Countries along the route - becoming the main front for Foshan brands to go global

On April 15, Liang Huiqiang, Vice Chairman of Guangdong Galanz Group, visited the company’s exhibition booth at the 125th Canton Fair to meet with customers and partners from around the world. As the new head of Galanz’s overseas market operations, he is leading the implementation of the group’s “1+5” brand strategy — where “1” represents its proprietary brand, and “5” refers to the five flexible approaches adopted to expand into different international markets. These include cooperative brands, joint venture brands, leasing established local brands, and other models tailored to local conditions.

It was revealed that Galanz achieved over 50% business growth in countries along the “Belt and Road” in the first quarter of this year. To date, the company has registered its own brand trademarks in 149 countries and regions worldwide.

Foshan is a backbone force in Made in China. However, in the early days of reform and opening up, the products of Foshan enterprises were mainly exported through OEM (Original Equipment Manufacturer). With the change of the environment, taking the path of high - value - added independent brands is an inevitable choice for the foreign trade upgrade of "Made in Foshan". The implementation of the Belt and Road Initiative has brought new breakthroughs for Foshan brands to go global

According to incomplete statistics, Chigo Air Conditioner has captured a 10% market share in countries along the "Belt and Road" initiative, meaning that one out of every ten air conditioners sold is manufactured by Chigo. "Chigo primarily exports its own brands to these countries," stated Li Xinghao, Chairman and President of Chigo Group, emphasizing that nations along the route have a relatively high recognition of Chinese brands and culture, making it easier for Chinese home appliance brands to enter local markets.

Noticing this opportunity, Vanward, a major player in the kitchen and bathroom appliance industry, has also taken action. Undergoing a brand transformation, Vanward has increasingly engaged in sports marketing in recent years to promote its own brand. After participating in the 2016 Rio Olympics, the company once again made its mark at the 2018 FIFA World Cup in Russia by becoming the official sponsor of the Argentine national football team. Lu Yucong, President of Vanward Electric, believes that "associating with the World Cup and the Argentine team will further enhance Vanward's influence in the global market."

Pioneering the Way—Helping Nations Enhance Their Industrialization Levels

 On October 12, 2017, in Uzbekistan, a country along the ancient Silk Road, Huo Chichang, Chairman of the Board of Xinzhongyuan Ceramics Enterprise Group, was warmly received by the Prime Minister of Uzbekistan. During the meeting, Huo detailed the company’s investment plans in the region. Today, this project, with a total investment of $150 million, has entered the plant design phase.

A group of trailblazing entrepreneurs from Foshan have begun exploring cross-border capital operations and global production capacity Layout. In addition to Uzbekistan, earlier this year, Xinzhongyuan also partnered with the Philippines’ Ayala Group to build a ceramic factory in the Philippines, aiming to create the “Foxconn of the ceramic industry.”

“The path of Xinzhongyuan’s overseas factory construction follows the ‘Belt and Road’ initiative,” said Chen Weiqing, Assistant to the Chairman of Xinzhongyuan Ceramics Group and General Manager of the International Trade Sales Center. He noted that the company has clearly felt the convenience brought by the expansion of the “Belt and Road” “circle of friends” for businesses. “Setting up factories overseas requires a stable foreign exchange environment. China and Uzbekistan maintain close ties, and the local foreign exchange situation is stable. The country is open and welcoming to Chinese enterprises, and we even received certain tax incentives for our investment there.”

Inspired by these pioneers, Yang Jianwu, Chairman of Foshan Biaomei Apparel Co., Ltd., also decided to “go global” and set up factories. The company has already obtained a business license in Myanmar. Tang Xufeng, General Manager of Foshan Jinyang Knitting Co., Ltd., is preparing to ship equipment to Bangladesh, aiming to put the Bangladeshi factory into operation this year… Over the past six years, Foshan enterprises that have “gone global” span various industries, including home appliances, ceramics, furniture, building materials, textiles, and equipment manufacturing.

Foshan companies that ventured earlier have achieved more robust development through overseas investments. In 2018, Midea Group’s overseas revenue exceeded 110.4 billion yuan, accounting for 42.52% of the group’s total revenue. Currently, Midea has production bases in several “Belt and Road” countries, including Italy, Egypt, Belarus, India, Thailand, and Vietnam. The group employs approximately 33,000 overseas staff, operates 24 sales and operational institutions globally, and does business in over 200 countries and regions.

Through overseas investments, Foshan enterprises have not only expanded their production but also brought high-quality products to local markets, fostering shared development with countries along the route. In India, where industrialization is accelerating rapidly, Foshan-based ceramic machinery companies like Modena and Henglitai have contributed to enhancing the local industrialization level. “In 2004, India’s ceramic industry was underdeveloped, relying on second-hand European equipment to produce low-end tiles. Today, India can produce world-class tiles, thanks in no small part to Modena’s 15 years of equipment and technical support,” commented Kamal Kumar, Manager of Modena’s India Office.

Africa is currently in the early stages of transitioning from a traditional agricultural economy to manufacturing. Foshan enterprises have taken the lead in investing and setting up factories there, not only effectively meeting local demand for industrial products but also creating numerous job opportunities.

Keda Clean Energy, a giant in the machinery and equipment industry, has tapped into the African market using a model of “establishing joint ventures with advantageous overseas partners + whole-line sales + technical process services.” Since 2016, the company has successively built ceramic production bases in Kenya, Ghana, Tanzania, and Senegal. “The Kenya factory employs over 1,100 local workers, with an average monthly salary of $300, which is above the local average,” said Li Ruiqin, General Manager of Keda (Kenya) Ceramics Co., Ltd. When including other employees supporting the enterprise, the project has created at least several thousand jobs. Boda Group, which has Deeply cultivate Africa for 20 years, has over 1,800 employees working on the continent, 80% of whom are local labor. Zhongchen Steel Structure also employs thousands of local workers in Africa. According to incomplete statistics, Foshan enterprises have created nearly 10,000 jobs in Africa.

At the same time, Foshan companies are actively involved in local public welfare initiatives. Zhongchen Steel Structure donated 20 million Rwandan francs and a batch of school supplies to the International Youth Foundation to support educational development in Africa. Keda (Kenya) Ceramics has actively built roads and provided scholarships locally. Its case was included in a 2017专题报告 by top-tier management consulting firm McKinsey & Company, titled “Dance of the Lions and Dragons: How Are Africa and China Engaging, and How Will the Partnership Evolve?”

Attracting Talent and Investment—Foshan Becomes a Hotspot for Two-Way Investment

In Nanhai’s Tianan Center, Guangdong Luti Health Industry Technology Co., Ltd., which has been open for just two months, is already taking shape. On April 18, as an investor, Dato’ Sri Ye Shaoquan, Executive Chairman of Malaysia’s Jidi Group, visited the company to hear work reports. Luti Health plans to invest 130 million yuan in Foshan to establish the Chinese headquarters for the group’s health industry.

In its cooperation with countries along the “Belt and Road,” Foshan is not only actively “going global” but also selectively “bringing in” investments. Countries with advantages in capital, technology, brands, and talent have become key partners.

Germany, with its world-leading manufacturing strength, has become one of the most favored countries for Foshan. In 2016, Vanward Electric established a joint venture with Bosch, a world expert in electric water heating, in Gaoming, achieving mutual benefits in technology and market access. In 2017, Yizumi ventured into the heart of Germany’s industrial R&D by partnering with RWTH Aachen University to set up a technology R&D center. After Midea completed its acquisition of KUKA, the two parties established the Midea KUKa Smart Manufacturing Industrial Base in Shunde in 2018, further complete Foshan’s robotics industry chain. In April this year, a joint venture formed by Freudenberg Filter Technologies Group and Apollo Group on the basis of the former Shunde Apollo Environmental Equipment Co., Ltd. officially began operations, heralding a new chapter in Shunde’s environmental protection industry development.

In addition to the “enterprise + enterprise” and “enterprise + research institution” cooperation models, Foshan and Germany have also explored an “institution + institution” collaboration model. In April 2018, the Foshan Municipal Government signed a cooperation agreement with RWTH Aachen University, under which the university will form a professional team to establish a high-level “Foshan University of Technology” following the German model of technical universities.

Italy, another traditional manufacturing powerhouse, has also become a key partner for Foshan enterprises. In 2015, Kito Ceramics pioneered by inviting Italian manufacturers to produce under its brand, causing a sensation in China’s building ceramics industry. Subsequently, Kito signed contracts with renowned Italian designers Felice and Roberto to conduct product R&D and design for the company, helping establish Kito as a leader in ceramic design.

Connecting and Exchanging—Welcoming Guests from All Over with Open Arms

"Foshan enterprises looking to enter Africa should adopt a step-by-step approach. When the product market is sufficiently large, local production can be considered," shared Zhang Lu, Vice President and Secretary-General of the Tanzania China General Chamber of Commerce, as a guest speaker at the 2019 Foshan Enterprise Investment and Trade Experience Exchange Conference in East Africa held on March 22.

In February of this year, Zhang Lu was invited to attend the 2019 Foshan Municipal Two Sessions as a non-voting delegate. Over the past two months, he has significantly increased his time spent in Foshan. He took the lead in establishing the "Tanzania China General Chamber of Commerce Representative Office in Guangdong (Foshan)," and plans to collaborate with community leaders from South Africa, Angola, and other African regions to promote the "going global" initiative of Foshan’s small and medium-sized enterprises. In April, he also assisted in organizing the Foshan-Rwanda "Belt and Road" Entrepreneur Exchange and Cooperation Matching Event, facilitating business exchanges and partnerships between the two regions.

Countries along the "Belt and Road" are home to large communities of overseas Chinese, with over 40 million ethnic Chinese residing abroad. They undoubtedly represent a crucial force in advancing the construction of the "Belt and Road." As natural bridges and links connecting China with countries and regions along the route, business associations led by overseas Chinese have become an important channel for Foshan’s international exchanges.

Established in 2016, the Malaysia-Foshan General Chamber of Commerce is dedicated to providing free "one-stop services"—such as legal and documentation support—to Foshan enterprises investing in Malaysia. As of the first quarter of this year, the chamber has facilitated the entry of approximately 70 Foshan companies into Malaysia, with total investments reaching RMB 10 billion.

Over the past six years, Foshan’s cooperation with countries along the "Belt and Road" has continued to deepen. Behind this progress lies the top-level design and support provided by government departments. As early as March 2016, Foshan introduced the Implementation Plan for Foshan’s Participation in the "Belt and Road" Initiative, which outlined the direction for development. In July 2016, the city government established a dedicated leading group for advancing the "Belt and Road" initiative, headed by Mayor Zhu Wei. In 2017, Foshan drafted the Key Tasks for Foshan’s "Belt and Road" Development in 2017 to ensure concrete implementation of these efforts. That same year, the city also allocated RMB 100 million in special municipal funds for building a new open economic system and RMB 10 million in "Going Global"Special fund to provide comprehensive support for enterprises expanding abroad.

Tong Quanqing, Deputy Director of the Foshan Bureau of Commerce, stated that in the future, Foshan will adopt an even more open approach to introduce international perspectives, ideas, and high-end resources, aiming to comprehensively enhance the city’s competitiveness, influence, capacity, and soft power in an open economy.

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