Learning about doing business in China -- from those who know

Paul Boughton

Is the Chinese boom passing you by? Do you know how to get your company into the country and what to expect when you get there? All this and more was answered at the recent European Chemical Marketing and Strategy Association (ECMSA) and Chemical World Database (CWD) meeting held in Brussels.

ProsCons and Experiences of the China Investment Boom" provided a significant industry audience with genuine insight into the issues facing European chemical suppliers when engaging with the Chinese market.
Told by those with hands on experience of working in Chinathere was sound advice on the options and key components of a successful strategybalanced against the everyday obstacles encountered in developing participation.
The speakers also offered perspective on the myths that have developed around the Chinese experiencemost notably around the competitive threat presented by Chinese manufacturing and the future prognosis for market growth and profitability.
René van Slotendirector of international trade and competitiveness at Cefictook a pragmatic approach to the rise of China as a chemical manufacturing heavyweight.
Stating that competition was in itself beneficial and that China will only become a threat if European producers fail to compete on its termsvan Sloten stressed innovation as being the key to a winning strategy.
He warned that in the rush to participatethere is a danger that European producers will fail to see that ahyperactivity' around China may blind them to better opportunities in other low cost countries.
Udo Jung and Ralf Spettmann of Boston Consulting Group presented a compelling argument for an in-depth understanding of value chains and cost competitiveness before making investment decisions.
This point was emphasised when Ulrich Koemm from Lanxess gave concrete examples of his own experience of developing specialty chemicals businesses in Chinathrough a variety of business modelsbut with each clearly under-pinned by a proven case for profitability as a pre-requisite to going ahead.
Johannes Wyrwolldirector of the Wolfsburg office for Volkswagen Group Chinadescribed the company's long and successful history in the Chinese automotive sectorhighlighting some lessons for upstream suppliers. Recent events point to a slowing of growth and the early signs of cyclicality in China.

Falling prices

Yet more soberingover-capacity in the sector is leading to falling prices for car manufacturerswith cost pressure already being passed back down the value chain. .
Andreas Petermd of German paint manufacturer Peter Lackepresented an example of how small enterprises can successfully and quite rapidly rise to the challenge of supplying and then producing in China.
By contrastBernd Blumenbergpresident of the BASF-YPC joint venture in Nanjinggave an extensive overview of BASF's road to building an integrated petrochemicals site from ground zero with a good choice of partners and a patient approach being the key lessons. BASF feels that it has exploded the myth that
aEuropean-style' plants cannot be built quickly and efficiently in China.

For conference papers contact info@ecmsa.org