EuroBiz Magazine, July 2008
|Magazines - EuroBiz Magazine|
|July 21 2008|
EuroBiz magazine is the internal journal of the European Union Chamber of Commerce in China, published monthly for Chamber members by SinoMedia Ltd. Distributed to over 20,000 China-based company decision-makers.
Dear Readers, The Sichuan earthquake was a devastating natural disaster. As many as 69,000 people died. The earthquake left 5 million people homeless. The Ministry of Civil Affairs reports that 5.4 million buildings were destroyed, and 21 million damaged. In contrast to the terrible impact of the earthquake in several counties of Sichuan and neighbouring provinces, the macroeconomic impact will be slight. Larger centres of population were to a great extent spared, and the greatest physical damage was in areas that are not major contributors to China’s industrial or agricultural output. The epicentre was in Wenchuan County, which has a population of 110,000 and is 160km from Chengdu, the capital of Sichuan.
In 2007, Wenchuan and Sichuan represented about 0.01 percent and 4.2 percent of China’s GDP, respectively. Chongqing, with a population of 28 million, lies about 350km from the epicentre, but has not reported any significant damage. The power supply in affected areas has largely been restored and the impact on energy production and mining was low. Our 50 member companies in Chengdu reported no fatalities amongst staff and their families.
The Chinese government has mobilised on a massive scale in response to the disaster. The scale of non-governmental involvement has been particularly striking, and the personal responses have been moving. As the relief actions carry on, members of the European Chamber are continuing their efforts to help the Sichuan earthquake victims. More than 200 European companies have so far donated cash and goods with a total value of around RMB1 billion (€94 million, US$145 million) to earthquake relief.
There have been reports about companies reviewing their investment in Sichuan and Chongqing in the wake of the earthquake. It may be prudent to conduct thorough due diligence of possible investment locations, including seismic history. But Chongqing and Sichuan should remain firmly on the European investment map. Earthquake-affected regions of developed economies such as Japan and the US have nonetheless remained economic powerhouses.
The European Chamber has started preparations for a major investment forum in the region in late October this year. It would be a mistake to regard this part of China as a backwater. Overall, inland provinces are growing faster, while the growth rate is peaking in coastal China. Restructuring the economy to encourage a shift to more value-added service and logistic operations will revitalise western China’s economy. With more than 60 percent of its population still residing on farms, agriculture is a major sector of the Sichuan and Chongqing economy. However, its massive gas reserves, combined with highly cost-competitive skilled labour, are helping lift Sichuan and Chongqing up the value chain.
Literally meaning “four rivers”, Sichuan has leveraged its abundant water resources into hydropower. Meanwhile, Chengdu and Chongqing, with a combined population of 120 million, are witnessing annual growth in property markets of over 20 percent, bringing them into the top 10 property markets in the country. Chengdu is becoming a shopping magnet for regional consumers. Combined annual retail sales for Chengdu and Chongqing are estimated at close to Beijing’s total.
“It is easier to climb to heaven than take the Sichuan Road,” said Li Bai, China’s most famous poet, a reference to the remoteness of the Sichuan-Tibet Plateau. Yet, this market with a population of one-quarter of the EU’s is worth the trip in October. Our help with disaster relief was well-received in Sichuan and in Beijing. Yet the long-term wellbeing of the people of this region depends above all on investment, on jobs and on confidence in their future prosperity. We should show that European companies will contribute even more to the economic development of such a promising region.
PDF format, 11.6MB, 68Pages.
The Chamber was formed with the support of the EU Delegation in Beijing on 19th October 2000. It is a non-profit membership fee-based organisation with offices in Beijing, Shanghai and Nanjing, Guangzhou, Tianjin and Chengdu.
Today, the Chamber is the leading exponent of European business interests in China creating a continuously growing business forum. It comprises of over1090 members, from global companies to small-medium enterprises. Its mission is to serve member companies by being the Voice of European Business in China.
It is built around a core of some 30 Working Groups, which meet regularly to discuss business issues in their respective industries. The Working Groups contribute to an annual Position Paper on Business in China, which the Chamber presents to the Chinese and European governments.
The Chamber is managed by a National Executive Committee made up of representatives from various European Member States. The Supervisory Board and the Advisory Council provide strategic input for the National Executive Committee. Each Chapter is managed at the local level by a Local Board which reports directly to the National Executive Committee.
Executive Committee members, the Supervisory Board and Local Boards are elected at the Spring Annual General Meeting.
|Last Updated ( July 21 2008 )|
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