China s Growing Economy and Opportunities for the Labour Market Zhi Dong ( 董治 ) Trade & Partnership Manager South East England Development Agency
CONTENTS China overview Key sectors in mainland China Opportunities in China s regional cities Brief overview of Hong Kong
CHINA OVERVIEW As a large and fast growing economy, China offers a wealth of opportunities for businesses as well as individuals. The world second largest economy Total GDP of $5.88 trillion GDP growth to be 9-9.5% in 2011 Shift to a more balanced economy China will benefit less and less from cheap labour Population: 1.35 billion Area: 9.6 million square km Capital: Beijing Government: Communist Party led state Currency: yuan (CNY or RMB GDP growth rate: 9.6% (2010) Major industries: iron and steel, coal, machine building, textiles and apparel, petroleum, cement, chemical fertilisers, footwear, toys, food processing, automobiles, consumer electronics, telecommunications
CHANGE OF GROWTH MODEL The 12th Five Year Plan (2011-2015) will be unveiled at the National People's Congress in March, which will represent a more determined shift to a more balanced economic structure greater domestic consumption less reliance on exports and investment greener high technology growth
KEY SECTORS Advanced Engineering (Aerospace) Energy Environment and climate change This shows is not only that there is huge scope for businesses but that the opportunities closely align with the UK s expertises. Financial and professional Services Information communication technology Life sciences
AEROSPACE China s aerospace industry developed well in the past few decades and is predicted to grow at an impressive rate over the next 20 years. Large Aircraft Project: C919 first flight in 2014 and be delivered in 2016 Regional Jet Project 500 regional jets needed in next 20 years Passenger Airlines 40 domestic airlines and 110 bilateral agreements with other countries Air freighter 425 freighters in 20 years Helicopters Relatively small but a priority to grow Maintenance, Repair & Overhaul (MRO) 5% of the world,1/3 of Asia
ENERGY China s rapid economic development requires a continuous increase in energy supply, which is both an economic and political focus. Leading companies: China National Petroleum Corp (CNPC), China Petroleum and Chemical Corp (Sinopec) and China National Offshore Oil Corp (CNOOC) Expertise needed in: Gas exploitation and exploration in newly opened areas; Geophysical data processing; Horizontal drilling and safe exploration/exploitation technology for high sulphur and/or dense areas; Leak detection remote monitoring and emergency repair solutions; De-sulphurization technology and automatic control systems for refineries; Gas distribution and pipeline construction; Pipeline detection and replacement; Pipeline materials, especially heat and corrosion resistant; and Instruments, meters, valves, etc. China speeds up offshore activities However, in general, Chinese companies lack sufficient technologies, experience and talents in the offshore sector compared with international players.
ENVIRONMENT & CLIMATE CHANGE More effort to re-balance the economy, including through more work to proactively combat climate change environmental concerns & demands for quality of life 26% of global carbon emission Carbon intensity cut by 40-45% by 2020 Copenhagen pledge Climate change law Clean energy investment plan (US750billion from 2011-2020) nuclear, wind, hydro, solar, biomass, geothermal, unconventional gas, new clean coal, smart grid and alternative energy vehicle technologies Low carbon pilot zones Guangdong became the first low carbon pilot zone in Nov. 2010-increasing use of renewables and nuclear, further improvement on energy efficiency, regional co-operation on adaptation and technology innovation, CCS and the piloting of market mechanisms such as carbon trading. Shengzhen-another pilot city
FINANCIAL & PROFESSIONAL SERVICES Shanghai is expected to have 360,000 people working in financial industry by 2015, a rise of over 50% from the current level of 230,000. The supply-demand ratio for high level financial professionals is 1:9 in large cities. Banking Insurance Private equity Securities Fund management Legal & other professional services Legal services: 14525 legal firms employing over 150,000 lawyers largest 5 domestic law firms: Dacheng, King&Wood, De Heng, Grandall, Jun He (2009) 5 largest international law firms: Baker&McKenzie, Freshfields, Gide Loyrett Nouel, DLA Piper and Jones Day (2009) Core business: litigation and criminal cases Growth area: foreign-related business, M&A, compliance, IP and overseas listings, etc
INFORMATION COMMUNICATION TECH. The ICT industry in China is large and complex with a wide range of products from low to very high-end technologies Main sub-sectors: Software products dominated by foreign brands ad lacks core technologies, high-end software development talent Hardware products 2 nd largest ICT hardware producer and continues to grow as the gov. banks, companies and manufacturers investing to meet the business growth and the requirement of WTO membership. Telecommunication dominated by local companies: China Mobile, China Telecom, China Unicom and China Satcom IT services banks, telecom companies, manufacturers and gov. are all investing in IT services. Currently, there are over 8,000 IT services companies. The top five are: IBM, HP, Digital China, Neusoft and CS&S.
LIFE SCIENCES The economic boom and ageing society have led to greater demand in advanced healthcare products and services in China Healthcare services Private health insurance Health screening and lifestyle management Private hospital Nursing homes for the elderly Professional training E-health Biotechnology Contract research organisation (CRO) Drug discovery Personalised medicine Gene Therapy and Biochip Vaccine Regenerative medicine Medial Technology Medical devices In vitro diagnostics (IVD) Dental products Pharmaceuticals Generic drugs Active pharmaceutical ingredient (API) Professional training Supply chain and e-business Traditional Chinese Medicine (TCM)
OPPORTUNITIES IN CHINA S REGIONAL CITIES Majority of regional cities are located in the economically advanced regions of the Bohai Rim, the Yangtze River Delta and the Pearl River Delta. They share certain key characteristics such as rapid economic growth, lower input costs, large and developing consumer and industrial markets, strong government support as well as great demand for talents.
HONG KONG Hong Kong is a truly modern, dynamic and international city with a mixture of eastern and western elements. It also serves as a springboard to mainland China for both businesses and individuals. Four pillar industries: Financial services Trading and logistics Tourism Professional services Six new industries: Education Medical services Testing & certification Environmental industry Cultural & creative industries Innovation & technology
THANK YOU Zhi Dong ( 董治 ) Trade & Partnership Manager Sector & Cluster Development Team South East England Development Agency (SEEDA) SEEDA Headquarters Cross Lanes Guildford GU1 1YA England Tel. +44 (0)1483 484 282 Mobile. +44 (0)7942 742 913 Email. zhidong@seeda.co.uk