Harbin Business Exchange in Brief
A Weekly Email Update . . . February 24, 2006

In This Issue

Surprising Harbin - Miss Universe China

Harbin and The One Region Strategy

Heilongjiang's Record Output

Harbin's Winter Olympic Presence

Get Your Free Copy of China International Business Article Reprint


Surprising Harbin - Miss Universe China

Did you know . . . fifty young contestants from around China gathered last week in Harbin to participate in the final of the 2006 Miss Universal China. The winner will represent China in the 2006 Miss Universe Pageant.

According to officials of the pageant, contestants jointly expressed their love for animals and children, some going as far as adopting tiger cubs and visiting orphans in the Heilongjiang Province. Eleven cubs have been adopted from the world's largest forest-based tiger park in Harbin. The committee also sponsored a trip for some candidates to visit a village in Qiqihar, where they became foster mothers for the orphans.

Qin Zhen, an official with the organizing committee, said that the pageant is a very important event among the world's various beauty contests. The annual event has attracted over 100 million TV viewers of 150 countries and regions.

This is the fourth year for the Chinese to participate in the Miss Universal pageant. As there has been no Chinese contestant in the semi finals to date, true to the competitive spirit, the Chinese remains hopeful to have their country in the semi finals this year.

Dear Friends:

Some have asked why we have made our commitment to Harbin.

First, because Harbin was our introduction to China. Looking at the ski industry in 1999, we were bound for the snow covered mountains of northern China. Despite the long terms prospects, we were ahead of market and infrastructure to get U.S. investor interest in ski development. It did give us an opportunity to get acquainted with the Harbin leaders, and to recognize many non-ski investment opportunities.

Out of those first meeting, and budding friendships, we developed the idea of the Harbin Business Exchange, and in response, Jill and I were appointed Special Foreign Investment Advisors to the city.

Most importantly, our tie to Harbin was based on our belief that the best modis operendi was to initially concentrate on a “one region” strategy – to develop and in-depth relationship with the government, business and civic leadership and to gain a mass of critical knowledge of the local culture and specific business opportunities.

The following article further discusses the effectiveness of such strategy and we recommend Harbin as the city of choice. In addition, we encourage you to contact us to obtain a FREE copy of a reprint of a recent article in the China International Business magazine regarding Harbin. Details can be found at the end of this newsletter.

Have a productive week! Larry P. Horist - HBE Chairman

  • Harbin and The One Region Strategy
  • The success of the “one region” strategy prompts us to recommend it to our clients and friends. Certainly, the Fortune 500 companies, with nationwide ambitions in China – and enormous financial and human resources – can implement an all-China strategy.

    I have been a critic of American investment in China. We are too slow, too timid and lacking the entrepreneurial spirit – at least as compared to the Canadians, Japanese, South Koreans, Hong Kongers, east Europeans and South Africans. I have warned that unless U.S. investors and business leaders become more aggressive, America will be on the short end of the burgeoning Chinese market economy.

    In addition to being more aggressive, we recommend the “one region” strategy for investment. One of our goals is to amass a group of investors to operate like an opportunity fund for multiple investments Harbin.

    Why this approach?

    The answer is simple. The ability to identify, negotiate, conduct due diligent and implement investment opportunities is significantly improved in an environment that is understood, and the relationships are both broad and deep. Among the major advantages is the ability to progress through the complex Chinese bureaucratic layers that are part of any business arrangement. A good understanding of the system can anticipate more issues, and bring about more favorable responses and decisions. It can accelerate the timetable.

    It is also much easer to monitor and manage multiple investments in a single cultural climate. In addition, there are many cost efficiencies, such as travel and accommodations.

    Why Harbin?

    Having established the point that a “one region” concept is highly beneficial, the question remains. What region? Of course, we suggest Harbin because of our historic ties. It is a region where our ability to advise and guide is critical. More importantly, however, are the reasons that reflect investor needs.

    Harbin offers some very decided advantages apart from our ability to bring investors under the most favorable conditions. Among them are:

    1. Wage and business costs well below other parts of China –especially the southern rim.
    2. A plethora of outstanding opportunities. As a “second tier” city in terms of economic advancement, Harbin offers extraordinary opportunities. It is what I have often called “the land of low hanging fruit.”
    3. A high and accelerating growth rate. Harbin is catching up, and the good deals are being snatched up by non-U.S. foreign investors.
    4. The Harbin leadership is highly motivated to secure American investment, which makes for much better “beneficial policies” – the Chinese term for tax breaks and other business incentives.
    5. Harbin tends to be a less corrupt environment that other regions – based on the reports of foreign business interests. The government enforces severe punitive policies and laws against bureaucrats who seek “private remuneration.”

    Of course, we like to believe that our presence, and ability to guide investors to the best deals, is a considerable advantage. Unlike many who offer their services to would-be American investors, we have a track record, focus on a region we know and understand, and have on the ground employees in Harbin. While our company, TJI International, Inc., has been afforded excellent opportunities in outer regions, they have only been tangential to our primary focus.

    If you are thinking of investing in China, either through financing projects or establishing your own corporate presence, feel free to contact us for more information.

  • Heilongjiang's Record Output
  • The grain output of northeast China's Heilongjiang Province reached a record 36 million tons last year, higher than the previous year, according to local government statistics. The areas sown to grain crops expanded to 24.4 million acres last year, up 0.6 percent year on year, according to the provincial statistics bureau. The province's meat output reached 3.06 million tons, up 17.6 percent year on year, and milk output was 4,4 million tons last year, 17.6 percent higher than the previous year.

  • Harbin's Winter Olympic Presence
  • The Winter Olympics in Torino has thrust Harbin into the spotlight as home of some of the best winter Olympic athletes in China.

    Zhang Dan and Zhang Hao, whose gutsy and courageous performance after the nasty fall in the quadruple Salchow claimed China’s first Olympic silver medal in figure skating. Both Dan and Hao are from Harbin.

    Yang Yang, the first Chinese speed skater who won the first ever Gold medal in the Winter Olympics for China during Salt Lake City 2002, was born in Harbin. She is the six-time overall world champion.

    Wang Meng, who won the women's 500m short speed skate in Torino (also China's second consecutive gold in the sprint event), hails from Harbin. Her inspiration comes from knowing that she comes from the same town as Yang Yang.

    First time Olympian Wang Beixing, a 20-year old speed skater who finishing sixth at the 2005 World Sprint Championships and taking ninth in the 1000m at the 2005 World Single Distance Championships, began skating at age 9 in Harbin.

  • Get Your Free Copy of China International Business Article Reprint
  • The recent article "Harbin Comes In From The Cold" in the November 2005 issue of the China International Business magazine highlights the growing opportunities in this region. Written by Michael O'Neill, this article talks about the history and its role in the economic development of China. This article is valuable as it highlights information that many potential investors are still unaware about this lucrative region.

    A reprint of this article is now available. To obtain a free copy, please email us or call us at 312-565-4467.

    :: 312 565 4467

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