Archive for May, 2012

Market Report of China’s Fine Chemical Industry

Posted on May 31, 2012  by Xixi  in Export to China, Industry Report   No Comments »
Market Report of China’s Fine Chemical Industry

In recent years, China’s fine chemical industry witnessed a rapid development. The base and the scale of chemical industry park keeps on expanding, and the foreign capital is entering the Chinese market at an ever-increasing speed. Over the “Eleventh Five-Year” period, annual growth rate of sales revenue and gross profit of China’s fine chemical industry maintained at 15%, ushering in a new stage characterized by comprehensive, multi-level and wide-ranging liberalization, competition and development. And in the “Twelfth Five-Year” period, with the accelerated pace of China’s economic transformation, fine chemical industry is also facing a structural adjustment and product innovation. It is expected that by 2015, China’s fine chemical production value will reach 1.6 trillion Yuan, more than doubled in 2008. Fine chemical products’ self-sufficiency rate will amount to 80% or more, gradually making China embark on the road of becoming one of the world’s major fine chemical powers.

Large yet not Strong, the Industry Needs Urgent Transition

Ever since the 1990s, along with the of petrochemical industry’s development toward deep-processing and the booming of high-tech, fine chemical industry in the world witnesses an unprecedented rapid development, its growth rate significantly higher than the entire chemical industry. In recent years, total sales of chemical products worldwide approximately amount to $ 1.5 trillion, among which fine chemicals and specialty chemicals account for $ 380 billion, with an average annual growth rate of 5% to 6%, which is 2-3 percentage points higher than the chemical industry. According to related statistics, at present, the total varieties of the world’s fine chemicals amount to more than 100,000 kinds. At present, the fine chemical industry is very developed in the United States, Western Europe and Japan, representing the development standard of fine chemicals in today’s world. Among them, the U.S. fine chemicals annual sales is approximately $ 125 billion, ranking first in the world; Coupled with Europe and Japan’s fine chemicals, with annual sales of 100 billion U.S. dollars and $ 60 billion respectively, the total annual sales of the three countries account for more than 75% of the world’s total sales. And their application of sophisticated technology has reached 60% to 70%.

After years of development, China’s fine chemical has become an important independent branch of China’s chemical industry and new economic growth point, which has formed into 20 to 25 categories, among which the pesticides, dyes, paints, reagents, photographic materials, and chemical medicine industry has experienced a large-scale development. Besides, the industry of feed additives, food additives, industrial surfactants, water treatment chemicals, paper chemicals, leather chemicals, oilfield chemicals, electronic chemicals, bio-chemical, functional polymer and others are also beginning to take shape.

During the “Eleventh Five-Year” period, China listed the fine chemical industry as one of the six areas enjoying prioritized development, and makes the following sectors as major field of development during the 11th Five-Year period: functional coatings and waterborne coatings, dyes, new varieties of its industrialization, an important chemical intermediate green synthesis technology and new varieties, electronic chemicals, high performance water treatment chemicals, paper chemicals, oilfield chemicals, functional food additives, high-performance environment-friendly flame retardants, surfactants, high-performance rubber and plastic additives, which further broadens the application field of fine chemical products. And the products have developed into a sophisticated, complex, comprehensive and functional direction.

According to incomplete survey, at present in China there are more than 8,000 fine chemical production enterprises. The production of fine chemical products amounted to more than 30,000 kinds, and the annual production of which amount to about 13 million tons, with the annual output of about 390 billion yuan and a sophisticate rate of 40%. However, at present, although China has become the largest producer of fine chemical products, its traditional fine chemical industry such as pesticides, dyes, paints, rubber processing are still facing a dilemma of ‘large volume yet poor quality’. Besides, they constitute a low proportion in the core final chemical industry, and suffer from a series of problems such as identical industrial structure, low-level redundant construction, and lacking in R & D investment, which pose as serious impediment to the development of the industry. Overall, the product structure of China’s petroleum and chemical industry is still mainly falls in low-end products and generic products, while high-end and special products constitute only a small proportion. Viewing from an overall perspective, fine chemical industry in China is in urgent need of transferring mode of development and embarking on the developmental path driven by innovation.

Targeting at the High-End Products to Enhance the Products Competitive Power

On May 27 ~ 28 ” , during the 12th Five-Year Petroleum and Chemical Industry Conference, i.e., the 2011 China Chemical Industry Park Development Forum held in Beijing, the China Petroleum and Chemical Industry Association released the ” 12th Five-Year Petroleum and Chemical Industry Development Guide” and more than 20 industries (special project) planning program to deploy the industry with a new development concept. Li Yongwu, president of the China Petrochemical Association, pointed out at the meeting that during the next five years, the China Petroleum and Chemical Industry must take a new path to industrialization, accelerate the transformation of development mode, and vigorously develop strategic emerging industries and high-end products to further enhance the capacity of energy saving and environmental protection and to achieve a healthy and sustainable development.

It is understood that many chemical companies in China are in great efforts to develop technology-intensive, exquisitely processed, and high value-added chemicals. They count on high-end fine chemical to enhance the industry competitiveness. According to Wang Weixing, Head of the Safety and Environmental Protection Department of the Juhua Company, the company now has centered upon 4 new fields: new materials, new energy, new environmental protection approach, as well as new usage. They have invested nearly 3 billion yuan in fluoride materials, new fluorine refrigerant, and new safety packaging materials, fluorine-containing electronic chemicals, fluorine-containing Special Functional Materials, special petrochemical materials, high-end equipment manufacturing, street area thermoelectric transformation. All these eight projects have begun at full capacity and keep developing in the direction of high-end, fine, and differentiated product. At present, the construction of first-phase of the Hydro plant TCE capacity expansion project, civil engineering and equipment installation have been in place. The new packaging expansion project will be basically completed in the fourth quarter. And the zero-level reconstruction of PVDC resin VDC monomer and electrolyze are also in rapid implementation.

In accordance with the “12th Five-Year” development planning of the Zigong City, and the development strategy of China Chemical Industry Group, Hao Hua Honghe Chemical under the China National Chemical Group would move to Zigong’s Beach Industrial District to create a Zigong industrial base, where fine chemicals accounted for 70%, while the basic chemical industry accounted for 30%. As an environmentally friendly emerging industrial base, it planned 16 projects with a total investment of over 10 billion yuan, which had been planned for five years for the construction be completed. According to Xie Xuerui, chairman of the Hao Hua Honghe company, the new industrial base is expected to be built since June 2012, which will be focused on the construction of technology production lines and supporting projects of tetrachlorethylene, environmental-friendly refrigerant, special engineering plastics and Stewed alkali and so on, with its focus on the development of chlorine chemicals and fluorine chemicals, in order to build a new industrial structure with the CFC chemical as its core industry and create a new chemical park worth 10 billion yuan.

In November this year, Ningbo Zhejiang Railway Jiangning Chemical Co., a wholly owned subsidiary of Zhejiang Jiangshan Chemical Co., Ltd. held a grand ceremony for 80,000 tons / year maleic anhydride and derivatives integration project in Ningbo Petrochemical Economic and Technological Development Zone, marking Jiangshan Chemical Ningbo Base ‘s official launch of construction. It is understood that the materials used are refinery byproducts, and its downstream products are related with new materials such as PBT, PBS, all that has conform to Zhejiang Province and Ningbo’s industry development plan. Technically, it has introduced international state-of-the-art N-butane oxidation solvent absorption process from U.S. Huntsman Company and Maleic anhydride esterification hydrogenation of BDO process from Davy Process Technology. Therefore, it is more advanced and enjoys more competitive edge than other devices of the same industry in various aspects such as safety, environmental protection, energy economical efficiency. As a result, it can promote the Jiangshan chemical to achieve the transition from basic chemical raw material manufacturers to new chemical materials industry leader in Zhejiang Province

 

Chemical Industry Park Boost Industrial Development

The fine chemical industry falls into numerous categories and involves a wide range of aspects; therefore, industrial policy has a great influence over it. Viewing from the perspective of structural adjustment and technological progress, the establishment of the Chemical Industry Park with the fine chemical as its feature, as well as giving preferential policies in favor of the base, will be conducive to the upstream and downstream of the fine chemical industry convergence, making it be better able to promote the development of the industry.

In recent years, many provinces and municipalities have made the construction of Fine Chemical Zone an important measure in adjusting the layout of the local chemical industry, developing new materials industry, and promoting the industrial agglomeration.

In the mid-1990s, taking the chemical characteristics and basis into consideration, China established 15 fine chemicals production base including Nantong , Suzhou , Wuxi and Zhongshan, Fushun , Xiangtan , Taizhou , Huzhou , Luzhou , Deyang , Wuhu, Binzhou , Kaifeng , Xinji, and Shashi. At present, apart from these bases, large-scale petrochemical park in Shanghai, Nanjing , and the Daya Bay, New chemical materials and fine chemical park in Nantong, Taixing , and Changshu, as well as Emerging Chemical Industry Park in Shaanxi, Ningxia and other provinces have added to our major industrial park. Judging from the industrial layout , most of the fine chemical production in China are located in Zhejiang, Jiangsu, Shandong, Shanghai , Tianjin and Guangdong and other coastal areas. By the end of 2010, there are about 3000 chemical industry park and chemical center completed or under construction. Among them, more than 60 are National Chemical Industry Park, especially in Shanghai, Jiangsu Province and regions along the Yangtze River, where there are more than 10 large-scale professional chemical industrial park, among which the Shanghai Chemical Industry Park, Nanjing Chemical Industrial Park are both National Chemical Industrial Park; besides, chemical industry in Zhejiang has also experience rapid development. Nesting zones of chemical industry has also formed in Ningbo and Shangyu. Most of these chemical parks are involved in the fine chemical industry.

Taking the Nanjing Chemical Industrial Park for an example, the park relies on the platform of Torch Plan in the region of Nanjing on building fine chemical industry base and actively develops the group in line with national industrial policies. It has enjoyed a broad market prospect in new materials, new energy, life sciences and high-end fine chemical products and has introduced advanced products of the Industry giants such as Swiss Ciba Specialty Chemicals, the German DyStar Company and Wacker company, Nalco Company(USA.), Albemarle Corporation(USA), Longza Company (Swiss), forming competitive advantages in the field of fine chemicals. Through vigorously introducing international capital, and actively promoting industrial upgrading and structural optimization, by 2015 the Nanjing Chemical Industrial Park will develop into a top world-class petrochemical industry base featuring advanced manufacturing, modern logistics and transport, as well as high-tech industry. With China’s highest degree of industrial agglomeration, the most advanced technology and the best ecological environment.

In the eastern city of Ningbo, Zhejiang Province, although the Zhenhai District was only 246 square kilometers, the chemical planning area constitutes 43.22 square kilometers, making it an important chemical industry base in Zhejiang Province and east China. After seven years of development, its industrial chain efficiency and regional environmental results has been in the forefront of the domestic similar chemical areas, attracting more than 20 million businesses from Akzo Nobel (Netherlands), Aekyung (South Korea), and Linde Gas (Germany). On January 6, 2011, approved by the State Council, the district is officially improved as National Economic and Technological Development Zone. In the future five years, the region will invest 100 billion yuan in developing specialty industries, high-tech industries and high value-added services, and the total industrial output is expected to reach 400 billion yuan, becoming the leading area of national petrochemical and new materials industries.

The Core of Development Shifts to Technological Innovation

Faced with unfavorable factors such as complex international macroeconomic situation and the industry cyclical downturn, strengthening technological innovation, adjusting and optimizing the structure of the fine chemical products, as well as focusing on developing high-performance, specialized, green products, has become important features of the current development of fine chemicals, revealing the future direction of the development of China’s fine chemical industry.

On the 2011 China International Petrochemical Conference held in September this year, president Li Yongwu pointed out that there has been a surplus in traditional products, while at the same time, there exists a serious shortage in high-end chemical products and some high-tech products are still in the blank, relying heavily on import.

Technological innovation plays a crucial role in the development of fine chemicals. Take Japan, a well-developed Fine Chemicals power for example, in the past10 years, the market for Nippon Synthetic dyes and traditional fine chemicals reduced by half, replaced by a large number of functional and greener high-end fine chemicals, Thereby greatly enhancing the level and economic efficiency of the fine chemical industry. For example, by focusing on development of functional fine chemicals in the field of semiconductor and flat panel displays, Japan has established a dominant position in the field of high-end products of the information recording and displaying materials. In terms of the catalyst, with the increasingly stringent environmental regulations, to meet the needs of the sulfur-free gasoline and other environment-friendly fuel, Japan develops new environmentally friendly catalyst in real earnest. At present the ultra-deep desulfurization catalysts and other high-performance catalyst occupies a very high share in the catalyst industry in Japan. The desulfurization capacity grows from less than 50?g / g to less than 10 ?g / g, which also contributed to the overall development of the catalyst industry. Meanwhile, sales of catalyst used in petroleum chemicals and automobile exhaust purification also grow at double-digit rates, accounting for half of the catalyst market. Japan catalyst production and sales last year were up by 7% and 5% respectively, breaking the record of the past six years.

In the future next five years, as China gradually increase the emphasis on the degree of the fine chemical industry; fine chemical industry in China is bound to enjoy great development. We should appreciate that the issuance of the 12th Five-Year Petroleum and Chemical Industry Development Guide will foster the development of strategic emerging industries as the main task, this guide proposed that by the end of the 12th Five-Year period, we will form a number of growth point with the strategic new industry as the lead, and we should enhance the rate of fine and specialty chemicals to more than 45%. The new chemical materials, high-end specialty chemicals, biomass energy, bio-chemical and bio-based polymer materials, the new coal chemical are all classified as direction for development. Meanwhile, in view of the profit decline of the traditional chemical products, the Guide pointed out that it will make the upgrading of traditional industries as a main task of the of structural adjustment. Besides, the guide also requires that differentiated development strategies be applied in three major synthetic materials, and organic chemical raw materials, which would be transferred from the popular type to the tailor version, meanwhile, we should improve the access threshold of structural surplus industry such as high methanol and calcium carbide industry, besides, we should strictly control the volume, speed up development of new technologies , new varieties, and extend the product value chain. Experts said the development of strategic emerging industries requires a lot of supporting fine chemical products industries, which will enhance the fine chemical rate to generate a large thrust of China’s independent innovation capability of the fine chemical and our industrial strength will thusly be significantly improved

China’s Export License

Posted on May 29, 2012  by Xixi  in Certification, Knowledge   4 Comments »
 China’s Export License


Definition of Export Permit

Export License is the certification for export issued by relevant authority, in accordance with a country’s export commodities laws and regulations. It is a control exercised by a country over exported goods. In general, some countries carry out export license system to required raw materials, semi-manufactures and Hard-to-get products and materials. By issuing license, the export can be restricted or prohibited in order to meet the demand of domestic market and consumers and protect the national economy.  Besides, antiques that can not be copied or renewed are also protected by the states, therefore, the export of which is strictly prohibited.  And in accordance with the international practice, the export of opium and other drugs and a wide variety of pornographic products are also prohibited

In accordance with the state regulations,  all goods announced by the nation that shall subject to export licensing , regardless of the identity of the owner or the means of the approach( except mode of external  processing and assembling, which must be handled in accordance with relevant regulations ) are required to apply for an export license prior to export . for non- foreign trade business unit or individual goods shipped abroad, regardless of whether the goods are subject to export licensing or not, shall apply for export license if the value of such goods is above 1000 yuan. For Goods carried by individual or mailed aborad, except those comply with customs regulations for personal use and with a reasonable amount, export license is mandatory.

At present, the authority responsible for the approval and issuing of export licenses are: the Ministry of Foreign Trade and Economic Cooperation and its Special Commissioner’s Office in the major ports; Administration Department of Foreign Trade and Economic Cooperation in provinces, autonomous regions and municipalities specifically designated in the state plan. And the issuing of the certificate is in accordance with goods and region classification.

How to Apply for Export License

Organization applicants or individual applicant (hereinafter referred to as the “applicant) should submit written applications to the issuing authority.

Content of the applications: the name of the export commodities (goods), specifications, destination countries and regions, quantity, unit price, total amount, delivery date, form of payment, etc. meanwhile, relevant documents or materials also need to be presented to the issuing authority. Foreign trade companies need to provide the original contract (or copy), while non – trade units need to provide the approval by the competent department (department or bureau at the provincial level).  The export of antiques needs to provide the approval material of the relevant authorities, that of books and magazines, approval of the competent department of the publication, that of the famous calligraphy and painting (modern and contemporary), approval by the Ministry of Culture, Gold and silver (excluding jewellery), approval by the People ‘s Bank of China, Patents, know-how ,  and traditional arts, approval by the national patent office and the competent department, urban residents or villagers, the certification letter issued by the street office or villagers’ committee to explain the situation and purchase invoices.

Under the following circumstances, relevant certificates and materials need to be provided.

(1)  As for foreign trade enterprises approved to enjoy export operation rights, when applying for export license for the first time, the copies of the following documents need to be provided: approval of the establishment of the company (enterprise), company (enterprise) regulations,

(2)As for foreign-invested enterprises, when applying for the export licence for the first time, the copies of the following documents need to be provided: documents of approval issued by relevant departments on the project contract, business license , and annual export plan issued by the National Ministry of Foreign Trade and Economic Cooperation.

Examination and Verification & Form Filling

Issuing authority shall start verification procedure upon receiving the relevant application materials. Upon its approval, the applicant could fill in the People’s Republic of China export license application form.

Issuing of the License

Issuing authority shall issue the Export License of the People’s Republic of China within 3 working days after the application forms have been handed over in quadruplicate, the first, second, and third of which shall be in the possession of the applicant, and upon them the customs declaration and bank settlement procedures can be made. Meanwhile, a certain amount of accreditation fee must be charged.

Products List That Need to Apply for Export License

China ‘s Export License( Example)

 

China-Japan- Korea S. FTA Will Promote the Development of Chemical Industry in Shandong

Posted on May 25, 2012  by Xixi  in General News, Importing from China   No Comments »
China-Japan- Korea S. FTA Will Promote the Development of Chemical Industry in Shandong

On May the 13th, during the China-Japan-ROK Leaders Meeting, the Chinese Premier Wen Jiabao , South Korean President Lee Myung-bak and Japanese Prime Minister Yoshihiko Noda mutually agreed that this year, China, Japan and South Korea would initiate FTA talks . Based on its existing industrial foundation, Shandong, a major Chemistry industry province and a bridgehead adjacent to Japan and South Korea, it can be the lead in setting up pilot trade cooperation area and petrochemical industry base with these two countries, among which, the cooperation in fields such as marine chemical industries, the green tires, environmental protection industry are the most conspicuous.

According to Li Guanghui, deputy director of the Northeast Asia Economic Cooperation and Development Research Center of the Ministry of Commerce, the establishment of the FTA will help the three countries in economic development, energy conservation and environmental protection, trade, logistics, petrochemical, high-tech related industries in  aspects such as investment facilitation and market openness, reducing tariff burden and non-tariff barriers. As the pillar industries of the all three countries, the petrochemical industry will achieve a more thorough integration of a more robust development in the process of regional markets integration.

Adjacent to South Korea, the Shandong Province not only enjoys the advantage of location but a favorable chemical industry as well, which is highly complementary with the Japanese and Korean chemical industry. The proposal of setting up regional economic cooperation experimental zones on west coast of Qingdao has been put on the agenda. And the plan for setting up a Regional Development Fund for the establishment of related industries is also under discussion. According to Yuan Xiaoli, deputy director of the Northeast Asia Economic Development Research Center of Qingdao University of Science and Technology, the FTA will give rise to the ocean, commerce, home appliances, chemical, agricultural, and other competitive industries in the region, in this way, all parties win.

Liuyan, Chairman of the Petroleum and Chemical Industry Association of the Shandong Province points out that the Shandong is the first large province in China that is approved to be marine economy pilot province. As Japan and South Korea are also major maritime countries, the cooperation perspective for the three parties is indeed promising. And according to Yan Yongjiang, Secretary-General of the Coating Industry Association of Shandong Province, although Japan has but a few high-end paint enterprises, its production techniques are very advanced. While our needs of marine paint products are expanding, with an average annual growth rate of demand for more than 20%. In addition to the ship and container coatings, marine the demand for anti-corrosion coatings is also huge. This brings opportunities for Shandong Province to seek technical cooperation for enterprises, and meanwhile provides a larger potential market for Japanese and Korean products. Besides, Shandong Province is also a major tire province, while Japan and South Korea’s tire industry also enjoy great strength. At present, Shandong Province is implementing the development strategy of the green tire, and the Free Trade Area will speed the process of integration of Shandong tire companies.

As chemical Province, Shandong Province in recent years implemented local environmental standards that are stricter than the national environmental standards. And it is quickly becoming a leading national market for environmental protection product. According to Li Guangjie, deputy director of the Shandong Provincial Academy of Social Sciences Institute of Economic Research, the energy saving and new energy industries are expected to benefit from the China-Japan-ROK free trade area. He also stressed that, in the past, Shandong Province had undertaken a lot of advantageous Japanese and Korean industries, but it did not master the core technology. Therefore, the next step is the use of Japanese and Korean investment should focus on the new energy, new materials, marine industry, environmental protection, high-end equipment manufacturing and other industries, meanwhile, it should improve the capability of independent innovation, to grasp the initiative of cooperating with Japan and South Korea.

Bright Prospects for Chinese Sea Food Products Import and Export

Posted on May 17, 2012  by Xixi  in General News, Importing from China   2 Comments »
Bright Prospects for Chinese Sea Food Products Import and Export

This year, China’s import and export of aquatic products have achieved encouraging results , from January to October this year , China ‘s import and export volume of aquatic products amounted to 6.6908 million tons, with a total revenue of $ 20.629 billion, an year on year increase of 17.53% and 29.02% respectively, among which the export volume was 3.161 million tons and its total revenue was $ 14.008 billion, an year-on-year increase of 22.75% and 31.45% respectively. The import volume was 3. 5297 million ton and the import revenue was $ 6.622 billion, an increase of 13.21% and 24.17%. This year, our trade surplus was $ 7.386 billion, an year-on-year increase of $ 2,063 billion.

In the export trade of aquatic products, the performance of general trade export is better than that of processing export. The proportion of processing export in the total volume keeps on declining. Shrimp, shellfish, tilapia, eel, large yellow croaker, and other famous farmed fish are still the major export items, and exports of the above species showed double-digit growth. The export of squid products, canned crab meat has show substantial growth, becoming a new growth point in China’s aquatic products, among which the total export of crab products such as canned crab meat is 481 million US dollar, a year-on-year increase of 83.57%. in Fujian Province, by virtue of the export of canned crab meat and squid products and trade of such products to Taiwan, the total export volume maintained a strong growth momentum, an year on year increase of 57%. All these have narrowed down the gap between the Fujian province and Shandong province, the top aquatic exporting province. The total export of the aquatic products of the two province amounts to half of the countries’ total.

Experts believe that the reasons leading to this year’s steady growth in the export China’s aquatic products are as follows:

First, the Japanese earthquake or other disaster in March made the processing and supply of Japan’s own aquatic production difficult to meet its domestic demand, therefore, many Japanese businesses increased their orders in China, making the order in most of the Chinese export enterprises experience a huge increase and the production was running at full capacity. Besides, countries before imported aquatic products from Japan have also shifted their orders to China.

Second, in recent years, China vigorously carries out safety special rectification work the quality of aquatic products, leading to a gradual increase in the level of quality and safety of aquatic products and vigorously enhanced the competitiveness of China’s aquatic products in the international market

Third, in recent years, the world’s major currencies experienced devaluation and evaluation, causing rising global price of aquatic products, China’s exports of aquatic products prices have risen along with this trend, resulting in the increase in exports of aquatic products in China becomes much higher than the increase in export volume.

Fourth, over the recent years, China and ASEAN had established free trade zone, and has set up ECFA with Taiwan, as a result, positive effects began to show. And substantial growth has been achieved in the bilateral trade of China’s aquatic products with ASEAN and Taiwan.

Experts predict that in 2012 China’s aquatic products export is still facing uncertainty.

First, as most countries are phasing out of import restrictions on Japanese food, our newly increased market share (as a result of import restriction on Japanese food) will be squeezed.

Second, as Europe, the United States and other developed economies has yet to show signs of economic recovery and their consumption growth is still weak , the demand for aquatic products is hard to show significantly increase.

Third, constraint factors such as domestic RMB appreciation, growth in labor costs , the lack of staff, and rising raw material prices still exist, which to some extent affected the healthy development of the export enterprise.

The Cold Winter in Foreign Trade Cannot Conceal the Industrial Advantage of ” MADE IN CHINA”

Posted on May 14, 2012  by Xixi  in China Export News, Export to China   No Comments »
The Cold Winter in Foreign Trade Cannot Conceal the Industrial Advantage of " MADE IN CHINA”

China’s mature supporting industry and cost-effective labor force accumulated over the years, combined with a relatively stable policy environment, is making some companies find it hard to move away

“3 years ago, Sumitomo Electric wanted to expand in China. However, as the cost is relative high, they shifted their investment to the Southeast Asia. But now this decision seems very unwise.” said Xu zhihong, General Manager of the E- Line Products Co., Ltd. of the Sumitomo Electric Industries( among the Global Top 500 Companies) in Suzhou. “The Southeast Asian workers’ productivity is not as good as the Chinese workers, combined with the instabilities in the local policies, now the Sumitomo Electric Industries value Chinese Market the most. “

Research found that despite there has always been news saying the traditional foreign trade orders and industries has been transferred to Southeast Asia, South America and even refluxed back to Europe and the United States, Chinese manufacturing industry, with mature supporting industry and cost-effective labor force accumulated over the years, combined with a relatively stable policy environment, is making some companies find it hard to move away

Because of rising labor and material costs , the Zhejiang New Jack Sewing Machine Co., Ltd., the largest sewing machine manufacturer in China, has considered for many times to relocate to foreign countries, but now the New Jack still has not set up factories abroad.

“In addition to low production efficiency, Southeast Asia almost has no supporting industries. And even some buttons and wirings would be transported from China, as a result, the project would be delayed.” said Qiu Yangyou, director of the international trade of the New Jack Sewing Machine Co. Ltd.

The latest foreign trade operation data shows that China’s foreign trade import and export situation is not optimistic. Despite the emergence from the shadow of the largest monthly deficit within this decade in February, the growth rate of the foreign export and import was only 7.3% in the first quarter. Even in the large foreign trade provinces such as Guangdong, Zhejiang, and Jiangsu, the foreign trade growth rates in the first quarter are all below the national average.

At the same time, the amount of utilized foreign capital is slightly lower. Commerce Department statistics show that in March, there were 2,374 newly established foreign invested enterprises, down by 6.5%. in the first quarter this year, the actual use of foreign investment nationwide amounted to $ 29.48 billion, down by 2.8 percent.

According to Zheng Jianrong, deputy director of the Guangdong Foreign Economic and Trade Office, the current situation of foreign trade and economic do experience difficulties. However, viewing from a variety of factors, China’s manufacturing advantage still exists, and the overall investment environment is still good. Therefore, it is no need to be over pessimistic.

Large amount of SMEs in the coastal provinces has always been the most active force in the manufacturing industry, however, the overall weakness in their anti-risk ability made them vulnerable to the impact of the economic crisis since last year. And it is reported that currently some of the leading companies are trying to stretch on the downstream chain, to create a “carrier effect” in order to improve the industries overall competitiveness.

The Zhejiang NINGBO BEIFA Group has the world’s largest single pen manufacturer room. Since the May last year, the group has cooperated with Chuzhou, Anhui Province to build a demonstration zone for the Chinese stationery industry. And the over 100 companies planning to move in includes all the supporting industries, product manufacturing, and logistics enterprises, and its influence has already radiated to Shandong and Jiangsu.

“Last year we began to build the China Stationery Commodity Center and turned ourselves from the original pen suppliers into integrated suppliers. The Wal-Mart headquartered in the United States had made orders worth more than 20 million U.S. dollars. And the effect of industry consolidation effect will soon show itself.” said the director of the Group.

Gu Bin, Director of Foreign Trade Department in the Suzhou Municipal Bureau of Commerce, said that at present in Suzhou there are two national export bases and 13 provincial export bases. And each base consists of about ten leading enterprises and supporting enterprises. Although the foreign trade situation is grim since last year, making the exports decline, the growth rate of export base is still above average.

Emerging industries has also accelerated the pace to participate in international competition and to seize industry opportunities. According to Wang Qiangxiang, general manager of the Jiangsu Gong Chuang Artificial Turf Co. Ltd, the cost of artificial turf is the only one tenth of the natural turf, but in the past the market and production are concentrated in Europe and the United States. Only since the 1990s, it began to enter China. And in 2005, Gong Chuang began to export artificial turf. Last year, the total areas of squares sold amounts to the top around the world..

However, the industry insider said that the insufficient industry cluster, lacking of protection of the IPR, and unclear competitive environment are still difficulties facing the “Made in China” products.

According to some foreign-invested enterprises, they are most concerned about whether the policy information is open and transparent, as well as whether the operating environment is legal or not.

Viewing from the initiatives and statements made by the Chinese government this year, the Chinese government has introduced a series of policies to guide capital flows to the real economic development in the manufacturing sector. Not long ago when the establishment of the Finance comprehensive reform pilot area in Wen Zhou City was approved, the State Council had put forth a requirement, that is, “to enhance the ability of financial services to the real economy”.

Eight Major Trends in selling Jewelry in China

Posted on May 12, 2012  by Xixi  in Product Marketing   3 Comments »
Eight Major Trends in selling Jewelry in China

As the world is undergoing never-ending changes and improvement, so is the jewellery industry as well as its marketing strategy. However, there would always be constant rules among these changes. Through viewing the development course of marketing in the jewellery and other industries, we can see that the jewellery industry marketing has shown at least the following eight trends.

Trend No.1: the traditional Chinese culture will play an increasingly important role in jewellery marketing. For most of the people, the xenophilia is only a temporary interest. Sooner or later they would grow tired of the foreign moon.  With the rise of China’s economy, consumers will find the precious merit of traditional Chinese culture. And thus began shift their attention to their own traditional culture. For instance, nowadays the tunic became increasingly popular on important occasions. It even overshadowed the trend of the western suit, which shows the increasingly prominent role of traditional culture.

Therefore, successful marketing requires an in-depth understanding of the traditional Chinese culture. And it also takes advantage of various opportunities and occasions. For instance, apart from the wedding market, many jewellery companies started to target at the gift market for friends and families, such as gifts for a new-born baby or for parents’ birthday.

Trends No.2: marketing strategy has to be based on the quality of the jewellery. Competition in the jewellery industry would focus on craftsmanship as well as brand value, with brand value playing an increasingly important role in competitions. Those who can seize brand value the ultimate weapon shall score the final victory.

The key for establishing a successful jewellery brand lies neither in advertisement nor famous spokesperson. and even heavy investment would be nothing during the complex and fierce competition although nowadays it is a common practice for jewellery enterprises to hire stars to be their spokesperson, they should always bear in mind that in the early development stage of the brand, attention need to be paid to more important aspects.

According to the Achievebrand Planning Agency, the key to establishing a successful jewellery brand is to size the hearts and minds of the customers. That is to say, the brands should be made to be deeply rooted in the consumers’ mind. Through adopting an ultra low-cost operation concept, step by step the brand could become synonymous with the whole industry. 

It must be pointed out that, in any case, the essence of jewellery marketing is to seize the limited resources of the consumers’ mind. Besides, the market waits for no man, it is always first come, first served. To certain extent, the jewellery market follows the rule of “survival of the very first”, rather than the so-called “survival of the fittest”. Therefore, only those who grasp the trend take the initiative to create the brand successfully could create a better future. Otherwise, they would most definitely perish.

Trend No.3: the jewellery brands will continue their differentiation, and professional brand would generate more recognition among consumers. We all know that jewellery is a big concept, which can be divided into a lot of categories, each having many enterprises engaged. So how would a consumer choose? The sustained economic growth, steady increase in per capita net income, rapid spread of the Internet, and rapid development in e-commerce, have put jewellery enterprises everywhere to a nationwide even worldwide competition, which further increases the consumers’ scope of choice, but at the same time disturbed the consumers’ perspective. How to make a choice became a headache of the consumers. Some of them are even at a loss about what to do. Therefore, the Achievebrand Planning Agency comes to a conclusion that consumer demand for the brand becomes even more specialized and professionalized. To build the brand in a systematic and professionalized way will gradually become the only choice of the jewellery enterprises.
 
For example, we all know the jewellery brand of Chow Tai Fook, because we vaguely know that the Chow Tai Fook Jewellery was founded in 1929 and has a history of about 80 years. However, if we narrow down to specific jewellery products, for example, which brand shall we choose if we are to buy gold products? What about pearl? Crystal? Diamond? Jade? And emerald?

In some regional markets, we may find the top brand for each product. For example, in Shanghai, when buying gold jewellery, consumers will choose Lao Fengxiang, because it was founded in Shanghai in 1848 and has gone through more than 150 years of development. It was the only century-old store that dates back to over 15 decades ago. It has 3 generations, more than 100 designers who won the title of Chinese Arts Master and Senior Artistic, as well as over 300 craftsmen and technicians. Another example is that in Chengdu, consumers usually purchase emerald from the Xue Shi Traditional Jade Shop, as it was founded in 1925, it has handed down thousands years of jade culture and civilization, striving to make its product classics. The jade and emerald from this shop is the benchmark of the jade industry. 

However, viewing from the national jewellery market as a whole, we cannot find a brand that dominates the mind of the consumers. The situation has little resemblance with that on the electric appliance market where we prefer Gree’s airconditioner, Hisense’ convertible frequency air-conditioner, Glanz’s microwave oven, Haier’s refrigerator, and Joyoung’s soymilk machine. In the jewellery market, no such cognition has been made.

This indicates that the jewellery companies must drop its traditional workshop-style business model, namely, a comprehensive product range covering all the categories, regardless of the business size. Instead, they should choose a more professional way of doing business, a solid, consistent efforts to establish the professional brand image, so as to make its brand synonymous with a certain product or category of products. Just as Galanz’s microwave, Qipai’s traditional Stand-up collar suit, or Wong Lo Kat’s herbal tea.

Trend No.4: marketing featuring low-cost and high efficiency becomes increasingly significant. According to the Achievebrand Planning Agency, brand communication requires methods and techniques. Heavy investment does not necessarily have a good result. As is known to all, the effect of the news media is much more powerful than advertisement; what’s more, it enjoys a much lower cost. 

For example, in 2005, pearl products challenged the leading position of the diamond products, an event also known as “Pearl & Diamond War”, had rocked the whole jewellery industry, which had immediately aroused the concerns and the discussion. This campaign has not only enhanced the brand value of the Snowerpearl, but also promoted the whole pearl industry to a new height, which vividly highlights the determination, confidence and courage of the Chinese jewellery enterprises to carry forward the Chinese culture. Once again this reinforced the market position of the Snowerpearl   as China’s top pearl industry. And during this whole marketing procedure, the Snowerpearl invested practically nothing in advertising, as the Phoenix, Sina, Sohu and other authoritative media had already made large amount of coverage. Today, this dispute has become a classic case of China’s jewellery industry .
 
Another example is a promotion campaign by the TESIRO, which dictated that on Valentine’s Day, for those who made a purchase of over 500 Yuan, a  luck draw shall be in place, of which the first prize is a double room and a condom. This is really a controversial practice. People were concerned that will that give rise to premarital sex? Or will this challenge China’s traditional morality? Marketing of this kind is ineffective unless people pay attention.  Therefore, these kinds of controversies are exactly what one company needs, as the controversies always provide good advertisement. And it is advertisement that promotes the brand values. As a result, with an ultra-low cost,   TESIRO has become a household name. No matter how the publics judge this advertising campaign, TESIRO is the only and final winner.

Trend No.5: the profit of OEM -type jewellery business will become thinner and thinner, and its living space would become lesser, as a result, the marketing would become increasingly difficult. In other word, the jewellery industry engaged in manufacturing and processing could survive and develop. However, this kind of enterprise would never disappear, just like the beggars in the city. Or else, they may even make a small fortune. However, it is not possible to become the main trend of the society. This is an important factor which the jewellery enterprises must bear in mind when developing their own brand marketing strategy. Otherwise, simply for the sake of saving trouble or playing safe, the future of the enterprise may get lost in this process, which will be really regrettable.

Trend No.6: the overall quality of the entrepreneurs or boss will become the biggest bottleneck to restrict the marketing process of jewellery enterprises. Problems such as technology, quality, and employees can be more easily resolved. The overall quality of the entrepreneurs or the boss, however, cannot be easily improved. To begin with, the entrepreneur’s personal quality is very important. Secondly, the moral standard of the entrepreneur also plays a crucial role. Last but not least, they need a correct direction of learning as well as sustained learning behaviour.  Why China’s jewellery industry has such a low market concentration? Why there are a lot of small workshops? All these have a great relationship with the overall quality of the jewellery entrepreneur.

Trend No. 7: Internet marketing will become one of the key tactics of the jewellery business marketing strategy. On the one hand, according to China Internet Network Information Centre, by the end of 2009, the number of Internet users in China reached 384 million. On the other hand, cases like Sister Lotus’ overnight popularity through the online marketing, and successful U.S. presidential campaign by internet, showed that with such great number of netizens and successful Internet marketing campaign, online marketing has become increasingly significant.

For example, the success of Zbird, an internet jewellery seller, has opened a new ground for online marketing. In 2002, it set up its first online diamond shop. By 2004, it had opened its first OFFICE – based diamond experience centre. And then, after seven years, the Zbird has promoted the” mouse + cement” diamond sales mode from Shanghai to  Beijing, Hangzhou, Guangzhou , Ningbo, Nanjing , Chengdu and many other cities.

It is worth mentioning that the network marketing and event marketing often work together, but this is a double-edged sword as they may promote the brand value or bring harm to the brand, which requires the jewellery enterprises to master the means of network marketing, otherwise, little knowledge must be a very dangerous thing.

Moreover, when a variety of events and crises of the Internet occurred, if the jewellery enterprises can not make a timely response and failed to make a corresponding marketing strategy, in that case, these enterprises are very likely to be on the brink of danger. Of course, if an event fit for online marketing occurs, the jewellery enterprise should seize the opportunity to leverage the power to play a multiplier effect, otherwise it is a waste of a free golden opportunity to enhance the brand.

Trend No.8: During the process of jewellery marketing, many people like to talk about the homogenization of the product quality. However, as far as I am concerned, in a fairly long period, this statement will be nothing more than a charming, self-deceiving lie. The quality differences between the jewellery products will continue to exist and play an active role. However, the Achievebrand Planning Agency maintains that a jewellery enterprise that solely relies on the product quality could not be a winner in the future marketing competition.  Just like a healthy, beautiful and talented girl is not necessarily a star. The key for a successful marketing lies in its brand operation. As is said in the above-mentioned paragraph, the essence of jewellery marketing is to seize the limited resources of the consumers’ mind and try to make the brand consumers’ first choice.

Luxury Products Marketing in China

Posted on May 06, 2012  by Xixi  in Product Marketing   No Comments »
Luxury Products Marketing in China

How to Sell to Chinese Rich People – Know What They Think

During the Spring Festival only months behind us, European and American department store industry were awed by the purchasing power displayed by the Chinese consumers. Facing this phenomenon, western media has made the following remark: in Asia, the conspicuous consumption is gaining in the popularity. Through purchasing the most famous luxury brand, people are actually showing off to the people around them.?

However, when luxury products from LV, Gucci, with logos printed all over, are dominating the Chinese market, the real man of wealth began to find these “entry level” luxuries dismissive. In their circles, only those private, customized, low-profile gadgets can prove equal to the name of luxury. Originated from Europe and the United States, these products find their way to China through non-mainstream channels. They always maintain a low profile and their reputations are being spread from mouth to mouth. Limited edition, plus the customized production, making these brands maintain a high price.

As production and sales of these products are very low, they follow a unique survival tactics, that is, be mysterious. Behind their low-profile show they are putting on, these products are really high profile.

The Brands Value Are Improved by Its Reputation

Reputation in the consumer circles are the survival secrets of these luxuries. To engage in this trade, a rule must be borne in mind: if the customers find the whole shopping experience satisfactory, they may tell 5 friends in their circle. However, if they find a single procedure not to their liking, more than 20 friends in their circle would most definitely get the message.

Mike is the Sales Manager of one of the Europe’s top yacht brands in Shanghai. For most of the time in one year, he had no sales achievement at all. And his work is to go to a private posh club. And in his spare time he would go playing golf or enjoying coffee, idling his days away.

To get in the wealthy circles is the core of Mike’s work. Only through establishing long-term relationships with those billionaires, can he sell his yacht. Although each year he can manage to sell one yacht only, he still makes a great living as the price of each yacht is as high as tens of millions dollars.

Yacht of this kind is rarely exposed to the general public, but in the posh circles, they are very much being sought after.

To do business with the rich, one need to be fully acquainted of their habit and characteristics. For example, although the rich grow increasingly interested in the yacht, they need to hire the specialized yachtsmen as they cannot drive the yacht themselves. Besides, they seldom purchase yacht in the mainland China, but via Hong Kong instead. Sometimes in order to buy a yacht, they will specifically register a company in Hong Kong. And then trade under the name of the company so as not to reveal their own name. The rich are experts in financial management. Even with great economic power, few of them would be willing to make a lump-sum payment. To sell a yacht to them, the seller needs to provide them with all the loan procedures and other matters.

Reputation in the consumer circles are the survival secrets of these top luxuries. One Malaysia diamond dealer said that to engage in this trade, a rule must be borne in mind: if the customers find the whole shopping experience satisfactory, they may tell 5 friends in their circle. However, if they find a single procedure not to their liking, more than 20 friends in their circle would most definitely get the message.

The consumer group of the top luxury is limited to a very tiny number of super-rich people. Once their reputation gets damaged, these luxuries simply cannot survive.

Diamond enthusiastic pursues only satisfaction— they have their own appreciation and understanding about the design and cut of the diamond. Most of them are not keen on showing off with the diamond. What they would do is to appreciate their own collections and then put them back to the safe, keeping the joy only to themselves. 

A top diamond flagship store was opened in an old house villa at the former French Concession in Shanghai. The majority of its guests are introduced by friends in this circle. Those jewelry counters in the crowded shopping district are considered to be short of privacy.

Operating luxury brands often require a great deal of patience over many years to soak in the rich circle. The recognized brands that last for decades or even centuries all experienced a painful process of getting accustomed to all kinds of peculiar tastes and habits of rich people before they could maintain a stable business.

Limited Version & Customized Design

As they only need to meet the needs of a very limited number of customers, these luxury brands are not interested in public awareness. The long-term service for a few top rich customers is often enough to support the continued existence of the entire brand

Mr.Lu is a luxury collector. And his personal favorite is Bottega Veneta, a brand famous for its waving technique. He enumerated the features of the handbags that attracts him: natural leather material, strict hand-woven technique, and the most special feature is that no LOGO could be seen on the entire handbag, from top to bottom.

A 35 cm Bottega Veneta handbag shall be priced up to 20000-30000 yuan, which was far beyond those “notorious” conspicuous brands.

Although no LOGO was printed on the bag, the weaving and designing style of the bag is so unique that the experts can recognize it with even one glance, and thus would show admiration to the bearer of the handbag, which is exactly what they need.

“The rich will not wear the same clothes as we wear. For them, the most embarrassing thing is to dress in a same dress with the others in a party. Therefore, they want their dresses as well as handbags to be unique.” said Mr. Lu. In his familiar circle, luxury brands which could suit to individual needs and do customized services is the most sought after.

A customized European wristwatch brand adopts a very low profile strategy. In China, it takes individual order only. Only after receiving specified orders and requirements from guests, the making of the wristwatch could be started. Throughout the year this brand would make only several or even one wristwatch of a kind. What’s more, to get the product, the buyers often have to wait for a long time.

A similar situation also exists in the fashion industry. It is precisely the low-key, private, and unique style of the customized brand that attract the rich and the celebrities, those top-notch persons.

Hou Mingxiang, manager of Luxury agents Jebsen Group Brand & Communications said that, now when the customers choose watch, they are no longer blindly worshiping those luxury brands. Whether to be high-profile or low profile is not their concerns. What they emphasize is that whether the brand culture and meaning is consistent with their own personality. A German watch brand, though only producing less than 20,000 watches each year, has a unique German flavor. Although its market activities are not as frequent as those ordinary brands, it enjoys great brand loyalty among a fixed group of enthusiasts.

An industry source told reporters that many urban women engaged in the financial industry do not want others to praise her new Prada handbag. What they enjoy doing is to take a beautiful and eye-catching handbag with brand unknown to others. It can always give them a sense of satisfaction.

As they only need to meet the needs of a very limited number of customers, these luxury brands are not interested in public awareness. The long-term service for a few top rich customers is often enough to support the continued existence of the entire brand

Give the Guest Clues to Follow

In order to maintain the independence of their beloved master brand, some designers will design several sub-brand to be the breadwinner.

Hiring Madonna or Sophie Marceau to be the brand spokesperson or publishing gleaming advertisement on fashion magazines are common practice among brands like LV and Dior. However, In Europe and the United States, there are many designer brands catering to smaller elite consumer groups. They never do such a thing as advertising, yet they still maintain a very high price.

Wang Feng in the luxury retail industry told reporters that “designer brands” are also very expensive. However, they are different from traditional luxury brands like LV or Gucci in their marketing ideas. Chief designer though they have, the traditional brands rely on a designer group to design their products, which means not all products are from the chief designer.

By contrast, Niche brand adopt a totally different approach. These brands tend to take names after the designer, emphasis on the designer’s personal style and often stick to the design concept for decades. These designers are often exclusive and conceited in manner; therefore, they do not appreciate the idea of using large LOGO to highlight their own brand. Instead they regard their personalized design as signature on the products. 

As they are unwilling to come under the spotlight, the sales of these niche luxury brands are not large. But these brands tend to have a stable group of enthusiasts who are always in pursuit of being different and unique—-they are bosom friends with those designers. These brands rarely have their own exclusive store. They maintain small-scale sales by opening boutiques in department stores such as the Fifth Avenue , Lane Crawford, as well as Joyce.

Wang Feng finds that in China, not only consumers in the first-tier cities as Beijing, Shanghai, Guangzhou and Shenzhen began to wake up from the worshiping of LOGO, consumers from the third or fourth-tier cities began to show interest in those niche designer brands. These brands through a variety of ways quietly penetrate into China, and received unexpectedly good result among Chinese consumers.


Of course, these designer brands do not always say no to exposure. They just have a more subtle way of delivering messages to its fans. Over the years, they would stick to their classical products, which can be recognized by fans through a single glance. And when new products are launched, they would invite some pop stars and celebrities to wear these dresses.

European and American fashion magazines and forum is interested in “street shooting” of the stars. After wore by certain pop stars, these clothes would soon be searched out by the fans. Let the fans take the initiative to find out about the brand not only to achieve the effect of publicity, sustains the low-profile brand style as well.

However, small-sized sales would bring about pressures on brand management. In order to maintain the independence of their beloved master brand, some designers will design several sub-brand to be the breadwinner. For example, the U.S. designer Marc Jacobs, in addition to having his namesake designer brand, also creates the sub brand Marc by Marc Jacobs, whose price is lower and buyers groups are broader.

Compared with the main brand, these products would use materials of a lower notch. They adopted friendlier marketing approaches and their profit can also help with the development of the main brand.

Wang Feng said that compared with the popular designer brands in the United States, the European family of luxury brands still retain the ancient workshop of the ” with shop in the front and workshop at the back.” This is a tradition of many generations. Their workmanship is superb, but they stubbornly refused commercialization, and are unwilling to give their own brands to factory abuse. They still only produce for a few enthusiasts. Against the backdrop of the financial crisis, many of these brands are having difficulties to support themselves, and eventually they are very like to be acquired or even go bankrupt.