CBBC’s business support services have continued to go from strength to strength and our Membership offering has continuously evolved and improved to best meet the varied needs of our diverse Membership.

In a post-Brexit world UK companies need to look East. Demand from the growing Asian middle class is the key opportunity for UK business in the coming decades – with China at the heart of this. The China-Britain Business Council, as the voice and the vehicle for UK / China business, has an essential role to play in helping our Members develop their business in China — Adriaan Commandeur, Chief Membership Office, CBBC

Take a look back at CBBC’s work over 2021-2022 in the infographic below:

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC can provide you with the information and support you need to succeed in China.

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Last Friday, China’s National Development & Reform Commission (NDRC) and Ministry of Commerce (MofCom) published draft revisions to the Market Access Negative List (hereafter referred to as ‘the List’). The List should not be confused with the Foreign Investment Negative List.

The List is usually officially published in December and outlines the rules for investment in various sectors for all market entities, including state-owned enterprises (SOEs), private companies, joint venture partnerships (JVs) and wholly foreign-owned enterprises (WFOEs). Each year, NDRC and MofCom divide the list into two categories, ‘prohibited’ and ‘restricted’ markets — this year’s edition is no different.

The industries listed as ‘prohibited’ are all off-limits to market actors, meaning that firms are not allowed to invest, partner or takeover any entity involved in that particular industry. This year’s list has attracted more attention than usual in foreign media because news collection, editing and broadcasting could become a prohibited industry. It is worth noting that items listed under ‘prohibited’ are usually ostensibly related to government activity or national security.

This year’s list has attracted more attention than usual in foreign media because news collection, editing and broadcasting could become a prohibited industry

Sectors determined to be ‘restricted’ are open to investment but only under the condition that the investor applies for access from whichever ministry oversees that particular industry. Industries considered ‘restricted’ include motor vehicle production and hotel management, to provide two examples. Foreign and domestic investors alike can assume that any area not covered by the list is open to investment and that there is no need to seek prior approval.

The 2021 draft sees the number of industries where involvement is either restricted or prohibited cut from 123 items in 2020 to 117. While that suggests that China’s economy is becoming more open, investors must consult the Market Access Negative List alongside the Foreign Investment Negative List and the Free Trade Zone Negative List for Foreign Investment, and these frequently contradict one another. As a result, the list does not appear to open China’s economy further to foreign investors as much as might be expected.

What’s coming off the list?

Seven items look set to come off the list and concern the financial services sector, leasing, and the provision of business services:

• Information transmission, software, and technology services: The entry has been adapted to no longer include the wording “No foreign satellites may be leased, nor may a foreign information provider set up an international communications gateway without permission”
• Stocks and mergers & acquisitions: The entry has been adapted to no longer include the wording “Stocks, mergers, and acquisitions of listed companies cannot be listed without prior permission”
• Foreign statistical analysis: In the leasing and business services industries, the wording “Foreign statistics related businesses cannot operate without a licence” has been removed from the text
• Water conservation and public facilities management: Permission might no longer be needed to install lightning protection equipment in spaces close to water
• Education sector: Companies wanting to provide security training might no longer need to obtain permission to do so
• Public health: Restrictions on the types of companies that can work with medical radioactive products could be lifted
• Online finance: Restrictions on online financial information are set to be eased

What is joining the list?

This year’s list is marginally shorter, coming in at 117 items. However, the business activities that NDRC and MofCom have added or expanded on in this year’s edition include cryptocurrency mining and the investment of “non-public” capital into a range of publishing activities, including live broadcasts, news-gathering, editing and broadcasting entities, and the operation of news.

Neither the inclusion of cryptocurrency mining or the restrictions on China’s media sector represents a new ban; the government had already indicated to investors through other pronouncements and channels that they are off-limits. However, their inclusion serves as a way of reiterating that such industries are not in line with the Party’s perception of China’s economy — over the last year, the government has sought proactively to ensure that companies operating within the media space are not “polluting” society or publishing content that violates the core values of socialism, for example.

In the case of China’s media sector, its inclusion is indicative of a sustained push by the government to take an even tighter grip on the reins as entry limits on internet-based news services for non-public capital were added in the 2020 List.

What has caught our attention?

Firstly, the fact that NDRC and MofCom provided less than five working days for businesses to respond with comments follows a trend where the public is increasingly being given less time to give their input on policy — public consultations used to run for as long as one month.

Secondly, businesses need greater clarity from NDRC and MofCom to ascertain whether Item Code: 10006 — which relates to prohibitions on news-media related operations involving non-public capital, and its provisions concerning “live broadcasting” — would cover foreign sporting events, such as the Premier League and Wimbledon.

Thirdly, despite a spate of opening up activity of late, the construction industry remains on the list, requiring all private construction companies to be approved as qualified construction enterprises. While the relevant requirements outlined on the List are equal for Chinese and foreign-invested enterprises, the reality is that foreign businesses find it harder than their Chinese counterparts to obtain such qualifications.

Finally, private enterprises wanting to provide arts examinations — such as those for music grades — still need approval from the Ministry of Culture and Tourism before providing assessments, despite the assessed content not being politically sensitive.

CBBC View

CBBC has responded to the public call for comment and welcomes the removal of items from the List. We anticipate that the removal of these items will improve the ease of doing business for private enterprises operating in these areas. Whether the Market Access Negative List opens the China market to foreign firms, only time will tell. CBBC looks forward to the publication of a complementary revised Foreign Investment Negative List.

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The Politburo Standing Committee, formally known as the Standing Committee of the Central Political Bureau of the Chinese Communist Party, is China’s most powerful decision-making body and currently made up of seven top political leaders (historically, membership has varied from five to 11 people).

The Standing Committee conducts policy discussions and makes decisions on major national issues when the Politburo, which has 25 members, is not in session – the Standing Committee meets roughly weekly, while the Politburo meets on a monthly basis.

The Standing Committee is selected every five years by the Central Committee of the Chinese Communist Party, as well as by incumbent members of the Politburo and the Standing Committee. All members hold at least one Party position and five out of seven holds at least one State position. The current Standing Committee was elected by the 19th CCCPC on 25 October 2017.

The current line up is as follows:

Xi Jinping

The No. 1 ranking member on the committee, Xi Jinping, has been a member since 2007. As General Secretary, he is the “core leader” of the Party and also commander-in-chief of the Chinese military as Chairman of the Central Military Commission. Xi also holds the title of President of the People’s Republic of China.

Born in Beijing, Xi was governor of Fujian and Zhejiang before being named Hu Jintao’s successor in 2008. His political theory, “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,” was written into the Party constitution by the 19th CCCPC.

Li Keqiang

The only other member of the committee to have served alongside Xi since 2007, Li Keqiang is Party Secretary of the State Council of the People’s Republic of China and Premier of the People’s Republic of China.

Li’s ascension through the ranks began with his involvement in the Communist Youth League. An economist by profession (he holds a PhD in economics), he has been instrumental in China’s financial and economic affairs, as well as its foreign affairs and national security. Li and his cabinet issued the Made in China 2025 strategic plan in May 2015.

Li Zhanshu

One of Xi Jinping’s closest political allies, Li Zhanshu is Party Secretary and Chairman of the Standing Committee of the National People’s Congress. He first became aligned with Xi when they served as party secretaries of neighbouring counties in his home province of Hebei in the 1980s. He accompanies Xi on most domestic and foreign visits and has even conducted foreign visits on Xi’s behalf.

Wang Yang

Wang Yang is Party Secretary, Chairman of the Chinese’s People’s Political Consultative Conference, and was one of four vice premiers of the State Council in Li Keqiang’s government from 2013-2018. Wang Yang is seen as a reformer and is credited with pioneering the Guangdong model of development – which puts emphasis on private enterprise and economic growth – where he served as Communist Party Secretary from 2007-2012.

Wang Huning

One of China’s top political theorists, Wang Huning is First Secretary of the Central Secretariat of the Communist Party of China and Director of the Central Policy Research Office. He is thought to have been instrumental in assisting Xi Jinping in developing his “China Dream” and “Xi Jinping Thought” ideologies. Born in Shanghai, Wang attended some of that city’s top academic institutions and was referred to work for the Party’s central authorities by a number of leading Shanghai politicians back in 1995.

Zhao Leji

Of all the members of the Standing Committee,  Zhao Leji is perhaps the man we know least about. As Secretary of the Central Commission for Discipline Inspection, Wang is the country’s leading anti-corruption tsar, successor to Wang Qishan. Born in China’s western Qinghai province, he rose through the political ranks there to eventually become Party Secretary, before being transferred to Shaanxi as Party Secretary.

Han Zheng

Han Zheng is Deputy Party Secretary of the State Council of the People’s Republic of China and First Vice Premier. Born in Shanghai, Han also spent most of his political career there and served as mayor from 2003-2012, then Party Secretary from 2012-2017. He became acquainted with Xi during his term as mayor when Xi stepped in as acting Party Secretary of Shanghai following the dismissal of the previous Party secretary for corruption.

The post Are these the 7 most influential people in China? appeared first on Focus - China Britain Business Council.

China represents the second largest global economy and one of the fastest growing consumer markets, experiencing GDP growth of 6.5% in the final quarter of 2020. Despite the scale of this opportunity, China can be a complex and challenging market for UK businesses to operate in, with significant regional variations and a plethora of market barriers to contend with. A simple Google search on “China Business” yields over three billion results, making it difficult for businesses to know where to start.

Whether you need to learn more about complex local regulations, IP protection issues, setting up in China or simply how to communicate more effectively with clients and partners, there is a seemingly endless list of issues for UK companies to contend with when entering the China market. Chen has been specially designed to help companies to cut through the noise and to access the most relevant and important China knowledge for their business. Unlike most conventional chatbots, Chen helps to curate the content, information, and resources of greatest relevance to your business and sector. As well as key statistics and trends for your niche sector, Chen helps to identify the most relevant sector insights, reports, news items, and practical business guides to help to navigate the China market more effectively.

Chen will provide users with access to video content, resources and reports on doing business in China

Commenting on the launch of Chen, Matthew Rous says: “Chen is a fantastic resource for anyone interested in doing business in China. Whether you are a first-time exporter, are looking to expand your existing China business, or simply have a specific query that needs answering urgently, our digital adviser can help you to access the best information and advice as quickly as possible. China can be a tough market to crack at the best of times, so Chen is an invaluable free tool for any business to start building their knowledge and mapping out a China strategy”.

Companies simply need to visit www.cbbchen.org to start speaking with Chen directly. Users will then be asked to register free of charge and on completing the conversation will automatically receive a free summary report and links to key resources. Chen will also offer users the opportunity to schedule a follow-up meeting with one of CBBC’s sector advisers for a more in-depth consultation.

The post CBBC launches its first AI-powered new Digital Adviser appeared first on Focus - China Britain Business Council.

RED started off as a platform for sharing product reviews and recommendations among young Chinese consumers, after which the platform began to implement e-commerce features that allowed individual merchants or brands to open up stores and sell products. However, despite the e-commerce options and the ability to purchase directly on RED, the platform is still mainly used to research products and find reviews, before the buyers head over to other e-commerce platforms such as Tmall or JD, to purchase the product.

Considered one of the biggest online lifestyle communities in China, last year, the platform reached over 85 million monthly active users on average and had a total of over 250 million users. RED’s user base is predominantly female, with the majority still under 30 years old, which makes the platform popular for categories that include travel, beauty, fashion, luxury goods, and fast moving consumer goods (FMCG). Although beauty is the largest category on RED, travel is currently the fastest growing.

These changes will have a large impact on smaller brands who require a lower commission rate in order to consider opening a store on the platform.

RED has its own user base, but compared to larger e-commerce platforms, user numbers are still relatively small. It’s therefore no surprise that the platform is better known for grassroots promotions and product seeding. The reviewers on the platform are Key Opinion Consumers (KOCs), a type of influencer that’s smaller in scale than a Key Opinion Leader (KOL), and which focuses on product testing and reviews. KOCs are generally considered more trustworthy and authentic due to their image of being ‘just another consumer’, making them a powerful influencing factor on the purchase decision making journey of consumers. Therefore, RED is a powerful tool for building brand awareness, especially if the target audience matches with RED’s already established user base. Many brands invest in building up a presence on RED to increase their credibility and reputation among consumers, even if the brands do not have a store on the platform.

Xiaohongshu reduces commission rate to just 5%

Reduction in commission rate

In early July, RED sent a notice to sellers, informing them of a reduction in the base commission rate that the platform would be charging. Before the reduction, RED’s commission rate was between 15 and 20%, depending on the merchant and the category of goods, which makes the drop a significant change.

Here’s an overview of what the company outlined in their notice to users:

• As a result of the COVID-19 outbreak and the slow recovery of the Chinese market during the latter half of the year, RED announced that it is willing to work with the merchants on the platform to build an ecosystem.
• Starting from July 1^st, 2020, RED will be reducing the base commission rate to 5%.
• The reduction in the base commission rate is applicable to merchants that have signed a store service agreement with RED and whose agreement is still in effect. An exception to this includes instances in which the merchant and RED have other agreements stipulated.
• For sales that are directed from RED’s product recommendation features, the commission rate charged by the platform is reduced to 3%.

With the reduction in commission rates, more brands and merchants will be encouraged to focus their e-commerce efforts on RED, by increasing investments, opening up a store, collaborating with KOLs, conducting product seeding, or by utilising the advertising tools that the platform has available. These changes will likely have a large impact on smaller brands that have lower sales volumes and require a lower commission rate in order to consider opening a store on the platform.

Since RED’s main source of revenue comes from advertisements, dropping the commission rates could be an attempt to increase the merchants on the platform, and therefore the revenue from sales commissions.

The lowered rates will also make RED more competitive for brands when compared to larger e-commerce platforms such as Tmall, which has a commission rate of 0.5 – 5%, and JD, which has a commission rate of between 2 and 8%. The exact commission rates for both Tmall and JD are dependent on the category. Moreover, RED prohibits diversions to other platforms such as Douyin, Kuaishou, Weibo and Taobao, which further limits the loss in traffic to competitors.

The increased attention on RED from brands and sellers will also impact its customers since after opening stores on the platform, brands will begin to drive customer traffic to RED. RED is likely to therefore become more accepted among users as a platform for not only reviewing and recommending products, but also for purchasing products. This shift in perception among consumers should also increase future e-commerce activity on the platform and could be an attempt to create a closed-loop system where users can go to RED both for product research and product purchase.

Sandra Weiss works for RedFern – a China-specific, full-service agency that helps brands navigate the digital ecosystem, increase their brand awareness and convert that awareness into sales. Learn more here.

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During the Covid-19 outbreak in China, live streaming was a market saviour for many brands and stores that were forced to shut down their offline channels due to the lockdown. As consumers were also isolated in their homes and spent more time online, the period became an opportunity for brands to focus on their online sales channels, a big part of which included live streaming.

Livestreaming was a market saviour for many brands and stores that were forced to shut down their offline channels due to the lockdown

In terms of percentages, Taobao Live saw a 719% month-on-month increase in new merchants in February, while the number of live streaming sessions on Pinduoduo increased by over 500% from February to March of this year.

The importance of live streaming in China was also demonstrated during the 6.18 festival, which was the first nationwide shopping holiday this year since the Covid-19 outbreak. Over the course of the 18-day event, JD hosted over 300,000 live streaming sessions, with live stream hosts ranging from KOLs to CEOs. In addition, more than a dozen live streams were hosted through Alibaba on 16^th June, which, combined, saw a total of more than 100 million RMB in sales.

New rules and regulations

Livestreaming is therefore extremely prominent in e-commerce and has helped drive sales for a vast number of different brands and industries. However, with the increased use of live streaming, there has also been an increase in concern for the misuse of the new format, especially due to the fact that live streams are not a permanent form of content. Examples of these concerns include vulgar or illegal content, fraudulent activity, and misrepresentation of products or services sold through live streaming, which could include false promotions and poor quality of products.

In order to tackle these concerns, several departments in China, including the State Administration for Market Regulation, have begun to work on developing standards for – and increasing supervision of – live streaming activity. National standards for e-commerce through live streaming are being developed by the China General Chamber of Commerce and, provincially, by authorities in the Zhejiang province, where Alibaba is headquartered. These standards are expected to be officially released and implemented in July, and will cover live streaming platforms, hosts, networks and all entities involved in the e-commerce live streaming industry.

The China Advertising Association (CAA), a non-profit organization that represents the Chinese advertising industry and promotes best practice, released its Code of Conduct for Online Live Marketing, which took effect on 1^st July. The report stipulates the rights, obligations and responsibilities of businesses, brands, or other participants of e-commerce activity through live streams. A summary of the main points outlined is provided below:

• Livestreaming hosts must have their real names authenticated on the platform before any live streaming activity can be conducted. During the front-end live streams, hosts may still use screen names, as long as they are in line with the requirements of the laws and regulations.
• During the live stream, all information provided to viewers must be complete and accurate. Livestream hosts cannot misrepresent, exaggerate, or spread false information on the products or services they promote, and cannot mislead viewers.
• Illegal or vulgar content cannot be spread through live streams.
• Any marketing data from the live stream that is provided by the host, for example to the live streaming platform or to the merchants, must be accurate. This includes live stream viewership numbers and sales numbers.
• Livestreaming platforms must provide marketing data as requested by the relevant authorities and must operate under their supervision.
• If breaches of the code of conduct are found, the CAA will report these instances to the relevant authorities for investigation.

Livestreaming hosts must have their real names authenticated and provide accurate information

In terms of recognising and regulating the profession of the livestreaming host, several steps have also been taken:

• Earlier this year, the Ministry of Human Resources and Social Security in China released a report that recognised 10 new professions, one of which was livestreaming salesperson, listed under internet marketing specialist.
• Authorities in Zhejiang province released ‘Specifications for Training and Evaluating E-commerce Livestreaming Talent’ on June 26^th. In this report, the first standards in China are provided for livestreaming hosts and include areas such as skill level, professional knowledge, training, talent evaluation and certification. These regulations set three skill levels – junior, intermediate and advanced – which are determined through independent assessments.

Finally, led by the Cyberspace Administration of China, crackdowns on illegal livestreaming activities have already begun, with a large number of livestreaming platforms already being warned or terminated due to their spread of vulgar or illegal content.

With new regulations and scrutiny on livestreaming activity in China, e-commerce through livestreaming is likely to become even more popular due to the additional trust that viewers will have for the information about the products and services they are being sold.

Sandra Weiss works for RedFern, a China-specific, full-service agency that helps brands navigate the digital ecosystem, increase their brand awareness and convert that awareness into sales. Learn more here.

The post What are the new regulations for live streaming in China? appeared first on Focus - China Britain Business Council.

BP and China’s Didi Chuxing (DiDi) announce they are forming a new joint venture to build electric vehicle (EV) charging infrastructure in China, the world’s largest market for electric vehicles. The new joint venture plans to develop a network of EV charging hubs across the country.

The ride-hailing and car-sharing platform Didi has approximately 550 million users, and around 600,000 EVs are running on it in China.

The joint venture with BP will develop standalone, reliable and high-quality charging hubs to provide EV charging services to DiDi’s drivers and the public. The partners also intend to expand the venture into loyalty and convenience offerings and other fleet services in the near future.

“As the world’s largest EV market, China offers extraordinary opportunities to develop innovative new businesses at scale, and we see this as the perfect partnership for such a fast-evolving environment,” said Tufan Erginbilgic, BP’s Downstream chief executive. “The lessons we learn here will help us further expand BP’s advanced mobility business worldwide, helping drive the energy transition and develop solutions for a low carbon world.”

The post BP and Didi partner to create electric charging stations appeared first on Focus - China Britain Business Council.

There’s been no shortage of coverage of China’s slowing GDP growth, the most recent being Q2’s 6.2 percent growth, the slowest pace since 1992. While no one should downplay the slowdown, it’s important to remember that China’s GDP is seven times larger than it was in 1989, and in absolute terms is expected to be over 60 percent higher than the last time growth was over 10 percent in 2010.

China remains an enormous market with opportunities aplenty, particularly in consumption, which accounts for around three-quarters of growth. Overall, retail sales grew 9.8 percent in June. The growth of fast-moving consumer goods (FMCGs) last year accelerated to 5.2 percent from 4.7 percent in 2017. There are industries such as auto which are contracting, and geopolitical tensions are shifting spending and preferences, such as student registrations to the UK which grew 35 percent last year, largely at the expense of the US. But, as a whole, many foreign brands continue to see strong growth across everything from sports attire to healthy food.

With each GDP growth announcement, it is important to note that Chinese consumers are becoming more discerning and sophisticated. Brands need to work harder than ever to break into the fiercely competitive marketplace and connect with consumers. Here are six trends to keep in mind to ensure your brand, product and service resonate with Chinese consumers.

1. Play to my tribe

The effeminate male is part of a large and lucrative consumer sector

The fastest-growing male fashion category online in China is lacy, transparent garb. This is mirrored by many male cosmetics categories growing well into triple digits. The effeminate male is part of a large and lucrative consumer sector who are shaking off traditional conformity and unashamedly buying products and services that reflect their personalities, their interests and their tribes. This is far from the homogenous segmentation of China that many brands employ. The best performing brands have segmented strategies by consumer and geographic profiles, ensuring that they connect through relevant and meaningful positioning, messaging, products, packaging, formats, promotions, partnerships and pricing.

 The best performing brands have segmented strategies by consumer and geographic profiles

 

2. Do it for me

One of the biggest complaints we observed around Singles’ Day last year was how unmanageable the deluge of promotions had become. Consumers are simply overwhelmed. Businesses are accommodating this by providing everything from shopping list curation to tech giants helping consumers make decisions through AI-powered recommendations. British brands can tap into this by offering food, fashion or travel itinerary recommendations for specific occasions, particularly for those less-familiar foreign categories which require an element of education.

3. Make it convenient

Luckin Coffee delivers a single cup of coffee to a home or office

There are countless Chinese businesses who have built their success on convenience. For example, Luckin Coffee delivers a single cup of coffee to a home or office. Just 17 months after opening its first coffee shop it IPOed on Nasdaq – the shortest duration in history from launching to listing. It now has 3,000 stores and aims to surpass Starbucks by the end of the year. Convenience has become an everyday part of Chinese lives, incorporating everything from seamless mobile payments, to the 10 billion+ meals delivered last year. Groceries and a host of other products can be delivered within 30 minutes. Brand’s customer journeys should be as convenient as possible and products should factor in convenient formats and packaging wherever possible.

4. Give me an experience

To stand out, brands need to do more than just sell something. They need to make the whole experience memorable and unique. In many cases, this involves combining products, services and marketing with interactive tech and creating meaningful experiences. The popularity of New Retail personifies this with consumers able to interact with their smartphones to try on lipstick, clothes and other gear on magic mirrors. In the tourism category, shopping used to account for the lion’s share of the budget, now most spending is on experiences. Marketing, product and channel strategies should always consider Chinese consumers expectations for an interesting, energising experience that could encompass anything from gamification to the physical retail experience.

5. Sell me better things

Super-premium products are the fastest growing – and often the largest segment – for almost every FMCG category. This is representative of the general trend of trading up. 26 percent of Chinese consumers traded up their purchases in 2018, versus 17 percent in the other top 10 other economies according to McKinsey. British brands will never compete with domestic brands on price, so should be targeting opportunities at the top end. Nevertheless, while Chinese consumers are demanding premium products, just being British isn’t enough, and brands need to justify the claims with relevant positioning, benefits and connections.

6. Help me improve

Chinese consumers’ desire for richer and more fulfilling lives is ever increasing

With more experience and discretionary income, Chinese consumers’ desire for richer and more fulfilling lives is ever increasing. This is alongside China’s hyper-competitive environment which is driving consumers to improve their skills to stand out from the masses professionally, physically and socially. Adult classes are one of the fastest-growing categories online. Between 2014 to 2017, running events increased 20-fold to 1,102. Any products and marketing that give consumers the impression that they will learn, get healthier, or become more attractive are likely to resonate well.

Ensuring that these trends are incorporated into your marketing plan will mean that you are well on the way to genuinely connecting with Chinese consumers and will maximise your chance of success in the lucrative Chinese market.

China Skinny is a marketing strategy, research and innovation agency based in Shanghai who has worked with almost 200 international brands to help them grow and prosper in the China market. More at chinaskinny.com

The post Six top consumer trends in a slowing Chinese economy appeared first on Focus - China Britain Business Council.

How long have you been dealing with China, how did it start and how has it evolved?

At Manchester City, we have had a fan base in China for many years and it has always been a market we’ve been keen to have a presence in. More recently, with President Xi’s widely stated ambition to develop grassroots football in China, which we were fortunate to hear first-hand when he visited the City Football Academy in Manchester, we saw an opportunity to participate in that movement and have a more permanent and sustainable presence in China.

In the past few years, we have seen City Football Group’s presence grow in China. We had a minority shareholding investment from a China Media Capital-led consortium in 2015, opened offices in Shanghai and Shenzhen, and now have commercial and media partnerships and coaches operating in schools across the country as part of Ministry of Education Programme. Most recently, along with our partners UBTECH and China Sports Capital, we were excited to fulfil our ambition of acquiring a Club in China, Sichuan Jiuniu FC.

With President Xi’s widely stated ambition to develop grassroots football in China we saw an opportunity to participate in that movement and have a more permanent and sustainable presence in China

How did the purchase of Sichuan Jiuniu FC come about and how will it work with the partners UBTECH and China Sports Capital? 

It’s no secret that we had been looking for an opportunity to be involved with a club in China for some time. Fortunately, we already had a relationship with China Sports Capital and UBTECH. We considered lots of other opportunities, but this one felt right for all of us, and fortunately, we were able to move forward with it. We are now focused on building and developing the Club to improve its performance on and off the pitch.

There has been a gradual swing from British companies investing in China’s infrastructure such as sports academies to Chinese investment into British football clubs and now, with this project, we see a British club investing into a Chinese club. What is next for UK-China football trade?

We look at it more in terms of global football. At City Football Group, we are invested and operating in the UK, US, Australia, China, Japan, Singapore, UAE, Spain and Uruguay. Within that, we see China and the US as significant football markets which still have huge capacity to develop and grow, so we believe there will continue to be more opportunities ahead.

Scott Munn CEO of City Football Group

Why is it important that City Football Group gets involved with China and what are the long term aims and goals?

We are committed to participating in the growth of football in China. We want to do this in a long-term and sustainable way and we believe the opportunity to grow and develop. Sichuan Jiuniu provides exactly that potential, in a significant city which loves football.

There are clear commercial goals of attracting sponsorship and investment as well as a new generation of fans but are there on field aims – such as player exchanges or recruitment ambitions?

All our investments are primarily football ones. We want to grow and develop successful teams which play an attractive style of football, engage their fans and play a key role in their local community. We believe if we can get those things right, other opportunities will follow.

The post Manchester City Football Club CEO explains why they bought a Chinese football club appeared first on Focus - China Britain Business Council.

Come February 2022, it’ll be all eyes on China’s faux-snow capped mountains as Beijing hosts the Winter Olympics, making history as the first city to have held both the summer and winter Games. Building on the momentum of Beijing 2022, officials seem set on turning China into a winter sports hub, with plans to build a RMB 1 trillion (£114 billion) industry by 2025, state news outlet China Daily reports.

With three years to go, preparations to get China’s Olympic infrastructure and fledgling ice and snow sports scene ready are well underway. The Games will be held across three key zones: downtown Beijing is set to house the opening and closing ceremonies and ice venues; while to the northwest, Yangqing District and partner city Zhangjiakou will host the snow sports.

Beijing 2022, expected to be the “most intelligent” Games to date according to Juan Antonio Samaranch, the Chair of the International Olympic Committee’s (IOC) Coordination Commission, is being built with the future in mind. The majority of new Olympic venues are earmarked for public use and competitions after the Games. Yet, in a country where winter sports have, until recent years, been something of an afterthought – China’s largest Gold medal haul for the Winter Games was five in Vancouver 2010, compared to 48 in the Beijing 2008 Summer Games – is there enough interest to build a sustainable industry?

In 2015, the government set out its vision of getting 300 million Chinese citizens participating in winter sports by 2025

Managing Director of Nielsen Sports Africa, Middle East & Asia Pacific, Kelvin Watt, notes that “Winter sports consumption is expanding in the Chinese market in terms of both an interest as well as a recreational participation perspective. However, compared to sports like football and basketball, winter sports are still relatively small in China, although we expect the Beijing 2022 Olympics to have a major impact in this regard.”

Indeed, the wheels are already in motion. After winning the bid in 2015, the government set out its vision of getting 300 million Chinese citizens participating in winter sports by 2025. China Daily cites goals to grow the sector into a RMB 600 billion (£68 billion) industry by 2020, build 800 ski resorts and 650 ice skating rinks across the country by 2022, and have winter sports contribute 20 percent to China’s sports industry’s gross output by 2025.

China-Britain Business Council’s (CBBC) Senior Director Tom Simpson explains that since winning the bid in 2015, “the Beijing and Central Government is doing more to encourage awareness of winter sports through broadcasting live ice hockey, and other snow/ice sports on television, as well as encouraging the establishment of teams, such as Kunlun Red Star who now participate in Russia’s Kontinental Hockey League.”

Furthermore, Simpson notes, “The growth of participation in winter sports, in particular through the construction of multiple ski resorts around the Winter Olympic site at Chongli [in Zhangjiakou], is one of the most noticeable changes… The hope is that the numbers of people taking to the slopes each year will continue to grow and establish a whole new segment of the consumer sports economy.” According to the Financial Times, Beijing is investing RMB 76 billion (£8.7 billion) into redevelopments at Chongli alone.

Noting the “huge potential” of the winter sports market, CBBC’s China Business Advisor Avi Nagel highlights training and education as two areas where British firms excel and could benefit in light of the push. The demand for instructors has drawn international snowsport organisations to Chinese pistes, including the British Association of Snowsport Instructors (BASI).

Since 2015, BASI has been holding courses across China in collaboration with a local partner. BASI’s CEO Andrew Lockerbie says he finds China’s development in a short space of time “phenomenal”. “When [BASI first arrived in China] there was a handful of ski resorts; now there are over 400 ski areas. The standard of the Chinese recreational skiers and snowboarders has increased exponentially [and] we’ve seen a phenomenal rate of development, both in infrastructure and performance,” Lockerbie explains. “Currently [in China] we’re doing around 25 course places per annum, next year that’ll be expanding to around 40… [globally] we run

350 course places per annum, so over 10 percent of our courses are now in China.”

Touching on common concerns related to the industry’s sustainability after 2022, Lockerbie adds that he thinks the huge increase in the volume of people heading to the slopes is promising. However, he also notes, “China is going to find its recreational market demanding more from their facilities,” resulting in Chinese snow sports enthusiasts spreading quickly throughout the rest of the world leading to high demand for Chinese instructors internationally.

Entering China’s fledgeling snowsports market is of course not without challenges. In an interview with ISPO.com, CEO of ski resort developers MAS, Paul Bojarski cites high costs and low salaries pricing people out, poor mountain choices for resort development, and the market not being ready as reasons he feels the Chinese ski industry won’t benefit as much as the Government hopes from Beijing 2022.

Despite challenges, Nagel explains that in the run up to the Winter Olympics there are, “lots of opportunities for British companies that are involved in the design, construction and operation of winter sports facilities.” A couple of high-profile success stories include architectural design firm Populous, who won the bid to design Beijing’s new National Speed Skating Oval, and engineering and design company Arup who have been involved in a number of projects related to Beijing 2022, including the Zhangjiakou Chongli Taizi City International Snow and Ice Town, the Water Cube, which will play host to the curling, and the Daxing New Airport which, when open, will be the largest airport terminal in the world.

However investors choose to approach China’s nascent winter sporting industry, Nagel emphasises that “to be successful, companies need to go to market to gain better insight into local conditions and meet with potential partners, do their homework to understand the aims and objectives of the Government.”

As momentum starts to snowball in the run up to Beijing 2022, it’s safe to say all players will be firmly focused on China’s RMB 1 trillion target.

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