Vol. 12 November 15, 2003

Recent Business HighlightsBusiness Membership Organization Forum delivered to local participants

Second-phase SME Mapping project completed in ZhejiangProvince

Leshan’s only SME lender turns to CPDF for full range of assistance

A new SME Linkage project kicks off in a bid to help local dairy farmers

Visitors To IFC-CPDFPeter Woicke, Javed Hamid, Harold Rosen, Karin Finkelston and Sergio Pimenta

People Among UsZiqiang Cheng, the new head with CPDF’s Investment Services

News From The RegionSichuan says its GDP may hit RMB500 billion by the end of 2003

Reemployment of laid-off workers in Chengdu amounts to 400,000

First private credit guarantee company receives government approval

The new banking sector regulator sets up branch in Sichuan

Foreign banks in Chengdu allowed to enter local currency business

Coming Up SoonThe first Business Edge Leaders’ Dialogue is scheduled for mid-December

Accenture will work with CPDF on its newly launched SME Linkage program

Recent Business Highlights

Business Enabling Environment (BEE)

CPDF sponsors high-level seminar on Business Membership Organizations (BMO)…

China Project Development Facility (CPDF), the IFC-backed SME facility, delivered, in collaboration with Sichuan Provincial Industry & Commerce Federation and Sichuan Civil Affairs Bureau, a BMO Forum to local business associations, private business owners and government officials during October 20 – 22. The event was widely viewed as providing business associations in Sichuan with practical tools in terms of operation management, value-added services, member recruiting, government policy advocacy and international exchange. In his opening speech, Eric Siew, CPDF General Manager, told 180 participants that BMOs can promote SME growth through facilitation or direct provision of demand-driven services and through advocacy aimed at creating a better business environment. Senior managers from Canadian, Chinese and German business associations gave lectures at the Forum.

Second phase of SME Mapping field work completed in coastal ZhejiangProvince…

The second and final phase of field work of Zhejiang SME Mapping project was conducted from October 27 to November 3. Ten focus groups were held in Hangzhou, Shaoxing and Taizhou, three major cities of the coastal province, most notable for the rapid development of its private sector, with participants from governmentagencies, financial institutions, SMEs and businessservice providers. The Zhejiang Mapping project, combined with a similar Mapping in SichuanProvince, will provide the basis for a comparative study on the similarities and gaps of SME business environment in these two provinces. Na Di, Deputy Director of SME Department under the State Development & Reform Commission, a key national-level policy making body, attended the meeting in Hangzhou. (news contributed by Lin Huang, BDO with the BEE team)

Financial Sector (FS)

Leshan’s only SME lender turns to CPDF for full range of assistance…

An MOU was signed on November 7 between CPDF and Leshan City Commercial Bank, the only SME financing institution in Leshan, a major Sichuan city located 162 kilometers south of Chengdu. CPDF will offer a comprehensive package of technical assistance to the local bank, including a diagnostic review of its operation, design of the credit manual, development of its credit scoring structure and establishment of a performance-based HR system. Jinshou Fan, Vice Mayor of Leshan Municipal Government, Xiaohong Zhang, Chairman of Leshan Economic & Trade Commission, and Harold Rosen, Director of WBG/IFC’s SME Department, were present at the signing ceremony.

Investment Service (IS)

Two local SMEs sign mandates with CPDF for investment advisory services…

The IS team added two companies to its client list on November 14, bringing the total number of Sichuan-based SMEs receiving CPDF’s financial advisory services to 17. Leshan Fuhua Paper Industry Co., Ltd. specializes in manufacturing paper using bamboo pulp that is derived from locally-supplied bamboo, and Sichuan Sihai Group comprises of 7 companies, 5 of which focus on pork production. The latter employs over 450 staff, of which 55% are women. Both firms are in the process of expanding their production capacity. CPDF is expected to help them to improve internal management and, as a result, raise finance required for their future growth.(news contributed by Quan Chen and William Beloe, BDOs with the IS Team)

CPDF works with Swedish consultants on pharmaceuticals sector review…

CPDF has begun a pharmaceuticals sector review with the help of Swedevelop Consultants. The project, which is financed by Swedish Trust Funds, will last for six weeks. The review is designed to provide CPDF and IFC with a comprehensive report on the sector. While the project will cover the sector across China, it will have a particular focus on the province of Sichuan. The final report will not only address the market trends and government policy but also the particular competitive landscape and challenges faced by the pharmaceutical SMEs in Sichuan.(news contributed by William Beloe, BDOs with the IS team)

CapacityBuilding (CB)

CPDF offers help to local dairy farmers through a new SME Linkage project…

The new Linkage project with the dairy division of New Hope Group, an IFC client in China and a fast-growing diversified private company, aims to build sustainable business partnerships between local milk suppliers and New Hope dairy plants in Sichuan. CPDF has brought in a consulting team of international dairy experts to work on the project, and a mid-term review was presented to New Hope on November 14. Meanwhile, CPDF has also hired Accenture Development Partnership to develop the methodology and tools for the linkage program, and build local deliver capacity through training of Sichuan consulting firms.(news contributed by Qiyun Yi, BDO with the CB team)

Italian consultant visits CPDF to work with the Corporate Governance team…

Luigi Parlatore, an Italian expert engaged by CPDF to provide consultation service to local financial institutions in Sichuan to improve their Corporate Governance (CG) practice, visited Chengdu from November 3 to 6,. During his stay, Mr. Parlatore met with the senior management of Chengdu Small Enterprise Credit Guarantee Co., Ltd, and taught a half-day seminar to 30 high-level managers at Leshan City Commercial Bank. Detailed recommendations will be provided to the two financial institutions in late November.(news contributed by Qing Lu, BDO with the CB team)

Local partners in CPDF’s Management Training Program (MTP) start course delivery…

Basis Educational Industrial and Better Training, 2 local training providers in the MTP program, began delivering CPDF-designed Business Edge training courses in marketing to managers in local SMEs. Three 1-day training sessions, involving some 45 SME managers and taught by CPDF-certified graduates of the Train-the-Trainer program, were held over the past few weeks.

In course development, between November 9 and 11, CPDF held the second Trainer’s Guide pilot focus groups, reviewing and improving the content of the Guide for three marketing courses – Promotions and Advertising, Product Planning and Development, and Target Markets. Eleven SME leaders and 5 prospective and current training partners offered valuable feedback and input on course content and delivery. (news contributed by Godfrey Firth, Marketing Coordinator with the CB team)

Visitors To CPDF

  • Peter Woicke, Managing Director of the World Bank Group and Executive Vice President of IFC, Javed Hamid, Director of IFC’s East Asia & Pacific Department, Karin Finkelston, IFC’s Country Manager for China & Mongolia, and Sergio Pimenta, Special Assistant to Mr. Woicke, visited Chengdu between October 17 and 18 to meet with senior government officials of Sichuan Province, local SME community leaders and CPDF staff.
  • Harold Rosen, Director of the SME Department of the World Bank Group, came to Chengdu from November 7 to 8 to participate in a series of activities arranged by CPDF for its financial sector technical assistance and SME management training projects.

People Among Us

Mr. Ziqiang Cheng (Charlie) just joined CPDF in October 2003 as Head of CPDF’s Investment Services. He graduated in 1984 from Huazhong University of Science and Technology with a bachelor degree in computer engineering, and earned his MBA in 1988 at NorwegianSchool of Management. Ziqiang worked for several international financial institutions, including UBS and HSBC, and the Ministry of Science and Technology of China, before he moved to California to run a start-up IT company with his business partners. He returned to China in 2001 to set up and led a new business entity under UFsoft, the country’s largest independent software vendor. Ziqiang holds a CFA and is a member of the Association of Investment and Management Research.

News From The Region

Government – Sichuan says its GDP may hit RMB500 billion by the end of 2003…

In spite of the negative impact of the SARS epidemic, Sichuan realized a GDP of RMB388.52 billion in the first three quarters of this year, up by 11.2% over the same period last year. Experts from the Sichuan Provincial Statistics Bureau project that total annual GDP for 2003 will reach the RMB500 billion mark.

Government – Reemployment of laid-off workers amounts to 400,000…

From 1998 until now, about 400,000 laid-off workers and jobless in Chengdu have successfully found new jobs, announced Chengdu Mayor Ge Honglin on October 29 in a report to an employment inspection delegation sent by the central government. According to Ge’s report, the city’s registered jobless rate has remained within 4% since 1998. Between January and September of this year, 83,500 jobs were created and 69,700 layoffs and idle people re-employed.

Business – First private credit guarantee firm receives government approval…

Sources from Chengdu Municipal Administration of SMEs disclosed that Chengdu Huilong Guarantee Company Limited, the first privately funded credit guarantee facility in the region, was recently allowed to register in the city’s Qingyang District,. The firm will mainly offer credit guarantee services to private enterprises based in the District, and is expected to play a demonstration role encouraging the setup of other diversified-ownership guarantee companies. Huilong also plans to increase its capital to RMB50 million soon form its currently registered capital of RMB7 million.

Business – The new banking sector regulator sets up branch in Sichuan…

The newly established China Banking Regulatory Commission (CBRC) opened its Sichuan Supervision Bureau in late October in Chengdu. As a provincial watchdog for the banking sector, the bureau will control and manage the financial institutions in Sichuan, including state-owned solely-funded commercial banks, stock commercial banks, urban commercial banks, foreign-funded financial institutions and their representative offices, monetary assets management companies, trust & investment corporations, finance companies, financial lease firms, postal saving agencies, and urban and rural credit unions. CBRC plans to set up administrative bodies in 20 cities and autonomous regions in Sichuan.

Business – Foreign banks in Chengdu can provide local currency services now…

CBRC, the recently setup governing body for China’s banking sector, announced on its website on November 6 that Chengdu and other three cities have been added to the list of Chinese municipalities where foreign banks can conduct local currency services with local enterprises. Foreign banks now can offer these services in 13 cities. As part of its WTO accession protocol, China promised to allow foreign banks to do renminbi business with domestic enterprises two years after the accession, and to remove all geographical and customer restrictions in five years.

Coming Up Soon

  • On December 14, CPDF will be holding, jointly with the Sichuan General Chamber of Commerce, the first Business Edge Leaders’ Dialogue, a seminar on advanced management techniques for about 200 SME leaders. Savio Kwan, COO of Alibaba Inc., will deliver a keynote address.
  • A manager and a consultant from Accenture Development Partnership are expected to work with CPDF’s SME Linkage project team to further strengthen our role in building sustainable business partnerships between large corporations and local SMEs.