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Entering the Chinese market: more challenges, more rewards

Posted by Tyler Kretzschmar
Tyler Kretzschmar
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on Monday, 22 April 2013
in Business in China

The global financial crisis and the fast growing Chinese consumer market, as well as the abundant wealth available for investment in China today, amplify the growing need to penetrate and operate in the Chinese market. It is no secret that China offers numerous opportunities to expand a business; however what remains a mystery for many small and medium sized enterprises (SMEs) is how to effectively address the challenges of entering and operating in China.

One such challenge is the growing market itself, giving way to an increasing number of competitive local companies. The 12th Five Year Plan that laid the roadmap for China’s social and economic development for 2011-2015 shifted the focus of the Chinese policy makers to the strengthening of China’s dynamic new homegrown companies, referred to in China as Domestic Private Enterprises (DPE), both home and abroad. In 2010, 60 percent of China’s GDP came from DPEs – this is in striking contrast to the 38 percent they contributed in 2005. The fact that GDP is expected to quadruple itself between 2007-2025 also gives perspective into the business threats facing foreign companies in China and in home markets in the next few years.

Furthermore, the 12th Five Year Plan’s goal to increase the overall quality of life for Chinese citizens is creating higher operating costs in some sectors. One example is minimum wage increases (up to 13 percent each year), translating into more costly production in many of the developed manufacturing hubs along the coast. Another is China’s goal of a 40 percent reduction in carbon-dioxide emissions per unit of GDP by 2020, constituting elevated environmental taxes for manufacturers. 

Chinese delegatie uit Jintan-Changzhou organiseert missie naar Nederland

Posted by Hulya Kaya
Hulya Kaya
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on Wednesday, 20 February 2013
in Next Step China

Jintan Economic Development Zone zal van 4 tot en met 6 maart een missie naar Nederland organiseren.  De missie, gericht op de sectoren High-Tech Manufacturing, Photovoltaic energy en New material, is bedoeld om zakelijke contacten te leggen met Nederlandse bedrijven die op zoek zijn naar productie mogelijkheden in China, investering en ondersteuning bij het vinden van de juiste lokale partner.

Jintan, onder de jurisdictie van Changzhou, ligt in het grensgebied van de stedelijke cirkel van Suzhou-Wuxi-Changzhou en Nanjing. Jintan ligt op een afstand van respectievelijk 105 km en 220 km van Nanjing en Shanghai. De stad heeft een zuster relatie met Cuijk, waar tevens een van hun gevestigde bedrijven, Teeuwissen Group vandaan komt. Andere Europese bedrijven zoals de Duitse EMAG Group en Pilz Industrial Automation hebben zich in Jintan gevestigd.

De missie zal verschillende doelstellingen hebben, namelijk het aantrekken van investeringen naar Jintan Economic Development Zone, maar daarnaast ook het aanbieden van matchmaking via Jintan’s uitgebreid netwerk voor bedrijven die op zoek zijn naar een lokale partner in de High tech, Photovoltaic energy en New material industry. Als business kansen zich voordoen zal Jintan tevens bereid zijn Investeringen te doen in geavanceerde Technologische bedrijven in Nederland die de stap naar China willen maken en hiervoor op zoek zijn naar kapitaal.

Bent u geïnteresseerd in een ontmoeting met de delegatie om zakelijke activiteiten in Jintan-Changzhou te verkennen, neemt u  dan contact op en stuur een e-mail naar Hulya Kaya, This e-mail address is being protected from spambots. You need JavaScript enabled to view it.  

 

 

The Israeli robotics industry is aiming to the Chinese Market

Posted by Lily Li
Lily Li
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on Tuesday, 19 February 2013
in Business in China

On January 7, 2013, Mr. Zvi Shalgo the chairman of the Israeli Chamber of Commerce in Shanghai and the CEO of PTL Group was quoted during a special meeting organized by the Israeli Robotics Association as saying “Foxconn is not alone! The giant Chinese company is intending to replace its workforce by a million robots by the end of 2014. “This reflects a growing trend in China: large local companies are now investing in robotics and automation, because of the dramatic increase in wages."

He said: "Since the new regulation of labor laws in China, which led to a radical increase in salaries, many enterprises have collapsed. The Chinese industry sees robots as a solution to the diminishing workforce problem. Due to the policy of 'one child' in China, the working age population shrinks, which will naturally lose the demographic advantage. " 

Mr. Zvi Shalgo, who introduced the principles of management in China, which are very different from those found in any other market, said "Your initiative and technology is the only competitive power you have in China, so, do not share it with foreign partners." PTL Group of Companies has developed over the years under a model allowing Israeli companies to enjoy a risk reduction investment along with responsible growth in China, without giving their technology to a Chinese partner. On the other side, the partnership with the local government which is willing to spend on benefits and incentives (millions of dollars) to attract industries with unique technology does not require a technological partnership in return. This option therefore is recommended.

Another speaker was Dror Marom, CEO of ACS (Motion Control) who has been operating in China for two years. The company develops motion control systems for the electronics, semiconductor, medical scanners, and digital printing market. Until 2010, ACS had two distributors in China, but given its results, the company realized that only a local presence would achieve a successful outcome. The company now operates in China through PTL Group in order to save the investment required in establishing its own subsidiary in China. PTL Group provides a total management shell including recruitment, handling administrative matters and personnel, finance and office management, so that local workers recruited are only concerned with managing sales. Marom also mentioned, that competition in China is tough, so "as an Israeli, your advantage is the unique technology you have, which should be kept."

PTL Group wins again at ATTA award: The award for “Transformation of 2012”

Posted by Lily Li
Lily Li
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on Friday, 30 November 2012
in Business in China

The ATTA Award ceremony was held in Hong Kong, on Friday, November 23rd, and PTL Group was invited to submit a case study for consideration. We are happy to announce that we were awarded with a prize for the second year running:
Transformation of 2012 - PTL Group Ltd for the business change and transformation of a foreign owned China joint venture.”

PTL Group took a unique approach in our presentation to the award committee, by presenting a number of transformation cases in order to change the perception of how to obtain turnaround projects. Rather than looking for companies with severe issues that need Turnaround, members should be offering preventative methods, by identifying issues for most companies before they reach the dire stages, and then offering steady transformation processes to improve their operations.

We aimed to highlight a number of selected projects within the last year that came out of performing soft audits, and show that this methodology could be very beneficial for all in the association. China is more about transformation rather than turnaround. Transformation is needed constantly – if companies stop transforming there's a chance they'll collapse. When we identify problems at an early stage, we encourage  the managers to adopt or create change in the company.