When a Trade War is not a Trade War

Opinion Piece by Prof. Michael Jeive

The news is full of reports on the current trade tensions, trade war or conflict between the USA and China.

What began with a gradual changing of positions, especially in the USA between 2016 and 2018 has rapidly escalated. The attitude towards China in the West, initially in the US, but also across Europe has hardened significantly. Internationally, the prospects of some form of conflict (whether trade conflicts or otherwise) between an increasingly assertive China and other regional or international powers is on the rise. While in the US a populist president attempts to energise his grassroots support by focussing his ire on perceived enemies both within and especially without US borders, within China the US is increasingly perceived as attempting to halt China’s natural rise back to regional if not global pre-eminence.

While it may be anathema for liberals, the use of trade as weapon is a traditional realist or geopolitical approach. We should not forget that the vast majority of governments across the globe are not simply liberal, and that both the US and China as well as most Asian governments fall into this category. A realist or realpolitik approach, epitomised by many by former Secretary of State Henry Kissinger (who negotiated the US/China détente during the Vietnam War to take advantage of and exacerbate Sino – Soviet tensions thus weakening the Soviets in the Cold War) would see maximising national power as the greater goal. Realists tend to see global political and international relations as geopolitical game whose rules change little over time. The struggle for power and influence, the mobilisation of partners through alliance formation or vassals states through clientist relations, conflict, war, scarcity and economic competition—all of these are seen as constant patterns and modes within an anarchic global system and they endure despite changes over time in ideologies, institutions, or technology.

Political liberals might point to the abolition of slavery and the diminution of great power wars as signs of enlightened human progress. Political realists might point instead to the brutal similarities, despite the passage of some 2,500 years, between how the powerful Athenians treated the weaker Melians in ancient Greece and how the stronger Serbians treated the unarmed Bosnians of Srebrenica in the modern Europe of the 1990s. Although realists recognize the potential for cooperation and peaceful relations among states, they tend to be pessimistic regarding the human condition and political behavior. Realists emphasize the fallibility rather than perfectibility of human beings or, as Robert Gilpin once put it, political realists “never had much hope for the human species to begin with” (Gilpin 1996, 3).

(Michael Mastanduno (2014) Realism in Asia in Pekkanen et al 2014)

The trend for a revisionary reading of relations between the developed West and China is further taken up in The Economist’s Changuan column:

Western relations with China have long whiffed of hypocrisy. Politicians mumbled about welcoming China’s rise when they meant that they did not know how to stop it. Such leaders hoped instead to manage the impact of that soaring growth so that, on balance, China, their countries and the world would all be better off. Chinese officials, in turn, continue to talk of seeking “win-win co-operation” with America, even as they privately accuse Team Trump of plotting to contain their country. The same officials boast of open markets but, when Western governments raise specific cases of brutal treatment of foreign firms, blandly reply that they cannot get involved in commercial disputes. (Source: The Economist)

The US President and some of his more ardent China critics accuse China of using its military, spies, economic power and propaganda prowess to undermine the U.S. around the world and influence its domestic politics claiming that such activities will no longer be tolerated. At the same time, more and more people within the Chinese government and corridors of power seem to be reaching the conclusion that the conflict is not about trade, but about preventing China’s re-emergence as a regional or global power

As Keyu Jin argues in a Caixin opinion piece,

Yet, in China’s view, what the U.S. is really reacting to is not only the specifics of its trade policy, but also its overall development model and its aspirations to become a major global power — aspirations that are not out of reach. In fact, the Chinese believe, Trump’s trade war effectively proves that China has become a real and present threat to American hegemony.

Whether this is true or not is irrelevant; what matters is Chinese perception. Whereas in the past, when only a few conservatives warned of U.S. attempts to “contain” China, virtually everyone in China now buys into this narrative, including a growing number of young people.

Having grown up amid prosperity and confidence, exposed to Western lifestyles and educations, China’s millennial generation — born in the 1980s and 1990s — were supposed to usher in an era of even greater openness and freedom. Yet these young people — who have previously reported much warmer feelings toward Western countries and Japan than their parents and grandparents — are having their faith in Western ideas tested by Trump’s actions.

The real danger is that rising nationalism could embolden a contingent of the Communist Party, known in China as the New Left, that denounces capitalism and its Western proponents, and calls for a return to the Maoist socialist order of 40 years ago. (Source: Caixin Global)

While a full-blown return to Maoist policies is still barely conceivable, it is clear that the post-Bo New Left have been emboldened in their criticisms of the liberal order, more insistent in their calls for red songs and red culture and more determined that the political, and especially orthodox party political views must be upheld in all places at all times at all costs. This has included the quashing of dissent; politicisation of the anti-corruption activities; demands for CPC leadership in all aspects of society; confirmation of Xi Jinping as Core Leader & Helmsman, removal of term limits for Presidency (and Vice-Presidency) and enshrining of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era in the constitution.

One key element in this calculation is the concept of Comprehensive National Power. The ideas itself has ancient roots, but in its modern form is related to the idea of soft power suggested by Robert Nye in his 1990 book. Soft Power is the power of influence which acts in addition to the hard power of military force. In the nineteenth century, the UK used its cultural power to influence the most powerful families in its imperial dominions, bring their sons  (and later daughters too) to Oxford and Cambridge,  their military officers to train at the elite officers schools in the UK and promote English literature and science as the global bench mark. Substitute Harvard, Stanford and Caltech, and US policy is much the dame today. China increasingly invites the children of elites in Africa to study at Peking University, some of these probably the grandchildren of those who studied at Oxford. However, Comprehensive National Power is more than just hard and soft power. There are various methods for calculating CNP, but include aspects including Critical mass (land, population, energy and resources), economic strength, technological strength, military strength and cultural appeal. It is precisely her that we see the nexus of the rising conflict between the US and China – not simply trade, but technological capability. The Made in China 2025 (中国制造2025) programme aims to comprehensively upgrade China’s technological capabilities reducing its dependency on western developed economies for key components especially semiconductors (see the ZTE crisis).

Central to a realist geopolitical approach would be to consider the ultimate interests and therefore goals of the conflict parties. China’s goals appear quite transparent – their policies laid out in plans and policies. The US appears less certain in its ultimate direction, but increasingly determined in its approach.

And it is worth remembering that Beijing’s endgame is not necessarily to ensure the financial health of its country this year or the next. If China were to suffer short-term pain to gain a real and lasting advantage over the United States — or at least not lose any advantages it does have — it might be willing to struggle a bit today.

“The negotiation between the two great powers isn’t about how many soybeans or Boeing airplanes they buy by the end of the year,” said Kevin Warsh, a former governor of the Federal Reserve. “We are at a pivotal moment in history. The actions of the U.S. and Chinese governments in the next 12 months will set the course for the relationship of the two great powers of the 21st century.” (Source: NY Times)

The current direction of travel of the US- China Trade War is certainly troubling, but not necessarily surprising when considered from a realist perspective. Some elements in both camps are lobbying for a meeting between Xi Jinping and Donald Trump on the fringes of the upcoming G20 summit. According to the Wall Street Journal “Mr. Trump has dedicated a team to plan for his summit meeting with Mr. Xi, … One of the people involved in the planning is Christopher Nixon Cox, grandson of former President Richard Nixon, whose trip to China in 1972 eventually led to diplomatic relations between the two nations. Meantime, the planning team on the Chinese side includes Liu He, Mr. Xi’s economic envoy…The plan is to get Trump in a room with Xi, get a small win and declare an end to the whole thing,”. However, there are strong forces in both Washington and Beijing arguing forcefully against such a compromise and for a decoupling of the US economy from China and at the current moment; it appears the hawks may have the upper hand.

Will Beijing be willing to suffer short-term pain in the form of falling orders and negative economic impacts of the Trump Tariffs in the hope that it can hold out until rising prices in the US and the impacts of its own targeted tariffs erode support for the current US policies? Might  global US corporations influence their own governments policy and put their weight behind the doves in the administration? The outcomes of the current trade conflict are unclear. In times of such uncertainty, it would be advisable for those closely engaged in international relationship with China and the US to revisit their risk assessments. For international companies dealing with the US and China the geopolitical situation has become increasingly volatile, uncertain, complex, and ambiguous (vuca). Their risk analyses need to be constantly updated and should ensure that political risk is included and weighted as highly as more traditional business risks. For scientific collaborations, the technology transfer clauses in agreements need to be carefully checked and new agreements drafted to ensure that win-win is not just an empty phrase. For all of us, we might hope that calmer heads on both sides will prevail and this trade war does not develop into a more dangerous conflict.

Additional sources:

Huang, S., 1992. On comprehensive national power – zonghe guoli lun. Beijing: Chinese Social Sciences Press.

Nye, J.S., 1990. Bound to lead: the changing nature of American power. New York, NY: Basic Books.

Saadia Pekkanen, John Ravenhill and Rosemary Foot, eds., Oxford Handbook of the International Relations of Asia (Oxford: Oxford University Press, 2014)

Schweizer Strategien für die Herausforderung China

von Prof. Dr. Ruedi Nützi, Direktor Hochschule für Wirtschaft FHNW

Die Schweiz hat die Volksrepublik China als eines der ersten westlichen Länder anerkannt. Eine wirtschaftliche Strategie fehlt jedoch und muss rasch ausgearbeitet und konsequent umgesetzt werden.

Die Schweiz nahm in den bilateralen Beziehungen zu China immer eine Sonderstellung ein. 1950 war die Schweiz eines der ersten westlichen Länder, welche die Volksrepublik China anerkannte. Mittlerweile bestehen über 30 offizielle Partnerschaften zwischen Schweizer und chinesischen Städten, Kantonen, Regionen und Provinzen. Die älteste Partnerschaft – zwischen der Stadt Zürich und Kunming – feierte im letzten Jahr ihr 35-jähriges Bestehen.

Das Freihandelsabkommen und die strategische Partnerschaft im Bereich Innovation bescheren der Schweiz erneut eine Ausnahmestellung – doch das Zeitfenster, diesen Vorteil zu nutzen, ist begrenzt. Denn China ist gemäss Plan auf dem Weg zur Vormachtstellung auf der Welt. Die Entwicklung wird dabei nicht konstant vonstattengehen. Vielmehr werden sich die Aktivitäten Chinas in allen Gebieten expansiv sein wie nie zuvor.

Darum muss sich die Schweiz vertieft mit China auseinandersetzen, Wissen über China schaffen und dieses den relevanten Akteuren zur Verfügung stellen. Ziel muss sein, eine breit abgestützte China-Strategie zu entwickeln und sich konsequent daran zu orientieren.

Der Event “Swiss China Update 2018” der FHNW vom 21. Juni in Olten versteht sich als Plattform für aktuelles Schweizer Wissen über China und seine Wirtschaft und Politik. Daher werden in diesem Jahr drei Schwerpunkte gesetzt: Im Wirtschaftsforum tauschen Schweizer KMU Erfahrungen und Perspektiven aus; im Tourismusforum erfahren Sie am Fallbeispiel Luzern, wie die Stadt mit ihren chinesischen Gästen umgeht; und das Partnerschaftsforum beschäftigt sich mit subnationalen Schweizer Partnerschaften mit chinesischen Städten und Provinzen.

Wir freuen uns auf Ihren Besuch am Swiss China Update in Olten! Programm und Anmeldung unter http://fhnw.ch/swiss-china-update

Die Hochschule für Wirtschaft FHNW unterhält seit 25 Jahren intensive Kontakte zu China. Aktuell verfügt sie über mehr als 20 Partnerschaften in 13 chinesischen Provinzen. Alljährlich besuchen 200 chinesische CEOs und Regierungsvertreter Weiterbildungsprogramme an der Hochschule in der Schweiz.

What’s Next for China? Lessons from the 19th Chinese Party Congress

On 11th December 2017, the FHNW School of Business / Swiss SME Research Center China launched the “China Insights” seminar series at FHNW in Basel with the question “What’s next for China after the 19th Party Congress?” and illuminated the topic from different angles.

About 60 guets followed the explanations of the experts: Ms Elisabeth Tester, ChinaIntelligence, interviewed Minister-Counselor Mr GU Hui (economic policy impacts), Ms Fiona Gao, Vischer AG (policy impacts), Mr Stephan Jüngling, FHNW (OBOR and international trade and diplomacy policy), Mr Gabriel Schweizer, Basel.Area (impacts on Sino-Swiss Business) and host and moderator Mr Michael Jeive, FHNW (key outcomes of the congress).

Minister-Counselor Mr GU Hui

 

The speakers: Gabriel Schweizer, Stephan Jüngling, Hui Gu, Fiona Gao, Michael Jeive, missing Elisabeth Tester

Elisabeth Tester is interviewing Minister-Counselor Mr GU Hui

Fiona Gao

Stephan Jüngling

Gabriel Schweizer

The host and moderator Michael Jeive

Networking Apero

Contact

Prof. Michael Jeive
Head of Swiss SME Research Center China
University of Applied Sciences Northwerstern Switzerland
FHNW School of Business
michael.jeive@fhnw.ch

China National Day on 1st October – Golden Week Holiday: booming tourism

Authors: Miaomiao Wang, Dominik Schaub and Joanna Zhou

The Chinese people have just returned to work after the Golden Week Holiday and after celebrating the National Day and Mid-Autumn Festival.

In 1999, the State Council of China announced the new “National Day and Anniversary Holiday Measures”, and decided to have golden week holiday for China’s National Day. It is made as 3 days public holiday together with stitching two weekends, resulting in a total 7-day holiday.

Year 2000 appeared in the first 7 days of “Golden Week”, since then the annual national holiday travel swept the country. Golden Week is also seen as a major move of stimulating domestic demand and promoting consumption.

Shenyang train station – © Dominik Schaub and Joanna Zhou

In 2017, National Day and Mid-Autumn Festival have overlapped and resulted to an 8-day holiday. According to CNTA (China National Tourism Administration), during the golden week this year, a total of 700 million Chinese travelled around China which generating 584 billion yuan (about 85 billion CHF) revenue and a year on year growth of 13.9%. It has been a transportation boom also with 12.95 million passenger trips made by plane and over 110 million passenger trips made by rail.

Shenyang train station – © Dominik Schaub and Joanna Zhou

CNTA data showed that about 6 million Chinese travelled abroad to 1,155 cities in 88 countries or regions during this National Day holiday, and the most popular destinations are Thailand, Japan, Singapore and US. Countries along “Belt and Road” become expected destinations. Chinese tourists are more interested in in-depth personalized travel experiences, as well as the rising demand of high-quality tours.

Contact

Miaomiao Wang, Olten
Research Assistant
miaomiao.wang@fhnw.ch

Dominik Schaub and Joanna Zhou, Harbin
Project leaders
FHNW School of Business / Swiss SME Research Center China
dominik.schaub@fhnw.ch, joanna.zhou@fhnw.ch

Insight China 2017- An exciting study trip

Author: Diana Jamous

Insights into China’s cultural and economic diversity for FHNW students

30 students and lecturers from the FHNW Schools of Business, Engineering, Life Sciences and applied Psychology visited China for 17 days as part of Insight China 2017

The student-organised study trip mainly focused on transferring knowledge between senior executives, government officials, Chinese universities and FHNW students. This has been an outstanding learning experience, including onsite visits to companies, public institutions and universities. The project, in its 16th year is a highlight for those who are trying to expand their own horizons in a unique way and who would like to discover how Chinese do business in reality.
To learn more about their visits visit their Insight China Blog

Insight China delegation in front of Bühler's offices in Wuxi, China

Insight China delegation in front of Bühler’s offices in Wuxi, China

In addition to the business programme, the students have had the chance to experience ´´Chinese culture and the local lifestyle´´, by visiting the Temple of Heaven, the Great Wall of China in Beijing, trying traditional Chinese food and exploring Beijing, Lanzhou, Shanghai, Shenzhen, Suzhou, Guangzhou and Wuxi. They have also had the opportunity to exchange knowledge with Chinese students, look at innovative technologies and a lot more.

 

‘‘Insight China 2017 was an extraordinary and unforgettable trip. It was perfectly organized and a good mix between impressive foreign culture and insights into innovative companies. And it was far more; it was a journey of surprises and emotions. As a smoothly functioning team we mastered challenging official and nightly events. It was great to be part of this Insight China team!’’
Prof. Dr. Alex Ringenbach, FHNW School of Life Sciences.

 

The world's biggest port was one of the highlights of the visit to the Kühne+Nagel subsidiary in Shanghai/China

The world’s biggest port was one of the highlights of the visit to the Kühne+Nagel subsidiary in Shanghai/China

What is Insight China

Insight China is a prestigious project in its 16th anniversary year at the University of Applied Sciences and Arts Northwestern Switzerland (FHNW) and offers ambitious students the opportunity to gain insights into China’s cultural and economic diversity. By promoting exchange between professionals and students, both sides benefit from each other through the combination of theory and practical experience. The aim is the transfer of knowledge between the delegation of students and the companies that are involved in the project to create and strengthen the foundation of doing business in China.

Insight China is one of four international student projects organized annually by the FHNW School of Business bachelor students. Read the joint magazine NEXUS.

 

Contact

Diana Jamous
diana.jamous@fhnw.ch

China’s Two Sessions

Author: Miaomiao Wang

National Two Sessions

The “Two Sessions” refer to the annual meeting of National People’s Congress (NPC) of the People’s Republic of China and The National Committee of the Chinese People’s Political Consultative Conference (CPPCC). Since the two sessions basically overlap in time, while both are very high in terms of operational importance for the country, it is collectively called Two Sessions.
The National People’s Congress is the supreme body of state authority, and the people elect their representatives through democratic elections to constitute the people’s congress to exercise concentrated state power.
The Chinese People’s Political Consultative Conference is an important body of the multi-party cooperative political consultation under the leadership of the Communist Party of China. Its main functions are political consultation and democratic supervision, to organize participates of all parties, groups and people from all ethnic groups and all walks of life to participate in politics. CPPCC members arise from consultations.
Every five years the two sessions, considered as one period, the annual meeting is called as X Plenary Session of X period. According to the Constitution of the People’s Republic of China, the significance of the “two sessions” is to collect the information and requirements from the people via people representatives, and convey it to the Central Committee of the Chinese Communist party. The representatives of the “two sessions” represent the interests of the majority, representing the voters during the two sessions to the relevant government departments to put forward their own suggestions and requests. Annual regional NPC and CPPCC also known as the two sessions, usually held the time before the national “two sessions”.
The 5th Plenary Session of the 12th National People’s Congress opened on 3 March 2017 and The Chinese People’s Political Consultative Conference opened 5 March 2017; both are in Beijing, China.

National People's Congress NPC, P.R. China

The Third Session of the 12th National People’s Congress NPC, P.R. China

Regional Two Sessions

Heilongjiang Province 2017: Revitalize the real economy
The fundamental goal in 2017 for Heilongjiang province is to improve the competitiveness of the real economy. This is also the first time that Heilongjiang Provincial government work report mentioned the revitalization of the real economy. The real economy is developing relatively slow in Heilongjiang province, and the reasons are both institutional and for unreasonable economic structure. The main factors restricting the development of real economy in Heilongjiang Province are the strong dependence of development path and low level of technological innovation, also the abnormal development of virtual economy have squeezed the space of the real economy development to a certain degree. To thoroughly implement important requirements focusing on revitalizing the real economy, for the real economy in Heilongjiang especially the manufacturing industry that the existence structure has the problem of imbalance and lack of competitiveness and other prominent issues. It is necessary to strengthen the macro guidance in time to give important market signals, also to guide the market focus on market reality, as well as to take effective measures to support, so to fundamentally improve the competitiveness of the real economy. Continue to promote industrial projects, deepen innovation drive. Specific measures can be multi-angle strive; to promote specialized and systematized investment; change the concept of existing enterprises, promote innovation, attract talents, strengthen management; industrializing high-tech achievements; to make full application of new business type and business model; and etc.

Reference:
http://learning.sohu.com/20170303/n482322792.shtml
http://baike.baidu.com/item/%E4%B8%A4%E4%BC%9A#2
http://news.cctv.com/2017/01/16/ARTIY9WClMNYTdYrbkUGwSYp170116.shtml

Contact

Miaomiao Wang
Researcher
FHNW School of Business / Swiss SME Research Center China
miaomiao.wang@fhnw.ch

Can China escape the middle-income trap?

Author: Vannak Im

Innovation and legale frameworks needed

The explosive growth of China over the last three decades has created a middle-income country. However, China did not manage to sustain its previous growth rate in recent years and its government now faces the daunting task of avoiding the middle-income trap: How to remain competitive with higher labour costs.

During the Preparatory Seminar of Insight China, four experts discussed this complex situation: Lukas Züst, Counsel & Head of China Desk at Vischer AG, Elisabeth Tester, Co-Founder ChinaIntelligence, Janwillem Acket, Chief Economist at Julius Bär and Prof. Michael Jeive, Head of the FHNW Swiss SME Research Centre China.

 

According to Acket, China has reached a crucial period in its economic development. Last year’s growth rate of 6.7% was the slowest pace in more than a quarter century, confirming multiple years of slowdown that impairs its economic transformation. Stuck at the middle-income level, the world’s second largest economy is unable to break through.

“China has entered the first stage out of poverty and the big challenge is, how can it go from its current stage into the next higher level,” Acket said.

He denoted China’s middle-income trap as a dilemma because of its sandwich-position. Due to the exhaustion of cheap labour, China struggles to maintain international competitiveness with low-cost countries. Besides, there is an intense high-tech competition with developed nations, according to Acket.

Meanwhile, the government recognises innovation as the key driving force for China’s further development and placed significant emphasis on science and technology in its 13th five-year plan. “If you look at the five-year plan, there is a clear focus to go away from heavy industries that actually brought China at the forefront, as the largest manufacturer of the world,” Acket noted. In order to overcome the hurdles of the middle-income trap, Tester confirmed the importance of creating an economy based on innovation and technology. “There is one word that characterises the whole discussion and this word is innovation,” Tester said.

Governance of innovation

A critical barrier that China must face before entering the spectrum of technologies is its own governance of innovation. According to Züst, the government identified the areas for improvement and is doing its utmost to strengthen innovation, yet they still want to maintain control and restrict with it the freedom of research. “That is the kind of contradiction that the current system still has,” Züst concluded. “If a government wants to be involved everywhere, it is not very motivating for researchers,” Acket added. “It is going to be crucial for China’s development process into the final stage, that the government allows free zones for research and development.” Furthermore the government is required to develop a legal environment that paves the way for innovation, in particular a functioning intellectual property protection system, according to Züst.

The shift from resource-driven growth to innovation-based growth is undoubtedly a huge challenge for China. However, the panellists are confident that China will move up the income ladder. The government understands what is required to foster innovation and if it also manages to cope with legal certainty, Züst believes, China will not be caught in the middle-income trap.

Author: Vannak Im
FHNW international student project “Insight China”
PR & Communication
vannak.im@insightchina.ch
www.insightchina.ch

Parallel Market Research in Multiple Chinese Cities – a new research concept

Author: Michael Jeive

The  Swiss SME Research Center China (SSRCC), a center within the University of Applied Sciences and Arts Northwestern Switzerland  FHNW, carries out market research in parallel in multiple Chinese regions leveraging our extensive network of university partners.

Why Carry Out Parallel Market Research in Multiple Chinese Cities?

It is easy to be seduced by the sheer size and apparent potential of the Chinese market. However, in many cases in reality China has multiple overlapping markets and its economy is as varied and complex as that of Europe. Comparing Harbin, Kunming and Shanghai is much like Copenhagen, Cadiz and London, and surely no one would research in Cadiz for a product launch in Copenhagen.

To understand the market potential and market entry modes for a Swiss product or service and to investigate potential market entry modes, the market must be segmented both geographically and by sector. This means finding the right place and the right channels to offer the best chances of success for your products or service.

Would you research in Cadiz for a product launch in Copenhagen?

Let’s consider one example:

Example Findings – Buying Decisions of Retail Cosmetics Customers

Customer preferences and buying behaviours are significantly different in Shanghai and Harbin and also amongst high and mid income buyers. Customers in Harbin respond to cosmetic products in a different way and use quite different criteria and process in the buying decision. Importantly, cities like Shanghai which are most developed are also the most contested and challenging markets while growth potential in many Tier 2 cities is strong and competition still comparatively weaker offering solid opportunities for those companies able to take them. Such data is vital for companies to developing marketing and communication strategies and enables targeted regional activities helping to segment and respond to large and complex market.

Selected cities within easy travelling distance of an FHNW School of Business partner (cities in bold are home to an SSRCC partner, others are within easy travel distance of a partner)

Parallel Market Research Process

Market research is conducted in parallel in several economic regions in China to support SMEs in their decision-making. This is made possible by the FHNW School of Business university network in China. Working with local university partners we also learn more about the local markets and the economic environment in China, ensure our researchers have local knowledge and minimise the potential impact of western researchers influencing the responses of the interviewees.

Swiss Concepts Applied Internationally

The initial market research concepts for the Chinese market are developed individually for each customer in Switzerland, then approved by the customer and tested locally in China by a local partner university to ensure user friendliness and data reliability. After the test phase, the adapted concept is approved again by the customers before the Chinese partners are trained in the research instruments.

This method ensures that each customer works with a project manager who understands the local position of the company in Switzerland and can guarantee that all confidential and sensitive data remain in Switzerland in order to minimise risk. At the same time, the quality of the research is maximized by taking advantage of local insights and the knowledge of the Chinese partners. This process ensures the reliability and clarity of the method for the entire geographically defined market research area in China. Once the research data have been collected in China, they are delivered to Switzerland for data analysis and reporting.

Lower Costs Thanks to Local Partners, Increased Benefits for Swiss Students and Academics

Our new market research method also means that the costs can be kept lower thanks to our local partners and the possibility to test the concept simultaneously in several Chinese cities spread over a larger area. This new method also strengthens and intensifies the cooperation with our local university partners. This results in additional research ideas and joint academic research contributions.

As a University of Applied Sciences and Arts, it is central to our function that we pass on our knowledge to our students in the classroom so that they are prepared for their future employment are more valuable employees for Swiss enterprises especially those operating in global markets now or in the future.

The Swiss SME Research Center China (SSRCC)

The SSRCC’s mission is to promote information and technology exchange and bring together industry partners from Switzerland and China to build cooperation and innovation. The SSRCC provides Swiss enterprises, especially SMEs, with a viable opportunity to gain a market presence in China while offering their Chinese counterparts the same possibility in Switzerland.    The SSRCC is part of the the Fachhochschule Nordwestschweiz FHNW, School of Business and provides services in the area of ​​business consulting and market research for Swiss and Chinese enterprises as well as joint research and executive development programmes with Chinese university partners. We are currently working on a number of market research assignments for medium-sized companies from the region of northwest Switzerland. The FHNW University of Applied Sciences has maintained an intensive exchange with companies from various sectors, renowned universities and important authorities in China for over 25 years. These relationships are used to foster the exchange of knowledge and business relations between Switzerland and China. In this way, we are able to improve the professional abilities of our students and help deliver opportunities for Swiss companies in the Chinese market.

Contact

Prof. Michael Jeive
Head of Swiss SME Research Center China
University of Applied Sciences Northwerstern Switzerland
FHNW School of Business
michael.jeive@fhnw.ch

Erster offizieller Besuch einer swissuniversities-Delegation in China

Eine Delegation von swissuniversities, bestehend aus sechs Vertretern von Schweizer Universitäten bzw. der EPFL Lausanne und Ruedi Nützi, Direktor der Hochschule für Wirtschaft FHNW als Vertreter der Schweizer Fachhochschulen, besuchte im Dezember 2016 in Peking, Shanghai und Shenzhen 14 chinesische Universitäten. Es handelte sich um den ersten offiziellen Besuch einer Delegation von swissuniversities in China. Dies in der Absicht, die von Bundespräsident Schneider-Ammann und Staatspräsident Xi Jinping beschlossene strategische Partnerschaft im Bereich Innovation zu konkretisieren.

swissuniversities Delegation 2016 bei Huawei

swissuniversities Delegation 2016 bei Huawei

Die chinesischen Partner zeigten grosses Interesse an einer Zusammenarbeit mit der Schweiz und mit Schweizer Universitäten und Hochschulen. Auch das spezifische Profil der Fachhochschule fand grosses Interesse, geht es doch in allen Volkswirtschaften um die Praxisorientierung der Wissenschaft. Die Hochschule für Wirtschaft FHNW unterhält bereits rege Kontakte zu nicht weniger als 10 Universitäten in China. In dem Sinn war z.B. der Delegations-Besuch an der Shanghai University of Finance and Economics SUFE ein Heimspiel für Ruedi Nützi: Die Hochschule für Wirtschaft FHNW plant zurzeit mit der SUFE neue Programme in den Bereichen Innovation und Entrepreneurship sowie Forschungs-Kollaborationen und in Zukunft Executive Development Programmes (EDP). Zudem hatte Ruedi Nützi im Juli 2016 an der Summer School der SUFE unterrichtet. Ein weiterer wichtiger Output des Delegations-Besuchs im Dezember 2016 war für die Hochschule für Wirtschaft FHNW u.a. die Aufnahme von Beziehungen zur Central University of Finance and Economics CUFE in Peking.

Solche Universitäts-Partnerschaften sind von entscheidender Bedeutung für eine moderne, international-orientierte Fachhochschule. Durch die Kollaborationen werden neue Kenntnisse generiert, und wir können das gewonnene Wissen an unsere Studierenden weitergeben, die sich in ihrem zukünftigen beruflichen Alltag in einem globalisierten Umfeld bewegen werden. Die Partnerschaften ermöglichen auch Austauschsemester an chinesischen Universitäten für unsere Studierenden, die sich dadurch neue soziale und kulturelle Kompetenzen aneignen können. Unsere vertieften Marktkenntnisse und das Ökonomieverständnis in China  teilen wir auch mit unseren Wirtschaftspartnern, um sie in ihren China-Aktivitäten zu unterstützen. Mehr Informationen dazu erhalten Sie auf unserer SSRCC-Website.

Winter sports market in China

The 1st China International Winter Sports Industry Conference and Exhibition in Beijing provided an overview of the Chinese winter sports market in the run-up of the Olympic Winter Games 2022 in Beijing. With the right know-how and the right partners, there are a lot of opportunities for collaborations and business opportunities for Swiss companies.

wintersport1This autumn the first China International Winter Sports Industry Conference and Exhibition took place in Beijing. The organization was supported by several Swiss organizations like the Swiss Embassy, Swiss Business Hub, SwissCham Beijing and Switzerland Tourism. But also the embassies of France, Austria, Finland and Germany and the tourism bureaus of France, Finland and Italy belonged to the supported organizers. Around 500 participants, interested in winter sports, attended the conference. Three European countries – Austria, Finland and Switzerland – hat the opportunity to present their countries and ski resorts at the conference. The European tourism experts experience a real skiing fever in China since the 2022 Olympic Games announcement and Swiss companies should grab the opportunity for extending their business activities to China.

wintersport2In developing ski areas, China can learn a lot from the European countries with mountains and a long tradition in ski tourism. But we also can learn a lot from the Chinese in using devices. The presented Virtual Reality technology could possibly be interesting to prepare for extreme skiing or freestyle skiing. But it is not only in VR technology where Switzerland can learn from China. The Chinese ski industry uses more modern technologies to enhance the skiing experience. There are many apps helping skiers with various steps of the experience.

Overview sport market in China

The conference provided an overview of the Chinese sports market. Chinese consumers in cities spend around 30% of their disposable income on sport related activities and products. This is equivalent to a real market value of approx. 7,4 billion RMB per year, mostly on football related activities. But there is an increasing high potential in winter sports regarding the Olympic Winter Games 2022 in Beijing.

Over the last several years the sport market grew by 17% per year. It is expected that by the year 2025 500 million people will be involved in jobs that have some relationship to sports. In the last few years tourism as a whole but also the winter tourism has become a mass product. Tourism will become the biggest driver of economic growth in this decade. But companies should start focusing on niche markets to generate the high profits. This might help Swiss companies that are already operating within a niche market. It might be better to increase the services and linked to that the quality instead of growing in size as the increased quality can lead to a more sustainable profit increase.

The Chinese target group

Chinese people who visit a ski resort actually do not only want skiing, therefore Ice and Snow theme parks are needed. Many of the guests want to spend more than one day in a resort, which requires a suitable hospitality concept and the resorts have to become multimode as most of the resorts only generate about 40% of their income with skiing. So far China has only a few ski resorts and they are quite small. Most of the ski resorts are situated in the Dongbei region which includes the province of Heilongjiang.

wintersport4Only 0,4% of the Chinese population currently ski (compared to 2,5% in the US or 20% in Norway), but the number is expected to rise sharply as 2022 approaches. Most of the skiers practiced skiing the first time and 80% of the people only ski once a year. China will improve the skiing experience online and offline. The online experience is an easy one as it quite cheap. The offline experience of course is more expensive as the whole infrastructure has to be set up. But for Swiss companies the offline infrastructure provides a lot of opportunities for collaborations.

Experts in Chinese winter sport resorts

wintersport9An experienced manager of ski resorts is Mr Benno Nager from Secret Garden Resorts. He shared his experiences at the conference. After many years in Switzerland and the US he was hired to manage the Secret Garden Resort in China. This resort is part of the planned Olympic village for the Nordic and Freestyle skiing events. From his experience an important part of a successful resort is its environment. It is useful to build a resort out of existing villages as they have already the needed infrastructure. He pointed out to the fact that if people are living in the village all year round the existing economy will ensure a more sustainable resort. The Olympic village will be built from scratch but if China learns from good and bad examples of ski resorts they can succeed nonetheless. And there are a lot of business possibilities for Swiss companies.

Mr Vincent Vahramian, a ski slope and ski resort architect who worked on approx. 30 resorts in China said, that due to the high percentage of people who spend only one day in a resort, the resorts should not offer too many activities for individuals but rather focus on family activities. If a family spends one day in a resort they would normally not attend individual activities but stay together. Physical activities rather than cultural, such as museums, increase the willingness of returning to the resort. And the resorts should rather focus on events and activities that create a certain atmosphere. This will encourage people to repeat their visits, too.

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If a Swiss company would like to analyse or try their market entry into the winter sport market in China, we are happy to help. For those who would like to attend the 2nd China International Winter Sports Industry Conference and Exhibition in 2017, safe the date: 20 – 22 September 2017 in Beijing.

Contact: ssrcc.business@fhnw.ch

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Beijing Olympics 2022 Fact Finding Mission
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China Ski Industry White Book
Author: Wu Bin / Wei Qinghua
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