The European Chamber in China published the new business confidence survey this June. Out of 1,262 EUCCC member organizations a total of 585 respondents completed the questionnaire during February 2021. Although the year-on-year revenue shifts were the worst in years, the market has recovered far quicker than had been initially anticipated and 42% of respondents actually saw their revenue increase in 2020. The winners were retail and automotive industries. Those hit the hardest were in the service industries, such as legal and aviation. China has become an important pillar for global operations, with 51% of companies reporting that their EBIT margins in China were higher than their worldwide average. This has been seen in Finnish companies as well. 68% of European companies in China are now feeling optimistic about growth. The whole survey can be found HERE.

However, the pandemic has taken a huge toll on the foreign employees of European companies in China. COVID-related travel restrictions have had a severe impact on foreign employees and the changes in individual income taxes - which come into effect starting in the beginning of next year - won’t improve the situation. It is said that the borders may remain closed for yet another year.

Based on the survey, market access continues to improve only marginally as 45% of members report encountering barriers. However, IPR enforcement continues to make steady progress and 2021 marks the first time that the majority of respondents found the level of enforcement adequate or excellent. In addition, the new revised Patent and Copyright Law came into force June 1st 2021, and Data Security Law of the People’s Republic of China will come into force September 1st 2021.

There's no doubt that the business environment in China has become increasingly politicized. The new Law of the People’s Republic of China on Countering Foreign Sanctions, which came to effect on June 10th 2021, is one such example. Tensions with the U.S. in particular show no signs of easing. Despite the politically complex situation, it is also a time of celebration. This year marks the Communist Party of China's (CPC) one-hundredth year since founding. And there's much reason to celebrate, as in recent years China has made numerous achievements like reduced extreme poverty for nearly 100 million people living in rural areas, and created the Belt and Road initiative - building ports, railways and 5G networks around the world.

Many Finnish companies have witnessed the changes first-hand over the years. One of them is our guest writer from Kemppi Oy, a company with a 30-year history in China.

On the behalf of FBCB, I wish you all relaxing summer time!

Ulla Nurmenniemi

Executive Director, FBCB

China is one of Kemppi’s strategic focal area. Kemppi has operated in China for over 30 years. During this time, it has achieved market leadership in the country in terms of demanding welding jobs, such as in the train carriage industry and aluminum platforms. For example, the new super-fast trains, many of which were welded using Kemppi machines, have exceptionally stringent equipment and quality requirements, but Kemppi’s machines meet all the criteria.

Frank Geng, who runs the subsidiary in China, believes the secret of success is in technology. The company stand out from its Chinese, Japanese and American competitors by concentrating on developing technology. For example, Chinese manufacturers are engaged in tough price competition, but they have not yet reached the same standard of technology as Kemppi.

It all began in 1986 when Kemppi delivered its first welding machines to Shanghai Shipyards. Once the people at the shipyard realized that the Kemppi machines were capable of demanding aluminum welds, switch-controlled Kempomats and small inverters were sold by the container-load. Since then, China has played a significant role in Kemppi’s business.

In 1991, Kemppi wanted to solidify its position in China. Instead of relying on individual transactions, the company began operating a regular business in the country with the help of a few large distributors. Customers were introduced to Kemppi’s products at various technology seminars, sales picked up and the investment in the Chinese market were fruitful. It was time to take the next step: Kemppi opened a sales office in Beijing in 1999. Over the coming years, the good sales results encouraged Kemppi to open its own subsidiary in the country. Kemppi Trading Beijing Company Ltd., now known as Kemppi Welding Technology, opened its doors in 2007. One of the new subsidiary’s most important roles was to build a comprehensive network of dealers in the country, as of 2019 the number of dealers increased from 10 to over 100. At the same time, interesting new products were launched, including the FastMig, KempArc, X8 and WeldEye.

In the years that followed, Kemppi expanded rapidly in China. From 2005, sales offices were established in Shanghai, and then in Wuhan, in the following year, the Kemppi Suzhou Souring Office was set up in Suzhou. In November 2018, Kemppi broadened its horizons further by opening a factory in Wuxi. It was possible to transfer the production of welding equipment from Finland to China because an efficient network of component suppliers had been built in China over the years. Locating the manufacturing operators closer to the network improved the competitiveness in a highly price-sensitive market and accelerated growth on secondary markets. 

Photo above on left: Kemppi China held the 2020 Dealer Meeting in Wuxi, Jiangsu Province on Jan 7th, 2020.

Photo above on right: Kemppi China held the 2021 Dealer Meeting in Sanya, Hainan Province on Dec 18th, 2020.

Photo below: Kemppi China colleagues had team building in December, 2020

Finnish Business Council Beijing is part of Team Finland in China, and an outstanding platform for all Finnish businesses in China. For those companies which need more visibility, we have launched a Premium Membership. It's an upgrade from normal membership, as you can see from the table below.

For those companies in Finland, who are planning to expand their businesses to China, or are in the early stage and don't have an office in China yet, we have a distant membership. It's called Proxy Membership. A very cost-effective way to make your company known to a large audience, and get essential contacts for your future.

See all membership options HERE