Harbin Business Exchange in Brief
A Weekly Email Date . . . July 22, 2005

in this issue

Surprising Harbin - Harbin's Community Spirit

Trade Mission in October

China Reforms State-controlled Industries

Pingchuan Signs with Guangdong

Heating and Cooling with Sewage


Surprising Harbin - Harbin's Community Spirit

Did you know . . . The capital of Northeast China's Heilongjiang Province has come up with an idea - a neighborhood festival - with the hope of raising residents' awareness of the importance of good neighborhood relationships. Zhou Xiqiu, secretary of the residents' committee on Renli Street, said: "Our initiatives are to help residents get better involved in community life, nurturing good neighborhood relationships."

Renli Street, in the old part of the city, is one of the places where the houses used to be mainly one- story. As the city began its renovation, most of the compounds were torn down, and good old neighbors now live many streets apart. What replaced them were steel and concrete structures that were taller, but also colder. Many new neighbors poured in, bringing with them new living habits. The warmth of the old, closer neighborhood relationships was gone.

"We used to know our old neighbors in the compound pretty well, and we got on quite well," said Yu Yinglian, a long-time resident of the street who now lives in a multi-story complex. "But now I even have no idea who's living across the hallway, " she said. Yu's husband knows a little about electronics and was often asked for help by the neighbors in the compound. "However, now even if he wants to help, I'm afraid the new neighbors would say, 'No, thanks,' "

The Harbin Municipal Civil Affairs Bureau is the main sponsor of the neighborhood festival, which will continue over two months. The bureau is calling on the communities to organize activities such as meetings among new neighbors, a neighborhood party, shooting a photo for all the people living in the same unit or even a cooking contest. Wang Guozheng, Civil Affairs Bureau deputy director syas, "A harmonious community life could exert positive influences over people's quality of life and attitudes."

Dear Friends:

Those who have read past commentaries know of my harangue regarding the timidity of American investors regarding Chinese opportunities. Well, my perception is not unique. Crain's Chicago Business recently published an article headlined, "Investors taking slow boat to Asia." Investor reluctance is likely to place the U.S. at a serious disadvantage worldwide in the future, unless we take up a greater presence in the world's largest market. The article quoted Paul Carbone, Managing Partner, Baird Capital Equities as saying, "We don't think . . . companies have a choice but to globalize. They have to figure it out or get left behind."

Where are the privatization investors? One of the almost unrecognized phenomena is the ability of foreign investors to privatize an enormous number of public works and infrastructure projects usually associated with government development and operation. For privatization advocates, there is a great irony. Last year, Professor Anthony Pagano, a leading authority on transportation and privatization, was HBE's guest on a fact finding trip to Harbin. He was impressed with the number of privatization opportunities that existed, especially in view of the old image of China.

Finally, we are pleased to announce that HBE will have a new President. Due to increasing workload, we are creating a stronger two-nation leadership team. Mr. Xie YingYi, who had recently been retained to provide legal and governmental assistance, has agreed to serve as HBE President. I will serve as Chairman of the Board, and continue as Chief Executive Officer. The changes do not affect the Advisory Board chaired by our good friend Bill Miller. We are all very excited to have Mr. Xie as part of the HBE team.

Hope all is well for you.

Larry P. Horist

  • Trade Mission in October
  • HBE will provide an opportunity for seriously interested business executives to visit Harbin. The mission will focus on three key economic sectors; (1) industrial investment (from Joint Venture Partnership to acquiring Chinese companies), (2) privatization of infrastructure (investment in highways, water treatment and waste removal, power generation, bus and rail systems etc.), and (3) tourism and entertainment (investment in hotels, resorts, amusements, sports arenas, restaurants, etc.) Participants will follow a customized meeting agenda designed to meet their specific interests, with all- delegation activities limited to overview meetings, official social occasions, and most meals.

    For more information please contact us at:

    email: info@thomasandjoyce.com
    telephone: 312.565.4467
    fax: 312.565.4460

  • China Reforms State-controlled Industries
  • Officials from the State Development and Reform Commission says China will speed up its introduction of a market-oriented mechanism to state-controlled civil aviation, telecommunications, power, railways and oil industries.

    A seminar was held in Harbin, capital of northeast China's Heilongjiang Province and headquarter of Daqing Oilfield, the country's leading crude oil producer. At the seminar on the reform and development of the oil industry in Heilongjiang Province, SDRC Vice Secretary General Cao Yushu defined the reform of the oil industry as being "difficult and sensitive" because the industry has a particular bearing on the nation's development. Cao says, "We have to conduct careful and in-depth studies before arranging specific moves to reform oil and other monopolized industries."

    In January 2005, China began allowing foreign companies to retail finished oil products. Furthermore, the wholesale market of crude and finished oil products to foreign entities is planned to be made available by 2007.

  • Pingchuan Signs with Guangdong
  • Harbin Pingchuan Pharmaceutical Holding Co. Ltd. (PINGCHUAN) announced that its has signed an agreement with the Guangdong Medicine Group Co. Ltd. (GDMG). The terms of the agreement authorizes GDMG as a franchisee of PINGCHUAN in five provinces of Southern China. GDMG plans to buy about 2 million USD worth of PINGCHUAN's products in 2005. Through their cooperation, PINGCHUAN has extended its network and market in the southern provinces of China.

    Hu ZhanWu, Chairman and President of Pingchuan Pharmaceutical Co. Ltd. elaborates, ''We are delighted to reach this agreement with the leading medical enterprise in Southern China. This purchase agreement not only increases our sales revenue in these five provinces, but also substantially improves our brand awareness in Southern China. While maintaining the existing marketing network, we are developing and setting up new marketing network and sales channel actively . . . One of our marketing strategies is to establish a connection with medical enterprises such as Guangdong Medicine Group, for the promotion of our products into their commercial networks throughout the entire country.''

    Pingchuan Pharmaceutical Inc. (PINGCHUAN) is a highly-developed pharmaceutical manufacturer of premiere medical equipment, with strong R&D abilities, and extensive marketing networks. Since its establishment, PINGCHUAN has focused its businesses on diabetes medicine and medical products. PINGCHUAN's network extends all over Asia and includes U.S., Japan, Russia, Southeast Asia, and over 50 percent of China.

    Guangdong Medicine Group Co. Ltd. (GDMG) is based in Guangzhou. GDMG is a large state-owned pharmaceutical enterprise which manages three pharmaceutical enterprises and controls 20 associate enterprises. In China, recent sales revenue for early 2005 has ranked GDMG number one.

  • Heating and Cooling with Sewage
  • In Harbin, Capital of Heilongjiang Province, P.R. China, researchers say they have invented a cheap and enviromentally safe way to keep city-dwellers cozy in winter and cool in summer harnessing untreated sewage. Researches claims the device reduces the cost of heating and air conditioning by 20 percent. Sun Dexing, a professor in the environmental science department at Harbin Institute of Technology says it is also eco-friendly, produces no pollution and uses no chemicals. Already, it has been successfully tested in a hotel and mall in Harbin.

    The invention works in conjunction with the standard system used in air conditioning units. Solid waste from the sewage is contain by filters, thus leaving the liquid portion free to enter the pump and transfer its heat to a coil filled with Freon. The freon will then be used to transfer the heat to the air. Though this process is electric powered, the heat from sewage makes it four times more efficient, says Sun.

    The process works in reverse for cooling purposes. Heat from the air is transmitted through the coil and back to the condenser then onto the liquid portion of the sewage. In addition, removing the heat through sewage while traveling to its destination, the device may relieve some of the "urban heat island effect" in highly populated cities.

    Though other countries have used sewage as an energy source, it is usually sewage that has been refined. According to Sun, his method is more practical and efficient. Jiang Yi, an expert on heating and air conditioning from the Chinese Academy of Engineering says, "The device has huge social and economic benefits."

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