key takeaways from china's 19th national congress, bcm updates

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BCM Monthly Meeting Update Mergen Chuluun, Executive Director 2017-10-30

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BCM Monthly Meeting Update

Mergen Chuluun, Executive Director 2017-10-30

Overview

• China’s 19th National Congress - Key Takeaways

• Recent Advocacy Efforts

• Membership Renewal Drive

China-Mongolia Trade

• China is a top export market at $3.8B (2015)

• China is a top import market at $1.4B (2015)

China’s 19th National Congress

Chinese Economy to Grow by $900B USD in 2017

• National Development & Reform Commission Chairman He Lifeng:

• GDP to exceed 80 trillion RMB ($12T); GDP growth 6.9% YTD; annual growth will reach 6 trillion RMB ($900B)

• Reduced overcapacity of steel/iron production by 110 million tons, along with 400 million tons of coal

• Emerging industries of strategic importance achieved revenue of 19.1 trillion RMB

• Regional plans will consolidate growth (Beijing-Tainjin-Hebei region; Yangtse River Economic Zone)

Chinese Private Sector• Ran Wanxiang, Vice President of United Front Work

Department, CPC Central Committee:

• 25 million enterprises China:

• 60% of GDP growth

• 70% of technological innovations

• 80% of new jobs

China to Erase Poverty by 2020

• Tuo Zhen, spokesman for Communist Party of China:

• 2012-16, people living in poverty decreased from 98.9M —> 43.3M (avg decrease of 13.9M/yr)

• Xi Jinping presided over 17 important meetings and conducted 25 surveys on poverty alleviation

China on Investments• China to be consistent in country’s policy of protecting legal

interests of foreign investors - General Secretary Xi Jinping, Communist Party of China (CPC)

• CPC spokesman Tuo Zhen:

• Made in China 2025 strategy, blueprint for upgrading manufacturing sector, treats domestic and foreign companies equally

• 2013-16, China invested $560B overseas & paid $100B in taxes to host countries

• Chinese business leaders look to acquire strong foreign brands, management skills, and business models

China on Investments• Global FDI $1.52T in 2016 (-13%)

• “Most leaving China are in low-end labor-intensive industries… FDI inflows in high-tech manufacturing and service (finance, education, and healthcare).” Zhang Yansheng, Deputy Director, China Council of Promotion of International Trade

• Reforms in the pipeline include FDI threshold, more free trade zones, nationwide negative list…

• Xi also announced plans to make state-owned enterprises (SOEs) bigger, stronger, and more efficient. He said the government will “promote strengthening, improvement and expansion of state capital, (and) effectively prevent loss of state assets, deepen reform of state-owned enterprises, development a mixed-ownership economy, and cultivate globally competitive world-class firms.”

Belt & Road Initiative Highlights

• Silk Road Fund investments has reached $4B; established in Beijing on Dec 29, 2014

• AIIB has 70 members; established in 2015

• China invested $50B+ in Belt & Road countries

• Chineses businesses built 56 economic and trade zones in 20+ Belt & Road countries

China Attracting Global Talent• “China will be a major exchange hub for global talent flow by 2022” -

2018 Global Talent Mobility and Wealth Management Report by Forbes

• “China will be largest export country of students abroad, but also major destination for global talent to settle down.”

• 6,000 high-level workers came to China under Recruitment Program of Global Experts in 2016

• China has become largest overseas study destination in Asia and 3rd largest in world

• “Priority should be given to education to speed up its modernization and to develop education that satisfies people’s needs” - Xi Jinping

Chinese Business Travel to Increase in 2018

• China now has largest business travel budget in the world at $317B (overtaking USA in 2016)

• 31% of Chinese companies expect to increase travel budgets next 12 months

• 90% believe increased client-facing travel would likely increase revenue

• 40% planned to expand travel budgets for opportunities related to Belt & Road Initiative - China International Travel Service American Express Global Business Travel

BCM Launches Anti-Bribery e-Learning Tool

• Purpose:

• Increase awareness on corruption and bribery

• FREE Interactive Tool for stakeholders

• E-tool – accessibility, outreach, and environmentally friendly

• Human Resource, Legal Department, and Management level

• 46 slides

• Approx. 60 minutes

• What are the requirements?

• A computer with mouse

• An internet access

• Will to do business without bribery

Parliamentary Fall Session Agenda Watch

BCM’s Legislative Working Group has identified following highlighted issues as of interest to BCM’s members (including draft laws on employment and mining):

1. Draft Law on 2018 State Budget of Mongolia 2. Draft Law on 2018 Budget on Social Insurance Fund of Mongolia 3. Draft resolution on main direction of the State Monetary policy in 2018 4. Draft amendment to the Constitution of Mongolia 5. Revised Law on Civil Service and the compiled draft on Amendment Law to the Law

on Civil Service 6. Draft Law on Investment Banking 7. Revised Law on State Registration 8. Revised Law on Property Rights Registration 9. Revised Law on Registration of Individuals 10. Draft law on Teacher’s Development 11. Revised law on donors 12. Draft law on enriched foods 13. Revised law on legal status of the capital city 14. Revised law on standardization, technical regulation and accreditation 15. Draft Amendment Law to the Law on Central Bank (Mongol Bank) 16. Draft Amendment Law to the Law on Banking 17. Other

Leveraging BCM for Your Advocacy Needs - Case Study• BCM Member Wagner Asia raises issue on Certificate of Origin 6/22

• NAMBC research & draft joint letter 7/23

• BCM organized first meeting with Customs Agency & business community 8/3

• BCM & NAMBC meeting w MFA Director of Foreign Trade & Economic Cooperation Dr. Enkhbold 8/16 morning

• MFA Director of Foreign Trade & Economic Cooperation Dr. Enkhbold meets w customs & tax authorities 8/16 afternoon

• Minister of Foreign Affairs presented issue to Government 10/25

• Minister of Foreign Affairs Munkh-Orgil has obtained approval of Parliament to discuss amendments to law on customs tariff & taxes in Parliament with 72.3% support 12/1

• Law on Customs passed in Parliament with 88.2% support 12/28

NewsWire - More Insight• Businesses that take advantage of changing business

and market landscape is more profitable.

• 75% of profits of a business depends on economy and industry; remaining 25% up to the business

• As such, NewsWire will increase focus on:

1. Trends

2. Global, Regional, and Macro Trends (that will likely impact Mongolian businesses)

Membership• Membership: 224

• Tough renewals end of 2016, but 77 new/renewed members since early this year

• Membership growing again

• Latest New Members include Jacobs, Suu, Korea Tourism Organization, Ombol LLC, Sky Pro Logistics, Shugam LLC

Why Renew• Policy & Advocacy - Working Groups, Director of

Policy, Executive Director

• Insight and Knowledge - Annual Summit, Monthly Meetings, Working Group Meetings, Knowledge Sharing Sessions, NewsWire, Field Trips, Company Tours, Conference Calls

• Networking - Annual Summit, Monthly Meetings, Working Group Meetings

What Makes BCM Unique• BCM is one of the most effective advocacy platforms

and advocates for stable, fair, and transparent business environment

• BCM is multi-lateral; not country-specific; not industry-specific. This multi-lateral approach allows for policy advocacy, knowledge sharing, and networking for investors and businesses from all countries and all industries

• BCM serves the largest community of investors and business leaders from around the world

Upcoming Events№ Event name Date Location Organizer Notes

1 Asia Property Awards 2017 Nov 7-8 Singapore PropertyGuru www.asiapropertyawards.com

2Knowledge Sharing Session (KSS) with Patrick McGinnis on Venture Capital Investing

Nov 14 UB BCM and US Embassy details coming soon

3 Gobi Cashmere Factory Tour for BCM Members Nov 16

Gobi Cashmere

Factory

BCM and Gobi

Cashmere

Business insight presentation; factory tour; and special

discounted shopping for BCM members

4 BCM Tax WG meeting with Customs Authority

Nov 17 (TBC) UB BCM On topic of Customs Taxes

5

“Analytics Based Investing - Mining Super Cycle”

Conference Call with Hedley Widdup, Lion Selection Group

Nov 21 Conference Call BCM

Topic: Research, analytics, and perspectives on mining super

cycle

6 PwC’s Academy Seminars Nov-Dec

UB PwC Various seminars throughout Nov-Dec

7 BCM 10th Anniversary Ball Dec 8 (TBC) UB BCM 10th Anniversary Ball

8

Member-to-Member Networking Event w Chinese

General Chamber of Commerce (CGCC)

TBC UB BCM and CGCC under discussions

Gobi Factory Tour

• Any questions?

• Email: [email protected]

• Twitter: @bcmongolia & @mergenchuluun

Thank you.