China rising

Summary

Despite the huge imbalance in size, Belgium and China have well-established trade links, and economic and business connections between the two countries are growing all the time. The global financial meltdown has of course had an impact, but China's economy is still growing, and several Flemish companies are setting their sights on getting a slice of the potentially lucrative Chinese market.

One is an economic giant, predicted to be the next global superpower, while the other is, by comparison, an economic minnow, whose population of 10 million is half that of Shanghai alone

Despite the huge imbalance in size, Belgium and China have well-established trade links, and economic and business connections between the two countries are growing all the time. The global financial meltdown has of course had an impact, but China's economy is still growing, and several Flemish companies are setting their sights on getting a slice of the potentially lucrative Chinese market.

Flanders in China

Waterleau, an engineering company based near Leuven, with offices in

Antwerp and Charleroi , is one company with its sights on China . It recently entered into partnership with the Beijing Golden State engineering company, which specialises in environmental protection projects and is, at present, one of the few companies engaged in such work in China . One of the aims is to help China tackle its notorious air pollution problem.

Working through its Chinese partner, Waterleau played a role in the development of two flagship venues for last summer’s Olympics – the national stadium and the aquatic park in Beijing .

The company was set up in 2000 by five partners, including Willy Gils, who is now its chief operating engineer. Eight years later, it boasts a 225-strong workforce and last year booked a turnover of some €50 million. Waterleau specialises in converting waste from raw materials into energy sources and, as Gils explains, is now involved in the construction and operation of several waste treatment plants in China .

The projects include a water treatment factory in Macau and a waste-to-energy plant in Shanghai , China ’s commercial centre, for which it supplies engineering equipment. Gils says that the significance of the Chinese element of its operation cannot be over-estimated, accounting for 15% to 20% of its annual turnover.

“China is a growing market, which is why we are always looking at new investment opportunities over there,” he explains. “The success we are having in China now has not come overnight; it’s the result of building up contacts over the last 20 years. There is huge potential in the Chinese market, and it has got to be said that most Flemish companies have not taken advantage of it.”

His comments are endorsed by recent research by the EU chamber of commerce in China which says that European firms are missing out to the tune of €21 billion, partly because of trade barriers but also due to not making the most of business opportunities.

Hubert Cooleman, Flemish economic representative in Beijing , who regularly leads business delegations from Flanders to China , says that when it comes to business opportunities in the most populated country in the world, Flemish firms are mainly focused on the environmental and renewable energy sector.

“The thing that Belgian-based enterprises have to realise is that if they are going to do business in China they have to be here for the long-haul,” says Cooleman, who is based at the Belgian embassy in Beijing . “Any success they may achieve is not likely to come in the short term.”

His role is to promote the Belgian market to the Chinese. “Unfortunately, at a time of global financial meltdown this is not very easy,” he says, “because Chinese companies are consolidating and increasingly questioning whether now is the right time to move.”

A whopping 50% of food imported to Europe comes from China . But some trade goes in the opposite direction. The Flemish Pinguin Group, based in Staden, near Bruges , is doing well in China . Set up in 1965 by brothers Georges, Andre and Frans Dejonghe, it specialises in ready-made meals and frozen vegetables. The company now has eight vegetable production sites, including three in Belgium , four in Britain and one in France .

Pinguin has just expanded into the Chinese market, where it sells a range of products in supermarkets in a number of cities. “Demand for frozen vegetables is constantly growing in China , due to the amelioration of the economic situation,” explains company spokesperson Nadja Meulemans.

After receiving more and more requests for Asian-style ready-meals last year, the company entered into a partnership with a Chinese producer to prepare “authentic stir-fry recipes according to ancient traditions,” Meulemans says. “All ingredients coming from Asia are rigorously selected, weighed and freshly stir-fried in huge woks. They are then immediately frozen and conditioned.”

Products sold in China by the firm include soups and meals with Chinese noodles, tofu and vegetable mixes, including Chinese cabbage and other specialities. “Our producers are carefully selected so that we can offer a complete range of oriental products of consistently high quality.”

Brussels-based Flanders Investment and Trade (FIT) is the body that oversees much of the activities of Flemish companies in China . The agency, set up in 2005, helps promote the interests of local enterprises both at home and abroad. ”We were set up because more and more Flemish companies are working beyond the boundaries of Flanders ,” explains Michelle Surinx, area manager for the Asia-Pacific region. FIT has offices in China , Hong Kong, Guangzhou , Shanghai , Beijing and Taipei . “Right now, business connections between Flanders and China are quite healthy and growing all the time,” she says.

Flemish Liberal MEP Dirk Sterckx, a former presenter with the Flemish TV channel VRT, has just returned from leading a European parliament delegation to

China . He met officials at the Belgian consulate in Shanghai and discussed future business links between the two countries. “ China is not always an easy place for a foreign firm to operate within,” he says. “But clearly this is a going to be a good place for Flemish firms to be based in future.”