The Real Deal by Lloyd D. Ward
Business Insights Beyond the News
Jan. 24, 2019
Vol. 1, Issue 2
As visionary business leaders, we sift through the clutter to see opportunities where others do not. The “we” I speak of includes many of the insightful professionals I have come to know and admire over my 40-plus-year career at Fortune 500 companies and as a business owner of and consultant to private enterprises.
I first began conducting business in the mid-90s. A decade later, I had the privilege of living there. During this time and since, I developed and maintained professional and personal relationships with influential business leaders. And in the past two months, I have traveled through China as a member of the Beijing Economic Development Council and private businessman.
While there, I worked with my good friend and business associate Mr. Changquan Lu, Chairman of Beijing ZANBO Marketing Management Consulting Co.. Mr. Lu is an author, professor and one of the foremost marketing experts in China. He introduced me to his network of emerging entrepreneurs and private business owners, whom he calls his “students.”
These entrepreneurs want to grow their businesses in their own country and expand into the United States. They want to sell their products, gain access to U.S. capital and learn from senior American business leaders. We can help them. And in doing so, we will unlock opportunities for ourselves. But first, we need to understand the state of affairs behind the headlines and beyond the clutter.
I created this newsletter to help with that understanding. Earlier this week, I told you about the new economic policy for China that President Xi outlined in eight points at the Central Economic Work Conference in December.
Mr. Lu says the eight-point plan creates an economy that “will usher in a golden development period of 10 years . . . and makes many of my students very happy.”
The eight-point plan and Mr. Lu’s summary of each point follows:
Support the development of private enterprises, create a legalized institutional environment, protect the personal safety and property safety of private entrepreneurs.
Mr. Lu: “The introduction of this system makes many of my students very happy. It means that the Chinese government has improved the legal status of private enterprises, foreign-funded enterprises and state-owned enterprises to the same level.”
2. Strengthen the protection and application of intellectual property rights to form effective innovative incentive mechanism.
Mr. Lu: “Protecting intellectual property rights is a new measure for the Chinese government — to respect knowledge and encourage technological innovation. For example, my books have had many pirated sales. And these measures will help reduce the possibility of copying and increase my motivation in knowledge innovation. Our company will also start a new round of trademark and intellectual property registration applications. This move shows that regardless of foreign or domestic companies, trademarks and intellectual property rights will be well protected. People using our intellectual property need to pay for it. “
3. Expand import and export trade, promote trade and encourage investment liberalization and facilitation.
Mr. Lu: “The measures to expand imports and exports will further reduce trade barriers and make trade and investment more convenient and efficient.”
4. Implement larger scale tax reduction and fee reduction to effectively alleviate the problem of difficult and expensive financing for enterprises.
Mr. Lu: “Tax reduction measures will reduce the tax burden of small and micro enterprises to 5% and 10%. As a taxpayer, I will have more money to spend and invest. “
5. Improve financial infrastructure and strengthen supervision and service capacity.
6. Relax market access, fully implement pre-entry national treatment plus negative list management system.
Mr. Lu: “Relaxing the policy of market access will not only create new impetus for investment, but provide a driving force for global products to enter China. Where China used to be a world manufacturing center, now the government is encouraging Chinese people to consume products from all over the world. Product consumption can reach trillions of dollars. We are moving from “made in China” to “made for China.” The impact on world manufacturing will be tremendous.”
7. Improve the old-age care system and work hard to solve the problem of old-age care in big cities.
Mr. Lu: “In terms of old-age care, China has entered into an aging society with 240 million people over the age of 60. Due to the family planning policy, one child needs to support four elderly people. And the family burden is relatively heavy. The government encourages investment in the old-age care industry, which has nearly 30 years of market opportunities.”
8. Promote a higher level of opening up to the outside world, focus on stabilizing foreign trade and stabilizing foreign investment.
Mr. Lu: “The policy of opening to the outside world shows that the Chinese government encourages foreign capital to enter China, to help China complete the upgrading of industrial structure and consumer industry, to provide better consumption for Chinese society, and to promote the upgrading of environmental protection, old-age care and other industries with the power of science and technology.”
As you can see from Mr. Lu’s comments, he is encouraged by the prospects for his own company and for the economy of China as a whole.
I am too. And I will continue to communicate news, impressions and insights.