Harbin Business Exchange in Brief
A Weekly Email Update . . . March 8, 2006

In This Issue

Surprising Harbin - Ice Queen

Come Fly With Me

Union Movement

Knock! Knock! Knock!


Surprising Harbin - Ice Queen

Did you know . . . winter swimming is the hottest event in Harbin when it is so cold that it hurts to breathe. Winter swimming began in China in the late 1940s and has unexpectedly taken off drawing millions of tourist every year, said Lin Senlin of the China National Swimming Association's Winter Swimming Committee. He said there are now about 200,000 registered amateur ice swimmers in China — mostly retirees — although there are likely more unofficial participants.

The main draw are the purported health benefits. "Through practice, diseases like high blood pressure, arthritis and heart disease can be eased, even cured." Unlike other Chinese and foreign cities where people get together informally for "polar bear swims," it’s a spectator sports with a fee in Harbin.

The Harbin swimmers perform between December and March, and are paid 75 cents for each show. Wu Jing, the 52-year-old dubbed the "Queen of Ice Swimming," (pictured) said the activity helped her get over a divorce and realize her lifelong dream of being in the spotlight. The Russians gave her nickname to her when she beat them in a competition in the 1990s.

Dear Friends:

This has been a very busy week around HBE. As readers already know, more than 60 Heilongjiang/Harbin visitors came to Chicago to promote investment opportunities. The centerpiece of the delegation activities was a luncheon and networking session led by Vice Governor Wang Limin. The event was organized by our friends at the International Visitors Center of Chicago. As you might expect, HBE was there in full force. Our Advisory Board Chairman William Bricen Miller was both a guest and working journalist. Among the amazing array of activities, Bill is also a contributing reporter to Washington International Business Report. Our full staff, Cyril Lim, Xiong Her and Sun Chang were on hand to greet our many old friends and to get acquainted with a few new ones. Jill could not join us since she is in China at the moment.

Of course many of our HBE members and friends responded to our invitation to meet with the Heilongjiang delegation. Despite a very tight schedule, HBE was able to make some important connections between key visitors and local business leaders.

The visit also received half-page coverage in China Daily through the good efforts Mr. Sha Yuchao, the media person for the provincial delegation. He helped HBE arrange an exclusive interview for Crain’s Chicago Business with Governor Wang. HBE then arranged exclusive interviews with Hu Yongchang, Director of the Harbin Economic Cooperation and Promotion Bureau (HECPB) and Ji Ping, of the Harbin Economic and Technological Development Zone.

The Vice Governor Wang gave an excellent overview of the business opportunities in Harbin and Heilongjiang. Guests were shown a PowerPoint presentation (I had actually seen the Power Point presentation when Mayor Shi Zhongxin and I gave tandem speeches to visiting foreign investors in Harbin in January). Those familiar with this newsletter would have recognized many of the selling points Governor Wang made in his speech.

Of course there were the reading of traditional messages from the Illinois Governor and Chicago Mayor, and presentations by host organizations, such as Motorola (my alma mater) and John Deere.

Most enjoyably, the visit gave us an opportunity to spend time with a lot of old friends from Harbin.

ON A DIFERENT SUBJECT . . . HBE has inaugurated a development program that will result in an even more effective organization. One facet of our growth programs is to increase the size and influence of our Advisory Board, headed by Bill Miller. In that regard, we are pleased and honored to announce two new additions to our Board of Advisors. They are Robert Kinsell, President of Kinsella Group, and Michael Hetzel, of Northern Galaxy. We will be announcing more additions in the coming weeks.

DATELINE HARBIN . . . Jill reports that she has been spending time with the female elite at endless feasts and events as they celebrate National Women’s Day. She is also not a member of a lunchtime Latin dance group. Somehow seeing a bunch of Chinese doing salsa makes me think the world is okay after all. Most of Jill’s time, however, has been all the necessary meetings and negotiations regarding the Hollywood Food Palace, as couple other investment projects.

Have a productive week.

Larry P. Horist - HBE Chairman

  • Come Fly With Me
  • China faces an enormous aviation safety and infrastructure challenge over the coming years as it grapples with explosive growth in passenger travel. The number of airline passengers more than doubled last year. There are 11,000 take- offs and landings a day. Restrictions have been imposed at major airports such as Beijing to guarantee safety. A multi-billion dollar program has been developed to upgrade fleets, train staff and expand dozens of airports making China an increasingly important market for aircraft manufacturers.

    In addition, airlines are gradually setting their own prices within government guidelines as a way of encouraging competition. In some cases, airline tickets are now cheaper than train tickets. China would also continue to welcome foreign investment in its airlines, the Civil Aviation Authority said, though foreigners cannot control more than 49% of a Chinese carrier, and an individual overseas investor is limited to a 25% stake.

  • Union Movement
  • The union movement is progressing into the Chinese workforce to protect workers as China’s economy continues to grow. With a large number of female migrant workers (dubbed as China’s “vulnerable group” by the United Nations Development Program) throughout China, union chiefs are stepping up efforts to prevent workers from being overworked and protecting them from occupational diseases and sexual harassment.

    Huang Yanrong, vice-chair of the All-China Federation of Trade Unions (ACFTU), said they are trying to bring more migrant workers (men and women) under the umbrella of her organization. To date, about 10 million of the 140 million migrant workers are with trade unions.

  • Knock! Knock! Knock!
  • AVON Products Inc, the world's largest door-to- door cosmetics seller, has obtained the first license for direct selling and will begin training their sales team after the Chinese government lifted a seven-year ban in December. China cracked down on all forms of direct sales in 1998 in an attempt to prevent fraud involving pyramid sales schemes, and even legitimate companies like Avon and Amway lost a major market opportunity.

    China's direct sales market, estimated to be worth US$50 billion a year, has also attracted other firms that have no prior direct sales experience. Around 15 firms have filed applications for the license, most of which are domestic health-care product makers such as Shanghai Jiao Da Onlly Co Ltd and Harbin Hayao Group, an industry insider said.

    New regulations state that direct retailers must not only have at least US$9.9 million in registered capital but also have a 3-year history prior to the issuance of the license.

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