Learning Points

Learning Points
1. Adaptation to their own culture, learn to become more flexible if you want to enter into the China industry.
2. Do not complain, but comply to what you have
3. Take note of the availability of labour, and understand your employees well
4. Bonding is important to create a united workforce
5. Don’t give up if you face difficulties, look for helps, there are a lot of trade development centers available to help you out.



6. Retaining a good talent pool within the company is important, once a good talent is lost, there is time needed to spent and retrain another up. This time can be costly in certain industry, and not affordable if it happens often.
7. Spend time and money to retrain the workforce regularly to keep them competitive and productive at all times. They will feel motivated to work harder as well as they know the company helps them to improve their skills constantly and be motivated to work and produce better final products.
8. Quality a very important factor to success
9. Singapore market is too small for profits; expansion into other countries is necessary to make more profits.
10. The people have a strong need for better lives therefore they are willing to work hard and being paid low.



11. Study the needs of the people carefully, and located your industry, office, sales office etc strategically
12. Stay ahead of the competitors always
13. If there is a will there is a way to gain and achieve what you want.
14. Retain profitable buyers, and the company need to be vigilant and able to phrase out the non-profitable buyers
15. Brand awareness is very important, there is a need to market your product well for long-term benefits.



16. Although one need to adapt to the culture and lifestyle of the people here in China, there are certain th
ings we should not adapt and change, for example our integrity should remain strong and not accept bribery or give in to them.
17. Good amount of capital is need to attain economies of scales
18. Important to have the skills needed for the industry you are setting up or working in.
19. Should know what you want to specialize in and do your homework well, so that you can achieve you want without much hiccups, and even if there is, you will be able to find and have a solution to solve it before making big losses.
20. Having a total understanding of the country is very important.
21. Know what you want to achieve at the end of the day, in another words define your target and specify your goals clearly.
22. One should not base on the dry facts form the Internet, but should come to China and experience it before judging if the facts are correct. Sometimes what is written may not be up to date or what is currently happening in China.
23. Get the right person and right job
24. Attitude in service is something that is lacking in China; there are opportunities to set up business aiming to give world-class good attitude services, or training programmes.
25. Knowing the preferences of the target market well.
26. One should not look at the short-term benefits but the long-term benefits.

10th day (21st March 2007)

Zhuhai Software Park
It is setup and started its operation in October 2000. From then till now, 52 companies have actually rented the place to stay in. Many universities have located itself in this area. It is high accessible due to the availability of the world-class airport and high way, etc. Events are held in the Zhuhai international circuit. It has its excellent environment with is suitable for the start up of new factories. All equipment that is required, and good connectivity are available in the park.

There are also many incentives provided, for example the government gives subsidies and support. Financial support and capital support were also given by the government, There were low rental provided and tax incentives available as well. Singapore has yet invested in this park. It also provides advises and help new business to achieve what they want for them.

9th day (20th March 2007)

Torch Development Area



Zhongshan known for the hometown of the giant Dr. Sun Yat-Sen, city develops its society and economy in perfect harmony, and in recent years, Zhongshan city won a series of honors included “National Hygiene City”, “ National Gardening City”, “ United Nation Human Settlements City”, “Demonstration City of National Environment Protection”, “China excellent tourism city”, “National Two _ Support Model City” and “National Technology Model City”.

The zone is located in the east of the Zhongshan city, 12 kilometers away from city centre. Facing the estuary of the Pearl River Delta on the east, it is adjacent to Shenzhen and Hong Kong, only separated from them by the sea. It is also approximated to Zhuhai and Macao on the south, Panyu district of Guangdong and Shunde on the north, Jiangmen and Foshan on the west. Of which we have been to Zhuhai, Foshan, Gaungdong, Shenzhen and Hongkong=). This favorable geographic location is a strong guarantee for the zone to make a rapid advancement.

Transportation:
The zone is situated in the centre of the Pearl River Delta with favorable transportation networks. By land, Jingzhu highway, Guangzhu East Highway are interlaced with Yixian Road, Humanmao road, Zhongshan harbor road running across the city; by water it only takes 70 minutes to reach Hong Kong by hydrofoil from Zhongshan port, which as one of the top ten container ports in China, it can handle over 700,000 containers with 4 million tones cargoes per year; by air, it is very convinent accessing to the sex airports nearby. The railway across the Pearl River Delta and the guangzhu railway are schedule to set stations in the zone.

Water Supply and Power Supply:
With four 110KV transformer substations and 2 waterworks supplying 10,000 tons of water per day, the zone can provide sufficient water supply and power supply.

Complete Facilities:
The zone offers a comprehensive set of facilities of telecommunications, hospital, school, hotels, shopping centers and entertainment places. Combining various functional districts and industrial parks, a hi-tech industrial city has formed integrating research and development, production, logistic and living.

In order to make use of the influence of central cities of Guangzhou, Hong Kong and Macao SARS, Zhongshan has planned a strategy for its Eastern Economic Development Area, so as to accelerate the construction of infrastructures and urbanization of the eastern coastal area based on the zone as a leader, and to achieve group development. It is foreseeable that the software and hardware investment environment will be further improved.

High efficient Service
The development zone constitutes administrative organizations based on high standards of state level, dedicating itself to provide domestic and international businessman effective, efficient, professional and international high-standard services. Moreover, the zone focuses on human services through providing one-stop services form negotiation to registration, from factory construction to manufacturing and to export. There are also special bonded warehouses in the Zone in order to facilitate the import and export of raw materials and products (this as observed during the trip and post trip presentation is one of the main advantage the business people loves =). You know what I mean and the reason behind - tax saving solution)

As a state-level development zone, Zhongshan Torch Development Zone enjoys not only the national beneficial policies, but also Municipal Economic Management Rights as a prefecture-level granted by Zhongshan municipal government, and also, the city government set up first grade financial system and favorable supporting policies in the zone, Such Municipal departments as industrial and commercial administration office, taxation, Country land, planning and public security, electricity supply and labor have all set up substation branches in the zone. In particularly, the investment and management service center in the zone, which integrated 20 functional offices, provides a service platform and guarantees one-stop service in high efficiency for investors.

For accommodating to the new circumstances, the zone has emphasized on providing comprehensive service for high level enterprises from home and aboard combining such advantages as industrial facilities, completed market and systems normative.

The zone has many manifesting advantages for domestic investment and also foreign investment.

For domestic investment, certified hi-tech enterprise, income tax rate will be levied at 15%. 5% of paid income tax will be refunded authorized by Municipal Financial Department to the enterprise whose export value exceeds 70%. New high-tech business shall enjoy income tax exemptions for 2 years starting from the year in production. For enterprise in business difficulties, at the expiry of such period, the paid income tax can be refunded authorized by Municipal Financial Departments within 2 years. For domestic hi-tech enterprise who are established at state-level or provincial-level, 25% of local levied collected income tax will be refunded from the date of first selling within 2 years for the provincial level and 3 years for the state level. For the enterprise who meet the request of state-industrial policies on the technical rebuild projects invested in China 40% if the domestic investment for the technical rebuild projects which are in compliance with contents of current emphasized and encouraged state industries and products and technology.

For Foreign investment, income tax of foreign-invested enterprises who intended period its 10 years or up can enjoy exemption for 2 years and reduction for 3 years from the year they make profits. Exemptions and reduction of income tax shall be applied to a certain period according to the tax. After that period, for the authorized advanced technical standards enterprises, 50% of the income tax will be levied on the tax law within the extended 3 years; meanwhile, the local income tax will be exempted. For the export value according to the tax law (the minimum rate should not be less than 10%) Should re-investment in developing hi-tech enterprise or product, which has more than 5 years, intended period is made after profit, the paid income tax for the re-invested portion shall be refunded. For the foreign party of the non-hi-tech enterprises, 40% of the paid income tax for the re-invested portion whose intended period is not less than 5 years. Etc.

As from the above examples we can see that the zone is helping the new business startups as far as it can. There are also other favorable treatments provided for.



To contact them:
Telephone: (86) 760-533933 (main) 5597902
Website: www.zstorch.gov.cn
Email: info@zstorch.gov.cn
Address: Kangle Dadao, Torch Development Zone. Zhong Shan City, Guandong province, P.R China

8th Day (19th March 2007)

Sunten Technology




The main products of the company are:
o Dry type transformer (8 billion sales)
o Rector
o Substation (3rd in the world)
o Switch Gear for industrial use (1-1.5 billion sales)

Their current strength of workers is 1500 workers. Amongst the workers, 600 are university graduates. Production workers take up to 900 heads. The company is actually established in 1988 since then it’s currently 19 years old. In 1996 it is the first to set up 160 000 KVA and in 2000 it set up 200,000 KVA. The company is well recognized for their product quality as they check every product thoroughly. It product has basically been awarded in
o ISO
o Environmental Friendly
o Daily operation is very important
o Germany imported technology and facilities






They have also keep close in relationship with the following universities:
o General Electric
o Tsinghua University
o Xi An Jiao Tong University

Exzition Transformer is one of their best products as well and it is used in most of the large operating dams.

Methods of sales used by Sunten were:
o One way business transactions
o Agent sales were in its minimal
o Two way business transactions

Sales orders are firstly received, and then the order is eventually separated and distributed out evenly to the workers. Production at the end of the day has to go through a quality check and then the final product is obtained. The final product will then be delivered to the consumers or buyers.

Regular outings are carried out to help foster the relationship between workers. Other services provided by the company are to the airport, railway stations and big shopping malls. It is mentioned during the Q and A session that the challenges met by the company was when the price of copper has raised rapidly over the years, so has the price of the steel. These are all raw materials of the production. The time delay of production to the actual sales has a big gap therefore its harder to predict the growth of the price, this eventually results in the lose in the difference of materials prices. This can be a very significant amount of loss made by the company.

Next challenge met by the company was the growth of competitors. They had provide many similar services and products. Internal company problem was another challenge to the company as well, these problems are mainly, capital, and labour. Its capital has to be enough to buy the raw materials as it is constantly picking up in its cost as mentioned. Next is the labour, as university grads for example they job hops frequently. They will stay for a year or so just to gain enough work experience and leave for a better job.



The next question asked during the question and answer time by the team was; what are the basic things foreign investors should equip themselves. The response given by the presenter was that one must have the correct mindset and the knowledge of the culture in China is very important. It is important that your own set of culture and China’s culture must not clash. Main Zi is important as well as said by the presenter. It is said that one should “ru xiang shui su”. The company should be able to make use of the local to work for them, so that one will be able to understand the culture of the local better through its local workers.

Thereafter “Guan Xi” can then be formed. It is again advice that “Guan Xi” serve as only an enhancer, to help smoothen the business. When the company meets with any problems, the local workers who are more familiar with how things work in China will be able to help the company solve the problem to a certain extend which non local is unable to.

It is expressed, as well that market share is important. No market share will eventually means no sales and business failure is unavoidable. One will have to study the surrounding environment carefully before deciding in any actions taken. For example if main consumers of the company comes from the locals in China. Therefore the company will have to focus on the local needs and meet their requirements.

The company has advertised its products faithfully. But the presenter has expressed that he feels that advertisement is a short-term solution. Good quality of the product is still the key to business deals and successful stories. The company being the first one to set up such a company is therefore rich with experience, this has been their main selling point and support to its excellent quality in product.

He also mentioned that the reduction in tax is only a short-term attraction of foreign investors. In the long term aspect, companies do not take that as a major component that is able to affect their finally decision making. The company has also opened itself to ke ji ta hui. Main countries that use the company’s products are:
o Dubai
o Hong Kong
o Maccu
o Zhong Dong as the biggest consumer.

7th day (18th March 2007)

Exhibition

The exhibition was based on different furniture brands that are looking for possible business companies to work with to bring their brands overseas and franchise. There was a large area to showcase the big range of different company’s furniture design.

Buyers from all over the world come in to take a look at the latest design. There was this particular company that interest me a lot. This company’s furniture is tied up with the theme of Disney collection, whereby everything furnished in the bedroom is in different Disney theme! It looks simply beautiful! But cameras were not allowed in the exhibition; so sad to say I wouldn’t be able to provide pictures of it. Each bedroom unit range from 5000 RMB to 10000 RMB and if you wish to bring in to your own country to franchise its 50% off this rate. But needless to say, there are other requirements they would have to discuss over again with you over your tea session. I do have the contacts of this company, if anyone is interested feel free to approach me menx! =)

Furniture Factory

The company does exports to US and Europe, which its designs are most suitable for sale there. The picture below will be able to tell you the reason why it is so.



The company is in operation for more than 10 years. Factory opened in the year 2004 and is specialized in sofa sets only. Their designs are by the local designers, whom have done their own research on the latest designs. Every year there is about 2000 to 3000 sofa sold. Of this about 80% of the sofas will be exported to the Middle East. $200,000 is their cost of production. When we asked about how the company has done to improve its competitiveness, the answer was to maintain and always improve on their designs and allow buyers to send in their own photos of their desired designs. They will then be about to manufacture for them.

They have attracted foreign investors through Internet communications, advertising on Internet about their product and services to make themselves get to know more businessmen. Trade companies can introduce buyers to them as well. Anyone can come in to purchase from them also, simply because over here, they will be able to buy low and sell high. In this way profitability has attracted them to buy from this company. They have also sold much of their products to Singapore trade fairs.

Difficulties faced by them were the different needs of furniture during different seasons, for example, there will be a higher demand of furniture during the festive season; chinese new year. Hence there will be months with low and slow sales. Transportation cost was mention to have cost to about 10% of the product price when one wishes to transport to Singapore; on the average its about 1000 Sing dollars depending also on the availability of empty containers and people sharing the containers. It is gauge that one container will be able to store up to18 sets of furniture. Where one sofa set is about 3000 RMB. It is also brought up during the Q and A session that they do not carry export licenses, therefore they have to make use of logistic companies to help them in this field of trade.

One tip given by the presenter when prompt about building good “Guan Xi” was to make use of local people to communicate and foster a trustworthy relationship and gain business trust. It is also expressed that in order to maintain a good “Guan Xi” it had be best done if the company is able to maintain a good quality of goods produced as promise to the buyers. They do not spend money on entertainment cost as they feel even if your quality is not good, you treat them to anything expensive they will not choose you as they supplier. It will be a waste of effort, because poor quality product cannot be sold, and no on e will be so stupid to buy them even after a spread of good expensive food. Therefore she enforced repetitively that the quality control of their own product is the key to success.

6th day (17th March 2007)

Pure tourist attraction visitation day… just uploaded a few photos. the rest can all be found on photobucket.com

5th Day (16th March 2007)

Again after a tiring day yesterday, we had wake up early in the morning to catch the spread of breakfast in hotel that we stayed in. We started sharing our own experiences at the wholesale market and the night market research. One thing we had all know, we are prepared for another round of visitation and market research at the end of the day.

Piano Factory



This year is the 50th anniversary of the Piano Factory. The pearl river piano factory is ranked the world biggest piano factory. Its product is sold in almost 80 countries. From the presentation, we got to understand that relationship the key to their success today. The boss has shared that it is through building good relationship with your business partners and thereafter you will be able to gain their trust and become friends with them. You will then be able to exchange your own ideas, thoughts and experiences with each other, from here much can be learnt, be it mistakes or experiences needed to help the expansion of the business structure.

Determination is also highlight during the talk. Getting to let the market know about their existence was a though fight, and here determination has played its role faithfully. They hired the best expert to test the quality of the piano and give them suggestion on how to go about improving their product even if it had meant a high expense cost for each visitation by the experts. This has proved to us once again, that the quality of the product is very important. In order for a business to grow, expand and make profit, quality control and improvement constantly the secret to success.

The boss of the factory expressed about this believe in the chinese phrase; “Shi zhai ren wei” meaning if you want something, as long as you put in the right amount of effort needed, what you want to achieve will be achievable at the end of the day, you will definitely reap what you sow.



The high technological advancement has helped in their survival through these long years as well. In order to make a good piano, the workers has to be good, the same theory applies; in order t have a good batch of workers, leadership is very important. The company has achieve this by getting its own workers sing a company song together with the piano piece accompanied, this is believe to have helped in fostering the unity of the employees.






Their workers working patiently on the art






Their high technology advancement



line production ..


high demand of labour .. this will prove it all



From the presentation, we have also found out that the company has to put in extra efforts when they tried to expand their business in Germany and American markets. They need to get the buyers and consumers of these markets to believe in their brand, as there already long exist brands such as Yamaha etc locally. They had advertised through sponsoring piano competition, an example is the secondary and high school organized piano competition. They have also hire local people to advertise their piano and sell them their new pianos to the locals, as the local are the ones who understands the needs of the local people, the best ways to attract them, their usual buying habits, how the law functions etc.

People would choose to buy this brand as a gift because its cheaper for example, therefore the salesperson can use the low price to hit on buyers who are low on budget and knows the location to sell, preferably in areas not so well off. While in China, the local people would prefer their local brands. The company has also received aids from the government when the company is working on venturing into another country.


Taking some time off the hectic schedule?





other products variations

Guangdong Ji Shu Shi Fan Xue Yuan

During the presentation done by the local lecturer, we were brief on the basic geographic, GDP, population knowledge of China; he has mentioned a lot of the financial improvement of China after these years. He has raised our attention to the China’s government’s main aim for these years that is to improve the financial growth each year and to decrease the amount of pollution existing currently within the country. But he has told us that there is a significant improvement in controlling the pollution in China. Major reconstruction of the area has helped in the financial improvement. They have also major in the market of medicine and food, which are well known and well liked. These five years it has make the fastest financial growth and a significant increase in the amount of tourist. The overall presentation was pretty poorly done, its too wordy and most of the information can be retrieved from the Internet with much ease, many of just couldn’t wait to get out of the stuffy classroom. Throughout the presentation, he was barely prasing how well the economy have been doing, but little did he bring up evidence to support it. After 2 hours of torturous lecture ever, we are finally over, we were so glad that back in NP our lectures were not contented like that, we had just die if it is done this way.

One of the group mates was so elated that the class has ended that he forgot his bag while making his way out. And guess what, when he went back to the classroom it was already locked and the attendant had already knock off. He could only collect it when the next class starts. Thank god, he got back his bag after lao yao made a trip to the school in the night. LAO YAO IS THE BEST+)


This is what I meant by the wordy presentation slides…


The dusty classroom


see nessa cannot stand the lecturer too!=)


another one packing to go.. haha