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UPDATED: April 24, 2010 NO. 17 APRIL 29, 2010
Confidence in Business Environment

Confidence in the Business Environment

Google's withdrawal has aroused criticism among foreign companies that China's investment environment is deteriorating. But this wasn't echoed by executives of multinational companies at the Boao Forum for Asia Annual Conference 2010 held in Boao, Hainan Province from April 9 to 11. At the forum, about 900 business leaders discussed necessary adaptations of business strategies and corporate governance to business climate changes in China and the rest of the world. Beijing Review reporter Ding Wenlei interviewed some of them. Edited excerpts follow:

Andrew Forest, Chairman of Fortescue Metals Group, Australia's third largest iron producer: We have a cozy relationship with the Chinese Government, the China Iron and Steel Association, and China's steel mills. We will expand our iron ore output from the current 40 million tons to 55 million tons by the end of this year, of which 90 percent will supply the Chinese market.

All our Chinese customers here tell us we should diversify, so we followed their advice. By diversification, we are looking for Chinese buyers for stakes in our magnet mines in the Pilbara [in Western Australia] and will decide whether to mine the Solomon iron ore project around the end of this year, which can help us further expand the annual production capacity up to 150 million tons. In addition, our group is now in talks with China Metallurgical Group on a joint-venture deepwater port in North Australia.

Kim Fausing, COO of Danfoss A/S, a Denmark-based energy efficiency solutions provider: We don't see the Chinese market as losing its competitiveness in attracting foreign investment. The infrastructure is extremely good and the educational system is producing a lot of highly skilled people.

China has become Danfoss' third largest market globally since last year. We will continue to invest strongly in China and localize our products, expecting China to be the company's biggest market in two or three years.

Mogens Terp Paulsen, President of Danfoss China: We attribute Danfoss' robust sales growth in China to the country's strong economic recovery and have continued investments in environmental protection and energy efficiency. The complete logistics services and product supply chain help us slash costs remarkably. We just launched a plant in Tianjin and will increase R&D investments to produce more localized products for the Chinese market.

Zhang Yaqin, Corporate Vice President of Microsoft and Chairman of Beijing-based Microsoft Asia-Pacific Research and Development Group: Microsoft has considered China its biggest market outside America, and is very optimistic about the business environment in China in the long run. We hope the market will become more transparent and expect better protection of our intellectual property rights.

Microsoft China serves as an all-around strategy center for the corporation with its established marketing, research and development (R&D), investment and manufacturing facilities. Apart from continuing to invest in search services and cloud computing, we will invest heavily in low-carbon businesses such as health care and education.

Tae-Jin Kim, President of SK China: SK Group views China as a platform for implementation of its globalization strategy. We eye long-term growth in the Chinese market. SK Group would like to cooperate with Chinese partners in a wide range of fields including energy and resource, chemical products, information and communication technology, and trade and services.

Peter Cornell, Managing Director of Terra Firma Capital Partners Ltd.: China means broad interests for us. We consider it both a source of capital and a destination of investments for our next round of fundraising.

Shi Bo, China Executive of Terra Firma Capital Partners Ltd.: We are interested in green and low-carbon projects such as green electricity and garbage treatment technologies in China. Terra Firma has not invested in China yet because it's a Europe-based fund, and because the projects we are looking at are relatively young. A mature management platform, a sound operation mode and a well-coordinated team, in addition to technology, are needed to guarantee the success of such investments.


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