It’s Time to Step Up Presence and Engagement in China

/It’s Time to Step Up Presence and Engagement in China

It’s Time to Step Up Presence and Engagement in China

The Real Deal by Lloyd D. Ward

Business Insights Beyond the News

April 20, 2019

Vol. 1, Issue 11

Greetings from Beijing. This is my third trip to China this year. And though I have been coming to this country for nearly 25 years, I learn something new with each visit.

I have returned on behalf of my company, Ward Holdings International, to meet with The Dingsen Group, the unicorn-like makers of a clean-charcoal product called Snow Carbon.

As readers of “The Real Deal” know, WHI is raising funds to invest in Dingsen’s Chinese expansion and build a licensing entity for its patent-protected product in the United States.

In China, restaurants are looking for an alternative to charcoal briquettes. Dingsen is approved by the government as a replacement charcoal in China. This positions Snow Carbon as the leading fuel product in the restaurant industry since the government banned the production and use of conventional charcoal in 2017.

Furthermore, Snow Carbon enjoys continuing tailwinds in the market – even in the face of an ongoing trade war with the United States and the slowing of the Chinese economy.

To put the economic news out of China in perspective and continue its thoughtful analysis, McKinsey has begun publishing a monthly China Brief: The state of the economy . The first one, published in March 2019, reminds us that the Chinese economy is still growing, just not as fast as it had been.

“Pundits have been buzzing in recent months about the slowdown of China’s economic juggernaut . . . Some high-profile companies are flashing warnings of plunging sales and . . . job cuts.”

Densen Cao, CEO of Dingsen Group

Yet, China continues to have one of the fastest rates of growth in the world. “This year, China will add the equivalent of the entire Australian economy to its GDP,” the report states.

The change in China’s economy is only an issue for those companies that took its growth rates and share-price valuations for granted, McKinsey reports. And I agree.

Lloyd Ward with Mr. Cao and Snow Carbon Distributor

The Chinese consumer is only getting stronger. As the country shifts its economic focus from manufacturing for export markets to producing goods and services for its own consumption, the economy must adjust. And it is.

  • Credit is becoming more available to small- to mid-cap private companies, after years of tightening following the global financial crisis of a decade ago.
  • Private capital is experiencing massive growth, after years of state-owned enterprises being favored.
  • An openness to foreign direct investment could create a window of opportunity for multi-nationals. As McKinsey states: “Ironically, just as headlines about China become less exuberant, now might be precisely the time to more purposefully step up presence and engagement.”

That is exactly what Ward Holdings International aims to do with Dingsen and its remarkable Snow Carbon product.

 

2019-05-02T03:27:42+00:00