Western Cape Business News

Send  Share  RSS  Twitter  04 Oct 2010

EXPORTS: W Cape Must Develop China Strategy


Recent Western Cape Business News

Wesgro and the Hong Kong Trade Development Council (HKTD) last week presented a joint seminar to Western Cape-based exporters on a workable strategy that will allow greater China market access and new investment opportunities from the Chinese Mainland.

The seminar, entitled Hong Kong – The Springboard to China formed part of the Wesgro Export Development Program. This development program has – as its aim – the objective of growing the number of Western Cape companies engaged in exports.

Wesgro CEO (Acting), Nils Flaatten, addressed the audience and said that many South African businesses has shown much interest in the Chinese economy but many had failed to formulate investment and export strategies and were losing out on new opportunities. He informed the audience that the global business environment was changing and that Western Cape businesses should take hold of and own the new opportunities being presented to them as this would contribute to profitability and sustainability of their business.

Wesgro has run a number of seminars on Doing Business in China but we feel that many companies have not yet realised the huge investment and export opportunity in China. Ironically, a number of large South African corporates have already set up profitable business in the People’s Republic of China. Their model, in accessing this market, has been around forming joint ventures with Chinese companies. You only have to look at the very successful examples of NASPERS, Standard Bank and SAB Miller. They all use Hong Kong as the springboard into the Mainland! Wesgro believes that businesses in our province should build on this strategy and so teaming up with the Hong Kong Trade Development Council makes sense. It is much easier to team up with Hong Kong-based businesses, who in the past 15 years ago, have moved most of their production facilities over the border into China and have now begun to sell value-added services. They operate in major parts of China such as Guangdong, Beijing and Shanghai and importantly they have knowledge that we can use. Why re-invest the business wheel when we have joint venture partners waiting for us in Hong Kong? Language barriers and a completely different business system make navigating the Chinese market very onerous, time-consuming and costly. Hong Kong also rates very highly on the World Bank’s Ease of Doing Business study and all procurement, banking and legal work is done in English”, said Flaatten

The Wesgro strategy also encourages companies to leverage Hong Kong’s knowledge and partnerships with mainland China in attracting new investment opportunities in the Western Cape and South Africa. He said that just as the Western Cape should use Hong Kong as the springboard to China – so too Hong Kong and China could use the Western Cape as the springboard into Africa.

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