SMEs, a future in China?

Firstly, what is  a  SME?

         A Small and Medium-sized Enterprise (SME), sometimes referred to as Small and Medium-sized businesses (SMBs), are businesses were the employees´ numbers fall below certain limits as do their revenues.  It must be mentioned that not only small enterprises outnumber large companies by a wide margin, but also they do employ more workers.  SMEs are also considered to be responsible for driving innovation and competition in many economic sectors.


Current Situation

        China´s continuous and exponential economic growth has demonstrated an extremely important need for new and innovative enterprises. Enter SMEs.

However, although there are nowadays many SME being established in China, the not well defined financial and legal limits and irregularities regarding them have been proven as an obstacle for their development in this country.

Therefore, their future in China depends directly in their access to financing.

Due to this, there are four main hurdles that must dissapear in order to fully introduce SMEs in this country.

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One of the first obstacles that should be tackled are the structural advantages that SOEs (State-Owned enterprises) have over SMEs in China so banks end their preference financing the first over the last.

This takes us directly to the second problem that should be taken care of. The so called “SME’s lending-focus”. Large banks only lend to SME by a 10%, in comparison to the 20% small and medium banks give. As large banks dominate the Chinese banking landscape, it’s of vital importance that this initiative gets support, so that these enterprises can have an easy access to this banks’ financial support, mainly to improve their efficiency.

Of course, this would mean that there’s also a need for a Interest Rate Reformation regarding them.

Last but not least, there is a urge to develop payment innovations that address directly the SME’s unique needs. That is, SMEs with a developed paying method can enhance both efficiency and margins, not only thanks to the supply chain’s performance, but also to the purchasing, T&E and trading finance new paying systems, if made possible.

In a nutshell, based completely in global benchmarks, in order to improve the SME’s access to working capital and financial status, these recommendations should be fully implemented, to remove these final obstacles and allow innovation into China’s economy, as SME’s have proven most competent in this.

Human Resources Management in China

Human resources

         Companies are nowadays more aware than ever of people different skills, values and cultural backgrounds, that is why they are  gradually increasing their effort to gather  and well-manage multicultural teams. In the end, companies’ identity is given by their own employees.

In this regards, both cultural and language barriers may exist when companies settled in different countries get involved in negotiations. So in order to successfully achieve agreements, is advisable to understand the other party’s culture and to put yourself in the other person’s shoes. By doing this, you will be able to anticipate to his/her interests and to know whether the negotiation is already finished, or in the other hand, is still going on, for instance.

China’s pecific case

          Some of the main cultural differences between western countries’ citizens and China’s citizens when negotiating, are that Chinese people tend to delay thee agreement further in time, shifting from one position to another, and knowing this, is important to be patient during the negotiation process, although it may turn out to be tough and annoying.

Another aspect to have in mind is that they do not feel the lie as something neither wrong nor unloyal, they actually aim to get the most out of the negotiation, even if they have to let you down at some point within the negotiation process.

The good leader

         When leading a team, communication effectiveness is a key point. A good leader must be tactful when he/she either talks or leads the team members, trying not to push them too much what would lead them to suffer from stress.

It is also important to have a handbook, so the employees can feel identified with its values when they join the team. Another action to be taken by leaders is to develop a reward/punishment system in order to challenge their employees to work harder and also to prevent them from behaving wrongly or badly.

And the last thing I would like to suggest, but not less important from the above, is that a good leader is not a person that only orders but also a person who listens to his/her employees.

HR Management in China



The chinese political system

China´s Modern political system: Totalitarian, Meritocratic or Democratic?
China is a meritocratic government. That means if you want to be one of the political leaders, you have to join the commitment party, you have to work hard, you get promoted and raise to the top by doing good work.
But, in some extreme cases, China is said to be a democracy because their leaders are voted. This democracy is not real in fact, because those leaders, which are local, are elected in the lowest levels of the Chinese political system. So at the high levels is definitely not a democracy.
Some people still criticize the Chinese political system today, saying that is a totalitarianism and a regime, a despotic government. That opinion is really controversial, but we can say that China is not a totalitarianism: the country has some problems but things are getting better.
The final idea will be that China is a meritocracy and that implies hard work.

China´s Political Regions and Divisions
China has three different political divisions: provinces (the majority of the divisions are provinces), but also has which are called autonomous regions (Xinjian, Mongolia,…). The difference between a province and an autonomous region is not that big, however the second one is given a little more of authority, they also have more local government representatives, more control over the budget and some regulations, but are still quite similar to the provinces.
China also has what are called “metropolitan areas” or “City States” (Beinjin, Shanghai, Chongging, Tianjin,…). They are like a province but actually is just a “big” city with the same rights than a province.
Hong Kong and Macao are Special Administrative Regions. They have their own currencies, languages, leaders and passports.
The population of these divisions is really big, so many China’s provinces are actually as big as some European countries and their economy could be more powerful. We can conclude that China is a huge economy with many different cultures, languages and regions, but it can change dramatically from place to place: there is no one China.


China's Division

China’s Planned Economy
The Chinese system is based on:
Five Year Plans: They were created based on the soviet model of control planning: how define your plan. The idea of planning in terms of five years works very well. The political leaders have two five years terms so a “Ten Year total term”.
These Five Year Plans are agreed every five year and it is a process of internal consensus built by the government. They stablish some decision about the investments, the industry and the direction of the cities.
In addition, China every year has what are called the Two “Big” Meetings. Three thousand people meet and vote different proposals. This represents are well known people (TV presenters, basketball players). The system is not perfect but is has a large background in dealing and treating and allow to introduce some changes in the country.


David López Illán (Master en Ingeniería y Gestión Medioambiental)

Trina Solar

Last Wednesdey,  we visited Trina Solar, the solar power leader company in China.

The first thing that we learned was the meaning of the word Trina: “Harmonised environment for the people, their main objective”.

The visit was divided into five stages:

The first one was in an auditorium and consisted of an introduction to the company´s history and trajectory throughout the years.

Trina Solar was founded in 1997 and was from the beginning a pioneer company in this field. In 2000 was created the first BIPV house model in China. After a few years, in 2012, they developed a technology of science key laboratory, this being a very important step for them to continue as the – pioneer leader company in innovation in the word –. I make special mention to the innovative characteristics of this company because, during the whole visit, it was mentioned many times, as they made very clear that they had invested huge sums of money and effort in this.

One other thing that we learned in this first stage of the company´s visit was that, not only three of their most important researcher partnerships are Solar Energy Research Institute of Singapore, the Australian National University and The University of Queensland, but also Trina Solar cooperates with more than fifteen countries around the world.

For the second part of the visit we were shown to an exhibition room where we saw very easily how solar panels are made, and which are the principal characteristics of the energy that they produce. As simple outline of how the panel making process works is:

Machinery → Silicon → Wafer → Cell → Module → System.

Furthermore, they also have built a smaller scale reproduction of their future plans, where Trina Solar  not only has their solar panel´s factory but also will constructed two more additional areas, one with several houses, for the company´s employees and another with schools, shops and a hospital for this mini-society that they have created regarding their workers needs when they started developing their business.

Scale reproduction of their future plans

Scale reproduction of their future plans

The third stage was a walk through the factory, where we were shown the machinery and the procedures of this process and the different areas in which the factory has divided the solar panel´s production. This was explained to us by a very nice guide who told us too, the particularities of each phase of the process.

The next stage was a very unique experience for all of us, as we had lunch in the factory´s canteen and where we experimented the huge gastronomical and behaviour differences between the Chinese culture and ours. So, even if Trina Solar is a leader company in this energy field, being one of the most important companies with a wide variety of partnerships throughout the world, they still have a typical and traditional Chinese canteen.

I mean that it was made very clear that they don´t waste much time and resources in this issue, that is, trying to adapt to what the modern XXI century society considers as a standard canteen, with a minimum appearance and hygiene levels.

As an end to this visit, we went again to the auditorium, where two experts answered, or maybe is better said, tried to answer the doubts that we had during the same. A thing that we can take from this visit was that, in this company each worker has his own field and they don’t know much about the other components and elements that forms the solar panel´s process. It was very curious to see that they don’t even have an overall idea of how the different elements inside the company come together to create these leadership and global results.

To sum up I think that this visit was very illustrative and I have to thank Trina Solar  for their attention in all moments and their predisposition to show us how this company works inside and out, clarifying our doubts.

It´s clear that they had organise this visit with lot of care.

Negotiation with Chinese business people

China is a country where culture and business are together. You should not do business in China without understanding the chinese culture before.
The first thing to account is the fact that language barriers exist. Is well known that english is the language of world-trading, however chinese businessmen can not always speak english so it would be advisable to negotiate in their mother language. You can either learn the language or bring your own interpreter in order to express your ideas with a high degree of accuracy.

In addition, Its important to meet an strategic business partner in China, which is not always an easy thing to do .
When looking for the right person to trust or rely on, you must have be aware of the fact that chinese people are very pragmatic and they would not hesitate in liying you if that allow them taking advantage of you or being in a better position

It is also important to settle a two ways trust relationship with your partners and an easy action to achieve this easily is serching information about them previously to the negotiation. By doing this, you will anticipate their expectations and achieve a more  advantageable agreement.

As a conclusion I would say that significant differences within cultures and backgrounds can create several problems and misunderstandings when negotiating.


Knowing our Chinese Business Partner

Knowing our Chinese Business Partner


Expatriation in China

My topic for today is expatriation in China, which I believe it’s an interesting topic. Unfortunately we haven’t seen this in class, so I’m going to explain what it is supposed to be an expat in china based on what I have been seen all these days in Shanghai.

As in the recent years the polices in china for foreign investment are more flexible, the number of expats in China has increased for sure, foreign companies want to be in this country, and they, most of the time will rely in a western employees to start businesses. During these past years I think that most of the expats are working in export products from their company, as most of the production is there, they are in the country to make sure about the quality of the products and also that the export is being delivered in the safest conditions.

According to the 5-year plan that the government launches every 5 years, (the next plan will be 2016-2020) the expats that will arrive to China will be heavily related to renewable energies and the environment. In Europe, for example, we already have a lot of expertise in this area, and we can help China with the ‘little’ problem they have regarding pollution, and I’m sure that companies will invest a lot in these environmental issues.

Daily life in China is not easy, due to that we have very different cultures and languages, communication and negotiation are always difficult. For these reasons (and for many more) I think that the conditions for all the expats are likely to be quite good, as the company will provide housing, western schools system for the children, transportation and all the benefits to try to encourage employees moving to China.

To sum up, I think that to be an expat in China is not easy, but it’s an experience that will change the way employees understand each other inside the company. Because of the challenge of living in China, spending few years here is one of the best things that could happen to your professional carrier.


Establishing Business in China

There are some key points that any who wants to establish a business in China must take into account. In this Blog we will analyze the main factors and steps to be followed:

  1. Sectors open to foreign investement. One  important issue is that direct foreign investment is not permitted across the board in China.  If you are planning to invest in China, the first step is verify whether and under what conditions your activity is open to foreign investment. The “Foreign investment industrial guidance catalogue”  classifies foreign investment in business as encouraged, restricted, prohibited or permitted. With this in mind we will know if our business is welcome or not in China.
  2. Destination of Choice. Even though Shanghai, Beijin and Guangzhou  are the major business, goverment and industrial centers, the business opportunities there are quite a few at the current time. Now the competition between companies in Shanghai or Beijin is huge, and a new business here must be carefully studied  if you want to succed. The new policies of the goverment are focused on less developed regions like Xinjiang, Chongqing, Sichuan or Yunnan, where new business have greater acceptance. In this regard,  the “Central-western catalogue”  lists activities and sectors in which foreign investement is encouraged in central and western regions, having preferential treatment under different policies.
  3. Forms of business establishment: Before you register with the government, you have to decide what type of business entitity to register. Ther most common for foreign business are Representative Offices (ROs), Joint Ventures and Wholly Owned Foreign Enterprises (WFOE). A Representative Office is the easiest way to enter the business with low costs. It is the strategy adopted at first stage of investment in a new country.  Actually, a RO limits the scope of your business since you cannot deliver any service or product and you cannot generate revenue. It is just there to represent your offshore entity to show you up and build your brand name.  A Joint Venture  requires a partnership with a Chinese citizen, in other words, you buy  shares of an established company in China through a partner that has  experience in China. It is the only strategy to enter the market in a short period with a local partner, but in fact is not the best alternative to follow. Finally, a Wholly Owned Foreign Enterprise ( WFOE) is a limited liability company owned by one or more individual or corporate foreign investors. The liability of the investors is limited to their subscribed registered capital. It is the most common choice for new foreign investments and give business owners the maximum quality control. On the other hand, a WFOE is much more complicated to set up and takes more time to get approval from the government, requiring also a minimal capital investment that you must put in a Chinese bank.
  4. Other major issues: The importance of developing a five-year plan business is crucial since once the govertment approves it, you will be able to operate only within its gidelines. Also, it is very important to find a liaison or representative to register your business, no matter how informed you are, and which will help you also to organize the necessary documents. Finally, be aware of trademark your intellectual property since intellectual property violations are a big issue for foreign investors in China.


And last but not least, take it slow. Chinese people like to take their time, doing business in a certain manner for thousands of years. Don´t even start to think that you are going to change it  😉


Chineasy. Aprender Chino

Hace poco ha llegado a mis manos algo muy interesante llamado “Chineasy”. Es una nueva herramienta para aprender chino que conoce de cómo funciona nuestra mente para hacernos más fácil el aprendizaje. Aprender chino es especialmente importante y difícil. Es de las lenguas con más palabras que existen y además funciona de una manera totalmente distinta a todas aquellas lenguas provenientes del latín. Además como bien es sabido China está emergiendo como primera potencia y no cabe decir la importancia de hablar chino.

Chineasy se basa en mecanismos visuales que ayudan a la mente a asociar y recordar las palabras chinas con la idea que representan. Además según se modifica la palabra también lo hace el significado de la misma.





Dejo a continuación el canal de youtube de Chineasy con las clases que ofrece:

Análisis de la nueva Lista Europea de Residuos (LER)

A partir del 1 de junio de 2015 la lista europea de residuos (LER) tendrá una nueva modificación. La decisión 2014/955/UE modifica los siguientes aspectos analizados.

La mayoría de los cambios corresponden a una mejor expresión, eliminando redundancias y actualizando términos usados. La nueva Decisión la puedes encontrar en el siguiente enlace:

DECISIÓN DE LA COMISIÓN de 18 de diciembre de 2014

A continuación se presenta una comparativa de los cambios más significativos:

Decisión 2000/532/CE Decisión (2014/955/UE)
RNP (16 01 03) Neumáticos fuera de uso


RNP (16 01 03) Neumáticos al final de su vida útil


RP (19 01 10) Carbón activo usado procedente del tratamiento de gases RP (19 01 10) Carbón activo usado procedente del tratamiento de gases de combustión
RP(19 11 07) Residuos de la depuración de efluentes gaseosos RP (19 11 07) Residuos de la depuración de gases de combustión
RNP(04 02 21)            Residuos de fibras textiles no procesadas RNP (04 02 21) Residuos de fibras textiles no transformadas
RNP(04 02 22) Residuos de fibras textiles procesadas RNP (04 02 22) Residuos de fibras textiles transformadas
RNP (10 01 01) Cenizas del hogar, escorias y polvo de caldera (excepto el polvo de caldera especificado en el código 10 01 04) RNP (10 01 01) Ceniza de fondo de horno, escorias y polvo de caldera (excepto el polvo de caldera especificado en el código 10 01 04)

Energía de fusión, el futuro energético

Es por todos sabido que los combustibles fósiles (Petróleo, Carbón y gas natural principalmente), son fuentes de energía no renovables, al menos con la tasa de consumo actual,  y que por tanto, tarde o temprano, se “acabará”.

Escribo se acabará entre comillas, ya que, bajo mi punto de vista, no será necesario que el petróleo o carbón se agoten, antes de que la explotación de estos recursos se vuelva económicamente inviable y/o se sustituya por otras fuentes de energía diferentes, más ahora que parece evidente la conexión entre estas fuentes de energía y el aumento de la temperatura media del planeta.

 La edad de piedra llegó a su fin y no fue porque se acabasen las piedras, sino gracias a las ideas, la tecnología e innovación. Comenta Richard Sears en su discurso “Planning for the end of oil”, en TED Talks.


Las energías renovables , como la eólica y solar, posiblemente no serán capaces de cubrir toda la demanda de energía futura, tienen una disponibilidad reducida (ya que dependen del tiempo o de la insolación).

la fisión nuclear es considerada peligrosa por muchos, debido a los posibles incidentes que puedan darse y la generación de residuos radiactivos.

Por ello la energía de fusión,  se alza como la opción de futuro más prometedora. “Es la energía del Sol”, consiste en la unión de dos isótopos diferentes de Hidrógeno (se necesita gran cantidad de energía para que suceda), el Deuterio, que puede obtenerse del agua, y el Tritio, para formar Helio. El Helio posteriormente liberará un protón acompañado de una enorme cantidad de energía que es la que se aprovecharía.

Reacción de fusión

Reacción de fusión


Ventajas :

  1. Es una fuente prácticamente inagotable de energía.
  2. No emite gases que aumenten el efecto invernadero.
  3. No producen residuos radiactivos, a diferencia de la fisión nuclear.


  1. A día de hoy los reactores de fusión consumen más energía de la que generan.
  2. El mayor desafío es controlar el plasma de fusión ya que debe alcanzar temperaturas de hasta  150 millones de grados para que se produzca la reacción de fusión, y que obviamente, fundirían el reactor de fusión. Se está intentando controlar el plasma caliente dentro de campos magnéticos utilizando un dispositivo en forma de rosquilla llamado “Tokamak”.
  3. Debe producirse el Tritio a partir del Litio presente en el agua.

Los científicos llevan los últimos 50 años intentando desarrollar la tecnología adecuada para solucionar los inconvenientes anteriores, saben lo que hay que hacer, pero no saben cómo.

A día de hoy se están haciendo grandes progresos en el centro de Cadarache, al sur de Francia, es un centro internacional de coste multimillonario denominado ITER, y se estima que en el año 2030 podrían implantarse las primeras centrales de fusión.

En el siguiente vídeo el físico Steven Cowley, director del instituto líder de investigación de la energía de fusión del Reino Unido, explica el escenario energético en el que nos encontramos, y el papel que jugará la energía de fusión en el futuro:



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