The Real Deal by Lloyd D. Ward
Business Insights Beyond the News
Feb. 4, 2019
Vol. 1, Issue 6
With the advent of the Chinese New Year on Tuesday, I am reminded why I am drawn to this amazing country and its rich culture. Of the many festivals that play an important and symbolic role in people’s daily lives, nothing is as grand and ceremonious as the Spring Festival.
When I lived in China in the early 2000s, I was awestruck at the scope and intensity of the celebration. Beijing with its 22 million residents nearly became a ghost town as residents traveled to visit family in other parts of the country.
It is estimated that more than one billion Chinese citizens travel to their home cities and back during this four-week period. Fireworks, family, food, wine, gifts and red envelopes are hallmarks of this very special occasion.
The 2019 celebration rings in the Year of the Pig, symbolizing wealth and good fortune.
Wealth and good fortune. I carry with me this serendipitous sentiment as I prepare to host a prestigious group of international investors later this month in Beijing.
Our investor delegation will arrive as our Chinese brothers and sisters are wrapping up their celebration. Yet, the pig, and all it portends, will be with us throughout our stay – and going forward.
Our delegation includes investors from the U.S., Canada, India and Korea. We are traveling to explore opportunities to partner with Chinese entrepreneurs and owners of small and mid-sized companies in China.
One of the companies, Dingsen, developed and patented a technology to manufacture a pollution-free barbeque/grilling charcoal called Xuetan.
Dingsen currently sells four versions of the product – each for different foods – in limited Chinese markets and seeks investors to expand into the U.S. and grow in its own country.
This product offers significant potential given the volume of traditional charcoal used in China and recent regulations limiting it use.
Another is Oak Hospital, a unique care facility specializing in the treatment of Alzheimer’s patients. In addition to traditional medical doctors, nurses, rehab therapists and caregivers, the facilities use the benefits of Eastern medicine. The result is a holistic solution to one of the world’s most critical healthcare issues – and one with an impressive financial upside to investors.
Consider the fact that first two Oak hospitals are cash-flow positive after just one year of operation. The financial potential of Oak Hospital is certainly worth our investors’ time and consideration.
So, as we explore these and other Chinese businesses during our trip, we will appreciate the long and storied history of this nation and look toward this year, The Year of the Pig, being our year.
I’d like to switch to another topic: the U.S.-Chinese trade war, which I have discussed previously. I said that President Xi’s new eight-point economic plan gives President Trump an opportunity to declare a “big win” in the trade war. With news reports of a Trump-Xi meeting in late February, the stage is set for Trump to do just that.
After talks by Chinese Vice-Premier Liu He and U.S. Trade Representative Robert Lighthizer last week, both sides gave the world reason to believe progress is being made.
And that progress addresses the issues President Xi included in his 8-point economic plan. Among them: intellectual property protection, market access and trade deficit to name a few.
President Xi’s economic plan shifts his country’s emphasis from production to consumption and opens up opportunities for the rest of us in so doing.
Against this backdrop, President Trump could use Tuesday’s State of the Union address to make this declaration of a win or he could wait until after the late February meeting. Either way, the economic developments in China have a major positive impact on U.S. businesses and investors.
It behooves us to be a part of it.