The world's biggest annual migration

If Europe and US demand decreases further there will be steep competition between these factories. With this competition comes reduced price margins and this will likely mean compromise on quality as these factories fight to survive. When your products become secondary to the factory’s survival, it is time to spend extra attention to make sure you are still getting the quality you expect.

When the bottom line is threatened, this is when quality problems arise. Instead of focussing their energies on maintaining the standards of your product, factories will be trying to get as many of your products completed as fast as possible so the next order can go through. Factories will likely also attempt to bolster their profits by blaming wage increases and raw material costs. Short-sightedness being a regular player in Chinese business, many factories will let all this happen at the detriment of your relationship with them as a customer.

Chinese New Year, following the lunar calendar, this year falls on the 23^rd of January 2012 and many workers will leave their jobs to return to their hometowns from the beginning of January onwards. Some (read: many!) workers will not come back to their jobs and go elsewhere. This happens for a myriad of reasons from family commitments to finding better pay elsewhere. Needless to say, because of this, January and February production capacity in China for many markets will be greatly diminished. With the economic outlook for exports to Europe and US from China the way it is, I expect this to have a profound impact on many manufacturing industries.

The buzz word recently attributed for China’s manufacturing scenario has been, ‘Stagflation’. Stagflation is a situation in which the inflation rate is high and the economic growth rate slows down and unemployment begins to increase.

I speak to many factory owners each week and the most common complaint and fear surrounds finding enough workers both qualified and unskilled. They all dread the “mafan” (麻烦) of Chinese National Holiday time as it is a period of real uncertainty. Their fears are not unfounded.

This year Guangdong increased the minimum wage for factory workers by 18.6% and more recently Sichuan increased the minimum wage for factory workers by 23%. The reason given by both provincial governments was to combat inflation. The wage hike will be a significant reason for many workers to go to these regions to look for jobs after Chinese New Year. Clearly this was the intention of the wage hike and only serves to pressure other provinces to increase their minimum wage.

In the short term, it will lead to massive employee shortages in other provinces and manufacturing industries. In fact, the migration period that follows every national holiday may be extended this year to facilitate the boost in an already titanic national moving of the masses. In the long term, you can expect other provinces to increase their minimum wage over the coming months to balance the worker shortage and this will lead to your products increasing in price.

Despite all of these hurdles it is not time to panic! It is still possible to maintain your price and quality in 2012. As with several companies and SMEs we represent, we’re now locking in purchase prices for a 12 month period and visiting factories over the production periods to maintain and improve quality levels at all stages. Working with factories we know and trust (and who know and trust us) allows us to provide purchasers with the best options for doing business in China during this uncertain climate.

If you would like some help or advice on dealing with your 2012 orders, get in touch anytime.

Give him something to smile about

Recently I wrote about a little tree cone I found in my Mengniu yoghurt and how it bugged me to the point of never wanting to buy that product again. Today I read about how Wang Xiaoshan, a columnist, published a microblog post calling for Web users to boycott all Mengniu products. This was because it was found in October of this year that some of Mengniu’s products were contaminated with over double the national permitted level of Aflatoxin M1. This substance is reported to cause severe liver damage and liver cancer.

How did this carcinogen get in the products?

Reports are formulating that cows were given Mildewed feed which caused the high levels of this toxin in the milk. If the levels were twice the acceptable amount then surely the feed is allowed to be somewhat mildewed (mouldy) anyway. If your animals eat crap, then why would you not expect the product from them to also be crap? Did no one hear of the adage, you are what you eat?

This is a lesson that has been out there to learn for many years and covers all animals farmed for meat and dairy. Most of you will be familiar with the following cases:

• Mad cow disease (BSE) and the human infection, CJD was formed from contaminated cattle feed in UK and Europe in the mid 1990’s.
• Dioxin (another carcinogen) in European meats from late 1990’s to mid 2000’s caused by mixing animal carcasses and animal waste in feed.
• In October 2008, certain egg products produced by Hanwei Group were contaminated with melamine in China. Agriculture officials believe adulterated feed given to hens could explain the elevated melamine levels.
• February 2009, an outbreak linked to banned animal feed additive Clenbuterol harmed at least 70 people in Guangdong Province. Clenbuterol, an asthma medication, is often added to pig feed to produce leaner meat.

All this got me thinking. We can look at Mengniu and point the finger once again but let’s face it; this one company isn’t the real problem. If one is doing it, chances are most of them are doing it. If most of them are doing it, why isn’t anything more drastic being done about improving the situation? Lessons can be learned from how other countries have dealt with this before. Why is China making the same mistakes? Food scares are a common problem and issue in China and there is an ongoing battle by the AQSIQ to combat this, but while the line between governance and private interest in China is blurred at best, these issues will always be there and profit will be put above quality, safety and social responsibility.

In China the concept of CSR is still not a well understood or developed business practice and this is where foreign brands can initially have an impact.

If I were a European Dairy farmer, I’d be getting hard at work preparing for the European dairy produce cap to be lifted next year and laying the ground work to begin exporting to China. If the feed is heavily regulated and pollution levels lower in the places where these animals are raised, I believe Chinese consumers will buy these products in droves based on these facts alone. I hope and expect we’ll see some real success stories of such European businesses booming in China.

Despite the recent Dioxin contamination and 18 month ban on Irish Pork, the food safety issues in China have caused much more damage to this industry. Foreign pork imports have resumed and are climbing again, paving the way for better regulated meat from Europe to take an even bigger bite out of the market.

I believe it is all down to responsibility to the industry and respect for the market. It’s about time we all start asking questions in order to get greater clarity and understanding about what it is that we are consuming. If you knew that the yoghurt you drink every morning may have cancer causing agents in it, would you drink it? If you knew that juicy steak you are eating came from a cow that lived its life being fed mulched diseased animals and sludge, would you eat it?

If you knew your yoghurt and sausages came from animals reared on green pastures and industry approved meal wouldn’t you feel more comfortable about what you put in your body? I know I would.

My former favourite yoghurt (and friends)

Almost every morning on my way into work, I stop at my local Jingkelong (Chinese Supermarket Chain) to buy a Yoghurt. It’s usually a Blueberry one with real blueberries in because I am a great believer in the health benefits of Blueberries. I also am careful about which brand of Yogurt I buy since the melamine scandal and various food safety and quality scares. Now I know this is scandal was mainly related to powdered milk but after reading, one cannot be too careful with any processed food they buy.

So to make myself feel safer and more at ease with my purchase, I buy Mengniu brand which has taken the moral high ground during the melamine crisis and done very well out of it. However, this morning after taking several scoops of this tasty yoghurt I felt something slightly harder than the normal soft, skinned blueberries (shame, because the skin is the healthiest part!).

To my relief it wasn’t any insect or part of an animal but a small pine cone from a tree commonly found in China. Now of course you or I don’t expect to find this in our food but what does it mean for their quality or the size of particles they allow to go in their yoghurt? I am happy that it was something natural and not artificial or (part of) something else! Nevertheless, I can’t help thinking what else might have made its way into this mix.

(left-right) A Blueberry, Not a Blueberry

I do believe that China is actively trying to catch up with the rest of the world in terms of food safety standards, unfortunately I am fussy enough with my eating habits to have been completely put off. Sorry Mengniu, it was nice while it lasted however it’s been ruined and I won’t be buying your brand again. The psychological effect of finding another crunchy bit in your yoghurt has put me off.

It could have been worse, much worse. How would this experience affect you? Would you continue to purchase a product after finding an ‘alien’ ingredient? Have you had similar experiences? We’d like to hear your comments.

UPDATE: A local friend has passed on this news link to us (sorry, Chinese only) which seems to be the Mengniu boss guaranteeing the quality of Mengniu products for export to Hong Kong and the world, but not making the same promise for their products sold in Mainland China.

Taking on the dragon?

Sourcing from China for the first time can be a daunting experience.

There are many cultural and language differences as well as huge differences in business mindsets. These combined issues can put you on the back foot from the start and put the supplier at a much more advantageous position.

This can easily negatively affect the result of your negotiations, both in terms of price and product quality.

Consider appointing an agent for you in China, who has local knowledge, experience and connections that can put you at an advantage over your new suppliers and your competition.

For a more detailed look at sourcing from China, take a look at some of our earlier articles, including:

Developing your products with existing Chinese manufacturers

How to control your China production more: Part 1

How to control your China production more: Part 2

How to increase your influence over China manufacturers: Part 1

How to increase your influence over China manufacturers: Part 2

Dealing with Small Factories in China: Pros and Cons

Dealing with Chinese Factories – Can they produce your entire order in-house?

Chinese Factories: Is your factory outsourcing your order?

Sourcing and Manufacturing Agents in China

Fake Body Shop in Fujian, China

However on my walk of I came across this little beauty. It’s clearly an unlicensed Body Shop store. The products within appeared genuine and from Hong Kong but all signage and interior design was a cheap and poor imitation mock up of the real thing.

The service staff were all happy to tell me the products came from Hong Kong and in my opinion they looked like they did. While that should be enough to convince me I was about to buy the real thing, I’ve been in China too long to take it at face value. The simple fact of the matter is, if it is not being sold in a licensed store, there is simply no way to be sure.

Mainland China is certainly no stranger to fake stores and products. We have the now infamous fake Apple Stores in Kunming, the fake Toni & Guy Store in Beijing, and believe me I’ve inadvertently cut myself shaving on my fair share of fake Gillette razor blades bought in local shops! Our own customers at Enter the Panda have come to us with real concerns about the IPR of their China-made products.

The Body Shop is unfortunately not yet officially selling in China, due to a claim by late founder Dame Anita Roddick that “cosmetics sold there have to be tested on animals“.  As a result, like other unavailable overseas products, when you live here you have to resort to travelling to somewhere nearby like Seoul or Hong Kong, or wait for friends who are visiting home to bring them back for you (incidentally, we’re almost out of Berocca if anyone’s in the UK)!

Real Body Shop, Hong Kong

I have a lot of friends that buy Hong Kong imported Body Shop goods for sale on virtual stores such as Taobao and various other e-commerce websites. These stores claim to be selling the real deal. It could just be me (I’ll admit I’m not the most seasoned of online cosmetics shoppers), but I still don’t feel comfortable with this as I am always scared of putting something fake on my already over-sensitive skin! Ebay also lists Body Shop items from ‘Gold/Top rated’ sellers and I personally wouldn’t consider purchasing from there either.

The Body Shop has some absolutely wonderful organic, cruelty free, fair trade products and I can understand a market like China’s having a growing demand for these. However, I think the longer this kind of unlicensed trading goes on, especially in cosmetics, the more damage this does for the brand in this country. Or does it?

Will the exclusivity drive the brand to be more desirable as an ‘exotic’ item? Either way, I think some better authentication from the brand or owners, L’Oreal, will surely help.

What do you think? Leave a comment below or email us.

Check out the links to popular sites selling ‘genuine’ Body Shop items:
Taobao.com
360buy.com

And how about this not so authentic website selling Body Shop goods in China:
bodyshop-china.com

The following is an article we wrote for Shanghai’s Settling Magazine about our experiences launching ETP in China. It was published in October 2011 and covered three pages of their ‘City Business Focus’ section.

Into the Unknown – Finding Our Feet in Beijing

Starting a new business anywhere is tough. Having the idea and motivation to get started is a big step, but as anyone who has attempted it will tell you, it takes time, persistence, stress and often luck. Starting a small business in China takes something else entirely.

Settling Magazine - Into the Unknown - Page 1

On Our Own

Coming from Ireland – though hardly a ‘nanny state’ – it’s fair to say I was coddled as I took my first steps into the world of business. Particularly during the boom years – before the Celtic Tiger became known as the Celtic Kitten – there were excellent tax incentives for small business owners and banks were ready and willing (perhaps overenthusiastically in hindsight) to offer loans to entrepreneurs. Today, fabulous organizations such as Enterprise Ireland still exist, helping young businesses network and develop trade and commerce.

I’m not sure what lessons learned in Ireland could have prepared me for trying to launch a business in Beijing. Certainly as a foreigner in this great city, there is no available support, no obvious guidelines and no clear information about setting up your business. You really have to dive in, head first and blindfolded, and figure out each problem as it hits you in the face.

Registering my business as a sole-trader back in Dublin in 2003 was a relatively painless experience. I visited two desks, one bank and within a couple of days I had a trading license, a VAT number and a checkbook with my company name on it. While setting up a limited company is a slightly more daunting task, there are still clear guidelines and steps to be taken. It’s paint by numbers.

Setting up a China WFOE (wholly foreign owned enterprise) with my business partner Dave White of Britain – another wonderful nanny state– was a grueling, nerve-wracking, arduous process that felt more like a 6-month game of poker than it did a calculated business decision. Like most start-ups we began humbly, with limited funds at our disposal. Aside from legal counsel for some of our setup issues, we did not have a glut of paid advisors at our beck and call. We had a blank canvas in front of us.

Guanxi

Trying to keep your finger on the pulse of the ever-changing rules of tax, accountancy, and government regulation as a foreigner is near impossible. Chasing that particular dragon required the application of “guanxi” (networking) and we were regularly forced to draw on the local knowledge of a decade worth of colleagues, friends and business associates to get the job done. And perhaps that is the point: one can’t just arrive fresh off the boat and set up a company in China. We had to keep reminding ourselves that if it were easy, everyone would do it.

Settling Magazine - Into the Unknown - Page 2

Believing in the old adage “from the mess comes success”, the difficulties we faced when first doing business here became the corner stone of the business model for our sourcing and export business, Enter the Panda. We set ourselves the task of championing the needs of foreign SMEs looking to do business with China. Along the winding roads of Chinese trade, we encountered many casualties among small foreign businesses. Through learning about their problems and helping them fix them, we together grew.

We found so many similarities in the tales of woe from these small businesses who had attempted to ‘go it alone’. So many had to learn the hard way, as we once did, about the vast gulf in business practice, negotiation and ways of thinking that exists between the east and the west. One Chinese proverb touches on the danger of venturing into business with anyone of vastly disparate mindset and goals: “tong chuang yi meng”. In English “same bed, different dreams”.

Local Knowledge

There’s no quick fix for local knowledge. You can be told about ‘face’, research Chinese bartering techniques, or even read The Art of War by Sun Tzu. But honestly, three straight days shopping in Beijing’s Silk Market would probably be a better education. Levity aside, in our office we still regularly compare dealing with factories and suppliers with bartering for cheap clothing and pearls. The roots of Chinese business mentality run deep from the tycoon to the street vendor.

Certainly, there is a wealth of opportunity in Beijing, as I’m sure there is in other cities in China, for those with the golden combination of local knowledge and western business mentality. Any company that can offer legitimate, trusted support to SMEs as they take their first, tentative steps in the China market will very soon find itself with an abundance of very grateful, long-standing clientele. Though our focus is primarily on trade, there are many other areas where a reliable guide would prove useful in this city.

People tend to forget, though somewhat new to the world stage, Chinese business culture has been developing and evolving for centuries relatively undisturbed by the West. In a country where a “town” is half a million people, and where the capital city contains Ireland’s population four times over, it’s no surprise there is often a sense of every man, woman and child for themselves. This stems from a unique spirit in Chinese culture, that no matter how it plays out, who wins or loses, it is all “part of the game” of business. Survival of the fittest: Darwin would be proud.

Settling Magazine - Into the Unknown - Page 3

Beijing

Beijing is a progressive city, but in many ways holds strong and proud to traditions. That being said, while there are certainly some cultural rules that are followed in business here, there are a lot more do’s than don’ts. What may be perceived as poor form or underhanded tactics to you or I, is often considered the logical and automatic maneuver by a local. This is to say that being the first or even being the best service available is not always what counts in China. Your “baby” will quickly find itself analyzed and copied a hundred times over if it is seen to be a profitable business model. The trick here is to adapt and grow, but what will mainly set you apart in the eyes of your customers will be you.

It is with that in mind and with that temperament that you have to approach business in this city. You need a thick skin if you want to survive, both financially and psychologically, on the battlefield of local commerce. An SME, start-up or freelancer is fresh meat. Whether you come out the other end lean or as scrap is entirely your own responsibility.

The upside of the difficulty in launching an SME here lies in the trials you face. It’s tough. But if you survive it, it in turn makes you and your business stronger. As for me, Dave and the Panda, we’re still here, growing and learning. Whether or not the lessons learned in this land over the past five years would prove valuable to me back in the arms of the ‘Irish Nanny’ remains to be seen, but would she even recognize me if I returned?

By Shane O’Neill for Settling Magazine

For more information on Enter the Panda, please visit the website www.enterthepanda.com, or email, info@enterthepanda.com

Why are these financial services companies offering trading consultancy and trade fair assistance?

In Hong Kong and Asia, much like the rest of the world, the financial services market is very competitive. Recently there have been many new start-up companies in the wake of the global financial crisis pertaining to offer you the best wealth management and financial services. These companies are mainly made up of individuals with a rich financial or legal background with a wealth of knowledge in the finance industries.

Many of them were made redundant by banks and investment firms or got out while the going was good. With the increasing number of these firms it is difficult to know who to trust, who to listen to and who to avoid. When it comes to trade and manufacturing issues, its best to look to people within the industry to get a clearer understanding of what is needed.

The Hook

Because of the increased competitiveness in the Asian financial services industry, some of these firms are looking further afield to find more revenue and work. As discussed in Part One, I have seen these ‘trade fair assistance services’ advertised and promoted by a number of local finance service firms and I wonder what extra they could offer over a local/international trading firm.

As far as I can see the answer is nothing. Based on the above case study, the client was given the bare minimum information they needed that they could have done themselves with very little extra effort and no extra cost. This is advertised as such to engage and find new clients to sign up to their own core financial services afterwards. For basically no extra effort and insight from companies like this you are getting no extra value for your money and instead, lining yourself up for a hard sell on:

•    Incorporation of Hong Kong or China companies

•    Virtual CFO

•    Company Secretarial Services

•    Visa Assistance

•    Trademark Registration

•    Tax Efficiency Structures

•    Offshore Banking Setups

•    Wealth Management

This is useful if you are considering setting up in Hong Kong or China, need tax efficiency structures or need financial services. However, for trade fair visitors, we go to look for products, suppliers and better solutions for our products.

Trade fair assistance is only truly valuable to you if you can have access to that extra local and international industry knowledge, trusted suppliers, extensive local experience and ability for solving technical and manufacturing issues. A trading company or trade consultancy would clearly offer the stronger partnership and assistance at a trade fair. This is vital if you look for trade assistance services.

Enjoy this, have you read Part One?

Also, check out our overview of trade fair assistance services.

These two industries are very different and just because a financial consultancy company operates in a certain geographical area, this does not necessarily make them experienced and knowledgeable in other industries. This is especially true when talking about technical solutions to trading and manufacturing issues.

Here is an excerpt from a case study I received in my mail box recently from a Financial Services Company:

CLIENT: A European based apparel importer and distributor who designs and sells high-quality clothing products to Europe, United States, and Japan.

PROBLEM: Our client struggled to source a niche product from a cost effective and high-quality supplier in China.

SOLUTION: Following detailed research into the client’s sourcing problem, XXX advised them to attend the Guangzhou Canton Fair, the largest trade exhibition in China where thousands of textile, fabric and garment suppliers can be found in one place. Before attending the fair, we arranged accommodation and transportation for the client and met with them to advise on local negotiating and trade fair customs. We also accompanied them throughout the fair and provided on-site assistance to overcome linguistic and cultural barriers.

Within the first 3 hours of attending the fair, the client sourced over 20 viable suppliers and was satisfied that they could evaluate, compare and sort out a great number of vendors in a time efficient manner. Being able to have face to face interaction with the right contact person, obtain product samples and negotiate prices all at the same time proved to be a successful solution to a problem that had previously caused delays in terms of time and money. Attending the right fair furthermore allowed the client to obtain more market insight and have a better understanding of the current position of their business in this region

I am confident that it cost this client a lot of money to have this financial service company attend this event with them. This company offered paid advice to a large international supplier of apparel to attend the Canton fair, a worldwide, internationally known yearly event that most markets know exists. It is clear to say going to the Canton/HK fair is very useful and allows you to meet face to face with suppliers and manufacturers. You are likely to meet many suppliers in your industry all offering similar items. It may be daunting as a first time visitor but seeking assistance and support for this should be provided by a trading company/consultancy as they can better serve your needs and requirements.

So what did this financial services company really do for their client in the way of trade fair assistance?

…met with them to advise on local negotiating and trade fair customs” and “We also accompanied them throughout the fair and provided on-site assistance to overcome linguistic and cultural barriers.

Most suppliers and manufacturers speak a basic English and are at this fair because of you, the client. They are there to accommodate you and make it easy for you to order. This is an annual, internationally renowned event where it is attended by people from almost every country on earth. People are specifically tolerant of each other’s religions and cultures. That being said, any visitor may need this to make them feel comfortable and help them meet their mandate.

…the client sourced over 20 viable suppliers and was satisfied that they could evaluate, compare and sort out a great number of vendors in a time efficient manner.”

As expected at a trade fair the client met lots of suppliers, however was then left to vet all the suppliers themselves and work out which ones were better than others and who could address their specific issue with no input from the financial services company at all! Surely they are just as likely to have been exposed to more mediocre suppliers that could easily have had the same industry problem and difficulty with whatever it was that they were looking to solve in the first place! How has this helped or assisted the client in any way?

This client would have been better supported and served if it had approached a good trade consultancy instead. This way the manufacturing issue and problem the client was facing would have been addressed as the focus point.

The financial services company could have better supported its client by looking at really why they had contracted them in the first place. However, this is not for the financial services company to know how to properly serve their client in this respect as it is simply not their industry.

Want more? Check out Part Two!

You might want to check out who needs trade fair assistance services.

What is Trade fair assistance?

Deciding to get on a plane and fly to China to a trade show can be a daunting concept. Taking on the cultural barriers of some of the world’s largest annual fairs can seem impossible. This leads many to reach out to one of many companies claiming to offer Trade Fair Assistance, companies that claim to offer on the ground support for your visit.

Be warned! Many of these companies do not offer any real value or benefit to you. Remember these are international annual events catered for you, the customer.

Before handing over your money and trade secrets to any company, be sure of two things:

1. Do you need Trade Fair Assistance?
2. Are you being offered a service that matches your needs?

Who needs Trade fair assistance?

You attend trade fairs either as an exhibitor or as a visitor. You are either a supplier or a potential customer.

A Trade fair assistance service shouldn’t really apply to exhibitors as they have probably done these many times before or have an event/exhibition company to help set up a booth/stand and manage basic operations. So for this purpose let’s eliminate this group from needing ‘trade fair assistance services’

As a potential customer looking for new suppliers, new products, new technologies, etc, you know your field of expertise. If you are looking for new products and technologies outside your business scope, the chances are that you have done your research and have a basic knowledge of what you are looking for.

If you are visiting the Guangzhou Canton fair, Hong Kong Mega Show or trade fairs that cover a large scope of products and industries, you may be visiting to browse and develop new ideas. You could also be visiting for the first time and not know what to expect.

These situations are where I would expect potential buyers not to know so much about the area the trade show is held in, particular items, specific industries and cultural issues. This is where a good trade fair assistance service comes in.

What should Trade Fair Assistance offer?

Trade fair assistance services should be there to offer you in-depth expertise about suppliers, local knowledge and key areas. More specifically they can approach a solution to an existing issue you might have and through their experience and knowledge find several ways to resolve it quickly and effectively. You should also expect a service that can help beyond the trade fair visit:

1. Vet potential suppliers
2. Negotiate price
3. Manage quality
4. Protect your brand

This leaves you to concentrate on the core business activities of sales and operation in your market area.

This range of services can be best supplied by a locally based international trading company or trading consultancy. It’s in the interest of these companies to support and help you find what you need and find the suppliers that most meet your requirements, be it price, quality or a specific technical issue.

We live in a small world these days. World markets rely on each other and what affects one country will invariably affect another. We have become so intertwined with who owes what to whom, and whose debt is held by whom to the point that the current looming European financial crisis has further unveiled the intricacy and co-dependency between Europe and China.

Europe is China’s largest trading partner. Europe has provided two decades of foreign investment, year-on-year solid bilateral trade and decades of technology exchange that has benefitted China’s rapid development. China has in turn provided Europe with the workforce and large scale production that has allowed businesses on both sides to grow and profit.

The present financial situation is almost entirely Europe’s fault, caused by poor fund management and reliance on a single young currency while member nations ignore policy and allow overspending. The mistakes made should be admitted and stricter rules enforced if they are to expect any further confidence in them and the Eurozone. Anyone considering aiding Europe needs to seek genuine assurances of change to the status quo before any assistance is to be offered.

If Europe suffers deeper financial crisis, then demand for products and materials will decrease. This will directly affect factories in China and Europe and cause a major decline in national exports, especially in China. As is always the case, it is the ordinary, hard working people of China and Europe that will be most affected by this fallout.

Based on the past 100 years of strong relations and support China and Europe has shared, I feel that China should support and help with the financial recovery in Europe. It is in their interest to do so. I wouldn’t want or expect China to solve the issue and bail everyone out, but it is in their interest to look at a way of at least maintaining trade levels so their manufacturing industry – on which they still rely heavily – is not critically affected. The domestic market in China is strong and still developing but it still has a very long way to go before it matures to a reliable level.

The prevailing attitude in the Chinese state-owned media appears to be that the request for help from Europe is ‘a trap’ and an ‘attempt to squander China’s hard earned wealth and reserves’. This is clearly not the case, as Europe looking to sabotage its biggest trading partner in order to get out of financial trouble themselves is, quite frankly, ludicrous. Or is it?

I can understand the calls for caution at this time however. We are all aware China has a lot of work to do domestically, maintaining a high level of growth and development. China therefore needs a great deal of money to progress in many areas. This will be made even harder due to the fallout of a deepening European financial crisis.

Politicians on both sides will express fears and raise issues, but at the end of the day if a crisis escalates and deepens the only way out is business. Business generates capital, employment and work. Now more than ever, our focus should be on working towards fresh business, renewed trade and developing solutions to support the changing world we live in.