Member Magazine for the Norwegian Chambers of Commerce in China, Hong Kong and Norway issue 1 / 2013

The Shanghai Free Trade Zone What is it all about and will it push reforms further?

Gerhard Heiberg China is likely to host the winter Olympics page 10

Trond Giske What does the future hold for Sino-Norwegian economic relations? page 12

Chris Rynning “Likonomics” combine growth and reform page 26

> CONTENTS 4 EDITORIAL Joint-editors

Chris Rynning and Geir Sviggum welcome you to Norwegian Links

5 SPOTLIGHT Mats Wermelin shares his experiences of moving to China

6 PIECES Bite-sized statistics about Norway and China

18 INNOVATION

NORWAY Knut Sørlie

Norwegian Business Forum

21 SHANGHAI CHAMBER Norwegian Business Association

CHAMBER Norwegian Chamber of Commerce Hong Kong

implications of Shanghai’s new pilot program

10 PERSPECTIVE Gerhard

23 NORWAY CHAMBER

12 EXCLUSIVE Trond Giske

24 COMPANY PROFILE –

14 EMBASSY NEWS

25 COMPANY PROFILE



LET US HELP YOU DO BUSINESS IN CHINA DNB has been present in China since 1982 providing financial services and advice to Nordic, Shipping & Energy companies. DNB in China and throughout Asia provides a wide range of financial products and tailor-made solutions for our clients. Our comparative advantage is understanding your business and our goal is to optimize your China banking solutions in a global perspective. General Manager, Shanghai Branch Mats Wermelin –[email protected]

Shipping, Shanghai Branch Cissy Zhou – [email protected]

Corporate Banking, Shanghai Branch Edward Jones – [email protected]

Markets, Shanghai Branch Xia Long –[email protected]

Heiberg examines the future of Norway and China in 2030

His Excellency Svein Sæther supports strengthening ties between our countries

12 EXCLUSIVE

Norwegian Chinese Chamber of Commerce

AQUALYNG

Desalination company Aqualyng explains its contribution to China’s water supply

highlights the importance of SinoNorwegian trade

– EVATIC

Technical support solution firm Evatic showcases innovative resource management systems

15 EMBASSY NEWS

26 CHINA ECONOMICS

Thomas Hansteen reviews the importance of research

17 LEADERSHIP Jan Arnulf highlights key lessons and leadership resources in China

Chris Rynning takes a look at Premier Li Keqiang’s economic policies

17 LEADERSHIP

CHINA ECONOMICS DNB – Banking the Norwegian way.

6

20 BEIJING CHAMBER

7 COVER STORY Wikborg 22 HONG KONG Rein & Co. discusses the

PIECES

welcomes Norwegian business to China

26

EMBASSY NEWS

15

issue 1/ 2013 • Norwegian Links

3

> EDITORIAL Will I ever get used to

Norwegian Chinese Chamber of Commerce PO. Box 54 Sentrum, 0101 Oslo Tel.: +47 414 40 388 E-mail: [email protected]

Norwegian Business Association Shanghai Royal Norwegian Consulate General Rm. 1701, Bund Center, No. 222 East Yan’an Road, Huangpu District, Shanghai 200002 Tel: 1500 1866 158 Fax: 123-456-7890 E-mail: [email protected]

Norwegian Chamber of Commerce Hong Kong Rooms 1510-1512, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Central, Hong Kong. Tel: +852 2546 9881 Fax: +852 3003 6506 E-mail: [email protected]

Norwegian Business Forum Beijing Royal Norwegian Embassy 1, Dong Yi Jie, San Li Tun Beijing 100600, P.R. China Tel: +86 10 8531 9600 Fax: +86 10 6532 2392 E-mail: [email protected]

For contributions and advertising, please contact Norwegian Links at [email protected] Publisher Leyton Trade Group Ltd Joint Editors Chris Rynning and Geir Sviggum Design, layout and prepress production Bamboo Business Communications Art director Johnny Chan

Geir Sviggum

Chris Rynning

Linking

Chinaand Norway You are reading the very first edition of Norwegian Links, a magazine that aims to facilitate trade and business exchange between China and Norway. While intertwined economically, the Chinese and Norwegian people know relatively little about each other. Coverage of China in the Norwegian media ranges from the highly critical, to awe of China’s economic progress. There is little room for deeper analysis and reflection. On the other hand, Chinese media rarely covers Norway at all, as we are only a small “blip” on the international radar screen. Norway is after all a country with less people than a small-to-medium sized Chinese city. Norwegian Links is circulated to more than 20,000 politicians, ministers, business and industry leaders in both China and Norway. They will hopefully read the articles with interest, notice key messages, and the sponsors and contributors. Norwegian Links also aims to provide opportunities for the many small-and-medium sized companies in China and Norway that would benefit from working together, making themselves known in our Company Profile section. Norwegian Links is here to facilitate, analyse and bring out the best in Norwegian-Chinese relations. As this is the inaugural edition, you will see many “opening statements”. All contributors and sponsors of Norwegian Links work hard for a stronger ChinaNorway relationship. Key messages in this edition and future ones are important to note in both countries. Our next edition will be dedicated to the Oil and Gas sector, where Norway is a global leader. A topical edition will naturally provide more analysis and in-depth views. You will also notice the magazine is a cooperative effort by the Norwegian Chambers of Commerce in Beijing, Shanghai and Hong Kong and the Norwegian Chinese Chamber of Commerce in Oslo. Every edition will have Chamber Pages with updates and articles from both their activities and members. We encourage all businesses to get involved with the respective Chambers. We want to thank all our readers, sponsors, the Embassy in Beijing and Innovation Norway for their generous support. Geir Sviggum, Joint Editor / Chris Rynning, Joint Editor

4

Norwegian Links • issue 1/ 2013

spotlight 

drinking warm water?

T

his summer I moved to Shanghai In my first weeks at work our ayi (cleaner) was kind enough to serve me water every from Stockholm. As the new morning. Warm water, to my big surprise general manager for Norway’s without any tea leafs in, just plain warm largest financial services group, water. I decided to start a campaign, a DNB Bank ASA, in Shanghai, mission, for the implementation of cold and a newcomer to China, I told myself water. the first period would be different; new I did a quick market survey with my culture, new language, new food and colleagues and their firm response was, overall new experiences. of course, warm water. I also found out The first period was fantastic. I guess the water dispenser actually did provide similar to when you fall in love, you tend cold water if the button at the back was to oversee any first impressions you put in the right position. So I changed the dislike. I truly fell in love with Shanghai position, and thought and China despite that this was the end of not understanding a the warm water era. But word that was said, nor I should have known understanding what that the button was and how to order meals swiftly returned to the at the restaurant and warm position again in not being even close to a matter of minutes by giving correct directions our ayi. She showed no to the cab driver, if I was mercy when it came to actually able to get one. tempered, cold water. Spending the Today, some months summer in Shanghai, the later, I have bought a warmest in ages, was a new water dispenser for challenge. It was not for the office. It is a more any of the above reasons, modern type, a type Mats Wermelin, General the warm weather, nor Manager, Shanghai Branch, which can produce both the in-and-out of air DNB Bank ASA warm and cold water. conditioned areas. The My mission was complete. However, to my difficult part was how to dampen the big surprise I now no longer mind our ayi thirst. As a Nordic, the obvious choice is serving me warm water. I actually enjoy to drink water: cold, refreshing water. drinking it, warm and refreshing. Surprisingly, it is far more difficult At least now I know I can have cold than you would expect to get a glass of water whenever I choose to. I wonder cold water in China. Water, yes, but water when that time will come though.  is served warm or at best medium warm! issue 1/ 2013 • Norwegian Links

5

cover story 

PIECES

5,051,275

1,360,270,000

as of January 1, 2013

as of October 3, 2013 or 19% of world population

NORWAY CHINA TRADE IN 2012

Imports NOK billion Percent

Exports NOK billion Percent

China

47

9

14

2

Total

507

100

929

100

The i a h g n Sha e d a r T Free : e n o Z

Photo: Bjørn Eirik Østbakken / Visitnorway.com

China’s population

Norway’s population

What is it all about?

How do I import seafood from Norway? Contact the Norwegian Seafood Export Council: www.seafoodfromnorway.com E-mail: [email protected] Photo: Pål Bugge / Innovation Norway

Little Streams, Big River

Chinese registered hotel stays in Norway, June and July 2013

84,000

6

Norwegian Links • issue 1/ 2013

The book is available at Amazon.com.

Adoptions from China 2012

Photo: Nancy Bundt / Visitnorway.com

Photo: Nancy Bundt / Visitnorway.com

NBF’s Chairman Chris Rynning launched a new book on China this fall. In his book, Chris analyzes the possibility that China is a more pluralistic and market-oriented economy than most economic observers would agree. Chris argues that China’s economic transformation has involved painful, but necessary, environmental concessions and discusses how cultural and policy norms established long ago, have greatly influenced current environmental challenges in the Middle Kingdom. The book also holds a number of relevant policy recommendations and investment ideas.

231 51 (22%)

Total foreign adoptions 2012

Background

On 3 July the PRC State Council finally approved the establishment of the Shanghai Free Trade Zone (the “FTZ”). Supported by Prime Minister Li Keqiang, this pilot program is regarded by many as a crucial step towards a new round of reforms in the Chinese economy. The FTZ launched on 29 September 2013. There are high hopes and expectations that it will lead to an increased presence of foreign investors in China. Rumours and speculation have been rife in recent weeks regarding the proposed features of the FTZ. Only two days prior to the opening of the FTZ the State Council published the “General Plan of the FTZ”. Although lacking in detail, it adds information about how the FTZ may eventually look. In the below we shed some light on some of the expected features of the FTZ and see what this could potentially mean to you and your business.

Where is the FTZ?

The FTZ is located in a geographical area covering a total area of 28.78 square kilometres in Shanghai, consisting of the following four existing special zones: • Waigaoqiao Free Trade Zone; • Waigaoqiao Free Trade Logistics Park; • Yangshan Free Trade Port Area; and • Pudong Airport Comprehensive Free Trade Zone.

What will be new about the FTZ?

Reduced administrative hurdles #1: Temporary suspension of certain laws that restrict foreign investment In a drive to reduce the administrative burden on foreign invested entities (FIE’s), several sections of some of the existing laws that regulate foreign investment will be suspended within the FTZ for an initial trial period of 3 years, with effect from 1 October this year. The main suggested changes are that foreign investors will no longer need to obtain approval from the authorities to establish a WFOE (wholly foreign owned enterprise) or a JV (joint-venture with Chinese partners) inside the FTZ, but merely have to file the establishment documents with the local authorities. Several other actions that previously required approval will also now be reduced to mere filing requirements, issue 1/ 2013 • Norwegian Links

7

 cover story Photo: Pål Bugge / Innovation Norway

Photo: Pål Bugge / Innovation Norway

including divisions, mergers and other significant changes in WFOEs. The proposed suspension will significantly reduce the red tape and time constraints currently experienced when dealing with government functions in China, and if successful will likely be rolled out across China following a threeyear initial trial period in the FTZ. Reduced administrative hurdles #2: Revision of the classification in the Foreign Investment Guidance Catalogue Currently, the administrative procedures relating to investments by foreign investors will depend on the classification of the specific industry in which the investment is planned. Investments are either “permitted”, “encouraged”, “restricted” or “forbidden”. For each classification, a different level of requirements or restrictions applies. For instance, for “restricted” sectors, it may be a requirement that a portion of the shares in the target business are on Chinese hands. For companies in the FTZ, the authorities have stated that they are looking into changing the current structure. Rather than having four separate classifications, a blacklist setting out those business sectors that cannot be invested in may be introduced instead. In addition, the approval process will be based on a mere filing requirement, rather than a full application procedure. 8

Norwegian Links • issue 1/ 2013

Photo: Pål Bugge / Innovation Norway

Photo: Hanne Olsen / Innovation Norway

• Companies registered in the FTZ will no longer need to seek prior approval Several changes to the current tax regime for certain types of investments outside are expected in relation to companies in of China, but will only be subjected to a the FTZ, and several more are expected to filing requirement (types of investments be announced in the future: not yet specified by the authorities) • In respect of the income tax payable • Establishment of corporate on the realisation of non-cash overseas headquarters and operation centres in investments (i.e. payments in kind), the FTZ will be encouraged companies registered in the FTZ will be able to pay such income tax by way of • More market-driven regulation of interest rates instalments (up to 5 years) • Less restrictions on companies doing • Financial leasing companies will enjoy offshore finance transactions tax refunds for establishing SPVs within • Generally – a significant reduction the FTZ in the current level of administrative • SPVs set up for the purpose to acquire supervision. airplanes (over 25 tonnes) will enjoy preferential VAT rates on such acquisitions A closer look at We are • Duty-free import by specific industry manufacturing and sectors optimistic processing companies In general, all participants that the FTZ in the FTZ of equipment in the FTZ will enjoy and machinery used a series of benefits and will indeed • Planned tax-breaks in reduced bureaucracy. signal some respect of goods shipped However, especially within from the Shanghai port in the shipping and finance meaningful the FTZ sectors, it is likely that change. additional specific benefits will be available. Although Other details are yet to be provided by the developments authorities, here is a snap-shot: We have been told to expect a series of additional measures in the FTZ, including: Shipping sector Shipping Companies • New regulations in respect of free trade The proportion of Chinese capital of goods and services (through a JV with a Chinese company) • For companies, reduced restrictions on required when investing in the Chinese foreign currency exchange

Reduced tax burden

shipping industry is likely to be reduced. In relation to goods that are destined for import to or export from China, foreign flag vessels owned by a Chinese company will now be allowed to transport such goods domestically between Shanghai and another Chinese port. Ship Management Foreign investors may be allowed to establish international ship management companies within the FTZ without Chinese investment required. Further encouraging policies to be introduced to develop shipping-related financing and insurance services, as well as maritime arbitration. Finance sector Banks A foreign financial institution will likely be allowed to establish a foreign invested bank, or to jointly establish a bank with a non-state owned Chinese company or another foreign financial institution

Geir Sviggum [email protected]

within the FTZ, without being required to first have to establish a representative office for an initial period of 2 years. A Chinese bank within the FTZ may be allowed to undertake offshore transactions. It may become possible to set up a “Limited Licensed Bank” within the FTZ. Financial Leasing The current compulsory requirement of minimum registered capital will be removed for financial leasing companies when establishing one-ship / one-airplane companies within the FTZ (SPVs). Financial leasing companies may be allowed to engage in commercial factoring. Credit Information Foreign investors may be allowed to establish credit investigation companies within the FTZ. Investment Management Wholly foreign-invested investment

Yafeng Sun [email protected]

Alexander Levi [email protected]

management companies may be allowed within the FTZ.

Conclusion

It is too early to tell how the FTZ will fare. There is little confirmation as to what exactly will be the regulatory framework for those who decide to set up shop in the FTZ. We anticipate that detailed regulations and policies will be issued and carried out step by step under appropriate conditions. Based on the information we have received and seen that is currently circulating, we are optimistic that the FTZ will indeed signal some meaningful change. People we have spoken to are genuinely optimistic. For anyone who have tried to manoeuvre through the bureaucratic jungle that is China, the mere suggestion that significant levels of red tape will be removed is worth taking note of. Wikborg Rein is the only Norwegian, and the largest Scandinavian, legal practice in China. 

Xiaomin Qu [email protected]

Tormod Nilsen [email protected]

issue 1/ 2013 • Norwegian Links

9

 PERSPECTIVE

Looking into the

Crystal Ball

Mr. Gerhard Heiberg was a recent guest speaker with NBF Beijing drawing a large crowd of Norwegians and Chinese alike. Mr. Heiberg was given the difficult task of looking into the crystal ball to talk about Norway and China in 2030. The IOC member and industry veteran shares some of his views on China and Norway. Interviewed by Chris Rynning

China’s economy will likely be the world’s largest by 2030, driven by continued urbanization and consumption. Beyond growth in size, what other changes do you foresee in China by year 2030? Gerhard Heiberg (GH): I believe that China will become, even more than today, globalized. Currently we see the trend that Chinese companies, not only governmentally owned, are going abroad making acquisitions and offering their own products to the world market. Just look at how China has developed their ship building and solar industry; they are now at the forefront globally in both industries. 10

NORWEGIAN LINKS • ISSUE 1/ 2013

Norway is a tiny economy, far away from China both in distance and culture. How do Norwegian companies get involved here and where are the biggest opportunities here? GH: There are many success stories for Norwegian companies in China, but there is certainly room for more! This is what I try to spend most of my time doing these days. I believe that there are big opportunities for Norwegian companies across various industries, and I believe that some of the biggest opportunities lie within the oil and gas sector. Photo: Norges Idrettsforbund / China is the largest consumer Geir Owe Fredheim of energy in the world, and that

number will just keep increasing in the coming years. Norwegian companies have an extensive knowhow and technology that should be a perfect fit for China and Chinese companies and lay the foundation for a prosperous relationship between the two countries, also cooperating on the NCS and in third countries as well. Tell us a little bit about your current business activities in China? GH: I am a part-owner and on the board of directors of Nordic Capital Advisory (NCA) that is engaged in cross-border advisory and transactional services, facilitating cross-border opportunities between the Nordic countries and China. My contribution here is my extensive network here in China, having been engaged in business in China since 1976, and been to this great country more than 130 times. We currently have two offices in China, Beijing and Shanghai, as well as our main office in Oslo. Our three main target industries, based on the Nordic expertise, are the oil and gas sector, maritime industry and aquaculture. You mentioned in Beijing that China may one day host the Winter Olympics. Maybe the torch will go from Oslo in 2022 to Beijing 2026, or is that too early? GH: Hehe, we will see! Now that Tokyo was awarded the 2020 Summer Games, I believe that it will be Europe’s, hopefully Oslo’s, turn in 2022. I do believe that if China is to apply for the Winter Games in 2026, they will be able to host fantastic games. I would be delighted if in fact the torch goes from Oslo to Beijing. It would be wonderful for Beijing to be the first city ever to host both the summer and winter games! In your experience, what are the biggest challenges Norwegian companies meet in China? GH: First of all I hope that the political relations between China and Norway will normalize as soon as possible! Then Norwegian companies must be able to understand Chinese history, culture

and background since they want to operate in this big country. This also includes understanding how business is done in China for instance the political dimension in everything one does. A lot of homework has to be done here! In recent years, we have seen China Inc. expanding globally. In which ways will Norwegian businesses or consumers see Chinese companies in Norway? GH: I think we will see much more Chinese interest in Norway and Norwegian businesses and industries in the years to come. As earlier mentioned oil and gas, fisheries and mining could be added. With the opening up of the Northeast Passage, Norway will be the closest European country to China! I expect Chinese companies to want to invest and look for “M&A” opportunities in Norway. This is of course based on the political stability and the knowhow, technology and the trust and confidence Norwegian business leader have built up over the years. Could you share an impression or an experience from China that made an impact on you, or changed your thinking on Norway – China relationships? GH: Having travelled around China and visiting almost all of the provinces have given me an understanding of China. This has given me an insight and admiration for the country and its people. Norwegians should be able to do much more with our friends on this continent if we spend enough time, energy and efforts in getting the proper relations. Any advice to Norwegian students looking for an international career? GH: With China soon becoming the largest economy in the world and having more and more influence in world matters, I would say to Norwegian students that either studying in China and/or working in a Chinese company would give a very interesting background for developing any career. 

ISSUE 1/ 2013 • NORWEGIAN LINKS

11

 exclusive Photo: Susan Fraser / Visitnorway.com

Photo: Yngve Ask / Innovation Norway

With an impressive speed, China has been transformed from a low-income country prior to its economic reforms in 1978, to the world’s second largest economy in 2010. China has succeeded in lifting more than 600 million people out of poverty, a historic achievement.

Photo: Siv Nærø/Innovation Norway

What does the future hold for

Sino-Norwegian economic relations?

12

Norwegian Links • issue 1/ 2013

Second, the strong Chinese economy has increased the demand for Norwegian products, services and technology. At present, more than 200 Norwegian companies are established in China. These companies represent a variety of different sectors, such as the maritime industry, chemical and pharmaceutical industry, environmental technology, information- and communication technology, construction, architecture and fisheries. I had the opportunity to witness the extensive cooperation while visiting China and the World Expo in Shanghai in 2010. I am hopeful and optimistic that the SinoNorwegian economic relationship will prosper

Photo: Morten Krogvold

C

hina’s growth has presented opportunities for the world community at large in two ways. First, Chinese reforms have reduced international costs of production. Finished products such as consumer electronics, computers, textiles, washing machines and toys are produced efficiently and profitably in China. Most Norwegian consumers have become accustomed to rely on Chinese products in their everyday lives. Today, China accounts for nearly 10 percent of Norway’s import of goods. The value of our import from China is nearly 10 times higher than only 15 years ago.

Trond Giske Member of Parliament and Former Minister of Trade and Commerce

in the years to come. The potential for future partnership is particularly evident in the energy sector, both nationally and in third countries. Norwegian businesses have leading expertise in managing and utilizing natural energy resources such as oil, gas and hydropower. Norway also has an advanced offshore supply industry and Norwegian companies control one of the largest offshore fleets in the world. There is also a great potential for increased cooperation in environmental technology. China’s ambitious environmental policy and investments in environmental technology to counteract the environmental problems caused by rapid industrialization is commendable. Third, I predict that we will see an even stronger interest in tourism, both from China to Norway and from Norway to China. The future holds great promise for mutually beneficial cooperation. The present situation in the political bilateral relationship between Norway and China is therefore regrettable. Lacking a bilateral framework to regulate trade between our two countries, I am concerned that opportunities on both sides can be lost. The Norwegian government should continue, in

The future holds great promise for mutually beneficial cooperation.

cooperation with the business sector, to seek to ensure the best possible framework conditions and greatest possible predictability for the Norwegian business sector. The recent launch of “Team Norway” is a signal of the government’s commitment to assist Norwegian businesses abroad. I am convinced that there will be many gains from stronger coordination between the different actors who provide services abroad, such as Innovation Norway, the Norwegian Seafood Council and the Foreign Services. I hope that “Team Norway” will make the services more visible for Norwegian companies. It is a great pleasure for me to introduce the first edition of “Norwegian Links”. This publication is a testimony to the extensive Norwegian presence and potential in China, and I hope the magazine will provide useful insights to further strengthen the economic and trade cooperation between our two countries.  issue 1/ 2013 • Norwegian Links

13

 EMBASSY news

Ambassador’s

C

relation to the oil and gas sector, banking hina’s spectacular rise to the top of and finance and IT has resulted in a niche the global economy is defining the 21st century. The Chinese economy’s where Norway has a competitive advantage, with a strong capacity to successfully size and scale will continue to make operate in the Chinese market. China the largest contributor to Seafood is also one of Norway’s most global economic growth over the coming years. important exports. We are the second largest Ongoing economic reforms will bring further exporter of fish, and China is number one. urbanization and the emergence of the world’s Norwegian companies cover the entire value single largest middle class. China’s consumer market is set to become the world’s second largest chain from fjord to dinner table in the fisheries and aquaculture sectors. by 2015. China is still a small market for Norwegian China is also emerging as one of the largest seafood exports compared to other markets, but exporters of capital, with growing investment the market potential in China is by far the biggest interests globally, in Europe and also in Norway. – both for our salmon industry, It is in this backdrop Norway and maybe even more for our white has to position itself. fish exports to China’s processing It is Norway’s ambition industry. to deepen and broaden our The business opportunities partnership with China. The are one of the main reasons Norway-China relationship is why Norway has expanded its a story of complementarity and diplomatic presence in China. We shared interests, despite our have an open-door policy in our different political, historical and Embassy and Consulates. Norway’s social traditions. diplomatic network in China – There have been, and still are already one of Norway’s most some obstacles. We would like extensive – consists of our Embassy to overcome these obstacles and Ambassador Svein Sæther in Beijing, our Consulate Generals manage our differences in the in Shanghai and Guangzhou and interest of both countries. our Honorary Consulate in Hong Kong. Norwegian companies’ presence in China We aim to work closely with the business is strong in key sectors such as the maritime community in order to strengthen the Norwegian industry, and both the energy and marine sector. footprint in China. This new business magazine Norwegian competence in the maritime industry is a step in this direction. I hope it will serve as a has accumulated through generations. This platform for those who already operate in China competence and access to specialized services and for those planning to do so. I am also sure and goods comprises Norway’s advantage: it will be a useful tool of information for both the complete maritime cluster; ship owners, the Norwegian and the Chinese governments at maritime services (such as legal and insurance), national, regional and local levels.  and research and education. This cluster’s close 14

Norwegian Links • issue 1/ 2013

Photo: Heidi Widerø / Innovation Norway

Note

Research cooperation: a way for companies to build knowledge and relations in China The research cooperation between China and Norway is now at the highest level ever. It is time to broaden our scope, and to look carefully into the question: where do we have the most to gain? Where can we identify the largest potential for mutual benefits between China and Norway in research? I will argue it should be in services related to the key technology areas, ICT, biotechnology and nanotechnology; in climate change, environment, food security and safety, energy and urban eco-solutions; and last but not least, aquaculture, health, and in general in areas Chinese scholars are particularly brilliant. A nation may apply a set of different reasons to stimulate research cooperation with another country. One reason is countries must work together to solve complex challenges they share. It can be global challenges shared by all countries, such as climate change. It can also be particular national societal challenges, such as an expected wave of elderlies. Another reason for doing research together is to facilitate business cooperation

and to prepare markets for products and services in a foreign country. This is particularly important for products and services that are not prêt-a-porter. If you are dependent on the government sector in the market country (e.g. licenses), you have strong competitors, and in particular if some of your competitors are state-owned, your company should invest in long-term research cooperation to gain necessary knowledge and personal relations. Yet another reason to set up cooperation with China is to explore their areas of excellence. That goes for setting up joint labs as well as for recruiting people. Scientifically, in 2010 China was best in engineering, chemistry, mathematics, and agricultural and computer science. China puts a lot of money into nanotechnology, ICT and biotechnology, as well as renewable energy, and in all these are areas it is possible to find world class research groups in China. I would guess that no other country has such a quality gap between the best and the poorest performers. So it is important to do your homework before you enter into ➤ issue 1/ 2013 • Norwegian Links

15

 EMBASSY news ➤ cooperation. No other country has so

The first pitfall is However, let us go to forget to set aside back to the business resources to manage sector. Setting up a your new knowledge and Joint Research Center, relations. or Joint Lab, provides The second is to knowledge of the neglect managing your systems, regulations intellectual property (IP). and competitors, and You need agreements access to key people Mr. Thomas Løge Hansteen, and recruits. Most Counsellor, Science, Higher on intellectual property rights (IPR), and the importantly, it will give Education and Research, you a platform to develop Royal Norwegian Embassy will to defend your in Beijing ownership. This is related relations to these actors, to new patentable discoveries, as well without being too conspicuous. This as to protect pre-existing know-how may be of extra importance these that will be exposed in the project. If days. Such knowledge takes time to you are not willing to defend your IP, acquire and systematize, and relations because you find it too difficult or too take time to build. Therefore, this is costly, you should not expose IP or for the companies with long-term existing technology. perspective. Patenting has a prize. Chinese The crux here is to be present institutions and companies are on an arena that opens doors often far more willing to patent than instead of shutting them. An arena Westerners. A few years ago in a with significant knowledge about Swedish–Chinese telecommunication technologies, markets, regulations and key players. If you chose to follow technology project, the Chinese partner filed over 100 patents whereas this trail, there are two major pitfalls. the Swedish company Ericsson did not file any. When Ericsson was asked if they had been tricked by their Chinese counterparts, the answer was: “No, we just did not see any commercial value in any of these discoveries”. China’s market for services is not as developed as in the West. Around 44 % of the Chinese GDP is from services, whereas for western countries this figure is around 70%. Development of new services to the Chinese market should have a huge income potential. There are already Norwegian players in this market, and President Xi Jinping is very much aware of the potential. One of the elements in his “increased indigenous consumption plan” is to develop new services throughout the country. There are several relevant resources for Norwegian companies and research institutions, which want to establish cooperation with Chinese partners. Among these are Innovation Norway, the Royal Norwegian Embassy in Beijing, the Norwegian Consulate Generals in Shanghai and Guangzhou, and several independent consultants. A Norwegian bank, as well as a law firm, is even established in Shanghai.  Photos: Heidi Widerø / Innovation Norway

many fake scientific articles as China; in fact it has developed into an industry. Wuhan University estimated the scientific plagiarism business in China in 2009 alone had a turnover of USD150 million. This is attributed to the fact the most important merit when it comes to promotion in the Chinese scientific system is the number of articles published. This focus is interesting in another way, as this article counting system was implemented in China to outweigh the guanxi element in scientific career making. On the other hand, the leading research groups in China are world class. Last year, the Chinese Academy of Sciences (CAS) claimed the top of the Asia ranking measured by number of articles published in Nature journals in the last twelve months, surpassing the University of Tokyo. Several Chinese universities are listed in the ARWU top 200 list, the global university ranking that puts the largest emphasis on research.

leadership 

16

Norwegian Links • issue 1/ 2013

Learning leadership

in China?

Teaching leadership development in China has been a true learning experience. It could be beneficial to others as well.

A

lmost ten years ago, I hosted a leadership development seminar in Shanghai. Watching the jet-lagged faces of multinational executives, I asked them if they would have come if the topic had been “Learning leadership in China”. They looked disinterested at me and answered “no”. When I asked why not, their answer was: “We wouldn’t think we’d have much to learn”. This played of course right into my hands. The day before, we had been sightseeing the city and had to stop at one of the bridges over Huangpu to photograph the Shanghai city skyline. Pointing to a projected picture of this man-made concrete fantasy that stunned them the day before, I asked them if they really had nothing to learn from people who could create such worlds. They got the point. Today, we could add a series of achievements such as the 80,000 kilometers of highways built in just 20 years (America has only half as much), or the Shanghai subway that in 15 years surpassed what London built in 150 years. The most thought-provoking fact is how China’s economy has sustained development despite frequent doomsday predictions.

It is rare to hear Westerners praise Chinese leadership culture. Westerners often seem blinded by the differences they find, and the obvious signs of problems that still abound in the enormously complex world that is China. When I first started teaching leadership development in China, I believed my students were undergoing the same phases of organizational development to Scandinavia in previous decades. Slowly, indirectly and sometimes by omission, they made me aware that their thinking rested on a vast heritage of leadership wisdom that informed educated Chinese. For my teaching not to be worthless, I should learn and pay attention to the sources of their thinking. 2000 leadership students later, I have learnt to appreciate a rich source of thinking about strategy, networking, building relationships, knowledge about the necessity of winning people’s hearts, and the necessary but sometimes backfiring nature of applying rules on people. Chinese

leadership philosophy is beautifully contained in short aphorisms that are easy to remember and as flexible as they are useful. Deng Xiaoping famously opened China’s economy explaining “It doesn’t matter whether the cat is black or white as long as it catches mice.” He said this standing on a millennia of similar catchphrases. In reality, the ancient roots of Chinese philosophy are informing not only Chinese executives, but also the western managers themselves. A hundred years ago, it was not rare for westerners to quote ancient Chinese wisdom with respect, and some of it is still retained in modern management thinking. The tricky part is to combine these in global management without undue friction. The aim of our program is to integrate these traditions in a natural way, as modern Chinese executives seem to do. As the most famous saying goes: “The best leaders are those who make people achieve by thinking: We did it ourselves.”  By: Jan Ketil Arnulf, Associate Dean to the BI-Fudan MBA program in Shanghai and associate professor, BI Norwegian business school issue 1/ 2013 • Norwegian Links

17

 Innovation Norway

A

s head of Innovation Norway in China – the trade and business promotion agency of Norway – my goal is to support Norwegian companies in their process of entering the Chinese market and to build links with Chinese sectors and businesses. These “links” are critical to create “win-win” opportunities between our two countries.

Welcome to China! China is important for the development of the Norwegian economy, both seen from a macro perspective in terms of economic trade, but also from a microeconomic perspective in terms of improving businesses’ competitive positioning. In addition, China as a huge market is impossible to ignore. I am very impressed by the Chinese achievements of the last decades, taking into consideration where China’s position was before the opening up policy in 1978. The gradual phasing in of a market economy, trade and investment liberalization, combined with strong national governance, has produced tangible results: Half of the population was lifted out of poverty, the standard of living has been increased rapidly and substantially, and modern infrastructure has been developed at a record speed. In this transformation process, China has become the world’s largest manufacturing producer, the largest exporter and the second largest economy. The challenges ahead are known and formidable. To mention a few: How to create a modern welfare society with an adequate safety net? How to reduce the rising inequality? These questions both relate to the issue of stability and the development of a harmonious society. Norwegian businesses can certainly assist China in coping with serious air, water and soil pollution as well as developing cleaner coal energy through carbon capture, utilization and storage (CCSU). Norwegian companies have developed new technologies in natural gas and renewable energy, including offshore wind, hydropower and solar power to reduce emissions. Continued trade and foreign investment into China is needed to facilitate competitive and innovative small-and-medium sized

China has become the world’s largest manufacturing producer, the largest exporter and the second largest economy. 18

Norwegian Links • issue 1/ 2013

Beijing team: Hanne Nærdal (advisor), Sebastian Myrseth (trainee), Michelle Liu (advisor), Knut R. Sørlie (regional director China), Alex Jian Wu (senior advisor), Pål Kastmann (deputy director), Gao Peng (senior advisor), Lin Song (senior advisor), Zhang Jiwu (senior advisor)

companies balancing the dominant and privileged position of the state-owned enterprises in the economy. With many of the challenges China is facing, Norway and Norwegian businesses want to be part of “the Solution”. Innovation Norway’s strong team in China is constantly working to assist Norwegian companies with this endeavor, especially in our priority areas like

maritime/offshore, energy/environmental technology, health technology and seafood and marine. In addition, we increasingly see tourism as an important sector. We would like to see more Chinese tourists in the spectacular Norwegian countryside and fjords. Innovation Norway in Beijing has this year started a new project related to clean energy and energy efficiency, targeting the less developed regions of China. We will be working with Chinese partners in the renewable energy sectors and build on previous energy efficiency programs. In the Shanghai area, where most of the Norwegian related businesses are located, our office with our new director Pål Bråthen, will focus on the maritime/offshore sector, in addition to attracting more entrepreneurs and startups from Norway through the new incubator we are in the process of establishing. Norway is powered by nature. The offshore energy, renewables, maritime, seafood and tourism sectors make us an attractive partner for Chinese companies and consumers. We must build on these strengths in developing closer and stronger business ties between Norway and China. My message to Norwegian companies is: Welcome to China! I am also welcoming Chinese companies to Norway for growth and job creation. This is a good circle, where Innovation Norway is at the center of Norwegian links!  By: Knut R. Sørlie, Regional Director China, Innovation Norway/Commercial Counsellor, Royal Norwegian Embassy, Beijing (Knut can be contacted at [email protected])

First Norwegian Incubator in Shanghai Innovation Norway Incubator Shanghai (INIS) will be a full-service Norwegian business incubator and accelerator strategically located in the heart of Shanghai in the Knowledge and Innovation Community (KIC) high-tech Innovation Park in Shanghai’s Yangpu district. INIS will provide Norwegian entrepreneurs, start-ups and small-and-medium sized enterprises with the best and most costeffective all-in-one solution to successfully start up, develop and grow their business in China. In addition to offering a central location, great working conditions and access to 14 universities, science parks and other innovative start-ups at an unbeatable price, Innovation Norway along with its partners, provide a wide range of services tailormade to each company to help reach their goals in China. INIS is set to open up and welcome Norwegian companies from Q2 2014. In the run up to the opening, recruiting and mobilization work will be given priority by both IN-teams in Shanghai and Beijing.

Shanghai team: Tom Jia Xu (advisor), Shi Qin (advisor), Pål Bråthen (director), Hu Zhuoguang (advisor), Ivar Moesmann (project manager)

Innovation Norway can be found at http://www.innovasjonnorge.no/ Kontorer-i-utlandet/Kina/

issue 1/ 2013 • Norwegian Links

19

Chris Rynning, Chairman

Norwegian Business Forum Beijing, NBF

NBF Board of Directors Chris Rynning, Origo Partners, Chairman [email protected] BT Markussen, DNV, Vice Chairman [email protected]

Recent NBF Events In March 2013, NBF held a literary evening with celebrated Norwegian-Danish author Lars Saabye Christensen. His visit to NBF and Beijing earlier this year was in connection with the Chinese translation of his breakthrough novel Beatles. Lars Photo: Cappelen Damm, Siv-Elin Nærø

Since its establishment in 2005, NBF has served as the informal Norwegian Chamber of Commerce in Beijing. NBF is an informal organization looking to improve business relationships between Norway and China. In particular, NBF promotes Norwegian businesses in China, while contributing positively to Chinese business opportunities in Norway. NBF meetings are held regularly where networking, information exchanges and mutual business opportunities take center stage. For Norwegian companies new to the Chinese market, NBF serves as a convenient and competent network for information and relevant experience. NBF is also proud to serve as a communication link to the Royal Norwegian Embassy in Beijing and Innovation Norway.

Mr. Rynning is the NBF chairman, and Founder and CEO of the London Stock Exchange-listed private equity firm Origo Partners. Chris frequently comments in various publications, such as the Financial Times, the Guardian, China Daily, Dow Jones and Private Equity Asia Magazines. Chris publishes a daily China email service and can be followed at www.chrisrynning.com and on Twitter: @ChrisRynning.

Vidar Skjæveland, Statoil [email protected] Chen Haibo, Scandpower [email protected] Edward Jones, DNB [email protected] Halvor Heiberg, NCA [email protected] James Desantis, Aker Solutions [email protected] Lise Nordgaard, Royal Norwegian Embassy, Associate Member [email protected] Knut Roald Sørlie, Innovation Norway, Associate Member [email protected]

20

Norwegian Links • issue 1/ 2013

also captivated NBF members with stories of making it as an artist. Details of how an airliner lost Lars’ luggage with the only copy of the then unpublished Beatles transcript was met with compassion from our members.

In May, Mr. Jamil Anderlini, the Beijing Bureau Chief of the Financial Times Newspaper, discussed Chinese economics and current affairs with NBF members. NBF was also joined on this occasion by our friends from Bergen Chamber of Commerce and Industry under the leadership of and Mrs. Marit Warncke and Mr. Johannes D. Neteland (TTS). In the same month, investor and International Olympic Committee member, Gerhard Heiberg, spoke to NBF. As a frequent visitor to China, Heiberg has a long and committed relationship with China since before the Beijing Summer Olympics in 2008. Drawing from his experiences as President of the 1994 Lillehammer Winter Olympics Committee and extensive advisory work and directorships, Heiberg shared his vision about Norway and China. See interview “Perspective” with Mr. Heiberg in this issue.

Photo: Origoplc.com

Beijing Chamber

shanghai Chamber Norwegian Business Association Shanghai, NBA The NBA was established in June 2001. It is an active forum for Norwegian companies and business people to exchange experiences and draw knowledge about businessrelated issues in China and the Shanghai region. The NBA was established on the initiative of Norwegian companies and individuals doing business in China. The Norwegian Consulate General in Shanghai supported the initiative, and the close cooperation with the Consulate General is considered a valuable contribution. In spite of NBA`s short history, the association has proven to be well received by its members. The number of members continues to grow, and actively participate in making the association becoming a dynamic forum. The Norwegian business environment and activities in the region are relatively small, but very diversified. The NBA actively contributes to bridge the various challenges and difficulties experienced by its members in connection with their activities. Its diversified experience and know-how gained with Norwegian companies being in the process of setting up businesses in China is gladly shared to all members.

Geir Sviggum, Chairman Mr. Sviggum has been Chairman since 2010. Geir is ranked by Thomson Reuters’ ALB among China’s “15 Rising Stars” within the legal profession for his “stunning achievement”. He has also been ranked by ALB among Asia’s 100 most influential lawyers. He is currently Managing Partner International with overall responsibility for the Norwegian law firm Wikborg, Rein & Co.’s nonNorwegian operations.

Recent NBA Events The association holds 8 – 10 meetings every year, including member meetings, workshops/seminars and social gatherings. Each meeting addresses a specific topic, recommended by the members. NBA’s first event after the summer was an event sponsored by paint company Jotun about culture and leadership in Norwegian companies in China. Norwegian companies’ operations in China have been a learning experience for the Norwegian parents. Norwegian involvement in China has also been important for many top level Chinese professionals

and the internationalization of their careers. The NBA invited several experienced Chinese professionals with decades of background among them from Norwegian owned companies. They shared unique insights on how professionals from a foreign culture experience Norwegian leadership. Speakers at NBA events over the years have included strategy professor Dr. Anil Gupta, Executive Director of the International Committee of Beijing Private Equity Association Mr. Victor Gao, Norwegian polar explorer Mr. Børge Ousland and other prominent individuals.

NBA Board of Directors Geir Sviggum, Wikborg Rein & Co, Chairman Ulf Eriksen, Westfal-Larsen Shipping, Vice Chairman Paal Utvik, Landmark Capital Erik Aaberg, Jotun Bent Wessel-Aas, Kongsberg Automotive Edward Jones, DNB Kjetil Lund, Kongsberg Maritime Consul Øyvind Stokke, Honorary member Commercial Consul Paal Braathen, Honorary member Kristin Olsen, Executive Officer

issue 1/ 2013 • Norwegian Links

21

hong kong Chamber

Norway Chamber

Dr. Derek Anthony, Chairman Norwegian Chamber of Commerce Hong Kong, NCC HK The Norwegian Chamber of Commerce in Hong Kong (NCC) was established in 1984. The Chamber serves as a forum for Norwegian companies in Hong Kong, individuals and local companies with links, or an interest, in Norway. The Chamber also promotes commercial exchanges between these two countries. Suitable representation on behalf of the Norwegian business community in Hong Kong to the relevant authorities and institutions in Norway and Hong Kong is another responsibility. We aim to contribute to enhancing the image of Norway in Hong Kong. In turn, the Chamber promotes knowledge of Hong Kong within Norwegian business circles. Hong Kong serves as a key gateway for business both to and from China. With the help of InvestHK and the Hong Kong Trade Development Council, useful information is provided for Norwegian businesses wishing to locate to Hong Kong. As a result, Hong Kong possesses exceptional networking opportunities, a sophisticated legal and financial system, and a businessfriendly culture.

NCC Board of Directors Dr. Derek Anthony, Music and Drama Institute, Chairman Kjartan Furset, Nordic Semiconductor, Vice Chairman Tale Øvstebø, Cameo

Dr. Anthony is the Chairman of the NCC in Hong Kong. He has lived in Hong Kong since 1994, and had founded the Music & Drama Institute (MDI Ltd.) by 2000 where he serves as managing director. Other distinctions include Dr. Anthony’s recognition as one of Asia’s leading vocal teachers, and his provision of corporate training for public-speaking and presentation skills.

Recent NCC Events The NCC is active in developing positive working relationships in the political, international business and diplomatic community. Events are frequently held, including the Nordic Networking lunches and Young Professional Cocktails, besides talks from businessoriented guest speakers. We organize or co-host business luncheons, and invite a number of individuals from Norway and the international community, such as Chinaexperts, business-leaders, company owners, media personalities, diplomats and government officials. Recent

guest speakers this year include Mr. James Kwan from Baker & McKenzie, Mr. Kim Osborg Nielsen from Nordea Bank and Hong Kong SAR Chief Executive, the Honourable Leung Chun-ying. Selling strategy seminars, discussing the Euro-zone debt crisis, taxation challenges and debates between Hong Kong and Singapore as the ideal business partner are a few of the talks held in 2013. Talks are often held in coordination with other Chambers, providing members with further opportunities to network beyond the NCC itself.

Since the NCCC came into existence in 2006, it has attempted to inspire connections. Its mission is to provide a professional and social forum for participation in NorwegianChinese business and cultural communities. Thus, business opportunities between the two countries are promoted. The aim is to become the preferred forum for Norwegian-Chinese business leaders in Norway. A new phase is currently in process, where business services are developed in response to members’ needs. NCCC aims to improve the understanding of cultural similarities and differences between Norway and China. Business is promoted through seminars and conferences in both Norway and China, along with preparing business delegations to, and from, China. Furthermore, in cooperation with the Chinese Embassy in Oslo, members can access efficient assistance in obtaining business visas to enter the People’s Republic of China.

NCCC Board of Directors Elise Chen, IBM and Chinese Culture Festival, Chairman, [email protected] Jarle Aarseth, NSB, Vice Chairman, [email protected] Lars Berge Andersen, Vice Chairman, Aker Solutions, [email protected] John Mosvold, Holstein Invest AS, [email protected]

Sigvald Fossum, Gard

Sissel Hammerstrøm, BI Norwegian School of Management, [email protected]

Stig Mathisen, Scandinavian Global Limited

Esben Hersve, Jotun, [email protected]

Joshua Miller, Asia Pacific Properties

Torkel Thorsen, NHO, [email protected]

Einar Straume, Rodskog Shipbrokers

Bjørn Richard Johansen, First House, [email protected]

Sidney Wong, Royal Norwegian Consulate Liu Cheng-Chan, Honorary Consul of Norway, Honorary Director Astrid Angvik, Nordic Concepts, Honorary Director

22

Norwegian Chinese Chamber of Commerce, NCCC

Norwegian Links • issue 1/ 2013

Elise Chen, Chairman Ms. Elise Chen was elected as Chairman of the NCCC board in 2009. She is also the program director for the Chinese Culture Festival (CCF) in Oslo, which she has been affiliated with since 2003. Besides serving as Chairman of the NCCC and director of the CCF, she also holds the position of professional development manager for IBM Nordic.

Recent NCCC Events The NCCC hosts a number of events on a regular basis with a number of different topics. In addition, weekly Mandarin Chinese courses in Oslo are offered to members and non-members alike as of January 2013. The topics discussed are as varied as our speakers, which are sourced from international businesses in Norway or China. Previous talks included discussing the environmental challenges facing the People’s Republic

of China, relevant legislative changes for Chinese business updates, financial opportunities from ChinaNorway relations and the importance of innovation as China continues to grow. Previous speakers have included business and political leaders, such as senior members from the Norwegian risk management firm, DNV, the chief economist for savings bank SpareBank1 Mr. Shakeb Syed, and State Secretary Ms. Jeanette Iren Moen. Even the Chinese Ambassador, His Excellency Zhao Jun, has provided thoughtful analysis on the Chinese economy and insights on China.

Ginni Wiik, Deputy Board Member Thomas Huang, Nordic China Advisory, Deputy Board Member, [email protected] Eivind Bryne, Forte, CEO, [email protected]

issue 1/ 2013 • Norwegian Links

23

 Company Profile / Aqualyng

Company Profile / Evatic 

Producing

blue gold

Improve Cash Flow Management and Make Your

Service Profitable

Aqualyng’s Caofeidian plant in China

Aqualyng’s Recuperator Technology

24

W

ith growing demand for reliable water supply for human consumption and industrial applications, China is expected to be among the three largest desalination markets by 2015. Originally a Norwegian company, Aqualyng has recently moved its international headquarters to Beijing and is now recognized as one of the most dynamic desalination developers in the Chinese industry. Since its inception in 1996, Aqualyng has had a strong focus on energy efficiency and the lowest life cycle cost, supplying plants to markets as diversified as Spain, Morocco, Egypt, Oman, Saudi Arabia and China. The landmark Caofeidian project, designed to produce 50 000 m3 daily of potable water for the local

Norwegian Links • issue 1/ 2013

industrial zone, was commissioned in 2012 and is recognized by the NDRC as a model plant for desalination in China. Having recently signed a master purchase contract for a new 50 000 m3 daily plant in Cangzhou, Aqualyng is currently the most successful desalination company in China. Our focus is on medium-to-large projects on a “BuildOwn-Operate” basis, where Aqualyng designs, builds, finances and operates the plants while selling water produced. In continuing our growth in China, we will work with both industrial and municipal clients, as well as potential co-investors in our projects. If you would like to learn more about desalination or if you have an interest in discussing joint opportunities with us, I would be very happy to speak to you.  Harry Boot, CEO, Aqualyng Holding AS Mobile: +86 139-1038-9244 E-mail: [email protected]

E

vatic is a leading Norwegian developer and operator of technical support solutions, with a broad presence in Asia and Europe. It specializes in helping companies manage enterprise resources within a seamlessly integrated system of mobile and fixed devices. Deployed in 27 different countries and translated into more than 9 languages, including Chinese, German, French, Swedish, and Norwegian, Evatic’s solutions have a proven track record across several industries, such as oil and gas, office equipment, electronics, electrical engineering and environmental management. Clients include Yara Praxair, Toshiba, Sharp, Kyocera, Konica Minolta and Karcher, which are all market leaders in their respective industries. “Evatic’s out-of-box application makes it easy to implement. I am certain our field service technicians also appreciate the tremendous benefits they experience by using Evatic Mobile Service. It makes our work much easier!” said Mr. Eiichiro Nishizawa, Head of Service, Konica Minolta Business Solutions Asia. Evatic streamlines the process of registering, planning and allocating work tasks to improve capital efficiency for clients whilst ensuring excellent service experience for end users. The Evatic Service allows clients to integrate contract

and field management, while Evatic Sales helps manage the customer relationship cycle. In addition, the Mobile Service platform enables provision of on-site repair updates, efficient time management and invoicing as well as a reduction in inventory load. Headquartered in Trondheim, Norway, Evatic has an active development center in Xiamen, China. Our sales offices stretch from Europe in Germany, France, Sweden, Netherlands and Spain, to Asia in Singapore. Moreover, Evatic works closely with selected partners in Southeast Asia, located in Vietnam, Indonesia and Thailand. 

Evatic CEO: Mr. Arild Andersen

Evatic is now actively looking for partners and clients in China. If you are interested in the business or partnership opportunities, feel free to contact us at: Asia HQ – Evatic Singapore office Mr. Arild Andersen CEO of Evatic Global Email: [email protected] Ms. Joyce Shi Marketing Manager of Evatic Global Email: [email protected] Tel: +65 6557 2947

issue 1/ 2013 • Norwegian Links

25

 CHINA ECONOMICS

BI-Fudan MBA Programme places No.54 in Financial Times global EMBA ranking 2013.

I Likonomics! T

he world has been introduced to “Likonomics”, a catch phrase used to describe the economic policy of Chinese Prime Minister Li Keqiang. With a Ph.D in Economics from Beijing University, Premier Li stand out from his engineering trained predecessors. Most believed until recently that Likonomics meant structural reform, deleveraging and no stimulus. However, Beijing has shown that Likonomics combines painful reform with growth objectives. In July 2013, Premier Li launched a “ministimulus” underpinning GDP growth, employing fiscal and monetary policies to avoid any hard landing. In parallel, the Premier continues efforts to curb property prices while materially upgrading rail, TMT and environmental technologies. Fixed asset investment is still a key growth driver, yet increasingly offered to private investors. While stimulating growth, China engineered a spike in the interbank liquidity rate, sending a signal to banks that shadow banking procedures must change.

26

Norwegian Links • issue 1/ 2013

Banks must put their wealth products onto their balance sheets so they can be “seen” and regulated. Private lending activities between companies and subsidiaries will need to be transparent and regulated. Not shying away from painful measures, the floor on lending interest rates was abolished in Q3. As for “deleveraging” the economy, there is little evidence to support this theory. In fact, there seems rather to be a “controlled continued leveraging”, which makes sense for a rapidly growing economy. Inflation is stable below 3% and the NPL ratio is relatively low, in combination reinforcing policymakers’ ability to stimulate growth. The RMB exchange rate is Chris Rynning, CEO, unlikely to appreciate much Origo Partners PLC further in the short term, as trade surplus as a percentage of GDP has come down. Adjusted for inflation, the Chinese currency has appreciated about 40% since the beginning of 2012 and cannot continue at the same rate as the average wage increase has been about 20% annually. Chinese exporters are “feeling the pinch” and China’s productivity gap with developed economies has decreased. Greater emphasis on environmental change and financial risk management may cause economic activity to slow, but Beijing is unwilling to let the economy go into deflationary territory. Fiscal measures are more likely than monetary, as China simply has a “cash build up” both domestically and abroad. Beijing seems ready to invest cash because China is in a relatively good financial shape. There is no material unemployment problem, SOE’s and commercial banks are (too) profitable, public finances are in surplus and the government is collecting taxes. With nearly USD 3.7 trillion in foreign currency reserves, China has a lot of power tools and policies readily available in its pockets. In conclusion, there is no hard landing in sight with Likonomics. 

BI-Fudan MBA Programme Educating tomorrow’s leaders

Get inspired: bi.edu/china

● Get the mindset and the tools to tackle the increasingly unpredictable future markets, through a part-time MBA with a focus on leadership and strategic thinking. ● The unique partnership between School of Management, Fudan University and BI Norwegian Business School gives you the best of both worlds. ● Get exposed to the world with modules in Shanghai, Oslo, Singapore, Berkeley and Madrid.

Photo: Manfred Jarisch

Our company Statoil is an international energy company with operations in 34 countries. Building on 40 years of experience from oil and gas production on the Norwegian continental shelf, we are committed to accommodating the world's energy needs in a responsible manner, applying technology and creating innovative business solutions. We are headquartered in Stavanger, Norway with approx. 23,000 employees worldwide, and are listed on the New York and Oslo stock exchanges.

Statoil China 28th Floor, West Tower Twin Towers, B12 Jianwai Ave, Chaoyang District Beijing 100022 P.R China