How to gain 800’000 customers in just one day?

Dear reader

受欢迎的 !

This is Chinese and means „welcome!“ (the pronunciation is something like shòu huānyíng de)

I would like to welcome you to this year’s last session of „Speed, Action: Results!“ with our subject „Doing Business in China.“

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For twenty years many an entrepreneur has been seduced by profit prospects in China. The calculation is easily made. Gain 1 ‰ of the adult Chinese as one-time-customer (let’s take 800’000’000 people) and you have 800’000 customers. Say you sell innovative vacuum cleaners like Dyson (from Switzerland) and you can calculate yourself how much you’ll be earning in three years. But is it really working out?

 If only it was not so hard to enter the market. We will provide you answers – we, that is: our selected specialists and lecturers:

Josef MondlHe is responsible for the Sino Swiss Management Training  of the China Competence Center at the University of St. Gallen and Senior Consultant of the TAO China Center Switzerland. The Tao China Center Switzerland is an ideal place meeting, exchange and cooperation not only for economic reasons but also other issues.

Tao Center Schweiz

Together with these speakers we will explore the opportunities and difficulties in doing business with China.

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At the end of the day there will be a round table with a Q&A session. The plenary discussion with all speakers will be moderated by Mr. Josef Mondl, one of the most distinguished China experts in Switzerland.

I am looking forward to meeting you!

Peter Lorange


Africa – An Economic Giant? Part III

Dear reader

a few weeks ago  I published an article, reflecting in brief statements which haven been made by popstar and Africa-activist Bob Geldof. Some of you might have read the article via our newsletter (subscribe here).

I have returned from my summer vacation and present you a few more in-depth thoughts on the topic “Africa – an economic giant?”, reflecting another three statements. Today I continue with the third of a total of five statements.

3. Statement

Europe and the US are hypocrites. They are investing money in China and in the Middle East – Regions far away from being democratic. At the same time, they worry about investments in Africa for the continent is not democratic.

What is wrong with European and American investors?

Here is my answer:

There are plenty of individual European and American investors that are active in Africa. But, we should acknowledge that the time horizon might be longer than what we typically find in well established markets –

hence, family dominated firms may be particularly attracted to African investments, when there might be less of a quarterly earnings pressure.

I have always mentioned A.P.  Moller of Copenhagen (the owner of Maersk Line / Safmarine).

Kind regards,
Peter Lorange

From Wembley Stadium to Africa: Bob Geldof

He made history when he united all major international artists on the stage of the Wembley Stadium in 1985. The event was called “Live Aid” and became legend.

Today he is still making music and only recently released his new album. At the same time he never stopped giving Africa, the mistakenly forgotten continent, a voice. Including provocative statements as at the Alpensymposium in Interlaken a few weeks ago.

Mr. Geldof says, Europe and the US are considering Africa to be a case for continuous help and support; media are establishing the image of an infantile foster child who needs help. Why is Europe not noticing the economic opportunities?

Bob Geldof

Europa is noticing Africa. More than that. The trade volume is extremely high but the terms of trade are not at the favors of Africa.

Now, China is setting footprints in Africa, exploiting and controlling commodities from copper to diamonds. Africa could have and should have the opportunity to do it by itself or – at least – with the support of democracies such as European countries or the US, says Geldof. An he is right. But we should not forget that nowhere is the corruption rate as high as in Africa, scaring off potential investors.

That is leading to the inconvenient question whether the continent is capable of doing so. Personally I think they lack the know-how and the capital basis. This is not particularly their mistake. The society was devastated after decades or centuries of colonization, often followed by decades of devastating civil wars – under the eyes of Europe and America, the self-styled gate keepers of democracy.

Provocative add of a development aid organization

That is what Bob Geldof is mainly accusing the European and American hypocrites of: that they are investing money in China and in the Middle East. Regions far away from being democratic. At the same time, they worry about investments in Africa for the continent is not democratic, say corrupt.

What is wrong with European and American investors? Investments lead to economic growth and to a better infrastructure. Africa does not primarily need help. Says Bob Geldof and I think he’s right. Africa needs investments. But especially from my point of view as a business academic, Africa needs also education. According to Bob Geldof, the African elites are not only graduating from international universities, they have also the highest scores in math and science in the world. I realize that the world is ignoring these facts, leaving Africa as a victim instead of looking at it as an economic giant.

Unfortunately, I have to conclude that it takes more than high volumes of traded goods, enormous natural resources and the highest final scores at universities to overcome that long-standing depression of great parts of the African economies. Especially the criticized European countries with their well structured civil societies are not only an example, they are a model for a possible future of the continent.

Peter Lorange

A truly global currency?

by Prof. Dr. Martin Hellmich*

Some analysts are warning that the USD is in danger of collapse because of the exploding U.S. government debt, the horrific US trade deficit and the new round of quantitative easing.

Others are warning that the EUR is in danger because of the serious sovereign debt crisis that is affecting Greece, Portugal, Ireland, Italy, Belgium and Spain.

The euro crisis will be with us for many years as the underlying causes, such as southern Europe’s lack of competitiveness which cannot be remedied overnight. The PIIGS states face years of low growth, severe curbs on public spending and social unrest.

The EUs governments need to agree on major reforms to Eurozone governance like stricter budgetary discipline, more mutual surveillance of economic policies and a mechanism for dealing with governments that need to restructure debt. Otherwise the chances of a default by one or more euro zone countries are very high.

This could be followed by a domino effect on other countries and even Germany, France and the UK would end up injecting capital and liquidity into their banks to ensure solvency.

Concerning the Dollar (USD), China and Russia already announced that instead of using USD to trade with each other they will now using their own national currencies. The fact that the USD has been the primary reserve currency of the world for decades has given the United States a tremendous amount of economic power.

Many countries have been heavily investing in dollar-denominated assets and now they are upset that those investments are going to be devalued.

So what happens if the USD and the EUR both collapse?

Creates a new financial order emerging from the ashes of a simultaneous collapse of the USD and the EUR a truly global currency? Or would the nations going back to use dozens of different national currencies?

With our knowledge today it is hard to decide which scenario will become true or is even the most probable. But we cannot deny that we have the severe part of a fundamental currency crisis in front of us and if the USD and/or the EUR collapse the world will certainly never be the same ever after.

* Martin Hellmich ist Managing Director der Brokerage Firma Cantor Fitzgerald Europe in London Fakultätsmitglied des Lorange Institute of Business sowie der Frankfurt School of Manangment and Finance.

Am Lorange Institute leitetet er das Module Wealth Management – Understanding and Hedging Currencies, Interest Rates and Commodities.