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 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 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 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） 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， 他创建了一个产量上百万的工厂， 并且帮助我制定了一个可行的计划。 他还帮助我意识到了我们公司能在中国市场上赢得竞争力的一个因素，就是我们在提供产品的同时也要提供服务。 如果有人对于一个市场感到陌生我极力推荐他去找一个有经验的朋友去征求意见找些点子。 同时， 我也会鼓励中国当地政府更多的利用在当地范围内成功的外国合资企业作为典型来吸引力了。 我相信很多在华的外国公司为了商业环境的进一步国际化会很乐意提供帮助的， 因为， 这一点也是他们努力工作想要实现的。 自从我遇到了自己的“模范”以后， 我在中国拓展业务就主要依赖如下几点： 计划 强大的并且积极的领导层 积极的目标 团队合作 很幸运的是， 我1993年到中国来的时候结识了一个朋友， 在我再次来到中国工作的时候， 他已经在广州设计院担任重要职务。 在中标内环路项目时， 我很庆幸他能欣赏我做生意的方法： 在预算范围内提供优质服务， 如实地评价我们竞争对手的工程质量。 在完成内环路施工建设这一过程中， 我们的合资企业变得有效率多了， 生产效率大幅度提高。 因此， 我们员工的工资也增加了， 与合作伙伴的关系也更愉快了。 我们的第二个大合同， 广园路， 获得了2000年中国最佳公路奖。 这个荣誉我们受之无愧， 这条路确实达到了世界级质量标准。 我们公司对目前西部开发带来的基础设施建设方面的各种机会特别感兴趣。 为了进一步参与西部开发， 我们清楚的意识到我们必须了解这一地区所提供的鼓励政策以及在这一地区从事商业活动要面临的风险。 我们希望能够借助我们在东部地区的成功经验， 并且明了我们面对的是一个完全不同的环境。 我想提一下我在中国东部获得的经验因为我认为这些经验在迎接西部大开发的挑战中会有一定的借鉴作用。 在中国西部地区， 不论在果有企业还是私营企业中都在着官僚主义， 因此， 对外国投资者来说， 最重要的是政府开明和包容的态度。 可能就先生在昨天的讲话中提到的几条基本原则能否被当地政府的高层官员理解并运用到政府政策中， 对西部开发能否获得真正的进展是非常重要的。 这几条基本原则在东部发展中也起到过积极作用。 西部大开发策略的提出带出了很多诱人的理论和商机， 但这一策略是否能取得持续性的进展还有赖于政府依据这些理论在更广泛的范围内作出建设性的调整和文化理念上的改变。 一个好的政府能耐心帮助一位有潜力的投资者做出在哪里投资的最终决定， 即使所需时间很长。 中国正在努力发展私营企业， 因此中国会逐渐把眼光投到诸如我这样的外国小公司身上， 越来越多地吸引这样的外国小企业来华投资。 有很多大公司在华投入大量人力以应付在中国做生意所要遇到的错综复杂的问题，但小公司仅靠自己的力量不可能做到，然而小公司的需求也是不容忽视的。 因此以下的几点建议是非常有用的： 由中国政府提供相关的英文资料并写成对外国投资者来说方便易懂的形式。 这是因为非常遗憾， 很多外国人不会说中文， 因此投资者很高兴和懂英文的人大交道。 同样重要的是， 政府能够为投资者不断地明确地提供政策的咨询， 并建立这种咨询中心为后来的投资者答疑。 这些看起来是小建议， 但对于投资者来说， 这些小建议能把消极的投资环境变为积极的投资环境。 我还发现了一些其他的对于发展我们业务很重要的因素： 有完善的可靠的解决争端的程序。在中国不管你在哪个地方从事商业活动， 在法律面前的平等性都很重要。 很多公司进入中国带来了其独特的产品。 但是引进处于技术前沿的产品也就意味着要对这些产品的拥有者提供保护， 打击 盗版和非法使用。 采取严格措施来保护知识产权的地方政府将会战胜那些只是作出口头承诺的地方政府。 针对中国决策过程不透明这一点而提供些引导帮助。 对于局外人来说是很难理解我们的合作伙伴以及政府内部的管理决策形式的。 这对于中国东部和西部同样重要。 接下来是我今天要谈的最关键一点： 绝大多数在中国取得成功的海外公司是那些有足够的适应性能适应不同的环境的公司， 适应性是他们成功的关键。 西方的公司进入中国，不能保持一尘不变的模式来开展业务， 必须要务实。