Long-term aims
Gauging the business climate
Jeroen Nijsen
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umbrella of STCF Hong Kong and with the support of the
Singapore office. Meanwhile, an important part of our Food
Agribusiness Research (FAR) programme is conducting research
on the Chinese F&A market, which we use both internally and to
provide advisory services to external clients.'
'On the advisory and investment banking side,' Wang continues, 'we
have both FAR and M&A teams that provide advice and execution
services to clients on market entry strategy, industry analysis,
investment and divestment. The M&A team is also expanding its
capability to include IPO advice to Chinese customers seeking a
listing on either the Hong Kong or Singapore stock exchange.'
Last but not least, the 'Country Banking' initiative is in the start-up
phase in China and Rabobank is close to completing the equity
investment into its first Chinese rural cooperative bank, which will
act as a blueprint for similar initiatives in other provinces.
RI's ultimate aim is to become China's leading foreign bank in the
F&A sector. This will involve a lot of hard work over the coming
years,' says Wang. 'We are focusing on around 30 sub-sectors within
the F&A sector, ranging from grain producers, dairy and livestock
farmers to beverage producers and food retailers. Supported by FAR
coverage for every sub-sector, our goal is to approach the leading
three or four players in each sub-sector,
giving us a potential cliënt pool of over
100 names to work with.'
Conducting business in or with China is by
no means plain sailing, however, and
several important factors need to be taken
into account. The regulatory environment
is crucial and there are still quite a few
restrictions on currency flowing in and out
of the country,' says Marjon Wind, Deputy
General Manager of RI's Shanghai branch.
The legal framework is also still in its
infancy and very often supposedly legally
binding documents fail to stand up in
court. The government is making progress
in this respect, but it won't happen
overnight,' she warns.
'The current business climate in China is
favourable towards manufacturing
companies,' Wind continues. 'The
government provides plenty of incentives
to employ local labour and manufacturing
costs are only 5-10% of those in more
developed markets, such as the US and
Europe. Philips, for example, employs
around 20,000 people in China,
representing around 25% of the
company's total production capacity, and
this is due to increase to 40% over the
coming years. Around 70% of this is
exported, however, and the real test
comes when companies try to build up a
business within China. At the moment,
