China’s economy is slowing down. Financial reports raise concerns that for 5 consecutive months the manufacturing sector shrunk in December 2015. On the other hand the Chinese government has just committed $60 billion to Africa after the FOCAC summit in 2015. State owned enterprises (SOE) companies continue to benefit from high level government introductions. President Xi Jinping and Premier Li Keqiang meet with their counterparts and usually sign billions of USD worth of trade agreements and more and more loans are signed.
How does this benefit the small to medium enterprises (SME) company in China? How does it help the family business in Asia to grow and prosper? What is the tangible benefit of the New Silk Road or “One Belt, One Road” initiative for entrepreneurs?
None. There is no direct, tangible benefit gained from these unless you are a State-owned in China because these companies are first to be included in the planning and execution of such major projects.
The Monkey year begins on February 8, 2016. Chinese New Year’s Eve is the second new Moon after Winter Solstice.
The Way of the Monkey
The year of the Monkey is ideal for 10x growth in sales for small businesses in China and Africa. This is the time to shake things up, create change, and innovate a new path. The Monkey’s enthusiast energy allows him to take bold risks that are rewarded and anything can happen. Even the most ambitious plans can succeed this year. There will be more than enough action and opportunity to keep your team busy. In the Monkey year, it’s okay to just make it up as you go along. Just don’t be gullible and trust the wrong people, or wily Monkey will take all the peanuts and leave you only shells.
Since 2013 I interviewed about 50 Chinese business owners in Ningbo, Hangzhou and Shanghai about their customers, their growth and their goals. Most of them are focussed on this business model developed over the last 10-20 years:
- Manufacture products
- Export them to the US and Europe
- Rely on Alibaba and similar “Made in China” B2B websites for new sales
New emerging shifts are taking place
- OEM manufacturers are starting to create their own brands
- Some are looking towards BRICs countries like Brazil and all Russian-speaking countries, which include Central Asia, which is in the direct path of the new Silk Road.
- Some are looking to import products for the growing domestic consumption
Even with all the turmoil of the Shanghai stock market in 2015, the domestic consumer market is indeed growing if we are to believe Alibaba founder, Jack Ma. At the FutureChina Forum in Singapore, former Worldbank Chief economist, Justin Yify Lin, said it’s necessary for China to move from investment led growth to consumption led growth.
The African Opportunity
According to Bloomberg the free-trade agreement that was signed in June 2015 between the East African Communities (EAC), Common Market for Eastern and Southern Africa (COMESA) and the South African Development Community (SADC) offers market access to 600 million consumers.
Kenya’s impressive technological and scientific achievements recently attracted significant investments from venture capitalists and some of the world’s leading multinational corporations, including Google, IBM, Facebook, Chase Bank and General Electric. In the past three years, General Electric’s revenue from Africa doubled to more than $3 billion.
Among the fastest growing economies worldwide in 2015 were Kenya and Nigeria. Even though South Africa continues to be on the brink of recession, it remains the first choice for Chinese companies to set-up their African operations.
Recently I conducted an impromptu workshop with DongGuan RiKang Industrial, a manufacturer of plastic packaging machinery between Shenzhen and Guangzhou. The sales team is almost entirely made up of graduates, and so I decided to introduce the BRICS countries as a sales pipeline outside North America/Europe. In the end I focussed on introducing the high growth countries in East and Southern Africa, as well as using LinkedIn as a tool to do sales prospecting.
This seminar is available to any Chinese company in English and Mandarin.