Harbin Business Exchange In Brief
  A weekly email update . . . April 22, 2005  

HEADLINES

Surprising Harbin - Harbin-Russia Trade Sees Robust Growth

TJI International invests in Harbin - Sees Entertainment and Tourism as Hot Prospects.

Institutional Reform Transforms Pharmaceutical Group

Group Powers up for Development



Surprising Harbin - Harbin-Russia Trade Sees Robust Growth

Did you know . . . Harbin has pledged to push business ties with neighboring Russia to a new high with bilateral trade volume predicted to increase by more than 30 percent year-on-year by the end of 2005. Over the past decade, trade between the two sides had remained stagnant, but last year, Harbin's annual import and export trade volume with Russia hit $103 million USD, breaking the $100 million USD barrier for the first time since the mid-1990s. Furthermore, comparing the province's yearly foreign trade volume of $3.82 billion USD, this clearly shows the massive potential of Harbin.

Harbin, the capital of Northern China's Heilongjiang Province, has committed itself to stepping up Harbin- Russia trade through promoting their economic and trade co-operation and broadening its international market. In Harbin's Xiangfang District, an export- processing zone will be established focusing on agricultural and sideline products, textile products, electronic products, mecha-electric product processing, and stock management. Another strategic move is to facilitate the construction of an economic corridor with Russia.

The Harbin-Vladivostok international trade "green lane" will be further developed, with Russia's Krasnoyarsk, Habarovsk, Ekaterinburg and Vladivostok as the target markets. In the next three years, Harbin will strive to become an important production and processing base for exports to Russia, with a target of taking the city's trade volume with Russia to above $1 billion USD by 2010. In addition, Harbin's agricultural co-operation with Russia is on a fast track. Taking advantage of Russia's good ecological environment and potherb and marine product resources, Harbin has co-developed green rice, green soybean, and other refined agricultural and sideline products with Russian partners.

   Dear Friends:

One of the most frequently asked questions regarding investment in China is: "How do I get my money out of China?" Simple: You take it out. If that answer seems too simple, then you are basing your impressing on the China of the past. As China has moved into the global economy and the World Trade Organization, the financial policies and practices of China have progressed. Investors and foreign enterprises will find that investments in China pose not much more risk that investments anywhere else in the world, money can be withdrawn rather easily, American companies can establish wholly owned business without Chinese partners, or branches of the domestic company.

Another question often asked: "Is this a good time to invest in China?" In my judgment, there is not place on earth that affords better investment opportunities. Even though the growth potential diminishes as the Chinese economy expands, there are many outstanding opportunities. Of course, due diligence is critical. Opportunity also depends on locale. While Hong Kong, Shanghai, Guangzhou afford many opportunities, the most exciting and profitable opportunities can be found in the second tier cities, such as Harbin. Here the growth projection is a steeper rise. -- Larry P. Horist

  • TJI International invests in Harbin - Sees Entertainment and Tourism as Hot Prospects.
  •   After spending 3 years promoting investment in Harbin through the Harbin Business Exchange, TJI International is making its own commitment. The company has formed a joint venture partnership with Brown's Chicken and Pasta to open a new concept food establishment in the prime location in Harbin. Located adjacent to an 8.screen Warner Bros Cineplex in a brand new shopping mall on the city's central civic plaza on the shore of the Songhua River, the new 500-plus Hollywood Food Court will feature a movie land motif and a wide range of American fast food menu items. The site is further enhanced by the adjacent Wal-Mart. TJI recently secured this exceptional space with a $21,000 lease advance. Larry and Jill Horist are planning a trip to Harbin in the near future to commence the on-the- ground planning and implementation. TJI International is also exploring other investments in the recreation, entertainment, and accommodation sector, including an upscale specialty restaurant in Harbin's new nightclub district, and the acquisition of a 5-star boutique hotel. For more information on these investment opportunities, call 312/565-4499.

  • Institutional Reform Transforms Pharmaceutical Group
  •   Harbin Pharmaceutical Group Co Ltd (Hayao Group), based on a successful reorganization late last year, registered a conspicuous record in production and management terms in the first quarter of this year. It notched up a business revenue of $283 million USD, up 17.7 percent year-on-year, and a total profit of $21.3 million USD, a 19 percent rise on a yearly basis. At the beginning of the year, the group set a minimum yearly sales income target of $988 million USD. By launching an effective audit and monitoring system, the group has slashed the raw material sourcing costs of its affiliated industrial enterprises by 5 percent year-on- year in the first three months, and that of its commercial subsidiaries by 2 percent. In addition, by exploiting the potential of production technologies and process management, the cost of the Cephalosporin series products, the group's mainstay variety, fell $48 USD per kilogram.

    Hayao Group Medical & Pharmaceutical Co Ltd, the former medical & pharmaceutical company affiliated with the Hayao Group, became an independent legal entity following systematic reform. This resulted in improved economic efficiency, with a business volume of $65 million USD in the first quarter, up 18.8 per cent over that of 2004. The management board of the Hayao Group, which chalked up $882.7 million USD in sales revenue, said they are confident of accomplishing the goal of $1.21 billion USD in 2005 through mergers and acquisitions, if this strong momentum in sales continues for the rest of the year. It aims to increase the sales scale of its Shiyitang and fourth pharmaceutical plants to above $36 million USD, its second and third traditional Chinese factories to over $24 million USD each, and the profit of its first bio-product factory and biological engineering corp. to more than $1.2 million USD in 2005.

  • Group Powers up for Development
  •   Harbin Electric Machinery Co Ltd (HEM), a subsidiary of Harbin Power Station Equipment Group Corporation (HPEC), clinched a contract in March with Taiwan Jiexing Construction Co Ltd. It is HEM's first project in co-operation with a Taiwan partner, marking a milestone that the firm's power equipment has spread to as many as 32 provinces, autonomous regions and municipalities in China. HPEC, a group comprising HEM, Harbin boiler Co Ltd and Harbin Turbine Co Ltd, is regarded as one of the biggest power equipment makers in China. Thanks to the group's growing technological strength, HPEC has won bids from many large-scale projects both at home and abroad over the past several years, and the waiting lists for orders is growing. The group's gross industrial output value increased year-on-year 126% to reach $1.43 billion USD, with its sales volume chalking up a record high of $1.27 billion USD.

    According to the Harbin Branch of the People's Bank of China, HPEC has accumulated a large amount of impress because of the mounting orders transforming the group from a large credit borrower to a large depositor. Also last year, HPEC's five 700,000-kilowatt hydroelectric generating sets started operating on schedule, easing serious power supply shortages in China's southern regions. HPEC has consequently won applause from both domestic and foreign contractors and customers for the outstanding performance of the five sets, all of which meet international quality standards. Additionally, HPEC won the bid for the hydroelectric generating sets to be used in the right side of China's Three Gorges Dam Project, the world's largest hydropower plant. As a result, four out of the total 12 sets will be manufactured by HEPC and are scheduled to be sent to the construction site.


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