4,5/4,5 CM Sociedade Portuguesa de Inovação An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Innovation Knowledge Resource Centre - SPI

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Index Part I – China at a Glance Part II – SPI’s Beijing Representative Office Part III – Project Examples

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part I – China at a glance i – China Basic Facts ii – Economic Overview

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part I – China at a glance i - China Basic Facts

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part I – China at a glance i - China Basic Facts  China is the most populated country in the world (1.3 billion) and has a territory similar to the United States (9.6 million sq km);  Its population grows at an average of 0.6% per year;  60 % of the population lives in rural areas and it is estimated that 10% of the population is below the poverty line;  Its unemployment rate is 9.8% in urban areas (an estimated million in 2003);  Substantial unemployment and underemployment in rural areas at 20% (estimate).

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part I – China at a glance i - China Basic Facts  Agriculture accounts for 49% of the labour force, Services 29% and Industry 22%;  Inflation is currently 4%;  Major crops and products are (by order of importance): rice, wheat, potatoes, corn, peanuts, tea, millet, barley, apples, cotton, oilseed, pork, fish;  Main export trading partners are: US, Japan, South Korea and Germany;  Main import trading partners are: Japan, Taiwan, US and Germany;

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part I – China at a glance i - China Basic Facts  China is the 4th worldwide touristic destination  In the last 25 years China became the 4th world economy 2020: Estimated to be the first: 130 million tourists/year  China: - 20 % of world population USA: - 5% of world population - 5% of production - 20% of production - 70% of toys, bikes and DVD players. - 60% of digital cameras - 50% of laptop computers - Until 2010 half of textiles consumed worldwide  Annual growth: 9,5% Central Planning Economy Market Economy

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part I – China at a glance  More than 23,5 millions of Chinese work for foreign companies  About 20 millions of Chinese students in Higher Education Institutions  4 million of new graduates entered the job market: 2004 A lot work to foreign bosses With low salaries, the best Chinese engineers are hired  China has 10,000 multinationals  Chinese are extremely open to foreign products i - China Basic Facts

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part I – China at a glance Dumplings Beijing Opera Chinese calligraphy Chinese painting Chinese tea The game of go i - China Basic Facts Chinese Culture

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part I – China at a glance  220 B.C. - The Great Empire Qin united China and established Qin dynasty, followed by almost 2000 years of federal dynasty;  Manqing Dynasty (Last Dynasty) replaced by a Republic;  Founding of the People's Republic of China (Mao Zedong);  Great Leap Forward (mobilize the peasant masses to increase crop production by collectivizing the farms and use the excess labor to produce steel), resulting serious damage to productivity;  – Great Famine (consequence of the Great Leap Forward);  – Great Proletarian Cultural Revolution (Mao Zedong); ii – Economic Overview (Key Milestones)

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part I – China at a glance  1971 – China joined in the United Nations  1978 –Launch of economic reforms and opening-up policy, which were implemented first in agricultural sector and then expanded to manufacturing and Science & Technology sectors;  1989 – Tian’anmen Square Event;  1992 – Deng Xiaoping’s tour to South China – Transform the planned system to market-oriented economy;  2002 – Join WTO – Further opening-up to foreign trade and investment and participation in international competition. ii – Economic Overview (Key Milestones)

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part I – China at a glance ii – Economic Overview (GDP)  GDP has quadrupled since 1978 (USD 1.6 billion in 2004; by comparison USA: USD 10 billion);  In 2004 China was the second largest economy in the world after the USA (although in per capita terms the country is still poor);  Average Annual Growth Rate of GDP: 9.5% since 1978;  Increased GDP has reduced the number of people below the poverty line by 400 million since 1979.

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun China's GDP and GDP per capita Part I – China at a glance ii – Economic Overview (GDP)

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part I – China at a glance ii – Economic Overview (International Trade)  In 2004, China was the 3rd largest merchandise trader in the world after United States and Germany;  The largest source of imports is Japan;  The second largest trade partner for the European Union after the United States;  China replaced Mexico as the second largest supplier in 2003 for the United States market after Canada;

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun 2003 Export Value of Principal Commodities Part I – China at a glance ii – Economic Overview (International Trade) Main export trading partners are: US, Japan, South Korea and Germany.

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun 2003 Import Value of Principal Commodities Part I – China at a glance ii – Economic Overview (International Trade) Main import trading partners are: Japan, Taiwan, US and Germany.

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part I – China at a glance ii – Economic Overview (Emerging Corporations)  Not only labor-intensive products are emerging;  Huawei (Telecommunication): Selected by British Telecom (BT) as one of 8 preferred suppliers of communications equipment for BT's 21st Century Network strategy;  Lenovo (PC): Acquired IBM Personal Computer Division creating the world's third largest PC manufacturer;  TCL (Consumer Electronics): Acquired Alcatel’s Mobile Phone business and Thompson’s TV Business;

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part I – China at a glance  China National Offshore Oil - CNOOC (Petroleum): Bid for Unocal with $18.5 billion CASH, a premium of approximately $1 billion above Chevron;  Alibaba.com (B2B E-commerce): World’s largest online marketplace;  GEELY (Car Manufacturer): China’s own brand GEELY has presented its own models at the Frankfurt Auto Show 2005 (established a factory in Malaysia and develops new models in Hong Kong). ii – Political and Economic Overview (Emerging Corporations)

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part I – China at a glance ii – Economic Overview (Education and Technology Transfer)  Technology transfer - Adoption of the latest technologies as part of an upgrade of the infrastructure is accelerating productivity. Local worker productivity in China is benefiting from knowledge transfer by foreign companies as well as from competitive pressures resulting from foreign investment.  Education - Education standards are improving but still have room to rise. In 2001 less than 70% of Chinese received a secondary education and only 13% received a tertiary education.

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part I – China at a glance Top 10 Universities  University of Beijing  Tsinghua University  University of Nanjing  University of Fudan (Shanghai)  University of Zhejiang (Hangzhou)  University of Nankai (Tianjin)  Xian Jiaotong University  Shanghai Jiaotong University  Chinese University of Science and Technology (Hefei)  University of Zhongshan (Guangzhou) ii – Economic Overview (Education)

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part II – SPI’s Beijing Representative Office i – Chief Representative ii – Mission and Objectives iii - Typology of Services iv - Actions and Activities v - Key Partner Organisations

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun SPI’s Beijing Representative Office began its activities in Its major activities include: offering consulting services to SPI China’s clients, conducting EU projects in China and providing market-entry service to clients who are interested in developing business in China. Part II – SPI’s Beijing Representative Office

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Chief Representative Part II – SPI’s Beijing Representative Office  Mr. Deng Xiaojun is responsible for representing SPI in the Chinese market. He has developed expertise in a range of activities, including information technology, innovation and technology transfer. Previous to SPI, Mr. Xiaojun worked for several years in the IT sector.  Mr. Xiaojun has a Bachelors degree in Electronic Engineering from the Beijing Transportation & Communication University, and an MBA degree from the School of Economics & Management of Tsinghua University in Beijing.

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part II – SPI’s Beijing Representative Office

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Beijing is the capital of the People's Republic of China, with 10.6 million permanent residents. The city is the center of politics, culture, and international exchanges, as well as one of the largest metropolis of industry, finance and trade. Beijing has a semi-humid climate with clearly cut seasons. Spring and autumn are short while winter and summer are long. The average annual temperature amounts to 13 degrees Celsius. Part II – SPI’s Beijing Representative Office

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun A modern city Part II – SPI’s Beijing Representative Office

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun View for traveler Summer Palace Tian’anmen Square Great Wall TiantanImperial Palace Part II – SPI’s Beijing Representative Office

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part II – SPI’s Beijing Representative Office

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part II – SPI’s Beijing Representative Office

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part II – SPI’s Beijing Representative Office

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part II – SPI’s Beijing Representative Office

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part II – SPI’s Beijing Representative Office

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part II – SPI’s Beijing Representative Office

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun SPI China has as its mission the offering of high quality consulting services to establish or increase the effectiveness of international activities and improve the overall competitiveness of:  Portuguese companies that want to enter or sustain their presence in the Chinese market  Chinese companies that want to approach the US and EU markets  Chinese government agencies and other organizations that want to develop their links with US and European counterparts  International donor organisations supporting Chinese development programs  Portuguese higher education institutions that want to develop their relations with China ii - Mission and Objectives Part II – SPI’s Beijing Representative Office SPI China established in 1999: Shanghai Beijing

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun  Support the development of business opportunities in China  Represent Portuguese companies in the Chinese market  Organize missions to China  Suppport Chinese companies in approaching the US market  Organize BioGMP seminars in China iii - Typology of Services  Present proposals to FP6 and other National and International Programmes Part II – SPI’s Beijing Representative Office

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun  Office location: Tsinghua University Central Business District: January 2005  Mr. Deng Xiaojun became SPI’s Beijing Chief Representative: September 14th 2005  Sara Medina and Miguel Taborda: bridge with SPI China Office iv - Actions and Activities  Submission of several proposals involving China:  ChinaFoodNet – Optimising Safe and High Quality Food Supply Chains between Europe and China - February 2005  EuroChinaFoodNet – Optimising Safe and High Quality Food Supply Chains between Europe and China - September 2005  ChinaLink – Establishment of Emerging IST Communities on an International Level with China - September 2005 Part II – SPI’s Beijing Representative Office

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun  ChinaFrontier – China’s Realities from a Frontier Research Perspective (FP6 – NEST): New projects: iv - Actions and Activities  ChinaAgroPlat – Promoting new R&D partnerships and identifying means of implementing and supporting successful cross-border agro-food R&D collaborations between Portugal and China (POCI).  EuroChinaFoodNet – Optimising Safe and High Quality Food Supply Chains between Europe and China (POSC). Part II – SPI’s Beijing Representative Office  ChinaFrontier – China’s Realities from a Frontier Research Perspective (POSC).

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun v - Key Partner Organisations  EUCCC – European Union Chamber of Commerce in China  China National Food Industry (Group) Corporation  Chinese Academy of International Trade and Economic Cooperation – Ministry of Commerce (CAITEC)  Torch High Technology Industry Development Center, MOST  Tsinghua University Part II – SPI’s Beijing Representative Office  Beijing Unirule Institute of Economics  China Centre for Business Cooperation and Coordination (CCBCC)  Shanghai Jiaotong University  Beijing Huabang Food Co., Ltd. (BHF)

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun  The Program promotes the commercialization, industrialization and internationalization of high and new technology in conformity with the orientation of the market economy. Part II – SPI’s Beijing Representative Office Torch High Technology Industry Development Center  TORCH, mandated by the Ministry of Science and Technology, is in charge of the administration of the Torch Program.  The Torch Program is a national guiding program designed to develop new and high technology industries in China. The program was approved by the State Council and was implemented by the Ministry of Science and Technology. v - Key Partner Organisations

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun  GLORAD’s mission is to advance progress in science and management in the areas of international R&D management, global technology, and transnational innovation.  Principal research areas: R&D and innovation in China Transnational R&D management and organization Global innovation, incubation, and technology-based entrepreneurship Part II – SPI’s Beijing Representative Office  Research Center located at Tsinghua University, P.R. China. Research Center for Global R&D Management (GLORAD) v- Key Partner Organisations

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun  NFIPC is linking enterprises, institutions, and governments in food industry sectors in China. Part II – SPI’s Beijing Representative Office China National Food Industry (Group) Corporation (CNFIC)  One of the largest Chinese state owned food industry corporations.  National Food Industry Promotion Centre (NFIPC) belongs to the CNFIC, and is supported by the Ministry of Science and Technology.  NFIPC and CNFIC provide consulting services in Chinese food industry sector, helping SMEs increase productivity and developing in overseas market. v - Key Partner Organisations

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun  Environmental Impact of Trade Liberalization in China: A Case Study on Agricultural Products.  Production and Marketing of Green Food Products in China after Entrance into WTO. Part II – SPI’s Beijing Representative Office Chinese Academy of International Trade and Economic Cooperation – Ministry of Commerce (CAITEC)  CAITEC is a think-tank of the Ministry of Commerce, engaging in research in the fields of macro and micro economy, trade, investment.  CAITEC has been involved in different food safety related projects: v - Key Partner Organisations

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part II – SPI’s Beijing Representative Office Beijing Unirule Institute of Economics (UIE)  Unirule Institute of Economics was founded in July 1993 and aims at promoting, supporting and also conducting high quality research in economics and other social sciences  Since its foundation, Unirule has been unequivocally pursuing the practical approach in its research, as opposed to being purely theoretical.  Unirule provides research in public utilities for state and local governments. v - Key Partner Organisations

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun  Since 2001, it has been listed as Pivot Head Enterprise of Agro- Industrialization in Beijing. Part II – SPI’s Beijing Representative Office Beijing Huabang Food Co., Ltd. (BHF)  Founded in April of 1995, Beijing Huabang Food Co., Ltd. is a large enterprise specializing in the production of fruit juice, with an annual production capacity of 100,000 ton.  The first food and beverage company in China, which has simultaneously applied and obtained ISO9001: 2000, ISO14001 and HACCP certificates. v - Key Partner Organisations

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part III – Project Examples i – ChinaParts ii – ChinaFrontier iii - ChinaAgroPlat iv - Approach Strategies to the Chinese Market

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun The focus of the project is to:  Enhance S&T co-operation with China within the Asia-Europe Meeting (ASEM) framework;  Exchange experiences in the S&T field;  Build bridges between the European Union and China's agro-food processing sectors. Part III – Project Examples i - ChinaParts (

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Long Term impact of ChinaParts:  Providing Chinese companies with a clear path to improve product quality to meet the import requirements of the European Union;  Establishing stronger networks within the food chain;  Strengthening synergies between European and Chinese agro-food stakeholders. Part III – Project Examples i - ChinaParts (

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Warsaw Agricultural University Poland SPIPortugal China National Food Industry (Group) Corp. P. R. China Universidad Politecnica de Valencia Spain Beijing Huabang Food Co. Ltd. P. R. China Unilever ENSIAFrance Campden & Chorleywood Food Research Association United Kingdom University of Milan Italy China Agricultural University P. R. China Ministry of Agriculture P. R. China Part III – Project Examples i - ChinaParts (

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part III – Project Examples

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun ii - ChinaFrontier China’s Realities from a Frontier Research Perspective Part III – Project Examples Frontier research refers to research that goes beyond the boundaries of current ideas – “speculative research”.  Objective: To research China’s science & technology realities as they pertain to the frontiers of research.  Project Partner: TORCH High Technology Industry Development Center  Subcontracted services: Research Center for Global R&D Management

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part III – Project Examples Specific Objectives :  Identify relevant Chinese S&T entities and conduct interviews with leading Chinese stakeholders  Map Chinese policies and programmes established to foster research activities that represent the frontiers of research  Establish a basis for the European Research community to monitor research activities in China that go beyond the boundaries of current ideas  Disseminate findings to NEST representatives, relevant DG Research representatives and the European Research community to encourage cross-border networking Stronger relationship between the European and Chinese research communities ii - ChinaFrontier China’s Realities from a Frontier Research Perspective

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Part III – Project Examples Dissemination Activities:  Project Brochure  Project Website  Network of Key Chinese Stakeholders Database  China Project Workshop  European Project Workshop  ing Activities  Project Seminar ii - ChinaFrontier China’s Realities from a Frontier Research Perspective

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun iii - ChinaAgroPlat  Direct result of a successful cooperation started with an international project entitled ChinaParts, which was coordinated by SPI  Build bridges between the Portuguese and the Chinese agro-food sectors, while further developing existing scientific and technological knowledge Part III – Project Examples

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun iii- ChinaAgroPlat  Establish a cross-border agro-food R&D platform strategy, aimed at promoting new R&D partnerships and identifying means of implementing and supporting successful cross-border agro-food R&D collaborations between Portugal and China; Part III – Project Examples  Planned activities are structured into the following workpackages : Project Workshop in Portugal; R&D Platform Communication Structure; Support to the Establishment of R&D Cross-Border Collaborations; Portuguese Delegation Mission and International Workshop in China; Cross-Border Agro-Food R&D Platform Strategy.

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun iv - Approach Strategies to the Chinese Market  Assist clients interested in initiating or strengthening international activities and establish a presence in foreign markets;  Support clients in reaching new international markets, partners or collaborators, supporting their business needs;  Perform comprehensive market studies that provide the necessary information for clients to make market decisions with a high degree of confidence; Part III – Project Examples

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun iv - Approach Strategies to the Chinese Market  Identification of Chinese cork stoppers buyers and establishment of the first contact for future cooperation;  Organization of a visit to China, allowing the Portuguese company to contact directly the potential Chinese buyers;  Provided all the support and accompany the Portuguese company to the meetings with the potential Chinese buyers. Support promotion and commercialization of cork products in China Part III – Project Examples

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Approach Strategies to the Chinese Market Part III – Project Examples

An Overview of the Chinese Market Sara Medina, Miguel Taborda and Deng Xiaojun Porto - Portugal Edificio “Les Palaces” Rua Júlio Dinis, no. 242, Porto, PORTUGAL Tel: Fax: TagusPark Núcleo Central, Oeiras, PORTUGAL Tel: Fax: Beijing – P.R.China China Garments Mansion, No. 915 Jianguo Rd., ChaoYang Dist. Beijing CHINA California - USA 2102 Business Center Drive, Suite 220E Irvine, CA USA Tel: Fax: Maryland - USA 5523 Research Park Drive, Suite 325 Baltimore, MD | USA Tel: Fax: Lisbon - Portugal