taiyuan city

Why should I take my company into the backblocks of China?

Bruce Ross Shanxi Province 2 Comments

The world’s most populous country has been achieving remarkable growth and transformation since Deng Xiaoping began the process of opening up and liberalising the Chinese economy more than three decades ago. Unlike Japan, Taiwan and South Korea whose hyper-growth was largely a result of their status as client states of America during the Cold War period, China’s emergence has been the product of its own initiatives and gradually evolving policies. One consequence of this has been massive foreign investment into China, a flow which shows no sign of abating.

There are numerous reasons why enterprising Australian companies, whether new or long-established, should seriously consider participating in this process by setting up business operations in China or actively selling their products or services into that market:

Two decades of uninterrupted extraordinary economic growth in China – The growth rate of China’s Gross Domestic Product (GDP) has not fallen below 7.6% per annum in the past 22 years and government authorities are pursuing policies aimed at sustaining this level of performance.

Chinese income per head 17 times as high as 20 years earlier – By comparison in Australia, a significant outperformer among developed nations, income per head in 2012 was just 3.6 times that of 1992. In those 20 years Chinese GDP per capita surged from US$363 to US$6091, an annual rate of increase of 14.4%. Over the same period Australia’s GDP per head rose from US$18,610 to US$67,036, increasing 6.1% per annum.

Australia and China – a small advanced economy versus an emerging economy whose population is sixty times greater – The opportunities for enterprise tend to be much greater in fast growing, transitioning economies. For those companies with global ambitions the Australian market is limited and geographically remote. China obviously has much greater potential and even though there are considerable challenges in establishing there, these may be more than compensated for by labour costs which might be a tenth of those in Australia, plus generous government incentives in land cost, tax free periods and loan interest subsidisation, etc.

Lack of local investment opportunity due to unchecked predatory behaviour of giant monopolising retailers – There has been a massive crowding-out and destruction of small and medium sized enterprises (SMEs) in Australia as Coles and Woolworths cannibalise traditional areas of small scale retailing such as service stations, bottle shops and pubs, butcher shops, fruit and vegetable shops, hardware stores, etc. In addition the bloated duo have used their overwhelming market power to destroy the profit margins and businesses of orchardists, farmers, winemakers and other manufacturers of food and beverage goods. Governments appear unwilling or powerless to challenge their insatiable greed, severely restricting avenues of enterprise in Australia.

Lack of government incentives or support in Australia for SMEs – Australian government bodies offer little incentive or encouragement to smaller companies setting up or trying to expand. By contrast, the central, provincial, city and county levels of government in China all offer significant preferential policies for new and expanding enterprises, both foreign and local.

Australian investments in China likely to benefit from exchange rate movements – It is generally recognised that the Australian dollar is overvalued and the Chinese renminbi is undervalued. As these currencies move toward more appropriate values, assets held in China and the cash flows they generate will be worth more to their Australian owners.

Looking beyond the obvious – When considering entry into China it is important to recognise that the country is not just one monolithic entity but rather a collection of provinces and autonomous regions which are at very different stages of development and have quite divergent development policies. Foreign companies have flocked into China attempting to take advantage of its growth and the possibility of access to its 1.3 billion consumers, but almost without exception they have crowded into the Tier 1 cities like Shanghai and Beijing or the Tier 1 coastal provinces.

Going where the others aren’t – Rather than joining the herd in the overcrowded and overly competitive major cities and provinces, Australian companies would do well to consider an alternative strategy of entering into a region where competition from other Western-owned businesses is extremely limited and where they can obtain first mover advantages. A good example is Shanxi Province where Bruce Ross Consulting focusses its attention. Until very recently it has been virtually ignored by Western companies and consequently has attracted very limited foreign investment.

The Tier 1 cities and provinces have by now experienced a flood of investment from virtually all of the world’s most advanced economies and with it access to Western technological expertise. They have no pressing need for additional foreign involvement. By contrast provinces like Shanxi are very much aware of the benefits they would derive from Australian technology and expertise and their counties are prepared to compete vigorously with one another to attract Australian companies to locate in their districts. They need to provide greater employment opportunities for their rural workforce, many of whom subsist on very meagre incomes and also need to be able to provide career pathways for their young graduates.

Shanxi has 75 institutions of higher learning, catering for graduate, undergraduate and vocational technical students. There is therefore a constant flow of new graduates looking for opportunities to make use of their skills. Unlike in Australia these young people cannot simply move to the cities where salaries and opportunities are greatest and where there would be strong demand for their services. In line with other Asian nations China operates a hukou or household registration system which identifies a person as a resident of a particular area. People can lose substantial permanent residency entitlements if they move outside their hukou area. As a result in a province like Shanxi there is a ready pool of keen young graduates who would be eager to work for an Australian company and who are less likely to be lured away by rival firms than their counterparts in the major cities.
Provincial GDP map
Provincial GDP table
Reducing regional disparities – In an effort to maintain social harmony and reduce the flow of internal migration toward the wealthy coastal areas, the Central Government has been actively pursuing policies designed at reducing the income and wealth disparity between its various regions. The map at left shows the location of three of China’s most important cities plus coastal provinces adjacent to them. It also shows Shanxi Province’s geographical position in relation to them. The table below the map makes clear that in general the GDP per capita in these coastal areas is very much greater than that of Shanxi Province. However, what is particularly interesting is that Shanxi’s per capita GDP is growing much faster than that of its wealthier near neighbours, especially so in the case of Shanghai where it is growing three times as fast. What this suggests is that over time there will be a tendency towards convergence in income and wealth levels between the various Chinese provinces.

A new frontier – An area such as Shanxi basically constitutes a new frontier, a place where there is very limited competition for those Australian companies with new products and ideas which want access to a greatly expanded market. Shanxi’s strategic location provides ready access to a huge potential market, not just Shanxi’s own 36 million people but also the adjoining Tier 3 provinces of Inner Mongolia, Shaanxi and Henan; a combined population of almost 200 million. so that once having established a beach head in Shanxi Province the prospects for further expansion are virtually limitless. It is clear from the map that goods produced in Shanxi can be quickly and cheaply delivered to a large proportion of the Country’s most affluent consumers.

In addition the fact that its capital city is situated about four hours inland by road from Beijing and from Tianjin’s seaport of Xingang gives convenient access for export and import.

Shanxi Province is relatively compact occupying just 1.63% of the national land mass. It has 11 cities ranging in population from 1.4 million to 5.2 million. It also has 119 counties and districts. This third tier of government is of particular importance to foreign companies because they compete vigorously with one another to try to attract new investment into their areas.

The pillar of Shanxi’s economic structure is the energy industry, and in particular coal mining. But in 2010 it was designated as China’s “comprehensive transformation pilot area of resource-dependent economy”, with the result that its focus shifted to building a base in new type energy, modern manufacturing industry and logistics, and becoming an important service provider for central and western China. By achieving all these targets, Shanxi intends to become an economic and cultural giant in central China.

There are already other indications of Shanxi emerging from relative backwardness and transforming itself economically. The Province has 78 scientific research institutes, employing 680,000 people, which have made breakthroughs in such areas as information, biological science, new materials, advanced manufacturing, and clean coal technology. There are numerous industrial parks distributed throughout the Province offering high quality infrastructure and support services.

The capital city Taiyuan has recently been announced as one of nine pilot cities for China’s Smart City program. In an effort to promote urbanisation and boost the national economy China is looking to transform cities by combining government investments, modern infrastructure and information technology to make them more competitive. Almost all of the other successful applicants are much wealthier and more developed regions, with five being located in provinces ranked in the Top Ten in terms of GDP per capita. The Smart City status means that companies at the more advanced end of the technological spectrum may now be much more inclined to consider locating in Taiyuan.

For enterprising Australian small and medium sized enterprises prepared to move out of their comfort zone Shanxi Province presents as a new frontier of extraordinary potential offering the prospect of securing first mover advantage in a region with a huge population which is rapidly becoming more affluent.

Bruce Ross Consulting can offer introductions, support and guidance for companies wishing to take advantage of the abundant opportunities in Shanxi Province.

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Map Of China

China admits it can’t feed itself – creating opportunity for Australian food producers

Bruce Ross Australian Business, China 3 Comments

China has abandoned its decades-long commitment to food self-sufficiency, recognising that increasing urbanisation and incomes, inadequate water availability and land degradation will lead to an increasing reliance on imported products.

In 1978, China announced a determination to achieve self-sufficiency in food. The policy achieved such success that by 2002 the Country had become a net exporter of food, but this proved not sustainable as a decade later it had surpassed the United States to become the world’s largest importer of agricultural products.

In January this year Chen Xiwen, director of the Communist Party’s top policy making body for rural affairs conceded the abandonment of the self-sufficiency objective. He stated that food supplies would come under increasing pressure as incomes improved and despite the Country’s adoption of more productive agricultural technology, China could not “turn back the clock” when it comes to imports. “During the process of urbanisation, we must pay attention to modern agricultural development and to farm product supplies, but of course, we certainly cannot pursue self-sufficiency,” he said.

“An appropriate increase in imports, if it doesn’t affect our country’s security, will be of benefit in easing domestic resource and environmental pressures,” Chen stated. “We do need to consider a more positive strategy towards going overseas, and make full use of the global market.”

“China has a big population and we used to face food shortages so the government has focused on quantity,” said Li Guoxiang, a researcher at the Rural Development Institute of the China Academy of Social Sciences. But food safety has now emerged as a bigger concern than food security after a series of scandals ranging from melamine-tainted milk to toxic heavy metals in rice and vegetables. “Quantity is still a precondition, but the government is now putting lots of effort into safety, and high-quality food imports will definitely increase,” said Li. “People will realize there are more advantages than disadvantages regarding rising food imports and things are turning in that direction.”

Since the declaration of self sufficiency in 1978 approximately 260 million farmers have moved to the cities. According to census data the rural population decreased by 80 million between 1982 and 2010. Rapid urbanisation has also produced a significant increase in the Country’s middle-class. Both trends have contributed to an increase in consumption of meat and dairy products, which in turn has caused an increased demand for animal feed, which is usually corn and soy based. The shift toward higher meat and dairy consumption can be expected to continue given the Central Government’s focus on closing the income gap between rural and urban areas in both coastal and inland provinces and its attempts to invigorate the economy through urbanisation and industrialisation. Urban households spend three times more on food than their rural counterparts: an average 36% of their disposable income.
Between 1978 and 2012 there was a 93% increase in output of cereals, coarse grain and oilseeds. Food security improved greatly with grain shortages no longer being the problem they once were. According to the international Food and Agriculture Organization (FAO) 21 percent of China’s population was undernourished in 1990; by 2012, that figure was down to 12 percent.

While China may be 97% self-sufficient in basic staples such as rice, wheat and corn, it is only 80% self-sufficient in total agricultural products. Rising disposable incomes, growing exposure to brands, better retail distribution and changing urban lifestyles are driving big changes in the pattern of Chinese consumer behaviour. China has overtaken the US as the world’s largest importer of agricultural products and is now the world’s biggest grocery market.
Until recently, meat and dairy products were luxuries. Now they have become essentials for any middle class family. Annual per capita meat consumption has increased over fifteen-fold in less than twenty years, from 3.8kg in 1990 to 58.2kg in 2009.

While Chinese consumers have a deep and well-founded distrust of locally produced food they perceive Australia as being green and clean with high standards of hygiene and labelling integrity. Thus China’s growing need for food imports creates considerable potential for Australian producers. But the real growth opportunities for Australian exports will not be so much in bulk commodities like grains but rather in meat, dairy products, fruit and grocery lines clearly branded as originating from Australia.

As urbanisation proceeds and huge numbers of Chinese become middle income earners, demand for high quality food will continue to expand. Those Australian companies which move early and build up brand recognition and distribution channels should have the potential for sustained high sales growth, in contrast to the relative stagnation in the Australian domestic market under the tight control of the giant retailing duopolists.

Bruce Ross Consulting can offer introductions, support and guidance for companies wishing to take advantage of the abundant opportunities in Shanyin County or other counties or cities in Shanxi Province.

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Shanyin County’s accelerated urban renewal and its opportunities for Australian businesses

Bruce Ross Shanyin County 3 Comments

To a Westerner the pace of change throughout China is astonishing. New expressways and high-speed railways snake across the country; towering apartment blocks rise in clusters; rivers are diverted and man-made waterways created. And virtually all of this frenzied activity is the product of the last few years.

Perhaps most impressive is the creation of completely new cities and towns. As an example Shanyin County, located in the north of China’s Shanxi Province, has been undertaking this type of exercise, but rather than creating a completely new town Shanyin County is in the process of transplanting an old town.

Downtown Shanyin looks very tired and grotty but its emerging replacement, Sanggan River New District, reflects what can be achieved when town planners are able to work with a blank canvas, a greenfields site. This enables a comprehensive and logical approach to urban regeneration. The process of developing a new town is not compromised by having to build around existing buildings or carrying out construction work while the normal chaos of urban activity goes on.

What Shanyin County has been able to do is create a model town or district where wide avenues and expansive squares separate the new headquarters of the County government, elegant commercial buildings, five-star hotel accommodation and lofty apartment towers. The timing of construction was extremely fortunate because in July the Central Government introduced a five-year ban on the construction of new government buildings throughout China as part of a national frugality campaign. This means that other counties will not be able to emulate Shanyin County’s initiative in urban renewal.

In August the Government of Shanyin County announced a five part strategy to accelerate “the key projects of urban construction represented by Sanggan River New District”:

  • 1. Carry out follow-up projects relating to the New District including the building of new roads, bridges and squares.
  • 2. Accelerate the renewal and upgrading of the old town.
  • 3. Speed up the expansion of “ecological greening projects” such as mass tree planting along County roads and the development of extensive wetlands designed to encourage and protect local fauna.
  • 4. Speed up the construction of indemnificatory or low cost, subsidised housing. “The Government is going to further promote the construction of low-rent housing, economically affordable housing, low-cost commercial residential housing, public rental housing, as well as the renewal of dilapidated houses in rural areas embodying seismic resistant construction technology.”
  • 5. Accelerate small town construction. “Bringing the surrounding towns and villages into the general plan of the whole County, the Government is going to further enhance the infrastructure construction and stimulate the impetus of the urban neighbouring areas.”

Implications for Australian companies

The construction of Sanggan River New District is very much in accord with the Central Government’s policy of promoting increasing urbanisation. However, massive expenditure on physical improvements – on infrastructure, commercial buildings and new housing – could cause more harm than benefit to the national economy unless it is accompanied by increased employment opportunities and incomes.

One major problem is that many rural residents are not really productively employed and exist on incomes that are barely at subsistence level. In 2012 urban incomes in Shanxi Province were 3.2 times that of rural incomes. Merely shifting people into modern urban accommodation doesn’t begin to bridge that gap. What is needed are increased opportunities for truly productive employment. Chinese counties have a great need for Australian technology and expertise, and in general they are prepared to offer very attractive incentives to our companies to establish operations there.

Shanyin County has a population of around 230,000, but its province Shanxi has 35 million inhabitants. Together with the immediately adjacent Tier 3 provinces of Inner Mongolia, Shaanxi and Henan there are about 200 million people who are potential consumers for the products or services that the companies provide.

Bruce Ross Consulting can offer introductions, support and guidance for companies wishing to take advantage of the abundant opportunities in Shanyin County or other counties or cities in Shanxi Province.

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Shanxi Grand Theatre

Shanxi Province capital Taiyuan awarded Smart City status

Bruce Ross Australian Business, China, Shanxi Province, Technology 6 Comments

Taiyuan has been announced as one of nine pilot cities for China’s Smart City program. The nine were chosen to be the forerunners from a list of 90 cities identified as potential Smart Cities in January this year. In an effort to promote urbanisation and boost the national economy China is looking to transform cities combining government investments, modern infrastructure and information technology to make them more competitive. The first nine cities are expected to finish Smart City construction within about three years before the program is sequentially expanded to the whole country.

Taiyuan’s selection should give considerable impetus to the advancement of Shanxi Province. Almost all of the other successful applicants are from much wealthier and more developed regions, with five being located in provinces ranked in the Top Ten in terms of GDP per capita. Both Xuzhou and Wuxi are in Jiangsu Province which has GDP per head more than twice that of Shanxi Province. It can be expected that accelerated transformative urbanisation will have a proportionately much greater impact in Taiyuan than say Wuxi which already has two massive and well-established high-tech districts.

The Smart City concept, originally proposed by IBM, has been embraced more enthusiastically in China than anywhere else in the world. There seems to be no bound to the government’s ambition to extend it to cities, districts and towns if the nine city pilot experiment is successful.

The Smart City approach is based on technologies such as the Internet of Things and cloud computing applied to transportation, healthcare, public security, environmental protection, etc. It aims to create an innovation network, which optimises the use of technology in the design and operation of infrastructure and buildings in a way that meets the city’s current and future demands. With regard to traffic management it provides access to real-time, detailed information on traffic conditions which can significantly reduce inner-city journey times. In addition, advanced technologies allow operators to respond quickly to emergency situations occurring throughout the road network. In general Smart City implementation provides the tools for analysing data for better decisions, anticipation of problems, and faster resolution thereby driving more sustainable growth and prosperity.

There are already other indications of Taiyuan and Shanxi Province emerging from relative backwardness and transforming economically. Since 2010 the Province has been designated as a Pilot Area to promote the transformation of economic activity in a resource-based region, and this has helped to stimulate greatly increased interaction with other areas and other countries. For example, in the first half of this year traffic at Taiyuan’s Wusu International Airport was up 95 percent year-on-year. Wusu, a national first-class airport, is used by 12 Chinese and foreign airlines, with 15 flights daily to Hong Kong, Macao, and Taiwan, and to foreign countries such as Korea, Thailand, Singapore and Cambodia.

Shanxi Province represents a new frontier of opportunity for enterprising and resourceful Australian companies. The Smart City initiative for Taiyuan means that companies at the more advanced end of the technological spectrum may now be inclined to consider locating there.

Bruce Ross Consulting can offer introductions, support and guidance for companies wishing to take advantage of the abundant opportunities in Shanxi Province.

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Shanxi Coal Miner

Shanxi’s coal mining wealth spurs diversification and transformation – and opportunity for Australian companies

Bruce Ross Australian Business, China, Shanxi Province 2 Comments

Coal mining companies in Shanxi Province have accumulated very substantial cash surpluses in recent years but have limited opportunities for reinvestment in their traditional industry. In addition government policy aims to fundamentally transform the Province’s economic structure and reduce its reliance on this single, polluting industry. As a consequence the mining companies need to seek alternative avenues for investment, and this offers opportunities for Australian businesses prepared to set up operations in Shanxi Province or those seeking to expand their businesses or undertake new projects within Australia.

Following on from its designation in 2010 as a Pilot Area to promote the transformation of economic activity in a resource-based region, Shanxi Province has encouraged its companies to diversify into non-core businesses. In 2011, coal companies in Shanxi generated 330 billion yuan ($51 billion) in non-coal sales revenue, accounting for 59 percent of the industry’s total revenue, and this proportion can be expected to grow.

Among the Shanxi companies actively pursuing diversification and a widening of scope of core activities is Shanxi Coking Coal Group Co Ltd, China’s largest coking coal producer and the world’s second largest by production capacity. Its 2012 sales revenues were 180 billion yuan ($28 billion), up 47.6 percent year-on-year. This giant group is mainly engaged in coal exploitation and processing but has now moved into mine construction, machinery manufacturing, mechanical and electrical appliances, power generation, chemicals, architecture, building materials, transportation, import and export, and tertiary services.

In 2012 Shanxi Coking Coal Group entered into a cooperative agreement with the Shuanghui Group, China’s largest meat-processing company, to build a pig slaughtering and processing plant. Located in Yangqu County in Shanxi Province, the enterprise includes slaughtering and fresh meat production, meat product processing, pig farming and fodder production. With a total investment of close to 1 billion yuan ($160 million), the project will slaughter 2 million pigs each year and produce 100 thousand tons of meat products to local consumers, with sales revenue reaching 3 billion to 4 billion yuan ($460 to $620 million). Shuanghui Group mainly contributed technologies and equipment, while Shanxi Coking Coal Group provided the land, labour and part of the financing.

On August 8 Shanxi Coking Coal Group signed a cooperation agreement with the China Datang Corp, marking a great step forward in the coal-electricity integration of the Province. China Datang is one of the five largest electricity generation companies in China. Its current installed capacity of around 113 gigawatts is more than double that of the whole of Australia. It can be seen that Shanxi Coking Coal has adopted a two-pronged approach to transforming its operations. On the one hand there is forward integration into coal-electricity and coal-chemicals, etc. On the other there is diversification into unrelated activities.

It is not just the mega corporations like Shanxi Coking Coal that have surplus cash flows and accumulated wealth which can be ploughed into other areas of enterprise. The owners of smaller mining companies and those who have sold their mines are also faced with the task of finding new projects in which to invest. Increasingly they have shown willingness to consider new areas of enterprise and to engage in investment offshore.

Faced with crowding out by large oligopolies in their domestic market and extreme difficulty in accessing venture capital, entrepreneurial Australian companies would do well to consider bringing their technologies and expertise to the attention of potential investors and co-venturers In Shanxi Province.

Bruce Ross Consulting can offer introductions, support and guidance for companies wishing to take advantage of the abundant opportunities in Shanxi Province.

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Shanyin County – Australian businesses should go where others aren’t

Bruce Ross Australian Business, China, Shanxi Province, Shanyin County Leave a Comment

Rather than joining the herd in the overcrowded and overly competitive major cities and coastal provinces of China, Australian companies would do well to consider an alternative strategy of entering into a region where competition from other Western-owned businesses is extremely limited and where they can obtain first mover advantages.

Shanyin County is a district in the north of Shanxi Province. Although its population is only about 230,000, its strategic location provides ready access to a huge potential market, not just in Shanxi but also the adjoining provinces of Inner Mongolia, Shaanxi and Henan; a combined population of almost 200 million. It is situated about three-and-a-half hours inland by road from Beijing and about four hours from Tianjin’s seaport of Xingang.

Shanxi Province has historically been China’s main area for coal mining, with a consequent reputation for being dirty and polluted. In response to this the national government in 2010 designated the Province as a Pilot Area to promote the transformation of economic activity in a resource-based region. Implementation of the policy focussed on building an Eco Province encompassing ecological rehabilitation of mining areas and environmental protection in rural areas. Central to this would be integrated environmental management stressing the rehabilitation of river basins and improvement of urban air quality.

The People’s Government of Shanyin County responded very enthusiastically to the new policy. The County generates very substantial revenue from coal mining and is investing much of this in transforming its image and reducing its people’s reliance on a single industry, thereby significantly raising their standard of living. The most graphic example of Shanyin’s determination to reinvent itself has been the relocation of its government buildings and commercial activities to a magnificent new town, a project which is nearing completion. The timing of this has proven to be particularly fortunate as the central government has just announced a five-year ban on the construction of any new public buildings throughout China, meaning that other counties will be unable to emulate Shanyin’s initiative.

Mayor Nan Zhi Zhong explaining Shanyin County's foreign investor policies to Bruce Ross

Mayor Nan Zhi Zhong explains Shanyin County’s preferential policies to Bruce Ross

Under its very dynamic mayor, Nan Zhi Zhong, Shanyin County has rationalised its coal mines, closing small inefficient mines or forcing them to merge to achieve greater productivity and efficiency, and there has also been great emphasis on improving mine safety. The County is also encouraging other energy based businesses to locate in Shanyin, but there is an insistence that any new industrial activities must be non-polluting. Industry which embodies advanced technology is particularly welcomed.

The County has succeeded in changing the focus of its main rural activity, dairy farming, to large scale, modern and hygienic operation, and it is now very actively encouraging new investment in other aspects of animal husbandry, fodder production and the processing of livestock and poultry faeces.

As part of the transformation of the County’s image and in order to provide new employment oppportunities for local residents Shanyin has devoted considerable resources to the development of ecological tourism through the creation of dedicated wetlands and man-made lakes on salt-affected land to encourage the proliferation of native birdlife and other fauna, as well as substantial investment in upgrading facilities at ancient military sites and other historic treasures such as the Great Wall.

Shanyin County is committed to encouraging and assisting Australian businesses to bring their expertise and technology to the County by setting up operations there. The County will use its best endeavours to provide those companies with all possible benefits available at national, provincial and county levels. In addition the County will offer assistance in areas such as aiding market research and obtaining approval for company registration, etc.

Mayor Nan is particularly keen to have Australian businesses establish themselves in his County, stating: “I admire the working style of Australian entrepreneurs and I’m hoping to learn from them in terms of effectiveness and success.” He sees the present relative backwardness of his County as providing significant advantages to foreign companies. There is a big space for development with abundant land, labour and electricity, and unlike most Chinese cities there are no problems with traffic congestion. Wage rates are very low compared to the major cities and coastal provinces, but the people are hard working and wanting to advance themselves.

Shanyin County Heshengbu Energy Industrial Park

Plan of Shanyin County Heshengbu Energy Industrial Park

Typifying the County’s commitment to transformation, in May 2012 construction started on the Heshengbu Energy Industrial Park, which is about 10 minutes from County downtown and five minutes from the New Town. This industrial park is just one of 10 key construction parks of the County.

Heshengbu Industrial Park utilises 10,000mu of saline and alkaline affected land which has been approved by the Provincial Land Resources Department as industrial land. The Park enjoys obvious location advantages, connecting 208 National Road, Dayun Highway [extending from Datong City in the north of Shanxi Provinceto Yuncheng City in the south] and Rongwu Highway [extending from Rongcheng City in Shandong Province to Wuhai City in Inner Mongolia Province]. There are more than adequate water, electricity, coal, heat, gas, and communication connections to the Park. There is abundant land for greenfield development. As a new energy industrial park, it is going to mainly focus on the development of coal chemistry, fine chemistry, bio-chemistry, chemistry new materials and electronic industries, while as a comprehensive park, it is going to play a leading role in the development of new high-tech industries of the County, of the city of Shuozhou and even of the Province.

An 8-lane avenue will extend from the New Town to Heshengbu, while a 6-lane avenue will join the east and west of the Park. Very extensive landscaping will be carried out to make the Park a real showpiece. Already there are 10 projects in the process of discussion, site selection, registration and project approval. These include coal to oil, LED, ceramic particle processing, ammonia and urea, waste rubber recycling, etc. Two of Bruce Ross Consulting’s client companies are negotiating with the County about establishing their Chinese base of operations in the Park.

On 19 June this year, Provincial Governor Li Xiaopeng carried out an onsite inspection of the Park. He fully affirmed the Park construction and called for more transformation of saline and alkaline affected land by further exploration and utilisation. The County committed to carefully making a good plan, constructing a high quality park, actively exploring and introducing new ideas, new methods, new types of industry transformation projects, and further utilising the saline and alkaline affected land to develop emerging industries and continuously expand the regional economy. The County will comply with the requirement of the Governor and aim at the development targets of the City and the County, and put further effort into Park construction to ensure that the Heshengbu Industry Park has a high standard of design, high quality of construction, high speed of development and high efficiency of management, to create a model park with first class facilities and housing billions of renminbi worth of diversified and high-tech industries.

It is clear that Shanyin County offers a very welcoming and supportive environment for enterprising Australian companies wanting to take advantage of the tremendous opportunities for profitable growth available in China.

Bruce Ross Consulting can offer introductions, support and guidance for companies wishing to take advantage of the abundant opportunities in Shanyin County or other counties or cities in Shanxi Province.

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Practical business wisdom in the Australian environment

Bruce Ross Australian Business Leave a Comment

A leading Australian entrepreneur, Alan Williamson, who for many years successfully guided a regionally-based company in what was arguably the toughest of business environments, namely manufacturing textiles in Australia, recently established his own consultancy, WARTS – Williamson Associates Recovery and Trading Services.

Each month Alan Williamson posts a commentary on the current situation for Australian businesses in the Blog section of the WARTS website. His theme is consistent – businesses need to face reality and despite the challenges, they can be masters of their own destiny. “Never let fear hold you back.”

The WARTS Blog – Well worth bookmarking and visiting each month for a dose of straight talking.

City view. Datong, Shanxi.

Shanxi Province’s GDP growth exceeds national average in 1st half of 2013

Bruce Ross China, Shanxi Province Leave a Comment

Shanxi Province recorded year-on-year growth of 9 percent in GDP in the first half of 2013, at 601.7 billion yuan ($98.1 billion), 1.4 percent above the national average.

The value added output for primary industry was up 4 percent, secondary grew 10.5 percent, and tertiary, 7.4, in the first half, while revenues reached 157.2 billion yuan, or 5.5-percent growth year on year. The main contributors to his growth were infant industries, provincial government policies, investment, consumer spending, and imports and exports.

In spite of a slowdown in the global economic recovery and structural transformations in the Chinese economy, Shanxi Province’s strong bases are helping to maintain steady growth. (Source: China Daily)

Bruce Ross Consulting can offer introductions, support and guidance for companies wishing to take advantage of the abundant opportunities in Shanxi Province.

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Focus on Shanxi

Bruce Ross China, Shanxi Province Leave a Comment

Bruce Ross Consulting concentrates its activities on just one part of the huge country of China, namely Shanxi Province. Shanxi, one of the 23 provinces of the People’s Republic of China, has 33 million people, that is, one-and-a-half times the population of Australia. It is just three hours by high speed rail and four hours by road from Beijing. It generates considerable wealth from coal mining, but until now has had very limited business links with Westerners.

Untapped potential for Australian investment

There is intense competition among Western companies to do business in Beijing and Shanghai and also in China’s coastal provinces, but an area such as Shanxi basically constitutes a new frontier, a place where there is very limited competition for those Australian companies with new products and ideas which want access to a greatly expanded market. In addition Shanxi is bordered by other provinces with similar attributes – Inner Mongolia, Shanxi and Henan – so that once having established a beach head in Shanxi Province the prospects for further expansion are virtually limitless.
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