Opportunity, Challenge and Confidence -- China's Western Development, A New Topic for overseas Chinese Businessmen
Jiang Hailin - Chairman of HAN JIANG GMBH, Germany
Nanjing, China - September 17 2001
Repected Mr Chairman,
Dear Guests and Compatriots:
As a new-generation Chinese entrepreneur from Germany, I feel honoured to be invited to attend the Sixth World Overseas Chinese Entrepreneurs' Convention. After it was held in Singapore, Hong Kong, Bangkok, Vancouver and Melbourne, this convention is finally held in Nanjing city of may motherland, a famous ancient capital on the Yangtze River, a mother river of the Chinese nation. We are here to discuss the same question adn aim at the same goal - to contribute ideas to ou motherland's prosperity and seek co-operation and common development as the new millennium begins.
Western development is a big topic in front of us. I would like to summarize it in three words - opportunity, challenge and confidence.
I. OPPORTUNITY
Does western development mean an opportunity to businessmen? Some people believe that the western areas are remote and far from the coastal area, and should not be the place for investment. Some people think that the ideas in the ill-informed western areas are out-dated, and the investment there will be too risky. Still others say the best investment timing has not arrived since the development has just began, and basic facilities are not yet in place. The question is when and how to capture the business opportunity.
1. Does the western development mean a business opportunity to overseas entrepreneurs?
Opportunities lie everywhere for businessmen. It is especially true in western China. This is determined by the special conditions in the region. There are 10 provinces, one autonomous region adn one municipality, Chongqing, the largest and youngest municipality directly under the central government. The population exceeds 300 million, equivalent to half of the population of the whole Europe. The region almost accounts for half of the territory of China. It boasts rich resources. But for historical reasons, its develoment was started later than the eastern part of China. So there exists a great gap in terms of overall economic development between the twon regions. But the gap means a business opportunity to businessmen. The process of narrowing this gap is one of construction and development, which will bring about huge economic changes. Businessmen can only find their position in the course of construction and become stronger amid development.
In my eyes, the western area is a gold mine. It will attract a large number of top companies in the world. The area is the paradise in the future where adventureres will distinguish themselves. the area is a once-in-a-hundred-year opportunity for investors. No shrewd businessmen will ignore it.
Prople often say, "Don't let slip an opportunity; it may never come again. It is the instinct of businessmen to grasp the opportunities because they are not always around. Only by meticulous investigationa dn survey can we grasp them and make right decisions on the western area.
2. How to grasp the buisness opportunity in western development?
Business opportunity is there. But how to grasp it? Chinese ancient scholar confucius said, "A thousand-li journey starts with the first step". To invest in the western region, we should face up to the reality. According to the traditional thinking of development, we can seek development orientation from th following aspects:
- Making use of local resources to build rough processing bases. For instance, developing processing bases with coal, pertroleum, farm products and water resources.
- Making use of local scenery and ancient cities, such as the "silk road", ancient city of Xi'an and Mogao Grottoes, to develop tourist industry.
- Avoiding the disadvantages in transport conditions - far away from the coasts, to develop high-and new-tech products such as computer chips and aircraft manufacturing, etc.
- Re-development of weaponry enterprises that turn to civilian products. There are many enterprises transferred from military production. They have good equipment and well-trained staff. But they lack modern sense of management. Their production efficiency is extremely low due to inadeuate use of technologies and equipment.
- Development of multi-functional service industry and infrastructure construction.
We businessmen often say "talk about business". That means the business is conducted in the course of exchange and talk. We need the government to create more opportunities for businessmen to talk about business. Western development is a big business in the new century. It should not be confined in the country. It should be extended abroad. The talk itself means exchange and publicity. This convention offers a good chance for exchanges, talks and publicity. The business opportunity is arising from such talks.
3. Overseas Chinese businessmen in Germany should seek opportunities from the complementarity of Chinese and German economies.
Germany is one of the leading economic powers in the world, ranking first in Europe in terms of comprehensive national strength. Its population is only 80 million, as large as that of China's Sichuan Province. But its foreign trade volume was ranked second in the world, toaling 1051.1 billion US dollars, which is more than double that of China (474.3 billion US dollars; excluding that of Hong Kong Special Administrative Region, 416.6 billion US dollars). China and Germany have long kept a good bilateral relationship, and economic and trade ties are also advancing steadily. The frequent exchange of visits between their top leaders has also created good conditions for furthering such relations. Last year, Sino-German trade topped 20 billion US dollars. Germany has had more than 2,000 direct investment projects in China, ranking first in the EU countries. According to China's statitics over foreign-invested enterprises in the country, Shanghai Volkswagen was ranked first for the ninth consecutive year. The magnetic suspension railway project in Shanghai finally chose German cooperation partners. as this convention is going on, the Third Asia-pacific Cooperation Week is held in Berlin with the theme focused on China. A "China Fever" is on again in Germany. As China is about to enter WTO, the whole Germany, Europe and world are optimizing about this most attractive investment market in the next dozens of years. The survey by the US Global Commercial Policy Committee indicates that China is very attractive to foreign investors with confidene index reaching 1.7, ranked seond in the world. Therefore, overseas Chinese entrepreneurs in Germany should try to serve as a bridge between the two countries in China's western development.
II. CHALLENGES
It is true that the western development will encounter many difficulties. It will be definitely a challenging experience. Any business opportunities will couple with risks. So it is only natural that the overseas Chinese businessmen will face challenges in the course of western development.
1. Risks and challenges
- Poor basic facilities
The economic development in the western area is very much restricted by the backward water conservancy, transport, telecommunications and public facilities. The density of railway and highway networks in the region is about only 20% of that in the coastal area. Highway transport is the main transport means. But its density is six percentage points lower than the national average, and its coverage is not adequate. The railway transport is also plagued by the problems of low density, inadequate railway lines and backward equipment.
- Outmoded ideas
The outmoded ideas rooted in the region are related to the way of thinking developed during the pplanned economy period. The outmodedness is reflected by its low labor efficiency, high market risks, weak sense of opening and low service level.
- Conservative ideas
Due to the geological location and inadequate opening, many government officials and professionals tend to be conservative. For instance, when they attrace foreign investment in their projects, they simply say all the projects will enjoy preferential policies, but cannot provide detailed financial statements, information about enterprises' performance and other reliable data.
- Efficiency and policies
Western development is started later than in other areas. Local people do not have a strong sense of opening. The work efficiency of some administrative departments is not high. Multiple-level approvals and numerous official seals have slowed down its development. At the same time, the decision-making deparments do not offer much advice to investors, who often find it hard to fully understand and follow the new policies. Some governments do not persistent in implementing the policies. Some even come up with their own policies, particularly those on arbitrary charges and levies, which has brought about negative impact.
All these factors will lead to investment risks. Of course, opportunities and risks coexist. Overseas Chinese investors should make in-depth investigations and careful studies before making a decision to make their investment a success.
2. Challenge from age
- Doing big at 40. Quite a few of participants today are new generation overseas Chinese. They were trained in domestic universities, studied in foreign universities and did business abroad after graduation. Most of them are in their 40s. When we meet, we would often talk about one topic," We went abroad to study Western science and technology and realize our personal value. We cannot let slip any opportunities." We cannot merely indulge in sigh. It is said that men in their 40s are in fruitful years. Western development has set a new stage for us. It is a new challenge of fate.
- An opportunity that benefits both the country and ourselves. The western development is not likely to occur once in a thousand years. I think this is true. For us, the development offers a great opportunity to make money and, at the same time, contribute to our motherland. So I think western development bnefits both the country and individuals.
3. A challenge from new thinking
Western development is not a construction spree in a traditional sense but should be a sustainable development for the generations that follow. Here I would like to touch upon the new concept in recent years: sustainable investment.
Sustainable development has been an issue drawing attention from all the countries. While speeding up economic development, China is also stressing sustainable development and implementing the sustainable development strategy. The western development is also covered by this strategy. The sustainable development aims to build a new economic growth and social progress mode that can not only satisfy the need of modern life, but also not damage the need of existence for the future generations. In other word, while satisfying the current need, we should also consider the existence of our descendents.
Overseas Chinese entrepreneurs' participation in the western development should be built on this basis. Overall consideration should be given to and planning be drawn for resource exploitation, environment protection and ecological balance. Otherwise, it will produce negative effect. For those non-recyclable resources, we should improve modern technologies, increase production and make use of recycled resources. We should make the most of foreign new technologies to launch such projects as may yield pollutants. Otherwise, today's development may put an end to the region's future. We cannot do any disservice to the people and their ancestors in the western region. So I think we are facing the challenge from new thinking in the course of western development.
III. CONFIDENCE
1. Our confidence derives from our advantages.
What are our advantages?
- National links: Overseas Chinese entrepreneurs are businessmen who seek profits. It is the innate nature of businessmen to pursue profits. So it is with overseas Chinese businessmen. But their business idease are closely linked with the traditional Chinese culture. Wherever and whenever they meet and do business, the Chinese put affection before everything else and seek win-win and common development. This comes fromt he gist of Confucius thought. The Chinese nation was born in the western region. The region is attractive to all overseas Chinese businessmen who also have strong emotional links with the land. The cooperation linked with national attachment will make them develop a sense of responsibility, pride and attachment. These advantages are irreplaceable by those of foreign investors.
- The advantage in cultural background. Because of cultural difference, the Westerners' investment in China will be limited by diferent ways of thinking. Overseas Chinese have long settled abroad and merged themselves with the local society. They have understood and adapt to Western culture and way of thinkin. When they invest in the western region, they have both modern ideas of Westerners and the way of thinking of the Easterners. They do not have any language barriers or problems in understanding local customers. So it is easy for them to win the trust and cooperation of local people. Isn't it a great advantage for them?
- Fund and technological advantage. Overseas Chinese businessmen have long lived abroad. They are well-informed about the international market and are following the development and high tech. At the same time, after years' and generations' hard work, many of them, especially in the Southeast Asia and Asia-Pacific region, have become business tycoons. With technologies and funds, they will proceed the investment with high proficiency.
2. Confidence derives from government support and assistance.
- Trust fromt h government. In his meeting with an overseas Chinese delegation, Mr Li Ruihuan, Chairman of the China People's Political Consultative Conference cited Deng Xiaoping's remark: "China's development could be very fast. One of the favorable conditions is that we have millions of overseas Chinese over the world. This is a great advantage of us." His remark no doubt reflected the government's affirmation, commendation and support.
- Historical experience. The experience of reform in the past 20 years has proved that Deng Xiaoping's judgement is correct. There are 30 million overseas Chinese all over the world. It is no exaggerating to say that where there is sea, there are Chinese. Where there is economic development, there are Chinese businesmen. In the domestic construction in the past dozend of years, the older-generation overseas Chinese have scored great achievements with the support and help from the government and set a good example of patriotic contribution to the motherland. Why should we have reason to be hesitant?
Against the background of economic globalization, overseas Chinese businessmen should engage in global cooperation to the greatest extent, complement each other and seek common development. With the adventurous spirit of Americans, metiulous work style of the Germans and the flexibility of Japanese, the overseas Chinese businessmen, with the Chinese people's wisdom and strong will, will join hands to write a new chapter in the history of western development.
We Chinese believe three things are essential to a great cause as an old saying: favorable climate, geographical and human conditions. Overseas Chinese have all these. The great western development has been unveiled and is awaiting the investment of overseas Chinese. Let us jointly develop west China and become stronger through common development.
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