Please find a short overview of SW China and opportunities for UK and international business in this vibrant, diverse region of mainland China:
Download SW China Briefing March 22
Our thanks to the British Consulate in Chongqing for kindly sharing this information.
CBI member, BP has announced that its subsidiary, BP Aviation, has entered into a joint venture agreement with China Aviation Oil Group Company, to develop the provision for the distribution of aviation fuel in Southwest China; principally Sichuan, Guizhou and Chongqing.
After receiving regulatory approval from the relevant authorities, the joint venture company will be committed to supporting the growth and development of China’s commercial aviation industry. There is huge market potential, considering that China’s commercial aviation industry is expected to boom between now and 2020, with aircraft in China’s airspace racking up over 2 million flying hours and the number of planes in China’s skies numbering over 5,000.
John Platt, CEO BP Aviation said: “[BP] are pleased to extend [what has been a] successful partnership between BP Aviation and China Aviation Oil. Through combining BP Aviation’s world-renowned business management best practise and innovative fuelling technologies, with the business networks and local expertise of China Aviation Oil, our two companies can look forward to continuing to deliver long-term sustainable development for China’s aviation industry.”
Prior to the signing of this latest joint venture, BP Aviation has managed two other joint venture contracts with China Aviation Oil; these are Shenzhen Chengyuan Aviation Oil and Huanan Blue Sky Aviation Oil Company. Through partnering with these two companies, BP provides aviation fuel to 29 airports in central and southern China.
Yang Xiaoping, Chairman and President of BP China said: “This newly signed joint venture contract not only demonstrates BP’s continued confidence in the China market, but also reaffirms BP’s commitment to supporting China’s transformation through continuous innovation and industrial growth.
CBI member, L’Oreal has launched its CeraVe skincare brand in China. The first range of products includes moisturisers, lotions and cleansers, and will initially be available on Alibaba’s e-commerce portal, T-Mall. Prices range from 45RMB to 374RMB, making CeraVe by far the cheapest foreign cosmetics label available in China.
Whilst L’Oreal’s initial distribution strategy for selling into the China market focuses on the country’s on-going e-commerce boom, the French cosmetics giant is also in discussions with Watson’s, for the offline distribution of CeraVe in China. Watson’s is the world’s largest cosmetics retailer, and is a household name in China. According to Chen Min, head of active cosmetics, L’Oreal China, “The company decided to approach selling into the China market through the country’s e-commerce infrastructure because most Chinese consumers shop for skincare products online.”
Ninell Sobiecka, vice-president for L’Oreal Asia Pacific said: “CeraVe will complement L’Oreal’s current product portfolio in China. […] moreover, the CeraVe series are labelled as accessible to all, with prices 40% lower than market rivals.”
It is CeraVe’s price-point that distinguishes it in-market. There currently is no foreign-branded skincare range for lower to lower-middle class consumers in China. With the launch of CeraVe, the French cosmetics manufacturer is particularly targeting Chinese consumers living in the country’s third and fourth-tier markets.
At the official launch held last Thursday, Ms. Sobiecka made the point: that, whilst The SkinCeuticals brand caters to China’s high-end and luxury market, and Vichy and La Roche Posay serve China’s middle-class consumers, the regions along the Western-side of China remain un-catered for.
This is L’Oreal’s second major product launch in China in six months. CeraVe will compliment a wider range of cosmetics products sold in China under the L’Oreal brand.
CBI member InterContinental Hotels Group (IHG®), one of the world’s leading hotel companies, has today announced the signing of ten new deals under seven of its brands in Western China.
The ten hotels will span several different tiered cities and well-known destinations in Sichuan, Chongqing, Shaanxi, Yunnan, Gansu, and Guizhou Province.
Building on the momentum of its existing and successful multi-brand hotel portfolio in the area, IHG will further strengthen its leadership and tap into the large potential of this fast-growing market. Boasting distinctive natural beauty and rich cultural heritage, the western area of China has been a worldwide attraction.
Enjoying great opportunities brought by policies like the Belt and Road Initiative, the cities’ economies continue to boom with the acceleration of urbanisation, as well as the upgrading of transportation and other supporting facilities.
According to world leading hotel and tourism consultancy, Horwath HTL, market expectations for the overall performance of the hotel sector in Western China have risen significantly in recent years.
Please read more here.
CBI member Deloitte convened the China Outbound Investment Forum in Chongqing, China as an important part of the 2017 Deloitte GCSG Annual Meeting.
On this occasion Deloitte invited over 150 professionals from 25 countries across the globe and enterprise executives from various industries, to discuss the development and trend of Chinese outbound investment in the context of China’s economic transformation.
Representatives from the Chongqing Commerce Commission delivered their opening remarks at the Outbound Investment Forum, during which they stressed Chongqing as the economic centre of Western China, a region which consists of many investment advantages, such as its favourable geographical location, unique system, platforms, industries and economic corridors, all of which have attracted large amounts of foreign investment and widespread international attention.
As Chongqing opens up even further, it will be considered as a new growth highlight with great potential.
Please read more here.
CBI member British Airways boosted its network between China and the U.K. with a new partnership with China Eastern Airlines, one of the three major airlines in mainland China.
Under the agreement, customers of China Eastern Airlines are now able to buy tickets for onward connections to seven cities in the U.K., namely Aberdeen, Belfast City, Edinburgh, Glasgow, Leeds, Manchester, and Newcastle with British Airways, with a China Eastern Airlines flight number added to the sectors.
By the same token, British Airways customers flying to China can connect to Kunming, Xi’an, Nanjing, Hangzhou, and Chongqing with the Shanghai-based airline. These tickets are now available for booking on ba.com, with a British Airways flight number added to the sectors.
British Airways currently operates direct flights from Beijing, Shanghai, and Chengdu to London.
What’s more, British Airways customers flying to the five Chinese cities leveraging the new code-sharing facilitation will have the additional benefit of earning Avios loyalty points on the China Eastern sectors.
Richard Tams, British Airways’ Executive Vice President for China, said, “The U.K. is home to such a unique blend of incredible cultural heritage, modern innovations, as well as marvelous shopping and sight-seeing delights, we are ready to welcome more Chinese travellers to the U.K. to see for themselves. This agreement not only opens up further the China market to our U.K. customers, but also gives our China-based air travellers access to our extensive network in the U.K.”
He added, “With an extensive worldwide network and a reputation for great customer service, China Eastern Airlines is a partner of choice for British Airways. Our collaboration will allow us to serve an even bigger spectrum of the blooming outbound travellers from China.”
CBI member Gatwick Airport is launching the U.K.’s first ever direct flights to Chongqing – one of the world’s largest urban centres and a major manufacturing and transportation hub in southwest China.
The twice-weekly, year-round flights will then continue to Tianjin, China’s fourth largest city. Starting from 25 June, Chinese carrier Tianjin Airlines will fly the Airbus A330 on the new Gatwick-Chongqing-Tianjin route, the airline’s first long-haul flights outside Asia and one that complements its existing network serving over 100 cities across China.
Both cities are currently not flown to from the U.K. Please read more here.
The European Union Chamber of Commerce in China released the European Business in China – Southwest China Position Paper 2015/2016 as a standalone report for the first time.
It compiles the latest assessments and concerns of European businesses operating in Southwest China with the aim of offering constructive recommendations to policy-makers in Chengdu, Chongqing, and Sichuan Province.
The Chamber hopes that this white paper will help to facilitate increased government dialogue and improve operating conditions for foreign companies invested in Southwest China, enabling them to invest further and help the region to develop sustainably and achieve its policy goals.
Please read more here.
Following President Xi's recent visit to Chongqing last week China Direct's Beijing team has prepared a short summary of Chongqing with key facts on the municipality, the One Belt One Road initiative and UK member engagement in the city.
For more information on opportunities in Chongqing and SW China please contact the British Consulate in Chongqing directly here.
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The China Direct team would like to wish you and your loved ones a very happy Christmas and New Year.
Download CBI China, U.K.-China Monthly Roundup, December 2015
