The Shanghai Expo is in full swing, but Neil Hodgson headed off the beaten track in China
LIVERPOOL Chinese Business Association (LCBA) is celebrating a highly successful pioneering visit to China.
A team of three, accompanied by LDP Business, spent five days in Linyi, a second tier Chinese city with a population of 10.3 million that is fast emerging as a commercial powerhouse.
Situated between Shanghai and Beijing LCBA identified Linyi as having the land, labour, location and ambition to offer serious opportunities to western investors.
The LCBA feel it perfectly illustrates China’s ‘open door’ policy of the 1990s, with high-ranking officials from Linyi municipal government and China’s central party all describing the opportunities for western businesses as a ‘fairyland’ as Linyi’s pace of development picks up.
The LCBA team was afforded unwarranted access to local and national government officials who all welcomed Liverpool’s overtures with unconditional pledges of collaboration and cooperation for future ventures.
Team leader Alan Seatwo said: “Linyi is full of potential. The impression we have is this is a place that will be one of the driving forces of the Chinese economy of the future.”
The team comprised Mr Seatwo, business consultant Colin Ling and Jack Cai, owner of Liverpool-based import/export company Dong Sheng UK Trading who, with his Linyi-based business partner Mr Wen, invited LCBA’s delegation.
They sought to gauge Linyi’s potential for future business, but also to propose collaboration in four specific sectors of automotive, food, drink and fashion.
All four excited interest at three key presentations the team delivered.
The first was at the Linshu Development Area, south of Linyi city and home to 113 companies who have already attracted investment from several European partners.
Leading tenants range from the Sunlight Tile Company which, although a fledgling operation, already supplies most of China’s domestic requirements and already has 14 new production lines under construction.
Biochemical company Fukshuea produces raw materials for the cosmetics industry, while in contrast Shandong Carter Heavy Industries manufacturers excavators for export to the Nordic countries.
At the opposite end of the scale neighbouring King Willow Arts and Crafts provides 40% of the world’s woven willow goods, stocked by the likes of IKEA, and made by a 100,000-strong home-based workforce.
Kingenta International, set up 12 years ago, produces 2.4m tonnes of compound fertiliser and has already penetrated markets in Australia, Malaysia, Korea, Japan, Canada and Thailand, while farm machinery and heavy plant maker Changlin Group is held up by the municipal government’s Bureau of Commerce as a rising star of the future.
It already provides engine parts for Ford Motor Company and BMW and 13 years after making its first rudimentary ‘walking tractor’ has recently signed a deal for hydraulic units with a Japanese company, contributing to its £50m turnover, with a £100m target within the next three years.
Linyi Bureau of Commerce vice director Ji Xu said: “Changlin is a dynamic company with great potential for development. It will be a good chance for making an investment.”
But he also highlighted the ground the UK needs to make up on European rivals like Germany and Holland, saying: “The UK is not very aggressive in making overseas investment. As Confucius said, ‘isn’t it a pleasure to have friends from afar’.”
Linshu deputy mayor Qingxiang Zhang also encouraged involvement from Liverpool, saying: “We would like to pursue investment from outside, especially from LCBA.”
At an official dinner for the LCBA team that night, hosted by central party member Madame Al Hua Zhao, Mr Xu outlined the opportunities for Merseyside firms to become involved with dynamic young Chinese enterprises, including the venture capital route.
“People can make investments in Chinese companies through venture capital and they can be listed on overseas markets.”
And he expressed his confidence in such opportunities: “We are confident with the Chinese economy. There is stability of growth, huge market demands, construction sites are booming and there are market demands in other aspects.”
