According to a report by the Asian Development Bank (ADB) economic growth in China is expected to dip to hit 9.9 percent this year and 9.7 percent in 2009. Concerning the East Asia in general the growth rate will moderate to 7.6 percent in 2008 and 2009 comparing with a growth rate of 9 percent in 2007. Such economic growth slowdown is attributable to the global economic slowdown, sharp rise in food and energy prices and inconstancy of the financial markets.

Rising inflation is a serious threat to the region’s sustained, strong growth as high import costs of food and fuel threaten to trigger a price and wage spiral, unleashing more inflation, the insider commented. Although the inflation rate had dropped 1.6 percent in February, the possible energy price liberation may bring the high rate back. And all signs show that a second-round price effect may be underway.

And the worsen economy situation especially the banking crisis has triggered global worry that the economic slowdown across the globe may continue. And Chinese economy is influenced by it.

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chinese economy, inflation, slowdown, US economy

Ericsson may experience the lowest profit drop in three years. It is estimated by 15 analysts that, in the second quarter the net income of the world’s largest maker of wireless networks fell 56 percent to 2.82 billion kronor ($472 million).

On July 18 Ericsson spokesman said that the company’s handset venture with Sony, Sony Ericsson Mobile Communications Ltd, almost had a zero profit, due to a waning demand on phones. Net income fell to 6 million euros from 220 million euros a year earlier and sales dropped 9.4 percent to 2.82 billion euros, the venture said.

In February Ericsson said the demand of telecom networks in Italian and other areas would be “flattish” this year. Jan Dworsky, an analyst at Handelsbanken Capital Markets in Stockholm said that “the global network market will be flat going forward, with limited growth next year, and competitive pressures will weigh on profit margins this year and next.”

It is said the company aims to cut annual costs by 300 million euros. Facing the challenging situation, last year, Carl-Henric Svanberg, CEO of the telecom giant, cut revenue forecasts twice. And it is announced to cut 1,000 staffs in Sweden and probably 3,000 more abroad.

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Although we have reaffirmed for several times that Chinese economy has a promising future, however, as a rational investors, we have to concern about the potential risks. A new policy that the finance sectors and other foreign trade enterprises should limit the hot money flowing into China is carried out by Chinese center bank. Meanwhile, Chinese stock market continues its bear market. It has fallen 49% since the peak of last year, which it becomes the worst stock market in the world. Moreover, the gradually increasing of exchange rate has put hundreds of foreign trade companies to the edge of abysm. Thus, as a foreign investor, maybe you’re optimistic about Chinese economy. Notwithstanding, to some extend, you might not be eager to lose money and not be satisfied with new economy policy and the rising of Chinese currency. There’re a large numbers of foreign investors buying real estate, stocks and insurance in China. Unfortunately, as the bad performance of stock market and the new policy to restrict the hot money, they may feel upset and worried about their assets in China.

Then, the investors will surly find out some solution to cope with the adversaries. At the same time, the understanding the situation of China and try to find a deputy in China become more and more important. Outsourcing industry will help foreign investors to ultimately reduce the risks of investing in China. BPOVIA, who help its foreign customers to reduce the risks in China, is an outstanding model of the industry. By providing BPO, ITO, KPO (knowledge process outsourcing) and PPO (personal process outsourcing) service, the investors would not pay much money, but can get the all-round service. BPOVIA can help to do many things in China instead of you. In addition, BPOVIA can do the marketing research and the strategy scheming for you, which will supply the information involved in the Chinese economy policy and the professional advice about how to run business in China and how to make money in China. Above are largely helped to save the cost of foreign investors and reduce the risks of the marketing deterioration.

We should not deny the achievement and infinite development of Chinese economy. However, the risks also can’t be neglected. What the BPOVIA and outsourcing industry contribute to the foreign investors are not only the time-consuming and low-cost service and products, but also give the supports on how to handle the economy policy and regulation. As the time goes by, the investors will realize the convenience and benefits brought by BPOVIA and other similar companies.

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hot money, investment

When adopting finance and accounting business outsourcing (BPO), there are several points you should pay attention to.

At the first place, create a tough management team and sufficient funding for them. It is recommended that the team should include personals from all the related departments, e.g. legal and operational members of the finance and procurement teams. Especially the IT staffs, including the software contracts manager as well as IT ERP and security specialists, should be included in the early planning stage, as they can ensure timely access to the internal system. Many organizations failed to do the job because of a lack of the experienced staffs.

Before conducting financial BPO, ask the providers for clear guidance on their application of the latest tools for this sector, so that your IT team could evaluate the different approaches. Also it is advisable that you get the latest issues on this sector beforehand .

Another point that should rise your attention is to conduct a close relationship with your BPO provider, and collaborate with them. They will be helpful in optimizing your business outsourcing procedure.

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close relationship, financial BPO, management team, tips

KPMG released its report on the study of outsourcing development. According to the report, both India and China are named the most popular outsourcing destination in Asia. Moreover, Singapore ranks the third in the research. By analyzing the differences between Singapore and its competitors, we can conclude that the service from Singapore cost more than other Asian developing countries. Due to the strong intellectual property protection, a well-educated talent pool, and overall a more secure and stable pro-business environment, the investors have to pay more in order to meet the need of the regulations in Singapore government and market. On the contrary, owing to the relatively backward laws and regulations in market economy and intellectual property protection, it will definitely help to save the cost.

Furthermore, in order to meet the challenges from other competitors, India outsourcing companies usually have a 3-5 years plan, which will surly contribute a lot to the business expansion and the keep the contact with the main customs. Just as what is said by an expert in economy that outsourcing is gaining steam and companies with no plans to outsource may soon find themselves at a competitive disadvantage. As a Chinese proverb goes Preparedness ensures success, unpreparedness spells failure. Thus, the importance of the developing plan for a company and industry cannot be overemphasized.

In addition, the all-rounded functions of India and Chinese outsourcing companies should not be omitted. For the reasons that they can provide services in the large scales, they are available for many personal demands and unusual orders. The low-cost, less time-consuming and the non-core activities are the core-competition of the outsourcing industry. However, only heritage the tradition of industry routine will broaden and enlarge the business of the industry. For example, many Chinese and Indian outsourcing companies can help their customs to design the strategy, such as research and development, engineering and risk management. In contrast, Singapore companies’ business is merely based on the traditional items, which brings fairly negative impact on the development of the companies.

In a word, outsourcing industry should not be only confined in the traditional routine, but try to search for the virgin land, where could help to promote the business.

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China, India, Outsourcing, Singapore

According to a statement from the website of National Development and Reform Commission (NDRC), property prices in China’s 70 large and medium-sized cities rose 8.2 percent year-on-year in June, compared with 9.2 percent in May. The slight drop of the growth rate indicates the property market is cooling down.

But there are some cities still “hot”, where new property price growth exceeded 13 percent year-on-year in July, including Urumqi, Haikou, Ningbo, Beijing and Hangzhou, which saw a growth rate of 20.2, 18.1, 14.7, 14.3 and 13.3 percent respectively. But all of the cities, Haikou excluded, experienced a drop of about 2 percent. There is another exception. Shenzhen is the only one in the 70 cities that has witnessed a price drop on a yearly basis, the price is 1.2 percent decreased.

Facing the falling property prices, some experts suspect that China’ banks may experience a credit crisis like US. But some other experts think that China’s banks are far from such crisis, despite the ongoing adjustment. “Some big corrections occurred only in a few cities that experienced crazy property price growth last year but don’t have enough demand to support the market,” “Besides, property demand in China is also much stronger than that in the US,” said Chris Brooke, president and CEO of CB Richard Ellis (Greater China).

The insiders believe that the current wait-and-see attitude adopted, does not mean housing demand is evaporating. And if the market does not drop as much as people expect after the Olympic Games, prices will back again and will probably even rise.

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1 percent drop, cool down, credit crisis, Olympic Games, property market, wait-and-see attitude

As is known to all, that Indian takes the lead of outsourcing industry. However, according to a recent study, that India is confronting the threats from other countries in the regions. The disadvantage of India still exits. The poor basic infrastructure, rising wages of workers, the serious floating of domestic currency have trigger the investors’ alertness. Some of the shrewd enterprisers have evacuated from India market and find other more appropriate regions to invest.

For example, due to the contribution of the relatively stable politic circumstance and economy policy, China and other Southeast countries have become the ideal location for the investors. The establishment of outsourcing industry should be based on the low-cost labor force, excellent talents and the policy support from government. Owing to the benefits in such fields, it’s possible that China and other neighboring countries would overtake India in outsourcing industry in the near future.

When we analysis whether an industry has a bright future, firstly, we should focus on the niche opportunities of this industry. Although the crude oil and coal exploiting industry are the must parts for the world economy. Notwithstanding, the oil and coal will be used up in the future. Hence, we ought to pay more attention to the rising of sunrise industry, which will never be used up and friendly to ecology. The outsourcing industry, especially, KPO and PPO totally represents the trend of industry adjustment. In spite of the popularity of English, but we should not deny there still many barriers, which reduce the efficiency of inter-culture transactions and communications. With the help of KPO and PPO, the business would successfully avoid the obstacles on the languages and cultures.

The higher education makes a remarkable achievement these years. There are more and more experts and talents stepping in outsourcing industry. By providing professional and high quality service, we have the sufficient reasons to believe that Chinese outsourcing industry, especially KPO and PPO, will bring the world a miracle, which Chinese people can make it!

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Chinese outsourcing, Outsourcing

From the slogan of Beijing Olympics, we can clearly assert the Chinese government put much emphasis on the environmental protection. The notion of the coming Olympics is to bring the world the Green Olympics, the Scientific Games and People’s Olympics, which highlighted the importance of environment and ecology.

According to a piece of news from China Daily, China has made a distinguished progress in the energy efficiency and energy consumption optimization. Most of provinces have reached the destination of energy-using cut of county’s 11th Five-Year Plan, especially the Hainan province, whose energy consumption per 10,000 yuan of GDP was less than 0.9 tons of coal equivalents, a very low level compared with other provinces.

Due to different industrial structure, Hainan province may own its advantage in the tourism and other smokeless industries, which consume less coal and crude oil. In contrast, the heavy industry based provinces are not lucky enough to avoid the serious pollution and huge energy consumption. However, I want to take Switzerland and Singapore as examples, although the main industry in these two countries is not heavy industry, but the national economy of them play an essential role in the world stage. Attributed to the reorganization of domestic industry structure, the sunrise and smokeless industry began to emerge as the important source of the taxes and GDP.

As the trend of world economy and the regulation of development, it’s a tendency that the industry would be more environment-friendly and the products would be more energy-saving. Hence, it’s the high time for the Chinese enterprises to adjust their strategy to meet the demands of the consuming market and contribute to the environmental protection.

Outsourcing industry is the promising industry, which is both energy-saving and environment-friendly. BPOVIA is the exact example to support my assumption. By providing the service of virtual assistants, it would cost little energy and desert no wastes. The implement of BPO and ITO are mainly based on the IT technology. Moreover, KPO (knowledge process outsourcing) and PPO (personal process outsourcing) has become the major service items of BPOVIA, which extremely help to reduce the cost of the clients and the wastes on the products and other regions. Since the service-providers and clients will never see each other during the transaction. The energy consumption of transportation will be saved.

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environment protection, Outsourcing

Today witnessed a dramatic fall of yuan in seven weeks, according to the China Foreign Exchange Trade System. It is the biggest drop since May 27. It is also the first decline in three days after a report today showed China’s economic growth cooled in the second quarter, increasing pressure on authorities to switch from fighting inflation to protect exporters. Before that the central bank had set a weaker daily reference rate, suggesting that it is seeking to boost growth and deter speculators.

Gross domestic product grew 10.1 percent in the second quarter from a year earlier, the slowest since 2005, compared with a 10.6 percent pace of growth in the first three months of the year, the statistics bureau said today in Beijing. China will likely allow the yuan to appreciate more slowly and relax controls on fuel price increases. As reported some export oriented industries has tried to persuade the government to rein in currency gains and increase export-tax rebate.

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Some Microcredit companies are going to be launched in Zhejiang province in July to cater to small and medium-sized enterprises’ demand for capital. It is said to standardized and regulate private capital, each country in the province will have one to two microcredit companies.

Microcredit has a 14 year history in China. In October 1993, the government introduced MF, modeled from the Grameen Bank, as part of the poverty alleviation initiatives. Since then three main players have immerged – CFPA, CASS (Chinese Academy of Social Sciences) and CICETE (China International Center for Economic and Technical Exchanges), along with their international backers. All of these players have focused on using Grameen styled MF as a poverty alleviation tool for rural China, to varying degrees of success.

Today there are over 300 small microfinance pilot projects, few of which are financially sustainable. CFPA is the only one which has brought all its project sites together in a branch model. Till now microcredit association has not been able to become a legal entity due to the lack of relevant registration framework, as their members are unable to become legal financial institution. Due to this lack of registration, microcredit association’s activities are limited to some training courses, and promoting NGO microfinance regulations negotiations with the relevant government bodies. China is considered one of the last frontiers for microfinance. The market is huge, the existing providers are not providing good service and most are not sustainable.

Concerning the to be built microcredit companies in Zhejiang, microcredit lenders will be chosen from quality private enterprises whose net assets should be no less than 50 million yuan, asset-liability ratio less than 70 percent and those that have been making profits for three years in a row, with revenue higher than 15 million yuan.

The project is launched at this time when small enterprises facing financing difficulties caused by factors like soaring raw material process, and tightening monetary policy. Statistics show that because of the credit crunch, most small and medium-sized enterprises have to resort to the private lending market.

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