UBS’ renowned conference centre located a stone’s throw away from the legendary “Paradeplatz”, the heart of Switzerland’s financial centre, was the venue for the second stop of the CEIBS 2nd Europe Forum. The first of the day’s panels provided valuable information on how European companies – especially Swiss ones – can and are embracing the Chinese market. Panellists represented global healthcare giant Roche, wealth management experts UBS, and the Swiss-Chinese Chamber of Commerce a networking and information platform for those serious about doing business in both countries. Read on for excerpts:
Lots of Opportunities: Trust is Vital
Managing Director, Head of Wealth Management APAC Switzerland UBS
“Five years ago in China, if I asked an entrepreneur if he might be interested in acquiring an international organisation or expanding his business abroad, he’d always ask, with a big smile, “Frank, why should I go to Europe? We have 10% GDP growth and we have a huge country. China is a big enough market; there’s no need to go to Europe.” Today, this way of thinking has completely changed.
We heard this morning about the huge capital flows. About one third of these assets go into the US; one third are distributed in Asia and one third comes to Europe. So it goes, primarily, first into real estate; because entrepreneurs are very comfortable with investing in real estate. But then of course some goes into industrial investments, hospitality industry, hotels, medical technology, clinics, beauty products, fashion, food, etc.
What I hope will be the key takeaway today, is that we love to help Chinese entrepreneurs find the right potential target in Europe; the right partner to collaborate with. Currently, my team and I have about 30 substantial groups looking to expand into Europe. At the same time, in Switzerland, I have access to about 50 companies that I know would be very interested in expanding in the other direction. They’d love to have an additional distribution channel as well as a fresh injection of capital. They want to keep the companies’ legacy intact for the next generation. So they are looking for a buyer, not because they have a mandate to do so, but because it is something they aspire to. I have about 40 companies in Central Europe, Eastern Europe, in the technology field – they’re looking for partners. So investments are welcome. But the biggest challenge for us is trust.
In Europe, entrepreneurs fear the size and aggressiveness of potential partners from China. The big challenge for us is to find out the investors’ true motivation. This is where CEIBS can play a crucial role: by acting as a facilitator between cultures; in particular, between Switzerland and China. Because it is all about true understanding. If we identify a sincere candidate in China, particularly in the production industry, and we have a candidate here in Switzerland, the opportunities are tremendous because this country has many outstanding brands.
Whether it's a chocolate maker or a fashion brand, the brands here are high-end, wonderfully developed and they generate great cash flow. But it’s all about finding the right partner. So, I encourage you to please help us create understanding of each others’ motivations. In this way, we can create long-lasting deals for all.”
Importance of the China market
Susan Griffing, Vice President, Global Head Country Clinical Operations, Roche
“We’ve been in China a long time: since 1926. Roche had an end-to-end value chain group based in Shanghai for many years. Not only that, we actually export some of the products we make in China to the EU and to the US. We’re very committed to China – and already [during today’s event] we’ve heard a number of reasons why commitment to this market is important. Roche is dedicated to patients in China; to our people in China and to expanding our business in this country and in the wider Asia-Pacific region.
We do drug discovery, research development, manufacturing, marketing and sales in China. In fact, Roche is amongst the leading multinationals in the country, ranked fourth in terms of revenue. We also consider China to be a strategic site for us, alongside San Francisco and Basel. Shanghai, Beijing and Guangzhou (we formerly had an office in the latter city) are key strategic sites for us, which goes to show just how important a link China is along our integrated global R&D chain. We have people in China who work on both China programmes and global programmes. We look to develop and attract talent in China and throughout the region.”
Are you listening?
Felix Sutter, President of Swiss-Chinese Chamber of Commerce;
Partner at PriceWaterhouseCoopers, Risk Assurance Division
“Listen to the Chinese government, it communicates with the business community. Have you read the Five-Year Plan? Do you understand what’s in it? Do you know what the potential implications of the hukou reform may be on the real estate industry? Do you understand what this reform means for education? Do you understand what new educational policy shifts mean in terms of number of students who will be admitted to schools in Beijing and other top-tier cities? What do they mean for students? The anticipated impact of all these changes has been communicated to us by the government, and we need to understand [these and similar issues if we want to do business in and with China].”
*Event date: May 20, 2016