relevant data for the attendees, Raymond Yip, the regional director for Western Europe at the Hong Kong Trade Development Council (TDC), took the floor. He structured his speech around four key points that, he explained, account for Hong Kong's positive growth prospects. "My country is much more competitive today. We have restructured by adjusting prices while maintaining an open economy," he remarked. The second factor is defined by the existing relationship with China, with whom they have maintained trade relations for over 25 years.
Economic cooperation between Hong Kong and the Pearl River Delta was the third point of the speech. This region has become "the leading manufacturer and exporter of watches, telephones, radios, toys, footwear, and clothing," he revealed. As a fourth factor, Raymond Yip highlighted the Economic Partnership Agreement (EPA), which establishes a free trade area between the mainland and Hong Kong, allowing any company to benefit from "zero tariffs" on 273 categories of exported products, provided they are classified as "Made in Hong Kong."
Finally, Raymond Yip specified that the TDC has 40 offices worldwide, one of them in Barcelona, and offers users a "business fit" service that connects applicants with potential clients or suppliers included in its database of over 100.000 entities. In addition, the website conducts extensive market research on opportunities in Asia. The director of Hong Kong Trade concluded his remarks by stating that his country "is the fastest route for trade, investment, and services in China."
Next, Katy Lam, Vice President of Messe Frankfurt, spoke about the advantages of trade fairs as a marketing tool in China. After a brief introduction to the socio-political and economic realities of the Chinese market, the representative addressed two of the most pressing questions for Spanish business owners: "How do I start a new business?" and "What is the biggest barrier to entering this market?"
One of the most useful marketing tools for Spanish exporters is trade fairs, ahead of public relations, the internet, or mass email campaigns. However, as the vice president of Messe Frankfurt explained, the excessive number of events can sometimes hinder this task. Katy Lam highlighted the Intertextile trade fair in Shanghai, where in eight years the number of exhibitors has increased almost tenfold, the number of visitors reached 46.000, and 11 countries from around the world had an official pavilion.
Following Katy Lam's engaging presentation, it was Albert Oñate's turn. The CEO of China Shipping Agency, through his speech on the role of transportation in trade, sought to convey the security that, in his opinion, now prevails in transactions between the two countries. "Just a decade ago, it was difficult to find good connections between our two markets," he began; "however, today, ships depart weekly, linking the main Chinese and Spanish ports." He explained that this guarantees that delivery deadlines can be met and, above all, simplifies the work of exporting businesses. "In 30 days, any type of merchandise can arrive in Spain from any port in China with a high level of quality," Oñate added.
Furthermore, the director of China Shipping Agency highlighted the peculiarities of transport in this country, taking into account its enormous size and the need for an operational river network.
Next, the roundtable moderator, José María Tripper, gave the floor to WX Huang, Greater China & South Korea Area Manager at Fortis Bank, who addressed the question, "How important are contacts in China when establishing business there?" Huang stated that personal relationships are fundamental when trading with China, although he clarified that they are not indispensable. He explained that nowadays, unlike in the past, both the quality of the products and the experience and expertise of the businessperson are equally important.
Another of the most controversial issues that arise when doing business in China is intellectual property and its regulation, and this is the topic addressed by Amadeo Jensana, director of the business circle at Casa Asia. In his presentation, he admitted that this problem is difficult to solve, as it stems primarily from "its cultural tradition," although he acknowledged the efforts of the Chinese government to adapt to international regulations. In this regard, Jensana reiterated the recommendation that all companies register their trademarks and patents through the relevant authorities. He listed the main challenges currently facing China as stemming from the rapid growth of the Chinese economy, such as "bridging the gap between coastal and inland areas."
Next, Ignacio Izuzquiza, president of IberChina Consultores, took the floor to explain the cultural and negotiation differences between the two countries. Izuzquiza asserted that the "Asian giant" has three very distinct zones: "In the south is Shenzhen, with investments primarily from Hong Kong and Taiwan; in Central China is Shanghai, which is very cosmopolitan, with highly developed infrastructure and where most investments come from Europe and North America; and in the north there is a concentration of provinces, the most important of which is Tianjin, where, unlike Shanghai, there is a cheaper but less specialized workforce."
The president of IberChina Consultores listed the main differences that can affect and interfere with doing business with this country: "China is an agrarian country, with communal and hierarchical structures, and with a morality based on Confucianism and Taoism. Furthermore, its distrust of Westerners must be taken into account."
Regarding business practices, Izuzquiza emphasized that businesspeople from both countries operate very differently: “Spaniards are individualistic, prefer short negotiations, have full decision-making authority, and are generally impatient; while the Chinese are collectivist, hold long meetings, lack complete autonomy in decision-making, and are in no hurry, as they seek long-term relationships.” Along the same lines, he insisted that haggling is an essential ritual and particularly valued the presence of intermediaries in negotiations.
After all the presentations, which undoubtedly helped to better understand the Chinese market and the social, cultural, economic, and political realities surrounding it, the question-and-answer session began. Joan Ros, from the company Binomio CGS, asked the speakers about the stability of the Chinese currency, the yuan, and its potential fluctuations against the dollar, to which it is currently pegged. Another attendee inquired about the changes to the taxes levied on the textile sector, taxes that will soon be eliminated, as confirmed during the discussion.
The roundtable discussion "China: Supplier and Customer – Real Business Opportunities" concluded with remarks from Ambassador Qiu Xiao Qi, who described the presentations as "very interesting." The diplomat praised the Asia-Pacific Plan promoted by the Spanish government and stated that very positive results have already been achieved. However, he acknowledged that the lack of Spanish investment is a reality which, in his opinion, stems from a lack of mutual understanding and the limited participation of major Spanish banks.
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