Archive for ‘Green shoots’

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21/04/2020

Coronavirus: China still seen as good opportunity for expansion by some foreign firms despite Covid-19

  • Israeli medical equipment firm IceCure Medical, with an initial US$4 million sales and marketing effort, will open its first Chinese office in Shanghai
  • English shopping outlet company Value Retail sees the chance to lure consumers who have been under lockdowns aimed at halting the spread of the coronavirus
Foreign firms, including Israeli medical equipment maker IceCure Medical and English shopping outlet company Value Retail, still see opportunities in China despite the coronavirus. Photo: AFP
Foreign firms, including Israeli medical equipment maker IceCure Medical and English shopping outlet company Value Retail, still see opportunities in China despite the coronavirus. Photo: AFP

Not only has the coronavirus pandemic not watered down one company’s expansion plans for China, it has given it even greater reason to push forward into the Chinese market.

Israeli company IceCure Medical is forging ahead with opening its first Chinese office in Shanghai, with plans to spend up to US$4 million for the initial sales and marketing effort for its non-surgical breast cancer treatments.

Chief executive Eyal Shamir said he has seen an uptick in Chinese interest in the company’s ProSense product, which allows the freezing of tumours outside a hospital environment, because it can free up facilities badly needed for Covid-19 patients.

The government approval of the company’s Chinese subsidiary is now only days away following a successful product console registration, according to Shamir, and it has already sold two units to the Fudan University Shanghai Cancer Centre for a clinical study.

World Health Organisation warns the ‘worst still ahead’ in coronavirus pandemic
“We are planning a full launch of the product in China for both breast cancer and breast benign tumours as well as other organs,” Shamir said.

“Post Covid-19, there will be a backlog of many surgeries and not only for breast cancer patients.”

IceCure Medical, though, is not the only foreign company eyeing expansion into China despite the risk of secondary outbreaks of coronavirus.

West of Shanghai, English shopping outlet company Value Retail is also expanding its retail space, banking on Chinese shoppers re-emerging from lockdowns to begin

spending again.

After being cooped at home for weeks, people want to be outdoors to enjoy the beautiful spring weather – Value Retail

Value Retail is proceeding with plans to enlarge its Suzhou Village shopping centre from 35,000 square metres (378,000 sq ft) to over 50,000 square metres, while also increasing the number of shops from 120 to 200, which will make it the largest of the 11 venues its controls globally.

It is working closely with the Yang Cheng Lake Peninsula government on a date for construction to start, after seeing a surprising increase in retail sales at its centres in early April. The company’s Chinese subsidiary, Value Retail China, attributed the rise to an increasing number of consumers wanting to “get outside” of their homes after being isolated for several weeks.

Suzhou Village sales have increased 40 per cent each week since the start of April, the company said.

“Thanks to the positive recovery [in spending] over the past several weeks, we are going ahead with the Suzhou Village expansion,” the company said in a statement. “After being cooped at home for weeks, people want to be outdoors to enjoy the beautiful spring weather. We provide a shopping experience for guests in an outdoor environment … the motivation for such an experience after isolation is huge. [Being] outdoors is seen as a luxury now.”

In addition, customers are flocking to both its Suzhou and Shanghai Village centres as a form of domestic tourism because of the curb on overseas travel, Value Retail China said.

Despite the economic destruction that the coronavirus pandemic has caused in China, it also is opening up expansion opportunities for entrepreneurial firms in several industries, such as e-commerce and online delivery, life sciences and infrastructure construction, said EY Asia-Pacific transaction advisory services leader Harsha Basnayake.
However, while businesses within Asia-Pacific expressed a desire for opportunistic expansions, most companies still held a pessimistic view of economic recovery that would drag on into 2021.
American companies already operating in China were even less optimistic with over 70 per cent of businesses surveyed by the American Chamber of Commerce in March saying they were reluctant about expanding in the coming year.

Although it is too early to say if retail property will rise – particularly when we are seeing new habits forming, going from shopfronts to online and how far this new behaviour will stick. China will gives us lots of lessons on this. – Harsha Basnayake

“We are expecting opportunities in real estate, particularly in commercial property and logistics, and we think industries in life sciences, some parts of health care and infrastructure will be interesting,” Basnayake said.
“Although it is too early to say if retail property will rise – particularly when we are seeing new habits forming, going from shopfronts to online and how far this new behaviour will stick. China will gives us lots of lessons on this.”
The Chinese government’s move to increase infrastructure spending to boost the economy will also benefit certain industries, such as cement production.
Despite suffering a 24 per cent drop in sales in the first quarter due to virus-related delays in construction activities, China’s largest cement manufacturer, Anhui Conch Cement, is likely to move forward with plans to expand in part due to its participation in the Belt and Road Initiative, according to analysts at S&P Global.

Though no one would be able to tell exactly what will happen when the Covid-19 uncertainties are not completely gone, signs of recovery in China have brought encouragement to us – Justin Channe

Desires to expand are also not limited to these industries, and even the hard-hit hotel industry is starting to show green shoots.
International hotel chain IHG said that the coronavirus would not derail its new Regent-branded hotel project in Chengdu, which is expected to start construction later this year.

“Though no one would be able to tell exactly what will happen when the Covid-19 uncertainties are not completely gone, signs of recovery in China have brought encouragement to us,” said Regent Hotels & Resorts managing director Justin Channe.

“While we saw business pickup across China over the past Qing Ming Festival holiday, Chengdu and its nearby destinations were among the leading ones. In the long run, we stay confident of the outlook for the China hotel industry, including the luxury segment.”

Analysing how coronavirus broke China’s historic economic growth run
Beyond the crisis, there will be ample opportunities for new merger and acquisitions (M&A) amid business restructures and failures, particularly in China, Basnayake added.

A new EY survey found 52 per cent of Asia-Pacific businesses planned on pursuing M&A in the next year.

“While the crisis is having a severe impact on M&A sentiment, there’s evidence from the survey that M&A activity intentions remain steady in the long term. There are many who recognise this is a time where valuations will be reset, and there will be stressed and distressed acquisition opportunities,” Basnayake said.

“For example, from our interviews with corporations in China, a majority said that Covid-19 has not impacted their M&A strategies, noting that the situation has not led to any cancellations or withdrawals from deals, but only in delays in closing deals.”

Source: SCMP

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29/12/2019

Discover China: Green shoots of prosperity as asparagus takes root in rural China

YINCHUAN, Dec. 28 (Xinhua) — In the remote Xiamaguan Township of northwest China’s Ningxia Hui Autonomous Region, swathes of green asparagus sway in the endless loess field.

Farmer Dong Yi started growing asparagus in 2017 when local officials encouraged villagers to cultivate the green plant to get out of poverty.

“We had never seen asparagus before, and everybody doubted if the plant could survive the harsh environment here,” said Dong, 56. “But I decided to try it anyway, because I was struggling to make money.”

Xiamaguan Township is located deep in the mountains, and the dry weather there leaves it in dire need of water. The township is among Ningxia’s poorest, where many people are still struggling to make ends meet.

Despite years of prosperity in the coastal regions, pockets of residents still lag behind in China’s underdeveloped rural areas, which poses a challenge for the country’s battle to wipe out absolute poverty by 2020.

In 2012, China had 98.99 million rural people living under the national poverty line of 2,300 yuan (329 U.S. dollars) in annual income. By the end of 2018, the number had dropped by 82.4 million, with 16.6 million still left in poverty. Ningxia is home to one of the largest poor populations in China.

However, the asparagus has brought fortunes to Xiamaguan Township, with more than 100 families having been lifted out of poverty since the industry took root there, according to the latest government figures. Currently, more than 130 hectares of asparagus thrive in the fields.

In the past, asparagus was something unheard of among impoverished farmers such as Dong Yi in Xiamaguan. Dong’s family has about three hectares of land. For generations, the family depended on grain plantation to make a living, though they barely made enough money to live a decent life.

A few years ago, a series of irrigation projects pumped water from the Yellow River into the dry, sandy lands in Ningxia. The Yellow River is China’s second-longest river. With more water, local residents decided to grow more crops, said local Party official Dong Zhanping.

“The farmers tried a variety of plants at first, including traditional Chinese herbs, and corn, but the yields were less than satisfactory,” the official said.

In 2017, township officials decided to introduce asparagus to the area after multiple field surveys. They invited a company that had success growing asparagus in a nearby county.

“We persuaded farmers to lease their land to us and we managed the land collectively,” Dong Zhanping said, adding that they gave 3,000 yuan to the farmers for each hectare of land they leased. Experts then cultivated asparagus seedlings in greenhouses, before planting them in the fields, depending on dripping irrigation technology.

“Different from the bamboo in southern China, asparagus can adapt to a very dry environment, which is why the land in Xiamaguan is perfect for its cultivation,” said company manager He Jiang. “Besides, the air here is fresh, and the soil is very clean, so the asparagus grown here is very good quality.”

In 2017, Dong Yi, the local farmer, went to learn about asparagus cultivation with the company’s technical staff in east China’s Shandong Province. He learned about weeding and fertilizing there, and returned home to train other villagers. By commanding new techniques and with hard work, farmers like Dong saw the potential of the industry after reaping a good harvest.

“This year we will have another bumper harvest,” he said. “Currently, more than 200 villagers are toiling in the fields.”

The success of Xiamaguan Township has permeated to other villages, according to local officials. In the past, many farmers left home for big cities for decent-paying jobs, but now they stay in their hometown and attend to the asparagus.

Dong Yi said the asparagus is in high demand, with orders from buyers in the provinces of Shandong and Guangdong. Many of the buyers purchased the crop online.

“When the harvest season comes in January, we will rake in more than 150,000 yuan per hectare,” he said.

The asparagus industry has also brought environmental benefits, including less sandy areas and more moist air, in addition to the economic boost.

“We hope to bring more farmers into the industry,” said Party official Dong Zhanping. “The plant has truly changed lives here.”

Source: Xinhua

Posted in asparagus, Green shoots, guangdong province, irrigation technology, loess field, Ningxia Hui Autonomous Region, prosperity, rural China, shandong province, takes root, Uncategorized, Xiamaguan Township, Yellow River, Yinchuan | Leave a Comment »

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