Improvement of Soft Environment Good Morning, Honoured Guests, Ladies and Gentlemen, We have heard a lot of interesting points from the speakers who have gone before me about creating a supportive investment climate which takes into account the interests and concems of foreign companies, while also helping Chinese companies and the various regions of China to realize their competitive advantages would like to tell you today about my own personal experiences, and those of my company, Universal Sealants, in Guangdong and China more generally. I would like to draw out those factors which I feel were most important in helping us to develop our business activity First, some background on my company. Universal Sealants UK Ltd has, over the past 20 years, become one of the UK's foremost specialist construction supply companies It operates throughout the world, including over the past 8 years in China. Our strength as a brid ge expansion joint contractor, using the Briflex BEJ system, forms the core of our business. We are the main system used by Welsh Development Office who spoke yesterday. Command 60%UK market USL first came to China in 1993, when I was sent to install some trial expansion joints in Guangzhou. Since then, our joint system has been put into use in Shenzhen, Shanghai, Ningxia, Bijing, Chengdu and here in Chongqing. As a small company, we are quite unique in our sector in China in having a manufacturing operation in the West of China, and a positive tract record of work in the east My company has since entered into a joint venture operation with a company in Sichuan, with a 49% share-holding My own experience suggests that it is difficult to build positive leadership, and aims, in such ventures. Each partner may be struggling to take control of the middle ground. Each may have put into the joint venture almost the same capital as the other. But one partner, in this case USL, will have one less seat on the board. Our best product is effectively in the hands of another company, and with it our world wide reputation. This is dangerous When i became involved in the joint venture 4 years ago, i needed to establish a clear niche for myself without stepping on any of the existing relationships within the company. And i needed to work out how business was done in China
1 Improvement of Soft Environment Good Morning, Honoured Guests, Ladies and Gentlemen, We have heard a lot of interesting points from the speakers who have gone before me about creating a supportive investment climate which takes into account the interests and concerns of foreign companies, while also helping Chinese companies and the various regions of China to realize their competitive advantages. I would like to tell you today about my own personal experiences, and those of my company, Universal Sealants, in Guangdong and China more generally. I would like to draw out those factors which I feel were most important in helping us to develop our business activity. First, some background on my company. Universal Sealants UK Ltd has, over the past 20 years, become one of the UK’s foremost specialist construction supply companies. It operates throughout the world, including over the past 8 years in China. Our strength as a bridge expansion joint contractor, using the Briflex BEJ system, forms the core of our business. We are the main system used by Welsh Development Office who spoke yesterday. Command 60% UK market. USL first came to China in 1993, when I was sent to install some trial expansion joints in Guangzhou. Since then, our joint system has been put into use in Shenzhen, Shanghai, Ningxia, Bijing, Chengdu and here in Chongqing. As a small company, we are quite unique in our sector in China in having a manufacturing operation in the West of China, and a positive tract record of work in the East. My company has since entered into a joint venture operation with a company in Sichuan, with a 49% share-holding. My own experience suggests that it is difficult to build positive leadership, and aims, in such ventures. Each partner may be struggling to take control of the middle ground. Each may have put into the joint venture almost the same capital as the other. But one partner, in this case USL, will have one less seat on the board. Our best product is effectively in the hands of another company, and with it our world wide reputation. This is dangerous. When I became involved in the joint venture 4 years ago, I needed to establish a clear niche for myself without stepping on any of the existing relationships within the company. And I needed to work out how business was done in China
My company, USL, has done a great deal of work to understand the full background of our joint venture partner. We had already established a clear idea of our common goal, to develop the market for our products in China. Clarity and consistency in our dealings with each other were very important. I decided that I needed to focus on relationship building within the company, to ensure that we could find a good way to work together and to bring some continuity to the process. Trust within a partnership is very important. And this often extends beyond the business to placing trust in the local government too. If any part of any of there relationships fails to deliver as promised, the future of any investment must be called into question I was lucky in several senses I realized early on that the first step in doing business in China was to stop and learn from the local cond itions I found among the British community in Guangzhou a mentor/coach who was happy to pass on tips and advice to me. That man, Steve Warren of the chemical company ICI, had built up a multi million production facility and helped me to develop a plar of action. He also helped me to identify the one factor which my company could offer to make it competitive in China: we would offer service to our customers as well as a I would certainly encourage others who are new to the market to find an experienced friend to bounce ideas off. At the same time I would encourage Chinese local governments to make more use of the successful foreign joint ventures within their area as role models to attract new investors. There is nothing like a success story to attract interest; and many foreign companies in China, as part of their commitment to the community they work in, will be happy to lend their services to further internationalise the business environment annin Str Leadership Positive goals eam work I was also lucky that, when I return to China to work in the joint venture, one of my contacts from my first visit to China in 1993 was now in a key position, at the Design
2 My company, USL, has done a great deal of work to understand the full background of our joint venture partner. We had already established a clear idea of our common goal, to develop the market for our products in China. Clarity and consistency in our dealings with each other were very important. I decided that I needed to focus on relationship building within the company, to ensure that we could find a good way to work together and to bring some continuity to the process. Trust within a partnership is very important. And this often extends beyond the business to placing trust in the local government too. If any part of any of there relationships fails to deliver as promised, the future of any investment must be called into question. I was lucky in several senses: I realized early on that the first step in doing business in China was to stop and learn from the local conditions. I found among the British community in Guangzhou a mentor/coach who was happy to pass on tips and advice to me. That man, Steve Warren of the chemical company ICI, had built up a multi million production facility and helped me to develop a plan of action. He also helped me to identify the one factor which my company could offer to make it competitive in China: we would offer service to our customers as well as a product. I would certainly encourage others who are new to the market to find an experienced friend to bounce ideas off. At the same time, I would encourage Chinese local governments to make more use of the successful foreign joint ventures within their area as role models to attract new investors. There is nothing like a success story to attract interest; and many foreign companies in China, as part of their commitment to the community they work in, will be happy to lend their services to further internationalise the business environment. Since I met my own role model, I have relied on a number of key principles to advance our business in China: Planning Strong Positive Leadership Positive goals Team work I was also lucky that, when I return to China to work in the joint venture, one of my contacts from my first visit to China in 1993 was now in a key position, at the Design
Institute in Guangzhou. Having won the tender for the ring road, I was lucky that he was receptive to my way of doing business: to offer a good service, on or under bud get and an honest opinion about the quality of some of our competitors work In the process of meeting the targets for the ring road contract, our joint venture factory became more efficient, and production speeded up. In the process, the workers moved on to higher wages for their higher output; and the foreign joint venture partner became more accepted Our second major contract, Guan Yuan Lu, won the prize for the best motorway opened in China in 2000. I feel it was a well-deserved prize, as the quality is world lass My company is particularly keen to become involved in the many opportunities now opening up to develop the infrastructure in Western China. In seeking closer involvement, we are very conscious that we have to understand the incentive regime prevailing in this region, as well as the challenges of doing business here We hope to draw on our positive experiences in Eastern China; but are conscious that we are tackling a very different environment here I would like to mention some of my experience in Eastern China as relevant to dealing with the challenges now facing those developing Western China. The state bureaucracy is still very influential in Western China, both in the Soe and private sectors. An open and accepting attitude among the government to the needs of foreign investors is thus very important. In order to facilitate real progress, it is important that local senior government officials both understand, and are encouraged to adopt as government policy, the basic principles about which Nigel Clark talked yesterday; and which have underpinned development in the East. Announcements about Western development contain many interesting principles and incentives; but these need to embedded in wider structural and cultural change if the strategy is to achieve sustainable progress A helpful local bureaucracy can go a long way to assisting a potential investor to make a final decision about where to invest As china seeks to develop its private sector, increasingly it will be looking to attract smaller overseas businesses to invest here. Many larger companies have large staff to deal with the intricacies of doing business here many smaller ones dont, but their needs are just as important. Helpful points include having material published in
3 Institute in Guangzhou. Having won the tender for the ring road, I was lucky that he was receptive to my way of doing business: to offer a good service, on or under budget and an honest opinion about the quality of some of our competitors’ work. In the process of meeting the targets for the ring road contract, our joint venture factory became more efficient, and production speeded up. In the process, the workers moved on to higher wages for their higher output; and the foreign joint venture partner became more accepted. Our second major contract, Guan Yuan Lu, won the prize for the best motorway opened in China in 2000. I feel it was a well-deserved prize, as the quality is world class. My company is particularly keen to become involved in the many opportunities now opening up to develop the infrastructure in Western China. In seeking closer involvement, we are very conscious that we have to understand the incentive regime prevailing in this region, as well as the challenges of doing business here. We hope to draw on our positive experiences in Eastern China; but are conscious that we are tackling a very different environment here. I would like to mention some of my experience in Eastern China as relevant to dealing with the challenges now facing those developing Western China. The state bureaucracy is still very influential in Western China, both in the SOE and private sectors. An open and accepting attitude among the government to the needs of foreign investors is thus very important. In order to facilitate real progress, it is important that local senior government officials both understand, and are encouraged to adopt as government policy, the basic principles about which Nigel Clark talked yesterday; and which have underpinned development in the East. Announcements about Western development contain many interesting principles and incentives; but these need to embedded in wider structural and cultural change if the strategy is to achieve sustainable progress. A helpful local bureaucracy can go a long way to assisting a potential investor to make a final decision about where to invest. As china seeks to develop its private sector, increasingly it will be looking to attract smaller overseas businesses to invest here. Many larger companies have large staff to deal with the intricacies of doing business here many smaller ones don’t, but their needs are just as important. Helpful points include having material published in
English, and in a format which is user-friendly for overseas investors. Sadly, many foreigners dont speak Chinese: so investors welcome the chance to deal with staff who speak good English too. It helps if a local authority offers clear and consistent advice on local regulations, and that helpdesks are set up for those who still have quires hese may seem like small points, but they can make the difference between winning, and a lagging environment for investors Other issues which we have found important in growing our business include Having adequate and reliable procedures in place to resolve disputes. Equality before the law is important wherever your business is based in China Many compan ies which come here have a unique product to offer. But attracting oroducts at the forefront of technology also means offering protection to the owner against copying and illegal use. Any local government which takes serious its commitment to enforce IPR protection will win over those who pay lip-service to the law Provide guidance on the opaque nature of the decision-making process in China Understand ing the lines of authority, both with partner organizations and within government is very difficult to the outsider. This applies equally in Eastern as Western China This is the key message I would like to leave you with today: the overseas compani which tend to be those flexible enough to adapt to different environments:this is the key to their success. Western companies cannot come to China with hard and fast ideas on doing business here; rather they need to be pragmatic
4 English, and in a format which is user-friendly for overseas investors. Sadly, many foreigners don’t speak Chinese: so investors welcome the chance to deal with staff who speak good English too. It helps if a local authority offers clear and consistent advice on local regulations, and that helpdesks are set up for those who still have quiries. These may seem like small points, but they can make the difference between a winning, and a lagging environment for investors. Other issues which we have found important in growing our business include: - Having adequate and reliable procedures in place to resolve disputes. Equality before the law is important wherever your business is based in China. - Many companies which come here have a unique product to offer. But attracting products at the forefront of technology also means offering protection to the owner against copying and illegal use. Any local government which takes serious its commitment to enforce IPR protection will win over those who pay lip-service to the law. - Provide guidance on the opaque nature of the decision-making process in China. Understanding the lines of authority, both with partner organizations and within government is very difficult to the outsider. This applies equally in Eastern as Western China. This is the key message I would like to leave you with today: the overseas companies which succeed in China tend to be those flexible enough to adapt to different environments: this is the key to their success. Western companies cannot come to China with hard and fast ideas on doing business here; rather they need to be pragmatic
(南大力先生讲演稿) 001年11月 尊敬的来宾,女士们,先生们早上好! 在我之前的发言人已经围绕着“照顾外国公司利益创造良好的投资环境,与 此同时,帮助中国公司企业和各个地区实现其本身的竞争优势”这一问题阐述了 自己的见解。 今天我想讲的是我自己的一些经验,一些关于我们 UNIVERSALSEALANTS 公司在广东,更大范围的说是在中国的一些经验。我会列举出一些我自己认为对 于发展我们公司的商业活动有重要意义的因素。 首先,我得介绍一下我们公司的背景。 UNIVERSAL SEALANTS(英国)有 限公司(USL)经过20年的努力,发展成为了一家顶级的英国专业建筑材料公 司。公司的商业活动遍布全球,进入中国已经有8年历史。我们的核心业务 是应用布罗斯桥梁伸缩缝系统承包桥梁伸缩缝工程。我们的系统是昨天参加讲演 的威尔士发展局所采用的主要系统。我们的系统占据了英国市场60%的份额。 1993年, UNIVERSAL SEALANTS在广州安装实验伸缩缝进入中国市场 此后,我们的伸缩缝系统陆续应用于深圳,上海,宁夏,北京,成都和重庆。 作为一个小公司,我们在中国的同类产业中比较特殊,因为我们在中国西部有 加工厂,在中国东部的商业活动也有很好的业绩。 我们的公司与一个四川的公司建立了合资企业,我们持有49%股份。但是 我的经验告诉我:在这样的合作条件下很难建立积极的领导层,也很难确立积 极的目标。因为合作双方都力争要控制合作企业的中层。合作双方投入的资本 几乎相当,但是有一方,比如我们USL,在懂事会的席位就少一位。这样就 使得我们自己最好的产品在另一个公司的手中,我们公司在世界上的声誉也掌 握在他们手中,这是很危险的。 在我四年前刚到这家合资企业任职的时候,我需要创建一个合适的环境方便 自己开展工作,但是却不能影响已经形成的公司内部关系。所以我必须知道在 中国要怎么开展这些工作。 我们USL公司为了全面了解我们合作的背景而做了大量的工作。我们已经 明确地确立了一个共同的目标,既是为了我们的产品发展中国市场。我们与合 作者相互之间的明晰性和连续性非常重要。我认为我们应该立足于公司内部已 经建立的关系,来确保我们能找到一种好的方法共同合作,使得整个合作过程 有连续性。公司内部合作各方的相互信任是非常重要的。这种信任往往扩大到 超出商业的范围,而关系到对政府的信任。如果合作的任何一方不能履行他的 承诺,都将对未来的投资造成不利影响。 在有些方面我很幸运 我很早就意识到了中国做生意第一步就是要先在当地学习。 我在广州当地的英国人中找到了一个好老师为我指点迷津,[他很乐意把自己 的经验和意见传教给我。]他就是ICI化学公司的 STEVE WARREN,他创建了
5 （南大力先生讲演稿） 2001 年 11 月 尊敬的来宾，女士们，先生们早上好！ 在我之前的发言人已经围绕着“照顾外国公司利益创造良好的投资环境， 与 此同时，帮助中国公司企业和各个地区实现其本身的竞争优势”这一问题阐述了 自己的见解。 今天我想讲的是我自己的一些经验，一些关于我们 UNIVERSALSEALANTS 公司在广东，更大范围的说是在中国的一些经验。我会列举出一些我自己认为对 于发展我们公司的商业活动有重要意义的因素。 首先， 我得介绍一下我们公司的背景。UNIVERSAL SEALANTS （英国） 有 限公司（USL）经过 20 年的努力，发展成为了一家顶级的英国专业建筑材料公 司。 公司的商业活动遍布全球， 进入中国已经有 8 年历史。 我们的核心业务 是应用布罗斯桥梁伸缩缝系统承包桥梁伸缩缝工程。我们的系统是昨天参加讲演 的威尔士发展局所采用的主要系统。我们的系统占据了英国市场 60%的份额。 1993 年， UNIVERSAL SEALANTS 在广州安装实验伸缩缝进入中国市场。 此后，我们的伸缩缝系统陆续应用于深圳， 上海，宁夏，北京， 成都和重庆。 作为一个小公司， 我们在中国的同类产业中比较特殊， 因为我们在中国西部有 加工厂， 在中国东部的商业活动也有很好的业绩。 我们的公司与一个四川的公司建立了合资企业， 我们持有 49%股份。 但是 我的经验告诉我： 在这样的合作条件下很难建立积极的领导层， 也很难确立积 极的目标。 因为合作双方都力争要控制合作企业的中层。 合作双方投入的资本 几乎相当， 但是有一方，比如我们 USL， 在懂事会的席位就少一位。 这样就 使得我们自己最好的产品在另一个公司的手中， 我们公司在世界上的声誉也掌 握在他们手中，这是很危险的。 在我四年前刚到这家合资企业任职的时候，我需要创建一个合适的环境方便 自己开展工作， 但是却不能影响已经形成的公司内部关系。 所以我必须知道在 中国要怎么开展这些工作。 我们 USL 公司为了全面了解我们合作的背景而做了大量的工作。 我们已经 明确地确立了一个共同的目标， 既是为了我们的产品发展中国市场。 我们与合 作者相互之间的明晰性和连续性非常重要。 我认为我们应该立足于公司内部已 经建立的关系， 来确保我们能找到一种好的方法共同合作， 使得整个合作过程 有连续性。公司内部合作各方的相互信任是非常重要的。 这种信任往往扩大到 超出商业的范围， 而关系到对政府的信任。 如果合作的任何一方不能履行他的 承诺，都将对未来的投资造成不利影响。 在有些方面我很幸运： 我很早就意识到了中国做生意第一步就是要先在当地学习。 我在广州当地的英国人中找到了一个好老师为我指点迷津，[他很乐意把自己 的经验和意见传教给我。] 他就是 ICI 化学公司的 STEVE WARREN， 他创建了