Tongji University Incubator

Introduction

Business incubators are designed to support start-ups through the early stage of the development. They provide the start-up companies with nearly all-aspect services such as hardware (space), funds, expertise, management, etc. to improve their chances to survive and succeed. To this end, business incubators are crucial for the development of companies which are characterized by new technologies.

Figure 1  The output of business incubation practices in China (2012).

 Business incubators have grown very fast in China during the past years. Figure 1 shows the corresponding data from the year of 2012. It can be seen that in total 1239 business incubators have been developed. Compared to the data in the year of 2000 (only 164), it is really a big step forward. Now these incubators support around 70,000 enterprises, which have about 1.43 million employees and take up almost 43 million m2 building area. The sum of revenue achieved by these enterprises is up to 490 billion CNY. In China, most business incubators are developed directly by government or universities. They guide opportunities and new ideas not only for start-ups but also for large scale companies. In addition, the form of these incubators is becoming more and more diverse, and as a contrast their functions are moving toward high specialization. Although the scale of business incubators has been developed rapidly, it is still worth noting that most of these incubators locate at the eastern part of China, where many fast developing cities locate and the economic environment is still much better than the western parts. Therefore, the effect of radiation from these incubators to the whole country is relatively limited.

Tongji University Incubator

To gain an insight to the Chinese University Incubator, the Tongji Unversity Incubator based in Shanghai area is taken as an example.  

Tongji University, located in Shanghai, is one of the oldest and most prestigious universities in China.  Among its various departments, it is especially highly ranked in engineering science. The architecture, urban planning and civil engineering departments have consistently ranked first in China for decades. The automotive engineering, oceanography, environmental science, software engineering and German language departments are also ones of the best domestically. Tongji University is not only famous for its achievements in scientific research, but also is recognized highly by its contribution to the social economy. For example, cooperating with the Shanghai government, it has developed the knowledge and economy circle since the year of 2005, which is centered on the university. The output value created by the corresponding enterprises increases from the initial 3 billion CNY to about 18 billion CNY in 2011. Tongji University plays an important role in the knowledge innovation and industry upgrading during the past years.

Shanghai Tongji Science and Technology Incubator Ltd. was founded in December of 2003 with a registered capital of 8 million CNY. It now locates in the Chifeng Road South Campus of Tongji University, having more than 700 registered companies and around 20,000 m2 official area. As a business incubator, it not only supplies basic offices for the young enterprises but also supports these companies with government registration, financial support and consulting services on taxation, science and technology, etc. During the past years, Tongji incubator has gradually established its professional incubator services platform and improved its existing enterprise services working mechanism, aiming to create the best environment for the incubation and growth of new companies. It has particularly put effort in supporting new entrepreneurships established by the graduated students. In addition, the internal management and control of the incubator is also becoming mature, which passed the Quality System Certification ISO90012008 in the April of 2010. It can be believed that in the future Tongji incubator will continue playing a significant role in technology transfer, supporting innovation and entrepreneurship and job creation.  

Tongji incubator is open to all industry sectors. 37% of the tenant companies have their focus on modern design. This can be traced back to the strength of Tongji University in architecture and design. Electronics and Information Technology represents the second largest group, which is followed by advanced manufacturing, environmental protection, and renewable energy & energy saving.  

Figure 2: Industry sectors of the tenant companies in Tongji Incubator (source: Tongji incubator)

Tongji incubator offers the start-up companies various supports. The rent for the office area is between 1~2 CNY/ m2 / day, which is less than half of the regular rent fee. The tenant companies can have 100% tax refund on the regional level. The incubator team organizes pitching and networking events between the start-ups and VCs quarterly. The incubator also provides marketing and HR service for its start-ups companies. It presents at various expos and networking events, offers free ads for its start-ups, and recruits talents for the start-ups. The financial office of the incubator is not only responsible for the financial issues of the incubator but also serves the start-ups, which does not have the capacity to deal with their own financial issues. Besides, supports for pitching preparation and IP application can also be received from the Tongji incubator. It can be seen from Figure 3 that the number of approved patents has been increasing over the years that the success rate for patent application has also been increased.

Figure 3: Number of patents applied and approved betweeb 2008 and 2011 (source: Tongji incubator)

There are even more polices to attract talent: Interns hired by the start-ups in Tongji incubator will be paid by the local government. High talents (e.g. returnees with own patents) who would like to start businesses in Tongji incubator can receive a compensation for private housing.

Normal incubation time duration is about 3 years. Before entering the incubation, the entrepreneur teams are training intensively to prepare for the pitch. The pitch is mainly attended by the VCs and industrial experts. The teams that pass the selection process could enter the incubator. The college students and graduates from Tongji a fund between CNY 200-500k can be granted by the incubator. This grant can be obtained in forms of debt with zero interest rate or as equity of the incubator limited for 2-3 years.

One third of the start-ups graduated from the incubator successfully according to the speaker of Tongji incubator. After leaving the incubator the companies can move to the accelerator in the Tongji Science and Technology Park, where more places are available and normal polies are applied.

Success story - Techase

Shanghai Techase Environment Protection Co.,Ltd was founded in 2008 by Wenbiao Zhang, right after his graduation from Environmental Engineering Department of Tongji University. Zhang and his team fortunately received 150,000 CNY investments from the Shanghai Students Technology Entrepreneurship Foundation in the same year to establish their own company. Techase is focusing on the development and manufacturing of water treatment equipment, the sludge disposal treatment and recycling, and the environmental engineering services.

To start a new enterprise is not an easy task. At the beginning of the entrepreneurship, Zhang and his teams did not have enough employees so they normally worked more than 12 hours a day to get familiar with the market and also to learn the operation of the equipment. In order to exhibit their services and techniques, Zhang and his team even tried to do the experiments for the market for free. The first order they received is 77,000 CNY, which greatly encouraged their enthusiasm. By the end of the year 2010, Zhang and his team had received more than 20 orders, which supported them to make the first round of finance of about 5.6 million CNY. After five years of development, Zhang made his second round of finance at the beginning of 2013 in about 30 million CNY. He promised to his team members that the company will achieve an output value of 0.1 billion CNY this year, and will appear on the market by the year of 2016.

Considering the successful performances of Techase, Zhang said once that he really appreciates the founder of his company, Tongji incubator. As people recognize, there are many difficulties for graduated students to establish their new enterprises. To this end, Tongji incubator supports in both finance and business experiences. For example, it decreases the rental for the office sites and also contributes with free investment. In this way, Tongji incubator helps decreasing the burden on the young companies, creating favorable environment for their rapid growth.

CHINANO in Suzhou

 CHINANO 2013 Conference & Expo took place in Suzhou, the city that is known as China’s nanotechnology commercialization and innovation hub. The main topics of the conference were nanotechnologies for energy and clean tech, nanotechnology applied in prevention and diagnosis, nano-tech investment matchmaking, etc. Many Chinese nanotechnology companies and international delegations attended the conference and the expo.

Pascal Marmier, the director of swissnex China, gave a presentation about the Swiss innovation in nanotechnology at the international roundtable. His talk gave an overview of the nanotechnology activities in Switzerland and the existing cooperation between Switzerland and Chinese universities in the field of nanotechnologies.  Here is a short summary of his talk at CHINANO 2013.

"Switzerland is considered the pioneer of nanotechnology and belongs to the most innovative countries worldwide in the field of nanotechnology. It started in 1981, as Heinrich Rohrer invented the scanning tunneling microscope (STM) at Zurich lake, which became the key instrument to open the door to the world of nanotechnology.  

Switzerland has recognized the importance and commercial potential of nanotechnology early on. Many Swiss companies have developed their expertise in nanotechnology and achieved commercial success.  Scheoller Textil AG uses nano-based finishing to develop intelligent textile products, which allow dirt and water to simply run off the surface. The ETH startup Nanograde produces customized nanoparticles. In addition, large pharmaceutical companies such as Novartis and Roche in Basel area are the leading force in nanomedicine.

A lot of cooperation between industrial partners and universities accelerate the Swiss innovation in nanotechnology. One is the Nano-Tera initiative. Nano-Tera aims to bring Switzerland to the forefront of a new technological revolution: using engineering and information technology to improve health and security, and to broaden our management of energy and the environment. Nano-Tera has achieved outstanding results in the areas of biosensing, design of medical implants and diagnosis tools, and monitoring systems for the environment.  Several Chinese universities are also involved in this program: Peking University, University of Science and Technology of China, etc."

Reported by Meijun Liu, Academic Intern, MSc. Micro and Nanosystems, ETH Zurich

Geneva signs strategic cooperation agreement with Beijing

Led by the President of the State Council, Charles Beer, a delegation of Geneva representatives visited Beijing to explore collaboration opportunities and to sign a strategic cooperation agreement with the Municipality of Beijing. Both sides were thrilled about the start of activities aimed at strengthening connections among the two cities / regions. The Geneva delegation consisted of 40+ business people represented a cross section of industries that are keen to increase their business with China: banking, trading, health services, accounting and legal services. Several leaders of economic development groups: Tourism, Trading industry, Wealth Management completed the group. Their programs featured presentations, networking and one-on-one meetings carefully prepared by the various organizers.

Left top (middle): Mr. Pascal Marmier, Executive Director swissnex China; right top: Mr. Jacques de Watteville, Ambassador of Switzerland; left bottom: Mr. Charles Beer, President of the Geneva State Council; right bottom: Ms. Hong Cheng，Vice mayor of Beijing

swissnex China, especially the Beijing team, was in charge of assisting the University of Geneva (represented by Mr. Mercier of HEC) and the Geneva University of Applied Sciences (HEG, School of Management represented by its Dean Ms. Maribaud). We organized for them various visits in the field of business and management, so that they could get a first hand experience about the China higher education system, and more importantly meet possible partner schools. We believe that this Geneva – Beijing cooperation would indeed be strongly enhanced by academic exchanges that would increase the flow of talents between the two cities!

Latest updates about the Swiss SME progress in the South China

Paradox Engineering

Paradox Engineering (PE) has designed and developed PE.AMI, a pioneering Smart City solution building an Internet of Things ready unified network communication platform allowing Cities to implement several advanced urban services and applications, such as Advanced Meter Reading, Lighting Management, Traffic Management, EV Chargers Management, and many more.

On 17th December 2012, Mr. Gianni Minetti turned to swissnex China, looking into the Smart City market in China. As time goes on, swissnex helped PE in Several meeting in Guangzhou, Shenzhen and Dongguan. PE found two trustful partners in the South, 1) Sino-Singapore Guangzhou Knowledge City (SSGKC) and 2) Research Institute of Tsinghua University in Shenzhen (RITS). MoUs were signed recently. In coming November, PE is invited to the 2013 China (Dongguan) International Science and Technology Cooperation Week.

In order to fertilize the progress in China, PE is looking for Chinese Engineer who has study experience in Switzerland. Based on the MoUs between SUPSI and the Chinese Universities, MSE Joint Master Program offers great Talent Pool and one student has already been interviewed by PE.

Fig: On behalf of Mr. Minetti--President of PE, Prof. Boer signed the MoU with SSGKC. 

Protoscar

LAMPO prototype is an electric super sports car developed by Protoscar. LAMPO3 is the most powerful full electric 2+2-seater in the world. It also is the first electric vehicle equipped with two different DC fast charging inlets. “LAMPO Ltd.” is ready to spinoff from parent company Protoscar, looking for the best matching partner.

In School of Engineering, Sun Yat-Sen University (SYSU), Top 10 University in China, an excellent team working on Battery Electrical Vehicle, who had already cooperation with University of Applied Science Lucerne, is trying to get in touch with Protoscar, seeking cooperation opportunities on LAMPO3. A feasibility study within SYSU internal in carried on.

Fig: Prof. Tan, SYSU, visited Protoscar in Switzerland, and drove Lompo2

Guangdong Zhengye Technological Liability Limited Company

Guangdong Zhengye Technological Liability Limited Company is a high and new-tech enterprise and is engaged in precision detection equipment and electronic materials, including X-ray, TDR impedance, hole checker.

Now they are in demand of small hole drilling in PCB, Laser water jet cutting in glass, PCB spray printing, 3D CT (tomography). Switzerland is well-known for technology innovation. Zhengzye turned to Swissness to find a link to Swiss precision manufacturing industry.

Furthermore, as a long terms strategy, in order to better communicate, understand, cooperate with Swiss, Zhengye send one young employee to SUPSI for year’s MSE study. Senior Engineers and managers are proposed to Switzerland for short term training.

Fig: In MSE China Module 2013, students visit Zhengye Ltd.

swissnex China participates workshop “ The interplay between Innovation and Law”

23, August - swissnex China joins an invitation-only workshop to share insights and explore the development of an analytical framework on innovation and law for future reference.  The workshop members are from diversified background with a cross-cultural and multidisciplinary perspective, interacting and building upon case studies, use cases, and examples from around the world.  During the morning discussion, audience have different definitions on innovation and the progress, imitation is a buzz word frequently quoted to harshly compare with innovation, which mirrors the current status in Chinese market and leads to a hot discussion on variables between china , US and European from culture, economic, legal infrastructure aspects.  In the afternoon session, audience debate the pros and cons of law with the impact on innovation,  whether law infrastructure fuels or constrains the progress of innovation. It concludes that law system in china requires an improvement and transform to a stimulator of innovation.

The workshop has reached a success and might also lead to a follow-up meeting in form of symposium or conference with expanding audience. 

Life & Health R&D Forum: Infectious Diseases and Vaccination

The Embassy of Switzerland, in collaboration with swissnex China and Swiss Re, organized the Life & Health R&D Forum, which took place on August 15, 2013. The half-day event, which was held at the Lakeview Hotel of Peking University, was preceded by a pre-conference in the form of a lunch, where Federal Councilor and Head of the Swiss Federal Department of Home Affairs Alain Berset and the speakers had an opportunity to exchange insights in their respective research fields. 

Federal Councilor and Head of the Swiss Federal Department of Home Affairs Alain Berset, who was accompanied by his delegation, opened the forum with a speech, where he addressed Switzerland’s commitments to international cooperation in addressing infectious diseases that are not bounded by geographical national borders. Among the participants were researchers and practitioners from top universities and established corporations.

In the evening of August 16th all speakers of the forum were invited for a dinner at the Residence of the Embassy of Switzerland.

Roboy Shanghai Tour

Roboy, the revolutionary humanoid robot born in 9 months, is developed by a team consisting of a number of research institutions and leading private companies, which is led by the Artificial Lab of the University of Zurich with its Director Prof. Dr. Rolf Pfeifer. It represents the future of robots and the true spirit of Swiss innovation in science and technology. Prof. Dr. Rolf Pfeifer and his team are taking the Roboy on a tour around the world. On 13th, August, they visited Shanghai, and co-organized a robot show with the Department of Automation from Jiao Tong University in Shanghai Science & Technology Museum. Two robots from Jiangtong University - “Jiao Long” tour-guide robot and “Jiao Long” intelligent wheel chair were exhibited together with Roboy and interacted with each other as well as visitors in the museum. The show became a great hit in the museum and attracted hundreds of kids on the spot.

In the evening, the 2nd episode of the robot show moved to swissnex China. Prof. Weidong Chen, Director of Institute of Robotics and Intelligent Information Processing, and Prof. Pfeifer did presentations to the public to introduce the “behind the scene” story of their robots. The audiences raised many questions, as they were very curious and amazed by the robots’ performance.

APEC China CEO Forum 2013

“China in Transition: New Leadership, New Prospects” was the topic of the APEC China CEO Forum 2013, which took place in Beijing from July 12-14.

It represented a platform to discuss issues such as how to move China from “Quantity Qrowth” to “Quality Growth”, how to make the “Green Leap Forward”, how China’s economy will perform in the next years, and what the Internet era will hold for the business world in the future.

The forum hosted many renowned speakers, among others:

• Zhang Baowen, Vice Chairman, Standing Committee of the National People’s Congress
• Richard C. Koo, Chief Economist, Nomura Research Institute
• Dr. Kai-fu Lee, Chairman & CEO, Innovation Works
• V. Paul Lee, ABAC Representative of Canada, Managing Partner, Vanedge Capital Partners Ltd
• Jing Ulrich, Managing Director and Chairwoman, Global Markets, China, J.P. Morgan

A hot topic of debate was Innovation in China.

For instance, Richard Koo explained that if one can make a lot of money without innovating, one will not innovate and that China is now going through the same process as Japan did some three decades ago.

He also expressed his concern with regards to China’s education system, saying that students in the USA get an “A” for challenging the teacher and that this does not seem to be the case in China at all.

Another highly contentious question was:

“Future technological innovation will mainly come from the East rather than the West: Agree or Disagree?”

Kai-fu Lee opened the dialogue by saying that today, visionaries like Steve Jobs are less needed. Through the Internet companies can develop a new product to respond to the needs of a small user group. By exposing the product to this group, they can learn from the feedback and experience whilst improving the product.

Paul Lee entered the discussion by championing why he thinks that in the next twenty years, innovations will mainly come from the West rather than the East/China:

1. The West teaches you how to think, the East how to learn.
2. The legal system of the East, and China in particular, inhibits innovation.
3. The financial system in the East is not well-developed enough to provide innovators with capital.
4. The West exhibits a society based on meritocracy, the East based on paternalism.
5. The availability and transparency of information in the East is limited.
6. For the East's leadership it is easier to copy and “stick with what works” rather than setting sail for new grounds.

The friendly exchange of blows began when Kai-fu Lee argued why the East/China has at least a chance at being more innovative than the West:

1. There is a strong information asymmetry; Chinese entrepreneurs know what is happening in the US, particularly in Silicon Valley, but vice versa this is not the case, yielding a great potential.
2. Chinese innovators are more hard-working than their Western counterparts.
3. China has a stronger focus on efficiency; products are developed faster than in the West (e.g. Tencent’s products).
4. China represents a larger homogeneous market than the West.
5. The competition in China is a lot fiercer, which gives rise to superior business models (compare WeChat to WhatsApp or Taobao to eBay).

Paul Lee stated that he agrees with all of Kai-fu Lee’s points. However, he argued that notwithstanding, it will take much more time for the latter six points to make a difference, because the West and the East are not on a level playing field.

Undoubtedly, the complexity of the issue is high, and there are many factors that could lastingly influence the dynamics. There are exciting times ahead.

SERI Delegation Visit Shanghai

From 10th-12th July 2013, swissnex China had the great pleasure to welcome a diverse delegation of Swiss scientists, professors, and innovation experts led by Dr. Mauro Dell’Ambrogio, Swiss State Secretary for Education, Research and Innovation. The delegation further included:

• Mauro Moruzzi: Ambassador, Head of International Relations for the State Secretariat for Education, Research and Innovation SERI
• Prof. Ralph Eichler: President of ETH Zurich
• Prof. Hyung Gyu Park: Professor for Energy Technology at ETH Zurich
• Prof. Herbert Binggeli: President of Bern University of Applied Sciences
• Prof. Gian-Luca Bona: CEO of Swiss Federal Laboratories for Materials Science and Technology (EMPA)
• Waltern Steinlin: President of CTI (Swiss Innovation Agency)
• Dr. Mario El Khouri: CEO Swiss Center for Electronics and Microtechnology (CSEM)

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The delegation arrived late on 10th July and began its official visit the next morning with a roundtable discussion with the Shanghai Municipal Science and Technology Commission on the topic “Science to market and innovation”.  Next stop was the Jiao Tong University, Minhang Campus, where the delegation met with the president and professors of the university, and visited the Paris Tech Institute on the campus.  In the evening, swissnex China, with the support of SwissCham Shanghai, organized an event on “What’s driving Switzerland’s success in Education, Research and Innovation?” at the Swissôtel Grand Shanghai. All members of delegation held a short presentation about their work and experience followed by a Q&A session and a lovely cocktail reception.

The next day was as busy and fruitful as the day before. The first stop was the Pudong Zhangjiang Hitech Park where the delegation visited SMIC, a public-private partnership in the semiconductor field, and the Novartis construction site. After having lunch with the Chinese Academy of Sciences, the group transferred to swissnex China’s offices to attend different presentations and a roundtable on innovation with several guests: Prof. Claudio Boer of swissnex China, Dieter Voegtli, Head Asia of Bühler Group, and Dr. Marc Laperrouza, Lecturer at HEC Lausanne and EPFL. The short visit of the delegation ended with a debriefing dinner with the Consul General of Switzerland, Heinrich Schellenberg.

We hope they enjoyed their stay in Shanghai and returned safe with many new contacts established, many interesting experiences made, and many lasting impressions gained. 

First Edition of the Swiss Business Awards in Beijing

The Swiss Business Awards have announced the winners of its first edition during an exclusive gala evening held at the Grand Hyatt Beijing on July 7th, 2013. More than 300 guests attended the event, including top economic and political leaders from both Switzerland and China. The ceremony was part of the official program of the delegation from Switzerland lead by Federal Councilor J. Schneider-Ammann coming to Beijing for the signature of the Free Trade Agreement between Switzerland and China.

“It is important to celebrate success, especially in times of uncertainty. A number of Swiss companies, large and small, have shown particular determination, courage, skill and hence success in their China business ventures. At the same time, Chinese entrepreneurs and businessmen have not been sleeping either and done a great job”, affirmed H.E. Ambassador Jacques de Watteville in his welcome address. "I am proud to see how successful and innovative Swiss enterprises are performing in China. I am proud to see how Chinese companies are successfully investing in Switzerland", affirmed H.E. Federal Councillor Schneider-Ammann in his opening speech. 

The Swiss Business Awards is an event organized by the Swiss-Chinese Chamber of Commerce in Beijing to thank companies for their achievements over the past years and to recognize their contribution to both the Swiss and Chinese business communities. This is the first year that the Swiss Business Awards are organized in China. In five different categories, the Awards honored companies and individuals who have achieved distinct results and demonstrated the highest level of commitment to the Sino-Swiss community and the promotion of Switzerland in China.

SwissCham Beijing has invited all fully or partially Swiss-owned companies doing business in China as well as all Chinese companies or organizations with a strong link to Switzerland to participate in the Swiss Business Awards. The applications of the award candidates have been reviewed by an independent jury consisting of representatives of the SwissCham Board of Directors, the Swiss Embassy in Beijing, and the private sector.

The winners this year are

• ABB (China) Ltd. for the Nestlé Innovator of the Year
• Holcim Ltd. for the China Haidian CSR Company of the Year
• Swisstouches Hotels & Resorts for the Startup of the Year
• Nestlé (China) Ltd. for Outstanding Achievements
• Sinopec (Addax Petroleum) for Chinese Investor in Switzerland

Courtesy of SwissCham Beijing; for more information visit SwissCham Beijing’s website.

Free Trade Agreement Signed by Switzerland and China

The Free Trade Agreement between Switzerland and China was signed last Saturday at the Ministry of Commerce in Beijing. Undoubtedly, it marks a new era in Sino-Swiss relations. This major milestone was preceded by many others.

One of the first ones dates back to 2007, when the Swiss government recognized China’s full market economy status. This was followed by a discussion on a feasibility study on an FTA in 2009. 2010 saw the conclusion of this study with both parties endorsing its conclusions and recommendations by signing a Memorandum of Understanding on August 13th, 2010. Actual negotiations began in 2011 and comprised nine rounds. And on July 6th, 2013, Federal Councilor Johann Schneider-Ammann and Minister of Commerce Gao Hucheng both inked the final version of the FTA.

What will now follow are the ratification processes of China and Switzerland. On the Swiss side its duration may take anywhere from one-and-a-half years to several. On the Chinese side it is expected to take less long.

Workshop on 3D printing and bio-materials

 3D printing is a buzzword in china now.  Universities and industry are passionate in the technology application in medtech area like artificial bone, dental implant, cardiovascular stent, as well as the application in aviation industry. As for consumer sector, you can find hundreds of household 3D-printing machines from Taobao.com. Heritage protection organization in Gansu province begin to utilize 3D printing in the fabrication of Buddhism stature fixed in Mogao Grottoes and exhibit the duplicates in other cities.

Swissnex China hosted a workshop on 22nd June with a group of 20 audience, discussing about the future uncertainty of this technology currently popular in china. Four professors and industrialists also shared with the public their insights on 3D printing prospects in the design, material, medtech industry. Is it a fad or pragmatic technology? What kind of negative consequences may end up with? Technology is always a two-bladed sword as said. 

Visit to Swiss Center Shanghai

On June 4th, 2013, the Swiss Center Shanghai (SCS) kindly invited Mélanie, Isabel and Lennart to their site in Xinzhuang Urban Industrial Park in Minhang, South Shanghai. After the team meeting, Aline Ballaman (Operation Manager at SCS) gave us a very informative presentation about the work that SCS, a non-profit organization, does in China.

SCS was founded in 2000 with the support of its members and sponsors such as several Swiss cantons, the SECO and had established a Joint Venture with the local Chinese Government of Xinzhuang Industrial Park. In 2003, SCS was officially opened with the presence of the former Federal Councilor Pascal Couchepin. Working together with a pool of professional partners and Chinese entrepreneurs, SCS’s mission is to support Swiss small and medium enterprises (SMEs) during their early-stage establishment on the Chinese market. Among numerous other services, SCS provides Swiss SMEs with the necessary network to professionals and government officials, essential market knowledge and industry sector expertise, and different facilities such as workshops and instant offices to rent. SCS has currently 66 members and sponsors and, over the last 12 years, has served more than 200 Swiss SMEs in entering the Chinese market with a success rate of ca. 95%.

Three points in Aline’s presentation and following discussion about her personal experience struck us as particularly interesting:

• Swiss companies have to understand Chinese market and adapt their product according to the local consumer needs in order to successfully establish themselves in China.
• China is not a market for everyone: One has to operate in a niche market segment and/or offer a service or product with a high added value. Otherwise, the non-locally produced product is simply too expensive compared to the Chinese competitors.
• Among its new member companies, SCS has noticed a trend away from machinery and tool production to more promising sectors such as IT and clean-tech, which also reflects a macro development in Chinas economy.

Among its new member companies, besides advanced machinery and tools, SCS has noticed a trend towards promising sectors such as IT and clean-tech, which also reflects the macro development in Chinas economy. One of the many success stories of SCS’s work with Swiss SMEs is the producer of high quality glass and steel doors and windows, Jansen. Based in Oberriet, SG, in Switzerland, Jansen has had a competence center in Xinzhuang Urban Industrial Park for more than 10 years. During this time, Jansen has completed more than 160 projects, which include the Hong Kong Pavilion at the 2010 Expo Shanghai and the Beijing National Stadium, commonly known as “Bird’s Nest”.

We would like to thank Sharon Ren, Executive Manager at Jansen, Aline Ballaman and the whole SCS team for this special visit and the delicious lunch.

Reported by Mélanie Boillat and Lennart Bolliger

AmCham's food safety conference instructive

On May 30, the American Chamber of Commerce (AmCham) held its annual „China Food Safety and Sustainability Conference“ in Shanghai. Mostly attended by around 100 business representatives and other practitioners, its focus lay on solutions for the food safety and sustainability challenges China faces.

The conference showcased, that on all sides - government, society, and business – efforts are made to tackle the problems. In his open and frank keynote, Dr. Chen Jun Shi from the China National Center for Food Safety Risk Assessment, explained the recent re-organization of the Chinese food safety system. In his view the new setup is a change for the better as it increases the effectiveness of the government system. However, he added, it needs furthers improvements and therefore he predicts it to be only temporary solution. NGOs like the World Wildlife Fund (WWF) are running projects to strengthen China's sustainability. They represent the growing influence of societal actors in China. A number of presentations demonstrated the contribution of private businesses to food safety. For companies, it simply is a business case, it became clear. Strict food safety standards are necessary in order to sustain reputation and business. Consequently, most apply standards higher than the Chinese. Although it was not a topic of itself during the conference, it became clear that the collaboration and coordination of all these actors involved in improving food safety remains a big question.

The conference also was a reminder how complex the issue of food safety is. In some instances it is linked to cultural aspects. For example, market research showed that China developed its own strain of food products that incorporate the approaches of traditional Chinese medicine. Another aspect was the kind of food risk. When Scott Minoie presented the sophisticated food safety measures in Element Fresh's internal production chain, he was instantly asked whether he merely deals with microbiological risks or also with risk associated with others substances in food (which he does). What is more, at several points of the conference, the role of media and unnecessary fearful population was raised. However, these issues of risk communication were only partially if at all addressed. It rather became clear, that a one day conference cannot fully grasp all aspects linked to food safety. There is a danger in raising but not really addressing issues. Risk communication is a good example. Media should report in a more objective manner and people just need to receive the correct information and figures about the real scope of a food safety problem, it was more then once proclaimed during the conference. However, risk communication research has long ago revealed that both will not work. Finally, bringing sustainability and food safety together in a conference turned out to be a challenge. The examples of water management were well chosen to display the connection between both areas. However, due to the limited time it was impossible to carve out the complex relationship between sustainability and food safety. Again this can be misleading, as it covered the fact that both can actually be contradictory.

As swissnex will continue to develop projects on the issue of food safety, the AmCham conference was very valuable. The presentations itself were very instructive and detailed. What is more, the conference was attended by many experts and relevant persons in this field.

Reported by Kai Kottenstede, advisor on food safety, friend of swissnex China.

Event Swiss Business in China: Success, Challenges and Innovation

 On the occasion of the Swiss Week, swissnex China organized a conference on Swiss business in China in cooperation with Swiss Center Shanghai and China Integrated.

With the recent publication of the “2013 Business in China Survey” realized by China Europe International Business School (CEIBS), Swiss Center Shanghai and China Integrated took the opportunity to particularly highlight the survey outcomes of Swiss businesses in China.

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Mr. Pascal Marmier, Executive Director of swissnex China, was giving an introduction on the topic.

The specific analysis of Swiss companies was at the center of the conference in which Maria Puyuelo, Nicolas Musy and Sarah Edmonds presented an overview of the general survey and then, more specifically, the most important trends among Swiss business in China. One especially interesting trend is that Swiss companies, on average, increased their profit level in 2012 by an impressive 9% in comparison with 2011.

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 MS. Maria Puyuelo

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 Mr. Nicolas Musy and Ms. Sarah Edmonds from China Integrated

Professor Dominique Jolly, renowned expert of the Chinese market at CEIBS-SKEMA, emphasized important changes in the driving factors that push companies and R&D centers to move to China. Whereas 10 years ago costs were the key driving factor, now foreign companies’ interests in coming to China are driven by market and knowledge factors.

Pierre-Alain Cerrali from Firmenich shared his observations from an operative point of view and stressed the importance for companies coming to China to establish R&D centers in order to keep a sustainable competitive advantage on the worldwide market.

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Professor Dominique Jolly

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 Mr. Pierre-Alain Cerrali

The conference was a great success. All speakers shared their personal perspectives and expectations for the future with the audience and both Chinese and Swiss participants received lots of interesting up-to-date information.

After the conference the participants had the opportunity to attend the official opening ceremony of the Swiss Week where they enjoyed a typical Swiss aperitif in company of members of the Swiss community.

Contributed by academic intern Mélanie Boillat

Few updates about innovation in China

Start-up contest is heating up in China

With influx of Chinese overseas returnees and increasing maturity of business start-up environment, start-up roadshow and contest is grabbing great enthusiasm of start-ups from diversified industries, as well as active engagement of venture capitalists and government.

Positioning own company in the industry spotlight to attract investment and increase  awareness and reputation are main triggers for popularity of start-up contests across the country.   On the other hand, competition for high-quality projects among venture capitalists are getting more intense, start-ups have much more bargaining power and usually chased by several VC now.  Governments in different cities or even regions are motivated to provide generous fund to support start-ups because the number and quality of companies newly recruited are important performance index on local government science& technology achievement.

Now the Dark Horse Series and Demo China are two leading business contests in china and organize tour match across China.

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An emerging Medtech Cluster in Suzhou, China

China medical device industry is growing at a fast speed with 21.3% CAGR in past ten years, stakeholders in the value chain are quite active and bring about significant changes.  More advanced technologies for premier market or technology that can be localized for mass market are sought by leading domestic medical device companies in China, distributors are facing fierce reshuffle and consolidations.

Government-backed science parks are also active in this field, Suzhou Science & Technology Town is an emerging player dedicated to develop medical device and diagnostics industry locally, currently a group of SME have been present there, along with Suzhou Institute of Biomedical Engineering and Technology Chinese Academy of Sciences and Center for Medical Device Evaluation. More importantly, Jiangsu province where Suzhou city is situated is taking the lead in Chinese medical device industry, followed by  Guang Dong and  Shan Dong Province in terms of industry sales revenue.

Local government SSTT is keen to attract international medtech companies to have R&D and manufacture bases there.  It aims to become a hotbed for medtech in china.

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Suzhou Institute of Biomedical Engineering and Technology Chinese Academy of Sciences 

Few updates about innovation events

Shanghai BioClouds Event   11th April

Shanghai Juke Biotech Park organized 7th Shanghai Bioclouds event on April 11th. Swissnex China Executive director Pascal and Project Leader for Innovation & Technology Lijun Zhang have been invited and joined the event and discussion.

 The activity gave a good stage to six enterpreneurs  who are either overseas returnees or western  companies representatives in china, They  shared their valuable experience and opinions of doing business in china, who all have gone through mindset or behavior confrontation. With the globalization trend, more and more Switzerland companies and entrepreneurs will come and explore this booming but challenging Chinese market.  How to understand Chinese business culture before setting up footprint is always  a hot discussion topic.

Venture Day Shanghai  9th April

Venture Day is a worldwide start-up entrepreneurs contest in Spain, Italy, Brazil, Colombia, Mexico, Singapore, India. On 9th April, it’s the stage for Venture Day Shanghai.  Innovation & start-up entrepreneurs are in the spotlight in China right now, in conjunction with the rise of china’s incubator trend, according to data of Quest VC, the number of science & technology business incubators has grown from 131 in 2000 to 1,034 in 2011, some are playing a role as an accelerator and mentorship, like Innovation Works,  Microsoft Cloud Accelerator etc. However, starting business in china is still tough, especially for fledging start-ups offshore, “you should try to  be yourself, but at the same time, you need reach a balance on how much comprise you can make” “ you don’t need speak Chinese as so to be successful , but always keep in mind the localization….”  Valuable comments gave by keynote speakers  in the contest.

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China regional innovation capability of China 2012

From the newly released survey from China Technology Development Strategy Research Group, Jiangsu Province tops the ranking of regional innovation capability in China with Guangdong Province following as second. Beijing and Shanghai have fallen to third and fourth. The foundation  for economy and technology development,  education level, openness of economical market, the attractiveness of foreign investment, the entrepreneur start-up environment, the collaboration level between academic and industry are all key criteria for the assessment and evaluation.  

Creating the cleanest toilets in Asia

​Teo Borschberg and Pierre Rousseaux are the founders of the start up Good Toilet Ltd. Their main goal is to create the cleanest public toilets in Asia. This sounds like a crazy idea, but in the end it is an innovative opportunity for young entrepreneurs to enter the Chinese market. They both have already participated at our Chinese New Year Celebration and now we have interviewed Teo about his experience as an entrepreneur in China. Check out the interview in the video below! If you are in China and cannot access Youtube, please watch the video on our Youku (Chinese Youtube) account: Click here

Is China on the path to become a knowledge society?

​Since 1978, the start of the 改革开放 (Chinese economic reform), China has experienced a tremendous growth. Nowadays China is the second largest economy in the world, but it is facing new challenges. China Integrated has focused on these new challenges in there latest report. They quote a CEIBS study: For both foreign (70%) and Chinese (72%) companies 'Finding & retaining talent' is the biggest Challenge cited in the survey. China Integrated concludes, that finding, training and retaining the right human resources will be the key factor for the future. It is a strong indicator, that the demand for high skill labor must be high.

​What are the greatest management challenges facing your company? (Source: Ceibs Business in China Sruvey 2013, p. 17)

Another indicator pointing towards a knowledge society is the fact, that China has started to focus on "Seven Emerging Strategic Industries" (e.g. Biotechnology, New-Generation IT) in their latest 5-years plan in 2011. Big internet and telecommunication companies such as Huawei are already big players based on the numbers of internationally filled patents. Furthermore in the CEIBS survey IP Infringements are not being cited as a main challenge, even by foreign companies. 

China Integrated also quotes a study of McKinsey that focuses on the demand and supply of labor in China. In the future years there is a considerable shortage of high-skill workers expected. China Integrated concludes, that China is on the path to quickly build a knowledge society, if it can overcome its biggest challenge - the reform of its education system.

Check on China Integrated for further information and more reports.​

Advertising Restrictions as a Double Edged Sword

Just recently the Chinese Government has announced that TV ads for luxury watches, rare stamps and gold watches are now banned from TV and Radio. The ban is about moral issues in the Chinese society, but the interesting part of this change are the consequences for the Swiss luxury watch industry. This news has already hit the biggest wristwatch retailers in China hard and their stocks went down last Wednesday. This is the logical conclusion, if one takes into account the obvious drawbacks of such a ban. For the famous Swiss luxury watch industry, the same could be assumed, but on closer look, it might be an opportunity for them.

Swiss luxury watches remain popular in Mainland China

Opportunity for Swiss luxury brands

It is very likely that retailers will feel cuts in revenues, but for the luxury wristwatch brands itself, this might not be true. Brands like Rolex, Patek Phillipe or Omega are well known in China. The purpose of TV or Radio ads is mainly to raise brand awareness. For a company like Rolex or Swatch a general ban for luxury wristwatches might not be a threat in the long run, it will be an opportunity. Companies with big market shares and already high brand awareness do not rely heavily on TV and Radio ads anymore. But a ban will be a problem for new market entrants, it will be very difficult to reach a high level of brand awareness, without the advertising impact of TV commercials.  Just keeping a famous brand's awareness high doesn't require TV commercials. Therefore a ban of broadcasted ads will not have an heavy impact on the Swiss luxury watch industry. From the point of view of Swiss luxury watch brands, the ban can have an strategic defensive effect to keep new entrants away from the market.

Beyond classic advertising: Social Media in China

Chinese consumers spend more time online than in front of the TV (source: marketer.com)

Wristwatch billboard advertisings or print ads in lifestyle magazines are well known in the west. But especially in China, additionally Social Media is of utmost importance. The the general shift from desktop to mobile devices will even more increase the importance of social media. Strategically the famous Swiss luxury brands are already all well represented on Weibo or even Douban, a platform for online reviews. If TV or radio ads are not an option anymore,  online platforms and social media will become the focus of advertising and marketing activities. TV commercials for example can be placed on Youku (the Chinese Youtube) and directly promoted over other online channels. Big brands like Rolex are already present on all important Chinese Social Media platforms. Additionally, the modern Chinese first tier city citizens spend more time online than watching TV. This trend is even more prominent in 2nd and 3rd tier cities. In general this is an opportunity for luxury brands. They can create a whole brand experience with the interactivity of Social Media and directly interact with their potential customers. Furthermore it is easier to track potential clients in the online environment. 

Luxury Watches and the Internet

Top 3 of online search inquiries in China are Swiss brands (source: Digital Luxury Group)

As mentioned above, online activities will become more and more important in the future. A recent report showed a 40% increase in online search activities in China for luxury watches in 2012 compared with the year before. The top 3 most searched luxury watch brands are all Swiss: Omega, Rolex and Longines. Basically Chinese consumer inform themselves over Baidu or Google before they travel abroad. The number of Chinese tourists traveling to Switzerland will increase in the future and so will also the sales of luxury watches. Furthermore China will soon be the biggest online market place in the world. Chinese people still prefer to buy their luxury watch in Switzerland, because then they know they won't buy an imitation. Big online market places like Taobao (a Chinese online market place for everybody) tackle this trust issue with a certification system for sellers. 

Swiss luxury watch brands are well prepared

All in all it can be concluded, that Swiss luxury brands will not be affected by this ban. First of all they already have a high brand awareness and don't rely heavily on broadcasted ads. It can even be an advantage in the future, to keep new market entrants away. Secondly, social media and the Internet will be the future in China and Swiss luxury watch brands are already well represented there. The stock markets did not show a strong reaction after the news (between -1.9 and -3.3 percent). The future will show, if Swiss companies can keep their number one position in China