Theme: The second economic globalization

Date: 11th.Dec.2007

Place: Renaissance Tianjin TEDA Hotel & Convention Centre

The Compere: Respectful leaders, ladies and gentlemen, good morning! The first Global Outsourcing Summit is here to open soon, first let's extend our gratitude to the holders, they are Tianjin Municipal People's Government, Asia-Pacific CEO Association and Global Outsourcing Center. Also let's show the warmest welcome to more than 500 domestic and foreign guests!

Witnessed as a significant year, 2007 has brought us the second wave of economic globalization which showed us that the world is flat. Yes, it is true: the world has turned flat because of global outsourcing that is a new focal point of the world. More and more people come to recognize that the greatest business opportunity in this century lies in global outsourcing in which people from different side of the earth can cooperate to reach the same goal and to create lots of miracles!

Today such miracle creator is focused in Tian jin. Okay, my dear friends, now let's welcome the opening of the first Global Outsourcing Summit!

Tian jin leaders attended here today are governor of Tianjin Municipal People's Government, Mr.Dai Xianglong, deputy mayor of Tianjin permenant committee, Mr.Huang Xinguo, director of Binhai area and member of Tianjin permenant committee, Mr. Gou Lijun, secretary of Tianjin Municipal People's Government, Mr. He Ronglin and director of Tianjin permenant committee, Mr. Li Quanshan.

Leaders from Chinese ministries and commissions include assistant of head of Chinese commerce department, Mr. Chong Quan, chief of high-tech and indutralization section of Chinese Science and Technology department, Mr. Gen Zhanxiu, deputy chief of product section of Chinese info industry department, Mr. Chen Ying.

Guests from abroad include former premier of Australia and chairman of Asia-Pacific CEO Association, Mr. Bob Hawk, former president of France house of councilors and european president of Asia-Pacific CEO Association, Mr. Christine. Carol, global operating president of Asia-Pacific CEO Association and board of director of Global Outsourcing Center, Mr. Zhen Xiongwei, and other CEOs and outsourcing expertises.

Now let's invite the host Mr. Dai Xianglong to give us a speech!

Dai Xianglong: Respectful Mr. Bob Hawk, honorable guests, dear friends, ladies and gentlemen, it is our honor to hold the first Global Outsourcing Summit here today, first of all, on behalf of Tianjin government, I'd like to show the warmest welcome to all of guests from 20 countries, and extend our sincere gratitude to the organizors, and particularly I want to send our respect to Mr.BobHawk, who made great contribution to promoting communication and cooperation between Australia and China and to the opening of this summit as well.

Today I have 3 major points to share with you.

No.1: The economic globalization has brought new opportunity for global outsourcing. With the unavoidable development of economic globalization and particularly with the fast spread of info-tech since 1990s, industrial division becomes more and more diversified, and the call for lower cost due to global competition is louder, therefore more and more international companies choose to outsource their noncore business which creates a new industry---Service Outsourcing. Service Outsourcing can not only improve the operating efficiancy of the original company, but also bring benefit to the service taker.

Global Outsourcing has embraced large scale market in recent years. It's said that the total volume in global outsourcing market increased from $150 billion in 2001 to $ 480 billion in 2006. There are four new trends in global outsourcing market.

Firstly, the trade scale is being enlarged increasingly which brings more and more positions in outsourcing industry. Since 2003, the average volume of the top 10 global outsourcing companies reached $ 2.34 billion, with highest $ 9 billion of single trade amount. While during the past 3 years, more than 400 thousand of white colar positions have been transferred abroad.

Secondly, outsourcing business is diversified from basic info outsourcing to business process outsourcing at higher level.

Thirdly, outsourcing carriers are not limit to developed countries and some large corporations any longer. There are more carrier companies in China, India, Brazil, Russia, etc.

Lastly, there will be more Offshore Outsourcing. It's predicted that within the following 5 years, outsourcing of white colar work will increase by 30%; outsourcing of global Internet's key area will increase by more than 45%; and more than half of occident companies will resort to offshore outsourcing. 

My second point is that Tianjin has some new advantadges for developing global outsourcing.

As the largest coastal city in north China, Tianjin was the trade center of north China historically. In recent years our economy increases by 15% each year. While the Chinese government has decided to develop Binhai new area as the third economy engine followed Shenzhen and Shanghai Pudong area. According to this strategy, we will construct Tianjin as an international port and ecological city which is also the economic center of north China. In order to achieve the above goals, Two Ports & Two Railways will be built. After the two ports are completed, Tianjin port will become the 6th largest port of the world. By the time of Olympic Games, the two high speed railways will be completed. only 25-30 minutes is needed to travel between Tianjin and Beijing, and there will be one train in each 5 minutes. Besides, the reconstruction ofTianjin airport will also be completed. We also set up a 10 million tons of oil refining project, and launched the load rocket project. A contract has been signed by president of Singapore to build up an ecology center.

With all of constructions mentioned above, several new advantadges have come to Tianjin.

Firstly, as one of the 11 outsourcing cities, we have strong basis for outsourcing development with almost 70 outsourcing companies; Secondly, we have excellent software industry basis. There are 30 software enterprises at present with 10 thousand employees, 43% of average increased sales, and 107% of average export increasement. Thirdly, we have possessed advanced Internet platform with 2000 G of core info exchange volume and the fast spread of electronic government and enterprises; Fourthly, we have huge potential market with the entrance of many international enterprises; Fifthly, we have rich human resource with 45 colleges and universities, 3 national software normal schools and 5 local ones. Besides a national outsourcing training center will be established; Lastly, the government has made us favorable policies with a $ 5000's annual fund for outsourcing development. 

Well my last point is that we should find new ways of developing global outsourcing industry. Here I have 4 methods to share with you.

No.1: To full develop the three outsourcing areas as demonstration including Binhai Hi-tech new area, developing area and the area in bond.

No.2: To build Binhai Hi-tech industrial area and Dongjiang area in bond with high starting level. 

No.3: To develop both nearshore and offshore outsourcing. While consolidating the cooperation with Japan and Korea, we should also start business with Europe and America.

No.4: To create favorable conditions for outsourcing enterprises, for example, to offer favorable tax policy and punish violation of intellectual property, etc.

That's all I want to share with you. I hope more and more friends will join in Tianjin's development. Let's embrace mutual benefit and open up together!

The Compere: Thanks Mr.Dai Xianglong for his passionate speech, now let's welcome Mr. Bob Hawk for his speech.

Hawk: Dear guests, ladies and gentlemen, first of all, congratulations to Tianjin Municipal People's Government, Asia-Pacific CEO Association and Global Outsourcing Center for holding this summit, and thanks for your invitation! My topic today is about the global economy integration. First, I'd like to express my opinion on outsourcing industry.

To be frankly, I have no specific knowledge about outsourcing industry, what I know is that the global outsourcing trade volume reached $ 120 million trillion which overpassed Australian GDP, and it will increase at 30-40%. In my opinion, outsourcing indutry is based on a basic economic principle---the principle of competitive advantadge. There is an example of miracle in Chinese economy. On Aug.19th, a medical enterprise in Wuxi city was publizised with initial price of $ 40, after 6 weeks, its price was doubled! How did it make it? The answer is it has offered outsourcing service to many countries. There are similar miracles happened in India. While China and India have something in common, that is both have created a favorable environment for outsourcing development, for example, favorable tax policy and intellectual protection law, also both of them have cheaper labor force. Therefore there will be lots of opportunities in Tianjin as mentioned by Mayor Dai.

Then I'd like to say something about the background. In my view, the background is the outsourcing economy being integrated. We have to pay attention to such issues because China has become one of necessary members of this economic utility. Since its establishment in 1949, 48 years has passed. In the first half period, Chinese economy was highly planned; then came the second revolution in 1978, from then on China began to develop its market economy and open up. During this period, Chinese economy has developed at high speed with 10% of average increase. Now China is the third largest country in trade; its impact on global economy is stronger and stronger. Are there any obstacles that might hinder its future development? The answer is Yes, just as mentioned in one recent speech of President Hu, China faces lots of challenges. 

I have not enough time to analyze each challenge mentioned by President Hu, thus I will only focus on one issue---the problem of sustainalbe environment. This issue has been paid attention by both China and Australia, two countries with completely different systems. China is right to point out that it will take no responsibility for the warming global climate, for it is the developed countires developed during the past 200 years that produced so many green house gases. As a  climate proffessor said, we should prevent the environment from destroyed at the very begining before disasters take place.

In 2001, Chinese GDP increased by 200% with larger energy demande, for example, more vihicles need more oil. As a result, the air has been polluted which consequently decreased the average age of Chinese people. Of course there is also environment friendly success in economy development which greatly encourages Chinese leaders. Another two effects brought by the warming whether are the melting of the frozen river and Chinese food industry. As mentioned by some Chinese leaders, the warming whether will impact 10% of Chinese total income and will threaten its food safety with large area of pant field being polluted; More money will have to spend on dealing with pathological changes; the water evaporation will inrease by 7% which will bring more challenges on dealing with drought. All of these problems are global economic issues.

On a conference held in Paris, we were discussing about environment protection which was said to be the responsibility of all countries. While I think the developed countries should take the major responsibility, for they produced the green house gases in the first place. Effective laws and policies should be made to cope with the present environment problems.

At last, let's work together shoulder to shoulder to solve the environment problems, for only with cooperation can we take care of our only home---the earth.

Thank you!

The compere: Thanks Mr. Hawk, this old friend of Chinese people who has paid close attention to Chinese economic development for a long time. Next, let's invite Mr. Chong Quan, assistant of head of Chinese commerce department.