Article

28.06.2017

EU and China: the economic climate is looking rather temperate

The annual EU-China summit provided a platform for the two powers to reaffirm their common commitment on climate change in front of Trump's America. From an economic point of view, however, negotiations were not very successful.

That famous saying comes to mind: 'the enemies of my enemies...' The 12th EU-China Business Summit, held in Brussels in early June 2017, saw China and Europe reach an agreement to reduce the use of fossil fuels, develop green technologies and contribute to financing an annual fund of EUR 90 billion for greenhouse gas emissions. From a purely economic view, there has been very little progress in discussions since June 2016. The EU missed an opportunity to become the first partner of China in respect of imports and exports.

Which strategy is the EU adopting on China?

In a fact sheet published on 1 June 2017, the European Commission summarised this policy through a series of "Council Conclusions EU Strategy on China". Its aim is to strengthen reciprocity and establish a level playing field and fair competition across all areas of cooperation. This is particularly relevant at a time when the European Union and China are working towards a Comprehensive Agreement on Investment, in order to create new market opportunities.

"Sound economic development, trade and investment also require respect for the rule of law. To conduct business, people need to be able to access free and independent information and also be able to communicate and discuss."  Cecilia Malmström, European Minister for Trade

Europe is also trying to improve the connectivity between Europe and China in terms of infrastructure and discussions on the digital plan. During the "Belt and Road" forum, which took place in Beijing in May, the European Union set out its vision on improving the connectivity between Europe and Asia; it requires for there to be cooperation on infrastructure, in particular financing, interoperability and logistics.

"A common framework of norms and standards is also central to a prospering economic relationship, for example, with regard to intellectual property rights or food and consumer product safety." European Commission, June 2017.

Trade, investment... and dumping

During the negotiations, the EU was seeking the completion of a Comprehensive Agreement on Investment (negotiations on which have been ongoing for about two years.) What is the priority? To create fairer competition for businesses.

The EU intends to continue collaborating with China to get it to make its markets more open to European investments. A key concern for the Commission is what it calls "China's industrial overcapacity" in a number of sectors, notably the steel and aluminium sectors. Discussing the argument for an "unfair competition for European companies", the European Union is finding itself "being flooded with dumped Chinese goods", a problem that China needs to "address rigorously".

EIF: a plan of EUR 500 million

On 2 June, the European Investment Fund and the Chinese Silk Road Fund signed a Memorandum of Understanding to invest in funds (private equity and venture capital) together. What is the aim of this Memorandum of Understanding? To invest, in turn, in SMEs located primarily in the EU. The total amount of funds committed should reach EUR 500 million, split 50/50. The initiative should supplement the SME part of the European Fund for Strategic Investments from the Juncker plan, aimed at enabling some 416,000 SMEs/VSEs in Europe to have access to funding.

Article

01.07.2016

Belgian SMEs abroad: first China, then the rest of the world for Punch Powertrain

In 2006, Punch Powertrain was on its last legs. Ten years later, the Sint-Truiden based company is a world player in automatic gearboxes. Their success story started in China.

European drivers are still holding on to their manual transmissions, but automatic is standard in the rest of the world. The arrival of hybrid and electrical cars has meant that European car manufacturers are increasingly taking the same route. Punch Powertrain is loving it. This company, based in Sint-Truiden, designs and manufactures automatic transmission systems – today for the Asian market, tomorrow for the rest of the world.

We are astounded when we park our car in front of Punch Powertrain. To the left and right, new buildings are appearing at Chinese speed. CFO Bart Delaere:

"Things are going well. Last year we doubled in size. Automatic transmissions were already being produced here between 1972 and 2008 by various owners, and near the end of that period for BMW's Minis. In a top year, they would send out 35,000 transmission systems. By the end of this year we will produce 50,000 systems... per month. Worldwide we have 1,200 employees, some 300 of whom work in R&D. By 2020, the R&D department will be employing 740 people, of which 600 in Belgium."

However, the start was not at all rosy. When BMW decided in 2006 to change supplier, Sint-Truiden did not know what to do. The contract with the German manufacturer ended in 2008, and no other customers were to be seen on the horizon. Despite this, a number of Belgian investors saw the company had potential. Not in Europe (a saturated market with little demand for automatic systems) or the US (a market in crisis with cars too heavy for the Belgian systems), but in the Asia-Pacific region. The first task for Punch Powertrain was to conquer China. Bart Delaere:

"Our CEO, Cor van Otterloo, used to work for Philips and knew China well. We developed a triple strategy of which we are still proud today. One: we need more customers. Two: we need more products. Three: we need greater geographic distribution."

The search for customers began in China. Punch Powertrain visited every Chinese car manufacturer, which is quite a task as there are 150 of them. Today, 15 are customers, including Volvo owner Geely. Proton in Malaysia is also a major customer. How did the Belgians manage that? Bart Delaere:

"Unlike the large Japanese players, we were also interested in producing smaller series. We also offered the Chinese to take control of the entire development process: software changes, adaptation to the engine, etc. We also consciously use the strategy of a local production for local customers. The R&D and production of core components is and remains here, but assembly is carried out at the customer. Our Chinese customers consider Punch Powertrain a Chinese supplier.

Even before we had one customer, we arranged a share deal with an existing company in Nanjing and converted it into a transmission factory. The management team we brought together at that time is still there, which is something special in China. The team consisted of people we had already worked with and we could trust. That is very valuable."

The second step of the strategy was aimed at an increased variety of products. Currently Punch Powertrain only produces CVTs, continuously variable transmission systems. The R&D department is working on a cheaper automatic system, a CVT which can also power heavier cars, and systems for hybrid and electrical cars. Bart Delaere:

"When we are able to cover the entire range we can start the third step in our strategic plan and contact the bigger players worldwide. Whether it will work or not, only time will tell. In 2006 we were virtually gone, and in 2016 we are back on the radar. We work in a flexible and cheap manner, are prepared to do small series and are able to quickly respond to demands. We want to keep it that way. We are growing well, but with regard to our working methods we want to remain a small, horizontal organisation with short lines. This flexibility is proving to be beneficial."

How Chinese is Punch Powertrain?

Bart Delaere:

"In China they consider us a Chinese supplier with Chinese management. That doesn't mean that we do everything the Chinese way. Before, many workers lived far away from the factory and slept on site, sometimes with their family. We didn't like that. So we immediately flattened the sleeping quarters and moved our employees to the city. We also installed heating and air-conditioning, as people were sitting with a heavy coat in the office in winter and in summer it was often unbearably hot. Out there we look after our employees, as we do in Belgium. We use a single status for employees and make no distinction between white-collar and blue-collar workers. The incentive programmes apply to everyone. We get a lot in return. Last year we had so much work that we almost had to cancel all leave, but we had enough employees who volunteered to come to work."

What is the role of the bank in this expansion?

In 2009, BNP Paribas Fortis and two other banks were involved in the restructuring of Punch Powertrain, says Jo Peeters (Relationship Manager at BNP Paribas Fortis):

"We provided the financing together with ING in Belgium and KBC financed in China. The restructuring wasn't all that easy as they needed new customers, but we trusted the shareholders and management team, and their business plan. They demonstrated that it could be done and have proven it. In their first year the turnover went from zero to €50 million. That was amazing. It is also great to see that their strategy of ten years ago is still going strong now."

At the start of 2015 the financing structure changed. Upon request of the customer, the Bank of Nanjing, a BNP Paribas subsidiary, took over the financing package in China. BNP Paribas Fortis became the mandated lead arranger for a new investment plan amounting to €270 million. Jo Peeters:

"BNP Paribas Fortis has taken on the majority of the financing and the balance is shared between KBC, ING and Belfius. This amount of €270 million is invested in phases in buildings and production machines in Belgium and China. We are also setting up a representative branch in India. Punch Powertrain proves that Belgian companies are also able to innovate and conquer foreign countries. The company is quick and flexible. As a financing bank we have to be quick in our responses and anticipate situations. We will be glad to continue to support them in their global plans."

Shortly after this interview, Punch Powertrain announced that its shareholders have entered into an exclusive purchase and sales agreement with the Chinese group Yinyi to purchase 100% of the shares of Punch Powertrain in Limburg.

Article

08.03.2017

Mobile payment conquers China

In China, pulling out your smartphone to pay for a purchase has become second nature. Indeed, mobile payments have emerged as a leading payment method in the country, surpassing even credit and debit cards.

Mobile phones: used all day long, by everyone in China!

In China, smartphones are a constant companion. They are used to communicate, get information, play games, watch videos, maintain professional or social relationships, go shopping and more. Smartphones play a bigger role in China than in any other country:

  • Among the 688 million web users in China, 90% use mobile phones,
  • 127 million users surf the web exclusively from their smartphones,
  • WeChat, a mobile messaging app, claims some 650 million users in the country.

To meet the needs of its users, WeChat has added a host of new features. In addition to communicating with friends and playing games, the app enables users to order meals, request taxis, pay for purchases in stores—or pay for taxis—and even transfer money to other users. It goes to show how mobile payments have become the new standard for Chinese users.

Mobile payments: online, on a daily basis

Mobile payments quickly conquered China in just a few years. In 2015, 65% of online transactions were made on a mobile phone, according to an Alipay study published in January 2016. Credit and debit cards have suffered from the success of e-commerce: one in five consumers owns one of these cards, but few use cards to pay for online purchases. On the contrary, mobile phones have become the perfect partner for e-commerce, m-commerce and, soon enough, everyday life in China. Paying by scanning a QR Code from a smartphone, both in stores and at automated distributors, is now an everyday habit.

Various players are now battling it out to win over the enthusiasts of mobile payments. Alipay, the uncontested leader in the field, now has 450 million active users (compared with 200 million for Tenpay, WeChat’s integrated payment solution) and carries out 170 million transactions a day.  Users are eager to test out new services on the market: when ApplePay hit China in February 2016, 30 million people signed up in the first few days alone. That enthusiasm has prompted other mobile phone makers to develop their own payment solutions: Samsung Pay, LG Pay and Huawei Pay, for example. 

Varying contexts across Asia

So, what is the result? Today, the following payment methods lead China in the order shown below:

  • Alipay, which holds a 48% market share—including an ever growing share of the booming mobile market,
  • UnionPay, a Chinese banking network and the world’s biggest credit and debit card system by number of cards issued, 
  • Tenpay, the mobile payment solution integrated into WeChat.

The context in China is unique across Asia. In Hong Kong, credit cards continue to claim the lion’s share of the market, with Visa, MasterCard and PayPal leading the pack! Visa and MasterCard are also on top in Japan, followed by Konbini, a solution enabling consumers to make purchases online and pay for them at convenience stores. In South Korea, Taiwan, Thailand and India, Visa and MasterCard remain the leaders.

(Source : www.bnpparibas.com)

Article

26.07.2018

BATX vs GAFA : la « guerre » des géants du web !

Derrière l’emprise des 4 géants américains du web, des milliards d’utilisateurs et de données… Pourtant, le pouvoir des GAFA est bousculé par leurs concurrents asiatiques ! Qui sont les BATX (Baidu, Alibaba, Tencent et Xiaomi) ?

La Chine est loin de se résumer à « l’atelier du monde », caractérisé par le « low cost » et la copie. De plus en plus, l’Empire du Milieu montre son ambition de devenir leader mondial des technologies. Force est de constater que le géant asiatique est sur la bonne voie : numéro un en nombre de brevets, des exportations « high-tech » passées de 9,4 % à 43,7 % en 20 ans, l’injection de milliards dollars dans la R&D, sans oublier des investissements massifs dans l’intelligence artificielle. Résultat : la Chine commence progressivement à faire de l’ombre à l’hégémonie des États-Unis dans des secteurs de pointe. Par exemple, Shenzhen (qui accueille plus 2.200 sociétés axées sur la technologie) ou le hub technologique de Zhongguancun ont largement dépassé la Silicon Valley sur bon nombre d’indicateurs économiques. Fers de lance de cette « menace » venue d’orient, les BATX ! Les 4 géants chinois du web, dont les aspirations de conquête ne s’arrêtent pas au continent asiatique.

Baidu, le Google mandarin

Fondé en 2000, le géant de Beijing est incontestablement le moteur de recherche numéro un en Chine. Baidu s’est même hissé au quatrième rang des sites les plus visités au monde, derrière YouTube, Facebook et Google. Grâce à son puissant algorithme et sa technologie de recherche en mandarin, Baidu est rapidement devenu la porte d’entrée principale du web chinois, notamment en étouffant ses concurrents locaux et en contribuant à mettre à mal l’aventure de Google dans l’Empire céleste. Capitalisée à 95 milliards de dollars (encore loin des 800 milliards d’Alphabet, la maison-mère de Google), la licorne de Zhongguancun n’a pas terminé son expansion et mise sur sa diversification : la cartographie avec BaiduMaps, Iqiyi à mi-chemin entre YouTube et Netflix ou encore la voiture autonome avec Apollo.

Alibaba et les 25 milliards de dollars en 24 heures !

Ce chiffre d’affaires record, réalisé par la plateforme d’e-commerce lors de la grande « braderie » de la « journée des célibataires » de 2017 (tous les 11 novembre), démontre bien l’hégémonie de l’empire créé en 1999 par Jack Ma. Seul véritable concurrent d’Amazon à l’échelle mondiale, Alibaba est d’ailleurs le premier distributeur mondial, allant jusqu’à vendre des avions de Boeing. Sans oublier son entrée fracassante à la bourse de Wall Street, grâce à une levée record de plus de 25 milliards de dollars. Le groupe de Hangzhou, qui revendique plus de 450 millions d’utilisateurs annuels (contre 300 millions pour l’américain), se différencie toutefois par son approche « marketplace » et se définit comme un véritable écosystème, proposant son propre système de paiement (Alipay).

Tencent et sa « super-app » WeChat

Succès fou chez le « Géant qui sommeille », le groupe Tencent (fondé en 1999) est profondément ancré dans la vie de son milliard d’utilisateurs, en proposant une multitude d’applications adaptées à leur quotidien, dont WeChat, le WhatsApp local. Messagerie instantanée (le fameux « QQ » lancé en 1999), site de vente aux enchères entre particuliers (sorte d’eBay), e-paiement, réseau social, jeux vidéo, objets virtuels ou encore streaming vidéo et musique, le géant offre une « expérience client » très aboutie. Ce n’est donc pas un hasard si Facebook s’en est inspiré ces dernières années… En matière de capitalisation boursière, le face à face entre les deux réseaux a également tourné à l’avantage du chinois, puisque l’entreprise de Shenzhen a récemment dépassé la barre des 500 milliards de dollars, se sacrant au passage comme la valorisation la plus importante d’Asie.

Xiaomi, Apple sans la pomme

Visiblement inspiré par les objets technologiques de l’entreprise de Palo Alto, le chinois Xiaomi se différencie pourtant de son concurrent américain. En effet, le cinquième constructeur mondial de smartphones, fondé (seulement) en 2010, fabrique une large palette d’objets « high-tech » (tablettes, objets connectés, batteries, casques, caméras miniatures, télévisions intelligentes), mais aussi des appareils électroménagers. Avec une valorisation estimée à près de 46 milliards de dollars, le géant de Beijing occupe la troisième place des plus importantes « scale-up » au monde. Mais la concurrence, notamment chinoise avec Huawei, est rude et l’entreprise n’hésite pas à se lancer dans l’intelligence artificielle et la fintech.

Derrière, la relève guette !

De « nouveaux » GAFA et BATX veulent également une place au soleil. Du côté américain, les NATU — Netflix, Airbnb, Tesla et Uber — s’imposent progressivement. En Chine, même scénario, avec l’émergence des Didi Chuxing, Nio, Vivo, Huawei ou encore JD.com. Affaire à suivre…

Discover More

Contact
Close

Contact

Complaints

We would like you to answer a few questions. This will help us answer your request faster and in a more appropriate manner. Thank you in advance.

Is your company/organisation client at BNP Paribas Fortis?

My organisation is being served by a Relationship Manager :

Your message

Thank you

Your message has been sent.

We will respond as soon as possible.

Back to the current page›
Top