Gilbert on the seminar circuit

June 26th, 2014

We are now at the end of the seminar period, only one left, early July.
It has been a busy and rewarding experience talking to the Swedish Chamber of Commerce and a range of (E)MBA delegations from several universities:
CASS (London, UK), Rutgers (USA), Groningen (The Netherlands), Rochester Institute of Technology (USA), Belmont (USA), Missouri (USA), and others as reported earlier.

See here some of the talks with the dates.
Topics have been pretty varied, the usual (very personal) China Introduction, Real Estate in China, How the Chinese Government works and takes decisions, the impact of the 3rd Plenum, the challenges China is facing in 2014 (and how the new government tries to deal with it), Quality & Durability (related to my book Toxic capitalism) and more.
It is always nice to receive feedback on the talks. In the pictures, see one card a group of students insisted on sending me. And:

“Thank you very much for addressing our CASS MBA group. Your presentation was excellent and after speaking to the students I know they were really impressed by the knowledge you put forward. We really appreciate your effort of talking to our group and being so open about your experiences and position in China. As usual you have provided some invaluable insights which the students much appreciate.” (By the organizer)
“Thank you for your presentation to Cass. I thoroughly enjoyed it and felt it gave us true insight into China.” (A student)

The seminars take typically 90 minutes including interactive sessions and Q&A.

Luxembourg National Day in Beijing

June 26th, 2014

On 23 June Sun and myself attended the National Day in the residence of the Ambassador Paul Steinmetz. It is an event I normally attend every year. The residence is in a very unusual location, in a hutong between Dong Si Nan Da Jie and Chaoyangmen Nan Xiao Jie. The event is in the nice garden and usually the air is humid and hot as in a sauna. This year we were lucky, no air and pretty pleasant.

The building carries many souvenirs for me as I was very close to the first Luxembourg ambassador in the early eighties. He had the arduous task to renovate the building and starting the embassy when electricity was not always guaranteed in the hutong. We all lived in the Beijing Hotel at the time and I also gave my small advice during the difficult renovation work (and for the problems of rats and mice…).
Pictured are the Luxembourg ambassador as well the ambassadors of Benin, Cambodia, Philippines, Bolivia, Congo Republic, among others.

The European Chamber Business Confidence Survey: my own take

June 18th, 2014

On 29 May 2014, in Sofitel Wanda Hotel, the EUCCC presented the results of its latest Business Confidence Survey, an event always closely watched by the media.
I joined the afternoon session where the new President, Joerg Wuttke, gave his as usual sharp overview. Details can be found on the EUCCC website, see:

Here is my 5 cents worth of highlights:

  • Two thirds feel business has become more difficult
  • Half feel the “golden age” for MNC has ended
  • Overall, more modest expectations, as well as planned expansions
  • 45% believe the 3rd Plenum could be an opportunity for reform
  • A decrease is expected in revenue growth and margins
  • A decline in optimism
  • Air pollution is affecting HR, especially in Beijing
  • Fewer identify China as the top investment destination
  • M&A is slowing down
  • Shifting operations to other countries: people think about it but few are going for it
  • IPR and environmental laws: still weak enforcement
  • About €21.3 billion of missed business opportunities per year due to market access barriers of all kinds.

The Chamber feels SME from Germany, Austria and some other countries are doing well. I always look at those statements with suspicion. A good number of SME are slaughtered in the Chinese market and don’t live to tell their stories. The Chamber thinks they are succeeding as they explore their own niche, avoiding a battle with the big companies. Rosy?
As Joerg mentioned, the media focused a lot on “The golden age for MNC has ended” and giving a rather pessimistic view. I gave my own comments in an interview with China Daily:

Some statements in the article:
Nearly half the European companies surveyed are reviewing investment opportunities in other parts of Asia, but so far only one-tenth of the companies have shifted plans from China to elsewhere in the past two years.
“It’s not like ‘Oh, my God, I’m gonna leave’. Actually I see no rush to leave China,” said Gilbert van Kerckhove, president of Beijing Global Strategy Consulting Co.
Van Kerckhove said the survey result should not be interpreted in a completely negative way.
There are some positives, too, as rising competition means China’s local companies are becoming more competitive and rising labor costs mean rising living standards.
“The slowing growth does not mean there is no growth,” van Kerckhove said. “It is not growing as rapidly as before, and that, in a way, is the normal mode.”

For human resources departments in European companies, air pollution has become the top difficulty when they try to attract and retain talent.
“Yes, air pollution indeed is a problem. I’ve talked to many HRs, and they all complained of this; high-quality talents are hesitant when making the decision to come to China, especially those with a spouse and kids,” Kerckhove said.

I also said: the situation for MNC has simply changed because Chinese companies have become stronger an better, a normal evolution. So, MNC do not have the market just for themselves.
What was not mentioned, is the one million dollar question: “Are foreigners still welcome in China”?
My answer is certainly not a firm “YES”. On the contrary. But that is a topic most are avoiding …

The new platform for China experts: Prodygia

June 17th, 2014

Nicolas Ruble whom I know since long has convinced me to join this platform – not easy as I am reluctant towards similar initiatives. Actually he came to me at the right moment: I was wondering if I should not upload short movies on Youtube with me talking. Well, that was done smoothly. Yesterday we had a near two hours fun interview session and here are the first results.

Do explore more of this new platform. I am also still “in the learning curve”…

European Chamber Elects New Leadership

June 11th, 2014

The elections were held on 24 April 2014 at the European Chamber’s Annual General Meeting in the Westin Hotel Beijing, during which three Vice Presidents, Bertrand de La Noue, Mats Harborn and Sara Marchetta, and a Treasurer, Francois Bernard, were also elected to the Chamber’s Executive Committee. It was the first time as far as I remember there was a real competition for president and vice president. All candidates gave their motivation speech, all with a pretty different angle. Joerg came out far ahead as the new president.
The member company representatives have elected Jörg Wuttke as the new president. As president, Jörg will chair the Executive Committee, which is responsible for providing strategic direction for the Chamber and representing our 1,800 member companies. Jörg is a German national and has been Vice President and Chief Representative of BASF China since 1997. This will be his second stint as president of the European Chamber, after having previously served for three years between 2007 and 2010. He is replacing the outgoing president, Davide Cucino.

Davide has now taken over my role as chairman of the Public Procurement Working GRoup. The Chamber finally “realized” the term as chairman is maximum three years. I set up the Working Group in 2005 and I have been the chair since then – nine years! I agreed to continue as vice chair to help Davide.

The challenges ahead for the Chamber are plenty. The Chamber has grown to become huge with 1800 members. Business is not getting easier; participation to Chamber activities can be a challenge in itself for most chambers who struggle with membership (not an issue with EUCCC), low turnout to events, effective participation to the Working Groups, definition of policies, etc.

Full overview of the Executive Committee of the EUCCC:
The Executive Committee’s prime responsibility is to provide strategic direction for the European Chamber. The members of the Executive Committee are collectively responsible for managing the European Chamber. The Executive Committee is chaired by the President. The Executive Committee is composed of members from various European Union Member States and is elected at the annual general meeting. Below you will find information on the functions of the Executive Committee members.

  • President – Jörg WUTTKE, BASF China
  • Mats Harborn, Vice President, Scania China Strategic Office
  • Sara Marchetta, Vice President, CHIOMENTI Studio Legale Beijing Representative Office
  • Bertrand de la Noue, Vice President, TOTAL (China)
  • Stefan Sack, Vice President, Comau
  • Alberto Vettoretti, Vice President, Dezan Shira & Associates
  • Francois Bernard, Treasurer, FJA & Partners
  • Maija Kurte, States Representative, Linearis Translations Beijing Ltd
  • Tom Behrens-Sorensen, States Representative, Clavis (Beijing) Ltd
  • Patrick Horgan, States Representative, Rolls-Royce
  • Adam Dunnett, Secretary General, European Chamber