West China: Why FDI Should Consider the Region

Op-Ed Commentary: Chris Devonshire-Ellis

Sept. 2 – Following the conclusion of our series of articles about investing in China’s western regions, I believe that foreign investors would do well to look at these emerging markets in China. As sales markets in the United States and Europe remain stagnant following the global recession and growth remains slow, China’s western regions offer a way out. For sure, they are emerging markets in their own right, and possess their own pricing and cultural sensitivities. Yet they also represent a huge potential market in terms of volumes. Read the rest of this entry »

New Special Economic Zone in Yili, Near Kazakhstan Border

Sept. 1 – China has ratified a new special economic zone in Yili, in northwestern Xinjiang near the border with Kazakhstan. The area is already China’s only Kazakh autonomous prefecture, populated mainly by ethnic Kazakhs. The prefecture has a total population of four million with about 500,000 living in the city of Yining, also known as Ghulja. The 200-square-kilometer zone will transform the nearby border port at Khorgas into a center for trade with Kazakhstan, including container transportation, processing facilities and the promotion of tourism in both Kazakhstan and Xinjiang. Read the rest of this entry »

Investing in Yunnan: ASEAN, Adventure Tourism, Myanmar and India’s Elephant in the Backyard

By Chris Devonshire-Ellis

Aug. 31 – Yunnan has always been an enigmatic province; encompassing four major Chinese minorities influenced by Vietnam, India, Burma and Tibet, and home to the very eastern end of the Himalayan ranges, it is never a simple region to categorize.

However, due to booming trade with the Association of Southeast Asian Nations (ASEAN) free trade area, the central government has begun to pay more attention to China’s most southwest province. The priority has been upgrading Yunnan’s transport links internationally in order to connect it to countries across the ASEAN region and to its provincial neighbors within China.

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Ningxia to Host China-Arab States Trade Forum

Aug. 30 – Yinchuan, the capital city of Ningxia, will host the first China-Arab Trade Forum in a bid to further align itself with Arabic investment in hopes of securing petro-dollar investments.

Yinchuan is an ancient Silk Road city with a strong population of Muslims, many of them Arabic and Persian descendants of early Silk Road travelers. The Bank of Ningxia launched an Islamic services unit last December, which applies Shariah law to lending practices. Since then, the unit has conducted more than RMB70 million worth of business, demonstrating that there is a market for such services. Read the rest of this entry »

Qinghai – Agriculture, Eco-Tourism, Tibet…And India?

By Chris Devonshire-Ellis

Aug. 27 – In my quest several years ago to obtain clients for Dezan Shira & Associates in every single province in China, it was obvious from the outset that in order to speak sensibly about each location, I would need to travel there.

In many of the provinces, some of them far flung, I also needed to solve the not insignificant problem of generating clients that were actually interested in investing in the western regions – a subject early issues of China Briefing magazine would solve as we featured, monthly, cities that were completely off the radar some 10 to 15 years ago. That combination of good old fashioned exploration and our marketing and intelligence facilities worked, however, and we began to generate clients who were amongst some of the earliest foreign investors in the western regions. Read the rest of this entry »

Chinese Exporters Owed US$150 Billion

Aug. 27 – While it is usually stories of shoddy goods and late deliveries that typically crop up in English language media concerning Chinese exports, another side to the story has emerged with the China Chamber of International Commerce stating that Chinese exporters are collectively owed some US$150 billion in unpaid bills from overseas clients.

The global downturn, and a weak recovery has lead to smaller Chinese manufacturers often exposing themselves to credit risks in order to generate much needed cash flow in a shrinking market. The result has been an explosion in receivables with average credit terms increasing by 150 percent. Overseas buyers also have the advantage of knowing that it would be costly, time consuming and culturally awkward for Chinese manufacturers to litigate. Read the rest of this entry »

Shaanxi: China’s National Science and Engineering Development Hub

By Chris Devonshire-Ellis and Fabian Knopf

Aug. 24 – Resource-rich Shaanxi has seen significant developments in the past few years, as this most traditional of Chinese provinces enters a new century full of hope, promise and a gleaming makeover of its capital city, Xi’an.

Like the most attractive of China’s magnets for investment, Shaanxi can rely on more than one component part for attracting development and creating opportunities. Coal supplies are plentiful and of a high quality, while the province also has large reserves of natural gas and oil. While that does give it a more hardened feel to life here, the province also boasts a rich cultural history, and that, coupled with excellence in engineering academia, gives Shaanxi a fairly unique character not found elsewhere in China. From the historical perspective, Shaanxi is considered one of the cradles of Chinese civilization. Read the rest of this entry »

Guangxi: China’s Direct Link to Southeast Asia

By Chris Devonshire-Ellis

Aug. 23 – Guangxi, in China’s southwest, has the geographic advantage of being in close proximity to other Southeast Asian countries, the world class financial center of Hong Kong, and Guangdong Province, China’s wealthiest and its largest manufacturing base. Bordering Vietnam to the west, Guangxi is connected to Hong Kong and Macau by the Xi River, and is China’s only western region with open sea port facilities. The government has placed emphasis on the importance of the province and its development in the coming years and even more so when it comes to future China-ASEAN cooperation. Trade agreements signed between China and ASEAN, as well as with many ASEAN member countries directly, including the scrapping of inter-regional tariffs, are in the process of re-energizing Southeast Asia and massively increasing trade. Guangxi is set to massively benefit from this. Read the rest of this entry »

China Encourages Further Use of Foreign Capital

Aug. 23 – China’s State Council has recently approved proposals aimed at further liberalizing the use of foreign capital.

Guobanhan [2010] No. 128, issued on August 18, states that China should optimize the structure of foreign capital. On one hand, China will encourage foreign investors to invest in industries such as high-end manufacturing, high-tech, modern service, new energy and energy saving fields, while strictly limiting the low level and overcapacity projects. On the other hand, multinational companies are encouraged to set up regional headquarters, R&D centers, procurement centers, financial management centers, settlement centers, cost and profit accounting centers and other functional agencies in China. Read the rest of this entry »

Is China Growing Too Big?

Op/Ed Commentary: Chris Devonshire-Ellis

Aug. 23 – For many years now, as I’ve traveled China on business, I’ve been skeptical of the GDP growth figures. From Shenzhen to Changchun and from Wuhan to Kashgar, via Chongqing, buildings have been going up, rather like mushrooms after a rain storm, as signs of the new prosperity and growth of China.

In fact, every single Chinese city, large and small, seems to have acres of new developments – but all lying empty. The giveaway is a quick evening tour of residential and business blocks. If no lights are on, why were they built? Entire development zones with no businesses. Blocks upon blocks of high rise apartments for tens of thousands of families – all unused, empty shells instead of the dream homes the advertising hoardings proclaim they are. Read the rest of this entry »

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