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Competing in the the New China Russell A. Meade CEO China Business Network.

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Presentation on theme: "Competing in the the New China Russell A. Meade CEO China Business Network."— Presentation transcript:

1 Competing in the the New China Russell A. Meade CEO China Business Network

2 CBN - Who We Are

3 Founded in China 1978 US-owned Shanghai-based Engineering Company We manage sales, marketing and manufacturing operations for western manufacturers

4 CBN - Partner Operations

5 Identify, qualify, due diligence on Chinese manufacturing partners Manage day-to-day operations of manufacturing projects Direct sales and marketing to China-based Western & Global OEM’s and major Chinese customers Assist in salvaging failed or underperforming China projects Perform pre-investment planning for large-scale manufacturing, sales and distribution operations Provide on-site Process and Quality Control

6 CBN - How we do it

7 English-speaking project managers and engineers “Boots-on-the-ground” Strong relations with Western-Global OEM’s in China Develop long-term mutually beneficial partnerships between Western and Chinese manufacturers Develop non-capital intensive SMA’s

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10 China: Economic Overview

11 US - China GDP 1960-2010 Source: World Bank 2011

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13 China: New Economy Infrastructure Government Growth Plans RMB Inflation Labor Costs Manufacturing Moving Inland

14 Everything is NOT cheaper in China

15 Everything is NOT cheaper in China Food: McD, KFC, Starbucks World’s largest luxury consumer goods market Real Estate Material Increases-Fluctuations

16 China: Gear Industry

17 Chinese Gear Manufacturers: At-a-glance Over 1000 manufacturers 55 with annual revenues over $16m 2005 - world 4th largest gear producer 2009 - world 3rd largest gear producer 2010 - world 2nd largest gear producer 2010 - world’s largest automotive manufacturer Source: China Gear Manufacturers Association

18 Motor Vehicle Production by Country

19 Chinese Gear Manufacturers: - numerous manufacturers Local Gear Industry: - generally low-grade product and technology - targets customers with low-grade requirements Majority of high-grade gears are imported into China - import value and size increases dramatically each year - only a small % of Chinese manufacturers compete in the high-grade segment of the market Source: China Gear Manufacturers Association

20 Chinese Gear Manufacturers: By region 6.6% 12.4% 41.9% 19.6% 16.5% 3%

21 Chinese Gear Manufacturers: 10 fastest growing industry segments 1. Automotive: Annual growth 25%. 2. Wind energy: estimated $2bn by 2020 3. Nuclear energy: 40 Mkw plants next 10 years 4. High-speed rail: 300 new train units per year 5. Coal mining: equipment for 3.8 bn tons output 6. Heavy-duty agricultural equipment 7. Engineering equipment 8. Large metallurgical machinery 9. Advanced CNC machinery 10. Chemical and oil refining equipment Source: China Gear Manufacturers Association

22 Chinese Gear Revenues: (including import volume) Source: China Gear Manufacturers Association

23 Chinese Gear Revenues: (including import volume) Source: China Gear Manufacturers Association

24 Chinese Gear Revenues: Imports vs. Exports Source: China Gear Manufacturers Association

25 Chinese Gear Revenues: % Imports by country 2008 vs. 2010

26 Chinese Gear Revenues: Auto & Industrial - Imports vs. Exports Exports Imports

27 Chinese Gear Exports: (by country destination) Source: China Gear Manufacturers Association

28 Chinese Gear Manufacturers: % Analysis by ownership Source: China Gear Manufacturers Association

29 Chinese Gear Manufacturers: CGMA Gear Industry 5 Year Growth Projections Source: China Gear Manufacturers Association

30 Chinese Market Challenges:

31 Communications Working with the RIGHT partners Quality Control Intellectual Property Negotiating “Best” Pricing Personnel Turnover

32 Chinese Market Opportunities: Selling Into China - “Boots-on-the-ground” Key Success Factors - Contingencies - A long-term strategy Price Advantage exporting to the West? Why Your Customers Need You More in China Than in the US

33 CBN China Manufacturing Report -Every 2 Weeks -Key Economic Indicators: Shipping vs. Currency -Weekly Material Cost Updates -RSS newsfeed - Article Archive

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37 Q & A


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