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Finding ways to attract foreign investment
March 26, 2012, Monday
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Finding ways to attract foreign investment
The Hangzhou government works hard to help local private firms set up joint ventures with foreign companies as it finds these partnerships often provide a substantial boost to the city's economy in more ways than one. Wang Yanlin reports.
Becoming partners with French health care company Sanofi has been the best decision ever made by Minsheng Pharmaceutical Holdings Co, says its President Zhu Fujiang.
Starting from investing in one of Minsheng's workshops in 1995, Sanofi now has two joint ventures with Minsheng.
"Sanofi is a global leader in prescription medicine and human vaccines, but its help went far beyond merely introducing new products," Zhu tells Shanghai Daily at his office in Binjiang District, Hangzhou, Zhejiang Province.
Most importantly, Sanofi has taught Minsheng how to run a modern company, Zhu says.
The partnership is meaningful for Sanofi as well.
Among its first steps to enter the massive Chinese market, Sanofi's investment in Minsheng has allowed the French firm to localize quickly and get a strong foothold in the fast developing Chinese market.
The former workshop, now a wholly owned subsidiary of Sanofi, reported annual sales of more than 5 billion yuan (US$793 million), up from 10 million yuan in 1995.
Strong link
When Sanofi began to enlarge its business into OTC market in China, another joint venture was set up two years ago, demonstrating the bond between the two long-term partners.
The case revealed Hangzhou's knack for attracting foreign direct investment by building a strong link between foreign investors and private business.
Hangzhou may be the best city on the Chinese mainland in demonstrating such close links between private companies and foreign investment.
In cities like Shanghai, foreign investors usually set up wholly owned ventures or team up with strong state-owned enterprises, such as Volkswagen with Shanghai Automotive Industry Corp, while foreign businesses are not so prominent in cities like Wenzhou, Zhejiang, where local private firms thrive and dominate the market.
"Make use of private business to attract foreign capital" is an official slogan in Hangzhou. Private businesses contributed nearly 70 percent to Hangzhou's overall economic output last year.
In 2011, Hangzhou approved the establishment of another 500 foreign-invested companies, securing US$4.72 billion of actual foreign investment, up 8.4 percent from a year earlier. Contracted foreign direct investment increased 6 percent year on year to US$8.17 billion in 2011.
Among the total value of Hangzhou's actual foreign investment last year, nearly 30 percent, or US$1.4 billion, was linked with private business. Its growth rate was an annualized 35.6 percent, or more than four times that of the overall pace.
The Hangzhou government provides strong support in facilitating potential partnerships between foreign investors and local businesses.
Last year, the Hangzhou Foreign Trade and Economic Cooperation Bureau organized a series of events to promote deeper engagements among private businesses and foreign companies. The bureau held seminars to elaborate on policies and led a delegation of more than 500 private firms' bosses on a promotion trip abroad.
"We are pleased that our efforts have borne fruit," said Hangzhou Mayor Shao Zhanwei in a recent conference to summarize the performance of private and foreign businesses in the city. "Closer partnerships between private firms and foreign companies will be further promoted this year."
2011 was a good year for Hangzhou in attracting foreign investment. Apart from the growth managed during an unfavorable global economic climate, Hangzhou also attracted investment from higher quality firms.
There were 10 projects set up last year coming from Fortune Global 500 companies.
Foreign investment was involved more in Hangzhou's economic restructuring. Nearly half of foreign capital attracted last year flowed into the city's 10 key industries of culture, tourism, finance, e-commerce, information technology, advanced manufacturing, Internet of Things, biomedicine, environment protection and new energy.
"Foreign investors will become more important as Hangzhou pushes forward technological innovation and fiscal revenue expansion," Shao said. "Foreign investment can also serve to improve the livelihood of our residents and help sustain trade."
With the global business outlook still facing many uncertainties this year, Hangzhou is cautious about what the future holds.
But the city will continue to attempt to lure foreign investment, and continue to raise the quality of foreign projects.
In its economic plan for this year, the Hangzhou government plans to attract 100 ventures between private firms and foreign companies with the total value exceeding 10 billion yuan.
Also, more supportive policies will be rolled out this year to encourage cooperation between the two major forces of Hangzhou's economy, according to the government document.
The Hangzhou government works hard to help local private firms set up joint ventures with foreign companies as it finds these partnerships often provide a substantial boost to the city's economy in more ways than one. Wang Yanlin reports.
Becoming partners with French health care company Sanofi has been the best decision ever made by Minsheng Pharmaceutical Holdings Co, says its President Zhu Fujiang.
Starting from investing in one of Minsheng's workshops in 1995, Sanofi now has two joint ventures with Minsheng.
"Sanofi is a global leader in prescription medicine and human vaccines, but its help went far beyond merely introducing new products," Zhu tells Shanghai Daily at his office in Binjiang District, Hangzhou, Zhejiang Province.
Most importantly, Sanofi has taught Minsheng how to run a modern company, Zhu says.
The partnership is meaningful for Sanofi as well.
Among its first steps to enter the massive Chinese market, Sanofi's investment in Minsheng has allowed the French firm to localize quickly and get a strong foothold in the fast developing Chinese market.
The former workshop, now a wholly owned subsidiary of Sanofi, reported annual sales of more than 5 billion yuan (US$793 million), up from 10 million yuan in 1995.
Strong link
When Sanofi began to enlarge its business into OTC market in China, another joint venture was set up two years ago, demonstrating the bond between the two long-term partners.
The case revealed Hangzhou's knack for attracting foreign direct investment by building a strong link between foreign investors and private business.
Hangzhou may be the best city on the Chinese mainland in demonstrating such close links between private companies and foreign investment.
In cities like Shanghai, foreign investors usually set up wholly owned ventures or team up with strong state-owned enterprises, such as Volkswagen with Shanghai Automotive Industry Corp, while foreign businesses are not so prominent in cities like Wenzhou, Zhejiang, where local private firms thrive and dominate the market.
"Make use of private business to attract foreign capital" is an official slogan in Hangzhou. Private businesses contributed nearly 70 percent to Hangzhou's overall economic output last year.
In 2011, Hangzhou approved the establishment of another 500 foreign-invested companies, securing US$4.72 billion of actual foreign investment, up 8.4 percent from a year earlier. Contracted foreign direct investment increased 6 percent year on year to US$8.17 billion in 2011.
Among the total value of Hangzhou's actual foreign investment last year, nearly 30 percent, or US$1.4 billion, was linked with private business. Its growth rate was an annualized 35.6 percent, or more than four times that of the overall pace.
The Hangzhou government provides strong support in facilitating potential partnerships between foreign investors and local businesses.
Last year, the Hangzhou Foreign Trade and Economic Cooperation Bureau organized a series of events to promote deeper engagements among private businesses and foreign companies. The bureau held seminars to elaborate on policies and led a delegation of more than 500 private firms' bosses on a promotion trip abroad.
"We are pleased that our efforts have borne fruit," said Hangzhou Mayor Shao Zhanwei in a recent conference to summarize the performance of private and foreign businesses in the city. "Closer partnerships between private firms and foreign companies will be further promoted this year."
2011 was a good year for Hangzhou in attracting foreign investment. Apart from the growth managed during an unfavorable global economic climate, Hangzhou also attracted investment from higher quality firms.
There were 10 projects set up last year coming from Fortune Global 500 companies.
Foreign investment was involved more in Hangzhou's economic restructuring. Nearly half of foreign capital attracted last year flowed into the city's 10 key industries of culture, tourism, finance, e-commerce, information technology, advanced manufacturing, Internet of Things, biomedicine, environment protection and new energy.
"Foreign investors will become more important as Hangzhou pushes forward technological innovation and fiscal revenue expansion," Shao said. "Foreign investment can also serve to improve the livelihood of our residents and help sustain trade."
With the global business outlook still facing many uncertainties this year, Hangzhou is cautious about what the future holds.
But the city will continue to attempt to lure foreign investment, and continue to raise the quality of foreign projects.
In its economic plan for this year, the Hangzhou government plans to attract 100 ventures between private firms and foreign companies with the total value exceeding 10 billion yuan.
Also, more supportive policies will be rolled out this year to encourage cooperation between the two major forces of Hangzhou's economy, according to the government document.
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