China Business Guide 中 国 商 务 指 南 2009 （The Light Industry）

Since 2004, Dabao saw negative growth in brand share followed by yearly decline in net profit. In 2005, Dabao generated a sales revenue of 780 million yuan, ranking No. 1 in domestic skincare products. However, Dabao sales only accounted for 1% of the total 70 billion yuan sales of Chinese cosmetics market.

The sales revenue of Dabao kept around 800 million yuan in recent years, much lower than 20% growth rate in Chinese cosmetics industry. On February 27^th 2007, Dabao was listed for transferring 100% stocks in Beijing Equity Exchange, quoting 2.3 billion yuan as the highest price among all stock right transfer projects here. This project was also a high price project in Chinese daily cosmetics industry. During the listing period, it attracted some international well-known cosmetics enterprises such as Johnson & Johnson (China) Investment Co., Ltd., Unilever (China) Ltd. and Kao Corp. for consultancy and investigation. Johnson & Johnson and Unilever were both willing to be the transferee.

There were three problems in acquisition process: price, brand maintenance, and staffing. Unilever only offered 1.7 billion yuan, much lower than the sticker price. Finally Johnson & Johnson won and signed the stocks transfer agreement on April 18^th 2008 and preceded the application to government. On July 30^th, Johnson & Johnson completed acquisition of Dabao, purchasing 83.42% of state-owned shares and 16.58% of staff shares respectively from Beijing Sanlu Factory and Dabao shareholding employees. Its acquisition was approved by relevant government and the necessary procedure was completed.

Founded in 1887, Johnson & Johnson is a large enterprise in the world engaging in health, medical care and well-being of consumers. Since establishing the first joint venture in China in 1985, Johnson & Johnson has developed baby care series and cosmetics in China with skin care brands including Johnson Baby, Neutrogena and Clean & Clear.

Johnson & Johnson planned to keep and develop Dabao brand with respect for the brand, its global brand net and the long term and stable trust among Chinese consumers. Their win-win partnership will realize brand complementation with the global marketing experience and technology innovation of Johnson & Johnson. It's a variable whether Dabao brand can be rebuilt or not.

Before Johnson & Johnson's acquisition of Dabao, many national daily chemical brands were successively involved in acquisition upsurge. For instance, Mininurse was acquired by L'Oreal; C-Bons Daily Chemicals under C-Bons Group sold 85% stocks to Beiersdorf; Zhonghua Dentifrice became a product under Unilever. These acquired brands didn't make breakthrough as expected but kept silent and finally vanished. China's national daily chemical products are greatly challenged by foreign investment acquisition.

Chapter 7 Key Enterprises of China's Light Industry

7.1 Agricultural and non-staple food processing industry

7.1.1 Shine way Industry Group

Henan Luohe Shine way Industry Group, headquartered in Luohe, Henan, a famous food city of China, is a large food group specialized in meat food processing. It boasts a total asset value of over 7 billion yuan, 45,000 staff, annual slaughtering volume of 15 million pigs and annual meat food output of 1.5 million tons. It is the largest meat food processing base in China, ranking No.166 in the top Chinese 500 enterprises in 2007.

The output of Shine way Group exceeded 100 million yuan in 1990, 10 billion yuan in 2003, 20 billion yuan in 2005, 30 billion yuan in 2007 and 35 billion yuan in 2008. As a trans-regional and trans-national food group, Shine way Group owns modern meat processing bases and supporting industries in 12 cities and provinces in China, over 200 distribution companies and logistics delivery centers in 31 cities and provinces to deliver over 7000 tons meat food to everywhere through perfect supply chain every day. It has set up offices in Japan, Singapore, Korea, and Philippines and so on for overseas market development with an annual value of import and export of over US$ 100 million.

Shine way Group is a leading enterprise of agricultural industrialization in China. Every year, it consumes 30 million pigs, 500,000 cattle, 200,000 tons of chicken, 50,000 tons of eggs, and 50,000 vegetable proteins. It transmits 8 million tons of grain through livestock breeding and drives periphery livestock breeding, feed industry and slaughtering to generate an output of over 40 billion yuan, providing indirect jobs for over 1.5 million peasants. Shine way Group aims at making the brand larger, stronger and longer and becoming China's largest and world leading meat food supplier.

7.1.2 COFCO East Ocean Oils & Grains Industries (Zhangjiagang) Co., Ltd.

East Ocean Oils & Grains Industries (Zhangjiagang) Co., Ltd. is a joint venture by COFCO, one of world top 500 enterprises and Singaporean Kenspot. It is the main production base for edible oil of Chinese famous brand Fortune as well as the one of the largest processing base of integrated oils and grains in the world.

East Ocean Oils & Grains Industries (Zhangjiagang) Co., Ltd. was founded in 1993 and opened up in August 1997. The registered capital is US$113 million, the total investment US$ 228 million. It covers an area of 1,300 mu and has 1,700 regular employees. The company is mainly engaged in deep processing of soy bean, wheat and rice in various factories of oil manufacture, refining, feed, packaging, flour, rice, special oil and soybean and so on. It produces Fortune series of edible oil, flour and rice, Four Seas of bean pulps and feed and Five Lakes feed. In 2001, the company passed the ISO9001 international quality management system certification, ISO14001 environmental management system certification, HACCP food safety management system certification and the United States AIB certification. In February 2008, it obtained OHSMS18001 Occupational Health and Safety Management System Certification.

The sales revenue of this company reached 17.11 billion yuan in 2008. From commissioning in 1995 to December 2008, the company has accumulatively paid taxes over 10.27 billion yuan, among which 1.72 billion yuan in 2008. It is on the list of Chinese Top 500 Foreign Investment Corporations and Top Ten of China's Food Industry for ten consecutive years. In 2004, it was cited as Top Ten Industrial Corporations in Suzhou. In 2007, it became An Excellent Pilot Corporation of National Food Safety Credit System Pilot Projects of China's Food Industry. In 2008, it ranked No. 325 in China Top 500 Companies, No. 178 in China Top 500 Manufacturing Enterprises. It also won the title of China Food Industry Excellent Enterprises 2007-2008.

7.1.3 Yurun Group Co., Ltd.

Yurun Group Co., Ltd. (Yurun Group), headquartered in Nanjing, Jiangsu Province, is one of China's Top 500 Enterprises with the business areas of food processing, real estate, tourism, trade & commerce and logistics. It has more than 100 subsidiaries and branch companies located in more than 28 provinces, municipalities and autonomous regions, such as Jiangsu, Anhui, Beijing and Shanghai. The total number of employees has reached 50,000. In 2008, Yurun was ranked the 165th in China's Top 500 enterprises, the 5th in China's Top 500 privately-owned companies, the 53th in China's manufacturing industry and No. 1 in China's meat food processing.

On October 3, 2005, meat food business of Yurun Group got successfully listed on Hong Kong Stock Exchange Market, thus making true of its effective connection with overseas capital. At present, the Group owns two listed companies Yurun Food (Stock symbol: 1068HK) and Nanjing Central Emporium (Stock symbol: 600280.SH). Yurun Group mainly engages in food and integrates slaughtering and intensive processing. It boasts four brands of Yurun, Wangrun, Furun and Dazhong Meat almost one thousand products. It has set up offices in 350 big and middle cities all over China. It has won Chinese Well-known Trademarks, Three Chinese Famous Brands and Chinese 100 Years Old Names. Yurun Group has been ranked the first in low temperature meat food market shares for 10 consecutive years.

Yurun Group is one of the first National key Leading Enterprises in Agriculture Industrialization approved by 8 ministries and commissions. It is cited as Advanced Unit of Quality & Efficiency in China's Food Industry and Distinguished Enterprise in China's Food Industry. In 2006, it was accessed as a national technology center by National Development and Reform Commission, Ministry of Science and Technology, Ministry of Finance and General Administration of Customs. In 2007, it was successively praised as Distinguished Enterprise in China's Meat Food Industry, China Well-know Trademark and AAAA Excellent Enterprise.

7.2 Food manufacturing industry

7.2.1 Yili Industrial Group Co., Ltd.

Yili Industrial Group Co., Ltd. (Yili Group) was founded in 1993. There are five divisions liquid milk, ice cream, milk powder, yoghurt and raw milk. More than 1,000 series of Yili brand products, such as popsicle, ice cream, milk powder, milked tea powder, asepsis milk, yoghurt and cheese are made by 130 affiliated enterprises of Yili Group. In course of 15 years' development, Yili has always been devoting to producing 100% safe and 100% healthy dairy products, and spreading concept of nutrition and health for Chinese. Meanwhile, Yili has been serving for the consumers' health and happy life according to the highest worldwide production standards.

From 2003 until now, Yili Group has always been leading China's dairy with strong strength, and has become the industrial representative of sustainable development with its steady growing trend. Yili popsicle and ice cream remained the highest output and sales in China for 13 years, and UHT milk run first consecutive years in sales. Since 2005, the production and sales of Yili milk powder and milked tea powder have been keeping first in China.

In the first half of 2008, Yili Group reached 11.511 billion yuan in main business income, increased by 23.06% comparing with the same period of last year. The high-additional-value and high-tech products including milk powder, cold drinks and yoghurt have continually showed increasing trend this year. Among which, the sales revenue of powder reached 2.14 billion yuan, increased dramatically by 64.94% on a year-on-year basis; the sales volume of Olympic product low-lactose nutrition milk increased by over 30 times in the first half of 2008; Classic milk grew by 150% on a year-on-year basis. Up to 2008, Yili Group has accumulatively paid taxes over 7 billion yuan. Meanwhile, Yili successively launched many large-scale social commonweal actibities such as "Sunny Love Full of Tibet", "Love Illuminates Way Home" and so on, accumulatively investing 600 million yuan for the public service. Moreover, Yili provide over 32 billion yuan funds for the cow-raisers and nearly 2 billion yuan funds for the farmers to buy cows. With help of Yili Group, 5 million cow-raisers have cast off poverty and set out on a road to prosperity.

7.2.2 Nanfang Lee Kum Kee Health Product Co., Ltd

Infinitus (China) Co., Ltd. was founded is 1992, renamed from Nanfang Lee Kum Kee Health Product Co., Ltd in March 2009. The company is dedicated to R & D of traditional Chinese herbal health products to complete the second mission of Lee Kum Kee Group to make the Chinese tradition herbal medicine with five thousand years history to be health products with modern technology and spread to everywhere in the world. With the development over a decade, the company has become a large health products enterprise cooperating with many authoritative research institutions and academies, home and abroad. It has successfully launched 4 series of over 30 products including Infinitus health food, Zhiya necessities, Weiya skincare products and homemate household articles.

Infinitus strengthen oral liquid of Infinitus won the honorable title of Top Ten Health Products by China Health Care Association for 4 consecutive years since 2002. In April 2005, Infinitus won the award of The Best Employer in Asia and The Best Employer in China as the only one Chinese national company in health care industry in The Best Employer contest jointly organized by Hewitt Associates, the international authority of human resources consultancy and 21^st Century Economic Report. In August of the same year, Infinitus brand was ranked at 62th on the list of 2005 China Top 500 Trademarks issued by World Brand Lab and the first in health care industry with a brand value of RMB 8.08 billion. In November 2005, the company won the top honor 2005 Corporate Culture Excellence Award in terms of enterprise cultural construction, jointly issued by China Association of Enterprises and China Entrepreneur Association. On November 17^th 2005, it was cited as 2005 The Best Employer-The Best Place to Work in China issued by Fortune. In 2006, Infinitus Xinhui production base won the top honor of China Quality Ding and Chinese User Satisfactory Ding, which witnessed its outstanding achievements in quality management and customer services. In 6^th International Health Festival in November, the company won The Best Enterprise and The Prize of Exhibition Achievement. Strengthen oral liquid and Changxinwei oral liquid both won the honor as The Best Products. In April 2007, Infinitus continued to hold the titles of 2007 The Best Employer in Asia and 2007 The Best Employer in China.

7.2.3 Inner Mongolia Mengniu Dairy (Group) Co., Ltd.

Founded in 1999 and with headquarter in the core of China Dairy Capital Shengle Economic Zone in Helingeer County of Huhhot, Inner Mongolia Mengniu Dairy (Group) Co., Ltd. (Mengniu Dairy Group) has a total asset of RMB 8 billion and 30,000 employees, and the production capacity of dairy products reaches 5 million metric tons per year.

So far Mengniu Dairy Group has established over 20 production bases including Helin base in 15 provinces of China and owned 5 major series of products which are liquid milk, yogurt, ice cream, dry milk and cheese in which are incorporated over 200 categories. Relying on the supreme quality of its products, Mengniu's products cover all Chinese market and are exported to overseas market such as America , Canada , Mongolia Republic , Hong Kong , Macao and other Southeast Asian countries

By the end of 2007, the sales revenue had reached RMB 21 .3 billion with a CAGR of 121% which made Mengniu the first dairy company that exceeded RMB 20 billion sales revenue in China; the profit and tax payment of Mengniu had reached RMB 1.087 billion and RMB 1.04 billion with the CAGR of 159% and 138% respectively; the market share of main products had surpassed 35%; the sales of UHT milk had ranked No. 1 in the world and that of liquid milk, yogurt and ice cream No .1 in China; the export volume and the number of regions exported to also had ranked No .1 in China. According to the statistics of The 1 st Annual Competitiveness of Top 500 Large Corporations of China released by National Bureau of Statistics of China in September of 2006, Mengniu ranked 11 among the rivals. The 1 st Annual Charts of Top 500 Brands of Asia in 2006 showed that Mengniu ranked No.3 among the dairy enterprises in Asia (the No.1 and No.2 were all Japanese Companies). The latest data from 2008 Top 500 Enterprises of China showed that Mengniu ranked No.225 which was unparallel to Chinese dairy makers. China Mengniu Dairy's stock was selected by the world famous financial service firm Morgan Stanley as one of Global Top 50 Blue Chip until 2012.

In March of 2006, Mengniu Dairy Group gained the honorary appellation of The Most Creative Enterprise of China, which made Mengniu the only food product maker to win this glorious title. Relying on the overwhelming advantage in technology, brand, quality and processing compared to competitors, Mengniu's premier product Milk Deluxe finally won the Award of IDF New Product Development at the 27^th Word Dairy Congress held in October of 2006, which realized a breakthrough from zero on international highest award record in China's dairy history. The breakthrough wins honor for the nation and adds glory to the Dairy Capital of China.

7.2.4 Shanghai Bright Dairy & Food Co., Ltd.

Shanghai Bright Dairy & Food Co., Ltd. (Bright Dairy) is a listed shareholding enterprise based on the multi-ownership of national, foreign and private capital. The company is mainly involved in the development, production and sales of milk and milk products, the raising and breeding of dairy cattle and bull, logistics and distribution, and the development, production and sales of nutritious health food. As one of the largest producer and sales enterprise in China, With the world-class dairy R & D center, dairy processing equipment, and advanced technologies, it is currently one of the largest dairy products producers and sellers in China, producing a series of dairy products such as sterilized milk, fresh milk, yoghurt, UHT, milk powder, butter, cheese and fruit juice and so on.

In 2000, Bright series products were designated as the exclusive dairy products for China's delegation to the 27^th Olympic Games. In 2001, it was a candidate for the Top 50 Most Admired Companies in China. Since 2002, it has been listed as one of the Top 100 Enterprises in Shanghai every year. It was successively made a candidate for Top 500 Enterprises in China, jointly organized by China Association of Enterprises and China Entrepreneur Association. In the Report on the Leadership of China's Stock Market in 2004 released by Fortune China, Bright Dairy was rated among the Top 20 Listed Companies with the Most Powerful Leadership in 2004. In 2005, it was granted as one of the National AAA1 Credit Enterprises by Chinese Academy of International Trade and Economic Cooperation (CAITEC) under the Ministry of Commerce. In 2006, Bright products were granted as the independently innovated products in the conference which was organized by Chinese Academy of Social Sciences and China Business Journal. In July 2007, Bright Dairy was granted as the most competitive brand by the Ministry of Commerce. In September of the same year, it won the title of Top Ten Food Safety Enterprises in China as the only enterprise in liquid milk industry jointly granted by the Ministry of Health, Ministry of Agriculture, Ministry of Public Security, State Administration for Industry & Commerce, and State Food Drug Administration. In October 2007, it passed the reexamination by review panel and won Shanghai Gold Prize for Quality.

7.3 Beverage manufacturing industry

7.3.1 Kweichow Moutai Co., Ltd.

Kweichow Mountain Co., Ltd. is a joint stock company initiated by China Kweichow Moutai Distillery Co., Ltd., Kweichow Moutai Technology Development Co., Ltd., Guizhou Light Textile Collective Industry Council, Shenzhen Research Academy of Tsinghua University, China National Research Institute of Food & Fermentation Industries, Beijing Sugar Tobacco & Wine Co., Ltd., Jiangsu Huaiyin Sugar & Tobacco-liquor Co., Ltd., and Shanghai Jieqiang Tobacco Sugar & Wine (Group) Co., Ltd. Moutai was approved by People's Government of Guizhou Province (No. 291 document, 1999). Its registered capital is RMB 185 million.

The annual output of Moutai liquor has already exceeded 10,000 tons. Moutai liquor at 43°, 38° and 33° have expanded the development space for mild Moutai liquors. Moutai Prince Liquor, Moutai Greater Liquor meet the demand of low and middle grade customers. Old Moutai liquor of 15, 30, 50, and 80 years old fill up the gap of master liquor, vintage liquor and old liquor in China. It has initiated ladder product development mode and formed over 70 varieties of 3 series of mild liquor, high, middle and low degree liquor and master liquor. Moutai has occupied the commanding height of Baijiu market and ruled the region of Chinese master liquor market.

7.3.2 Tsingtao Brewery Co., Ltd.

Tsingtao Brewery Co., Ltd. (hereinafter referred to as “Tsingtao Brewery”), one of the oldest beer makers in China, was founded in 1903 by German and British merchants under the name Nordic Brewery Co., Ltd. Tsingtao Branch. Today, Tsingtao Brewery is China’s largest brewery and is also an Official Sponsor of the Beijing 2008 Olympic Games.

On July 15, 1993, Tsingtao Brewery became the first-ever Chinese company to be listed on the Hong Kong Stock Exchange. On August 27, 1993, it listed on the Shanghai Stock Exchange making Tsingtao Brewery the first Chinese company to be listed in both Mainland China and Hong Kong. In 2007, Tsingtao Brewery achieved a total sales volume of 5.05 million kiloliters globally, with the market share of Tsingtao Beer in China reaching 13%. In that same year, World Brand Lab valued the brand at RMB 25.827 billion, placing it first in China’s brewing industry. Tsingtao Beer is exported to 62 countries and regions, including the USA, Japan, Germany, France, UK, Italy, Canada, Brazil and Mexico. The Barth Report, the authoritative report of the global beer industry, ranked Tsingtao Brewery as the 8th-largest brewery in the world based on total yield in 2006 and 2007.

Tsingtao Brewery has received numerous awards and recognition in some of the most prestigious beer competitions held in China and around the globe since 1949. In 1906 at the age of 3 years, it won Gold medal at the Munich International Expo. In 1980s, it won three first-place awards in beer contests in the United States. It won Gold medals in international contests held in Belgium (1991), Singapore (1993) and Spain (1997). In 2006, it was ranked at 68^th on The World's Reputable Companies by Forbes. In 2007, it won Grand Prize at the Asia Brand Ceremony. It was also rated in the 1^st and the 2^nd Top 10 Chinese Global Corporate Brands” in 2005 and 2008, issued by Financial Times. In the 2^nd event, Qingdao Beer swept four recognitions in the categories of Brand Equity, Consistently High-quality, Product & Service and Brand Equity Overseas.

7.3.3 Wuliangye Group Co., Ltd.

Wuliangye Group Co., Ltd. is situated on the bank of Minjiang River, north of Yibin City in Sichuan Province, Southwestern China, which is known as the "First Major City along the Yangtze River". The predecessor of Wuliangye Group Co., Ltd. was "Sichuan Yibin Distillery, China Monopoly Company", which was jointly founded in early 1950s by several brewery mills passed down from ancient times. The factory was formally renamed as "Yibin Wuliangye Distillery" in 1959 and following "Wuliangye Group Co., Ltd." after restructuring in 1998.

Wuliangye Group Co., Ltd., a modern corporation boasting a profound corporate culture, is mainly engaged in the production and operation of Wuliangye and its serial alcohols, while concurrently manufacturing and operating precision plastic products, series car molds, precision and high-end injection and stamping molds of large, medium and small sizes, and involving in bio-engineering, pharmaceutical industry, printing, electronics, logistics and transport, and other related service sectors. Sales revenue in 2006 was RMB20.05 billion. Buildings and facilities for scientific and technological development, production and operation are scattered regularly in a garden-like factory park, where around 30,000 employees are working conscientiously.

  Wuliangye Liquor", the product that won Wuliangye Group Co., Ltd fame, is an outstanding representative of strong aromatic liquor. With broomcorn, rice, glutinous rice, wheat, and corn as raw materials, stirred by " Baobaoqu" (a kind of saccharified yeast starter), " Wuliangye Liquor" is made in traditional process, from fermentation in the aged cellar, years-long brewing to appropriate blending. That unique process that takes the five different cereals as raw materials can perfectly mingle and absorb the essence of all the five. "Wuliangye Liquor" has formed its own liquor style, featuring " lasting flavors, mellow savor, luscious and refreshing tastes, harmonious and just-right flavors, and especially famous for its versatile flavors". Widely acclaimed for its six major advantages, i.e. unique natural eco-environment, over 600-year-old ancient cellar passed down from the Ming Dynasty (1368-1644 A.D.), recipe of five grains, brewing process, harmonious quality and "Liquor City", it has become a treasure among today's liquor products.

Since Wuliangye won the gold prize at the Panama Pacific International Exposition (PPIE) on behalf of Chinese products in 1915, "Wuliangye Liquor" has been honored 38 gold medals in various kinds of expos throughout the world. In 1995, it was once again titled the PPIE gold prize at the 13th event, marking a splendid achievement of “gold medals standing firm for eight decades”, and awarded the title of King of China's Liquor Industry at the 50th World Statistics Conference. In June 2002, "Wuliangye Liquor" got another gold prize at the 20th International Business Exhibition held in Panama, which was also the only gold medal for liquor products as well, continuing Wuliangye's century-long glories. Meanwhile, "Wuliangye Liquor" boasts a series of honors: title of "National Famous Drinks" for four consecutive terms, four gold medals for national excellent products, and the first batch of Top10 Well-Known Trademark in 1991. In the past several years, as the pacesetter in the market, "Wuliangye" brand has successively topped the list of "most valuable brands" of liquor manufacturing and food industries. Its brand value was evaluated at RMB 45.086 billion Yuan in 2008. Wuliangye Group was granted its second National Quality Management Award in 2003, and it is also the only enterprise in this industry to have gained this award for a second time.

7.3.4 ShanXi XingHua Cun Fen Chiew (Group) Co., Ltd.

 Shanxi Xinghua Cun Fen Chiew (Group) Co., Ltd. is a new state-owned group company, mainly engaged in the production and operation of famous Chinese baijiu (liquor) --Fenjiu and Zhu Ye Qing jiu, etc. As one of the largest baijiu production bases in China, Singhua Cun Fenjiu Group generates an annual output of 50,000 tons.

The group has 22 subsidiaries and branches with 8000 staff. It covers a floor area of 2.3 million m² and a building area of 760,000 m². As the core enterprise and the largest wholly-owned subsidiary of the Group, Fenjiu Plant Joint Stock Co., Ltd. became the first company in China's baijiu industry and in Shanxi province to be listed in Shanghai Stock Exchange in 1993.

The Group owns two well-known trademarks Xinghua Cun and Zhu Ye Qing. In 2006, the Top 500 Most Valuable Brands released the brand value of Xinghua Cun reached 4.776 billion yuan. Its dominant serial products include Fenjiu, Zhu Ye Qing jiu, Rose Fenjiu, White jade fenjiu, wine and beer. As a typical brand in odor Baijiu, Fenjiu is famous for softness, sweet, lingering fragrance and aftertaste. It enjoys high reputation and loyalty at home and abroad. The leading varieties include National Fenjiu, Blue and white porcelain Fenjiu, Chinese Fenjiu, Laobai Fenjiu and so on. Zhu Ye Qing jiu is the only Chinese health care liquor recognized by the Ministry of Health.

7.4 Plastics manufacturing industry

7.4.1 Xinjiang Tianye (Group) Co., Ltd.

Xinjiang Tianye (Group) Co., Ltd., founded in July 1996, is a large state-owned enterprise under No.8 Agricultural Division of Xinjiang Production and Construction Corps. It share holder Xinjiang Tianye Co., Ltd. got listed in Shanghai Stock Exchange in June 1997. Xinjiang Tianye Water Saving Irrigation System Co., Ltd. got listed in Hong Kong Stock Exchange in February 2006.

Xinjiang Tianye is principally engaged in plastics, water saving facilities, chemical products, calcium carbide, food, thermoelectricity, mining, cement, foreign trade, construction and real estate. By the end of 2008, it generated a total assets value of 15 billion yuan, industrial sales value of 6.7 billion yuan, the profit and tax of 1.2 billion yuan, up by 40% year in year out. Its products including plastic film for agricultural use, water saving facilities, PVC pipes, PVC resin and sodium hudroxide have won titles of Xinjiang famous trademarks. Meanwhile, its sodium hudroxide became National Free-inspection Product. In 2007, Tianye PVC won the title of Chinese Well-known Trademark. The company has been listed in China's Top 500 Manufacturing Enterprises for many years.

Xinjiang Tianye owns national-class enterprise technology center, National Center for Efficient Irrigation and Technology Research-Xinjiang and Postdoctoral Research Center. There are over 2000 professionals and technical staff, among whom nearly a hundred have master degree and above and over 70 are senior technical staff. With the mission of higher quality and sincere service, Xinjiang Tianye was granted as Enterprise with Credit and Keeping Contract. All of its subsidiaries passed ISO9001 quality system certification. Its construction enterprise was the first one to win National Luban Prize. In 2006, the group company won the title of Four Virtues Excellent Leading Collective of Chinese stated-owned enterprises by Organization Department of the CPC Central Committee and State Assets Administration Committee of State Council. The first stage 400,000 tons PVC project and auxiliary project of 1.2 million tons PVC chemical project of Tianye was approved by NDRC in December 2006. With the great effort of all Tianye staff and the builders, the first stage project was brought in full production in June 2008, in which many world-class and national leading creative technologies and energy-saving and emission reduction technologies were applied. At present, Tianye Group boasts a PVC output of 700,000 tons, an ionic membrane sodium hudroxide of 600,000 tons, calcium carbide of 1 million tons, electrical energy of 800,000 kilowatt and acetylene sludge cement of 1.5 million tons. All of these achievements have made Tianye on the top of the same trade in China.

7.4.2 Shanghai Zijiang Enterprise Co., Ltd.

Shanghai Zijiang Enterprise Co., Ltd., founded in 1981, is a private investment holding corporation focusing on proprietary investments. It has been dedicated to the R & D of environment-friendly urban new materials. It now boasts four divisions of packaging, bottle caps/labels, drinks OEM, film parent metal in over 40 share holding and joint-stock subsidiaries. As the largest and the most profitable packaging material manufacturer with the most diverse products in Shanghai and Shenzhen, it principally produces and sells a variety of PET bottles and performs, caps, labels, sprayed aluminum paper and paperboard, BOPET film, CPP film, high-grade ink, multicolor screen printed plastic containers and other new materials.

The company's annual capacity is 5 billion PET bottles and performs, 20 billion crown caps, 10 billion plastic labels, 4 billion plastic security plugs, 1 billion filling beverage bottles, 2 billion paper printed packages for medical and food use, 150 million myriameter aluminium paper and paperboards, 200 million meter plastic packages and printings, 60,000 ton film, and over 10,000 ton high-grade ink. Zijiang is leading the domestic industry in terms of production scale, technical levels, quality levels, sales and economic profits.

7.4.3 Foshan Plastics Group Co., Ltd.

Foshan Plastics Group Co., Ltd., founded in 1988, is a new high-tech enterprise providing new materials for industry, agriculture, science & technology, transport, communications and architecture areas and so on. It is mainly engaged in five series including various plastic filming and synthesized packaging materials, artificial leather, plastic knitting laminated products, constructional engineering and photo-electricity, decorating materials and macromolecule new materials of other functions. It got listed in Shenzhen Stock Exchange in May 2000. It's relatively large in current asset scale close to 5 billon yuan among the same domestic enterprises. The company owns many key technologies. It's a super-sized enterprise group with subsidiaries distributed in everywhere in China and a plastic new material production enterprise with the largest scale, complete range of articles, the largest export volume and overall competitiveness at the head of the industry.

Since 1992, the company has many economic and technical norms ranking first in the same business for many consecutive years. In 1996, the company was chosen as one of the 512 large enterprises with key government support in 1000 enterprises by State Economic and Trade Commission. It was ranked as one of 70 large scale enterprise groups with Guangdong Government key support and one of pilot enterprises to establish modern enterprise system. In October 1997, it became one of the 66 Key High-tech Enterprises of National Torch Program. In 1997, it became one of the first 19 superior enterprises of technological creation by Guangdong Economic Commission. In February 2000, it was awarded as the only one new material enterprise in strategic industry among the 50 industry leading enterprises. On May 25^th 2000 Foshan Plastics Group Co., Ltd. A share got listed in Shenzhen Stock Exchange (abbreviated as Foshan Plastics shares, Stock code 000973). In March 2002, the company became Guangdong Advanced Group in Scientific and Technical Research rewarded by Science and Technology Department of Guangdong Province. In September 2002, the company won the Advanced Enterprise Special Award Title of Good Quality and Benefits by Guangdong Society of Quality. In 2003, the company was recognized once again one of Key High-tech Enterprises of National Torch Program. In the same year, it was on the list of Chinese Top 500 Enterprises by China Association of Enterprises and China Entrepreneur Association

7.5 Papermaking and paper product industry

7.5.1 Shandong Chenming Paper Group Co., Ltd.

The predecessor of Shandong Chenming Paper Group Co., Ltd. is Shandong Shouguang Paper Making Plant established in 1958. The group's principal activities are producing, processing and selling machine-made paper, paperboard, paper making raw materials and paper making machinery. It's the largest state-owned paper making enterprise, Key High-tech enterprise of National Torch Program in China as well as one of the 520 Key Enterprises by the State Council. The company boasts 5 world class paper production lines and 15 domestic leading lines to produce 3 large categories including cultural paper, newsprint and packaging paper, and over 200 species in 8 series including writing paper, sided offset paper, light coated paper, newsprint, art paper, boxboard paper, office paper, and specialty paper. With a marketing network all across China with 45 sales branches and offices, it's a collective papermaking enterprise covering papermaking, pulp making, energy and papermaking machine.

Shandong Chenming Paper Group Co., Ltd. developed 33 papermaking patents and new technologies independently. It produced 7 national class new products and 23 products filling up the gaps in China. A 100,000 tons high-grade culture paper project of national Double + established and operated in 1998 was chosen as national outstanding project in technical reform. Its major product light weight coated paper filled up the gap of China and it's exported to international market such as Japan in large quantities and was regarded as the first piece of paper of Chinese paper industry to the world. Two technologies including "poly nano-colloidal silicon particle glidants" and "AKD alkalescence papermaking technology with talc powder as filler" passed provincial technical evaluation in 2002 and played an important role in improving product quality, reduce cost and replace imported products. 45g newsprint and 42g newsprint produced in 2002, the latter of which filled domestic gap, highlighted Chinese paper market. After the establishment and operation of 153,000 ton high-grade art paper project in August that year, the company has produced over 20 species in 4 series of Xuesha, Xueying, Xuehu and Xueyan, which completely replaced imports by its actual production capability reaching 300,000 tons and the international top level. In 2003, the company successfully developed 45g wear-resistant paper and an overall mature pulp making technology of cottonwood to pulp with the help of post doctorate workstation.

7.5.2 Hainan Jinhai Pulp & Paper Industry Co., Ltd.

Hainan Jinhai Pulp & Paper Industry Co., Ltd. is one the 13th super-scale pulp and paper making enterprise invested and constructed by Sinar Mas Group-APP in China mainland. The company is located in Yangpu Economic Development Zone, Hainan Province, with an area of 4 square kilometers. The first stage project to produce 1 million tons chemical bleached sulfate eucalyptus pulp was invested 10.5 billion yuan and opened up on March 28^th, 2005. The second stage project to produce 1.6 million tons is invested 1.36 billion yuan and opened up on March 29^th, 2007 and predicted to continue its production in 2010.

The pulp making production line of the first stage project of Jinhai Pulp & Paper has so far ranked the largest single pulp making line with the most advanced technologies. Besides the top-level vanguard technology, the main facilities all adopted well-known professional products in the world which embodies the advanced level of pulp and paper making industry in current world. The second stage project of Jinhai agrees with the national development direction of all-in-one operation of forest, pulp and paper. It shortens the production process flow, increases the company comprehensive benefit and greatly benefits the local region economically and socially. It provides more than 2000 direct posts and drives service industry like transportation and Dining sectors as well as the economic development of Yangpu and the whole Hainan.

Jinhai Pulp & Paper has invested 2.7 billion yuan in pollution control to recycle and reuse waste from production process, purchase advanced three wastes treatment facility and introduce in anti-pollution production technology. Jinhai conducts strict management in daily production and ensure all its emission reaching or exceeding national level one emission standard finally after processing. In April 2006, Jinhai Pulp & Paper passed ISO14001 Environmental Management System Certificate. In June 2006, the first stage project was inspected and accepted in terms of environment protection by State Environmental Protection Administration. Jinhai's effort in environment protection has been highly appreciated by the country and Hainan provincial government.

7.5.3 Gold East Paper (Jiangsu) Co., Ltd.

Gold East Paper (Jiangsu) Co., Ltd. is founded by APP with a total investment of RMB 15.146 billion (US$1.823 billion). It is located on a 4,514 mu site in Dagang, Zhenjiang city, Jiangsu province. The company is richly advantaged in convenient transportation and location since its own two 10 thousand-ton berths and nine 20 thousand-ton berths in the next-door Dagang port are connected with 136 ports in more than 40 countries and regions.

Gold East's production capacity is 1.35 million ton culture paper annually. Four paper making production lines and one spread coating production line were built up in 2002. By far it has produced 1 million ton and owns 2 enterprise wharfs of 20 thousand-ton, a autonomous thermal power station rated at 210MW installed gross capacity, a fresh water plant with a capacity of 99,500CMD, a effluent treatment plant with a capacity of 75,000CMD and auxiliary projects of a ground calcium carbonate plant and precipitated calcium carbonate plant. Gold East stands at the top of the world in facilities and technologies.

The production lines of office writing paper and spread coating base paper are supplied VOITH SULZER in Germany. Spread coating paper production line are wholly imported from Valmet in Finland. The paper production process adopts world-class control technologies of Distributed Control System and Quality Control System by ABB.

Gold East Paper (Jiangsu) Co., Ltd. is committed to environment protection. It has implemented environment protection policies in up-and-coming spirit. So far it has invested near 600 million yuan in environment protection projects. For instance, it introduced the most advanced circulating fluidized bed boiler from Finland which can deprive over 85% sulfur dioxide generated from boiler coal fire and thus prevent acid rain from sulfur dioxide discharge. Furthermore, the most advanced wastewater treatment system makes wastewater completely meet the national first class discharge standard. There are fish ponds and the updating instrument to monitor water discharge.

7.5.4 Huatai Paper Co., Ltd.

Huatai Paper Co., Ltd. is a subsidiary company of Huatai Group. Its total asset value reaches 15 billion yuan. It can make the machine made paper papers of 4 series and more than 100 types with an annual output capacity of 2 million tons, including newsprint, culture paper, package paper and daily life paper. It has an annual capacity of 1 million ton chemicals and paper-making auxiliary chemicals, 500,000 color ream printing and a daily printing ability of 8 million folios. Huatai paper serial products have won Shandong Products Quality Award. Huatai won the titles of Shandong Famous Brand and Build Chinese Famous Brand. Huatai was the first Chinese Well-known Trademark in domestic paper making industry. Huatai newsprint, offset paper and writing paper are National Free-Inspection Product, which are marketed widely in more than 20 provinces and cities, as well as scores of countries and regions in America, Eastern Europe and Southeast Asia. In 2007, the accumulated income of the group reached 13 billion yuan, contributed profit and tax of 1.5 billion yuan. Since 1995, its comprehensive economic profits have ranked in the front in the same industry in China.

Since 2000, Huatai has invested 7 billion yuan in succession to purchase 4 world-class high-grade color newsprint production lines from Germany. Among these lines, the 160,000 tons newsprint machine invested in 2001 was the largest in China at that time. The newsprint production line with an annual capacity of 250,000 tons invested in 2003 was the most advanced in the world and the first new concept paper machine on the same platform in Asia. It adopted the latest VOITH standard modular design and advanced technology we well as automatic control systems such as DCS, QCS and MCS. Its ability to produce 38-48.8 k/m² newsprint filled up the blank of domestic high-grade light weight newsprint. At the end of 2005, the high-grade color offset news printing project with annual output capacity of 400,000 tons is the largest newsprint project in the world. The total investment on this project reached 2.28 billion yuan. The designed machine speed was 2000 meters/minute. Huatai introduced world top technology equipment from companies like Germany VOITH, Finland Metso, and Austria Andritz. All the indexes rank first in the world. The production line can produce 34-60 k/m²high-grade color newsprint. Meanwhile, it can generate various types of products such as gummed paper, telephone book paper and dictionary paper and so on. So far it's a newsprint production line of the largest stand-alone output capacity, the most advanced equipment, the fastest machine speed, the widest paper web and the best quality. In October 2006, Huatai added 12# machine newsprint production line with a stand-alone output capacity of 450,000 tons. After production, Huatai annual newsprint production capacity reached 1.2 million tons, covering 1/3 of Chinese market. It has become the largest newsprint base in the world.

7.6 Furniture Manufacturing Industry

7.6.1 Beijing Qumei Furniture Group Corp., Ltd.

Founded in 1987, Beijing Qumei Furniture Group Corp., Ltd. has become a large well established furniture group with design, manufacture and sale abilities during over 20 years development. It is now Vice-director Unit of Chinese Furniture Association and a leading enterprise of Chinese furniture industry. Qumei Group has many national honors such as China Famous Product, China Well-known Trademark, and China Environmental Labelling. Qumei products are environmental-friendly designated purchase units of government.

Qumei Furniture Group has hired over 3000 employees and had a total registered capital of over 85 million yuan. There are 3 furniture production bases which occupy 260,000 square meters. The warehouses cover 150,000 square meters. Qumei has established a wide marketing network in China and has over 600 retailing stores selling exclusive products, among which, over 40 stores are larger than 3000 square meters.

Qumei Group manufacture system owns 4 large bases and panel furniture production line and solid wood furniture production line of world-class. 80% of its equipment is imported from Germany and Italy and so on. It spent 20 million yuan to purchase solid wood bending furniture processing equipment and technology from Denmark. So far, Qumei is the only furniture enterprise with this technology and equipment in China, which has enriched the Chinese traditional furniture processing manner and ended the China's furniture industry situation without bending furniture manufacturing capacity. It has enhanced the competitiveness of Chinese bentwood furniture products in international market and made great contribution to China's furniture industry to go to the world.

7.6.2 Zhejiang SUNON Group Co., Ltd.

Zhejiang SUNON Group Co., Ltd. is a business group mainly engaged in furniture R & D, production and sales. It is comprised of four wholly-owned subsidiaries: Zhejiang SUNON Furniture Manufacturing Co., Ltd., Zhejiang SUNON Home Furniture Co., Ltd., Zhejiang SUNON Real Estates Co., Ltd., and Hong Kong SUNON Co., Ltd. as well as many branches all over China.

Zhejiang SUNON Group Co., Ltd. is the one of the largest office furniture enterprise in current China. Its office and production base cover more than 150,000 square meters. First class mechanized production equipment from Germany and Italy is adopted in full set. The registered capital is US$ 15.5 million. SUNON has over 430 talents in management, marketing and technology, accounting for over 20% of all employees. It has become the largest and most powerful office furniture enterprise in East China with leading R & D and production capacity and sales volume in domestic office furniture industry. The company has paid close attention to product quality management. It has passed ISO90012000 Quality Management System Certification and ISO140012004 Environmental Management System Certification. SUNON cooperates with many famous Italian design companies and furniture academies at home. Due to its insistence on original design, SUNON has developed many new products and won design gold medals in top international furniture exhibition in Asia for many times.

The company had its trademark SUNON registered in 1998. In 2003, it was selected as the Vice-president of Zhejiang Furniture Association and in 2004 as the Vice-President of China National Furniture Association. It won the titles such as Zhejiang Famous Product and Zhejiang Famous Trademarks in succession. In 2006, it became the first patent model enterprises in Zhejiang, technology center of Hangzhou city and office furniture designated purchase units of central authorities and governments. In March 2007, it reaped a laurel of China Famous Trademark.

SUNON insists on an operation concept of Work Is Leisure. It follows the design ideas of Humanization, Intelligence, Standardization, and Systematization. SUNON is dedicated to R & D of Green Environment-friendly Furniture. All its products are developed independently, most of which have obtained national patent. Many have won gold medals in various domestic furniture exhibitions.

7.6.3 Dalian Huafeng Furniture Co., Ltd.

Dalian Huafeng Furniture Co., Ltd. is a modern furniture manufacturer with 50 years’ history and high reputation in the world furniture industry. The company covers a total area of 6 square kilometers and a building area of 2 million square meters. It owns 20 factories and 12,000 employees with an output capacity of 4 million sets (pieces) of Huafeng furniture. The products vary in tens of thousands of types for living room, dining room, bedroom and office and so on. More than ten new products are developed every day. Huafeng products are marketed widely in China and Japan and USA. In 2007, Huafeng generated an output value of 2.5 billion yuan, sales revenue of 2.3 billion yuan, a foreign income of US$150 million and tax of 300 million yuan. Its sales revenue, tax and export volume ranked first in China’s furniture industry.

Dalian Huafeng Furniture Co., Ltd. ranks first in top 100 Chinese furniture enterprises and top 10 enterprises of the best profits. Huafeng won the title of The First Brand of Furniture Industry, Recommended Product by China Consumers’ Association and China Key Brand with Reliable Quality for Environment-friendly Products. Dalian Huafeng Furniture Co., Ltd. obtained ISO9001 Management System Certification in 2002. In 2004, Huafeng was regarded as China Famous Trademark by State Bureau of Trademark. In 2006, it was regarded as China Famous Product by General Administration of Quality Supervision, Inspection and Quarantine of China. Dalian Huafeng Furniture Co., Ltd. is accepted as the first brand in China’s furniture industry.

The company has won the titles of Dalian Major Taxpayer, Star Enterprise in Liaoning, Chinese Excellent Township Enterprise, and Unit of Credit on Abiding by Contract of the State in succession. The General Manager has reaped the laurels of Dalian Praiseworthy Township Entrepreneur, Liaoning Excellent Entrepreneur, China Township Entrepreneur, Model Worker in Zhuanghe City, Dalian City, Liaoning. In 2005 he became a Model Worker awarded by State Council.

7.7 Leather, Fur, Feather/Down, and Their Product Industry

7.7.1 Zhejiang Kasen Group

Founded in 1995, Zhejiang Kasen Group has developed to be a large group enterprise specialized in the research, production and sales of furniture leather, upholstered furniture and car leather. It is the incontrovertible leader in above arenas in China.

According to statistics by National Bureau of Statistics of China, China Leather Industry Association and China National Furniture Association, Kasen is the largest leather products manufacturer and upholstered furniture manufacturer in current China. Kasen process purchased materials such as rawhide and wet blue leather into finished leather and assembly upholstered furniture products. Kasen manufacture products bases on international clients' design, and promote Kasen with the clients' brands.

7.7.2 Jiangsu Senda Group Co., Ltd.

Founded in 1977, Jiangsu Senda Group has become the leading enterprise in China's shoe-making industry. In 1997, Senda was designated the first famous brand of domestic shoes industry. In 1998, Senda brand was successfully marketed in Italy. In 1999, it won the special award of State Model Quality-Benefit Enterprise. In May 2000, the General Secretary Jiang Zemin inspected Senda. In 2001, Senda took the lead to pass ISO2000 Quality System Certification. Five brands including Senda, Haorenyuan, Fanciulla, Renault, and Basto became National Free-inspection Products. In 2002, Senda was rewarded as one of the 16 most competitive Chinese enterprises on the way to world-famous brands by China Federation of Industrial Economics and China Promotion Committee Top Brand Strategy. It was also regarded as China Famous Product by General Administration of Quality Supervision, Inspection and Quarantine of China. In 2002, Senda paid tax of 81 million yuan, the first tax payer in three consecutive years in Yancheng city, Jiangsu. Senda integrates traditional culture in east and shoe-making craft in west and produces fair, comfortable, fashionable, and quality shoes which lead the domestic consumption trends and reap almost all the highest honors in China's shoe-making industry. All the economic indexes rank first in the same industry consecutively. Senda marches forward together with the world shoes industry by introducing top-ranking shoe-making production lines and advanced management experience from Italy, Britain, and Spain and so on. The new century opened a new era for Senda. It will make full use of the existing resources, and promote cultural and ideological progress and patriotism education by all Senda people of one mind. By the end of the tenth five years, Senda aims to produce 30 million pairs of shoes annually. In 2007, its group economic aggregate is targeted at 10 billion yuan. Senda will make great effort to be a leader of world shoe-making industry.

7.7.3 Kangnai Group

Established in 1980, Kangnai Group is one of the leading shoes manufactures in China, mainly involved in medium/high-grade leather shoes and concurrently engaged in leather goods, clothes, underwear, mould, commerce and trade and so on. It has more than 4000 employees by now. On an area of 160 mu, it is equipped with world-class shoe-making technology and facilities. The annual yield of high and medium grade leather shoes is up to 9 million pairs. In 2007, its sales revenue reached 2 billion yuan.

Kangnai Group Co., Ltd. is executive member of China National Light Industry Council, Vice-president Unit of China Leather Industry Association, President Unit of China Quality Management Association, Vice-director of China Shoemaking Committee, Chinese Excellent Enterprises (Top 200) of Good Quality and Benefits, Key Enterprises of Five First in Zhejiang, and Zhejiang leather manufacturer with the largest scale and the best economic profits. It has obtained ISO9002 Quality System and ISO14000 Environment Management System Certification. In 1999, Kangnai was regarded as China Famous Trademark by State Administration of Industry and Commerce. In 2001, Kangnai leather shoes are rewarded as the first national free-inspection products. Kangnai Group won the prize of Zhejiang Quality Management. Since 1993, Kangnai has successively won the honors of China Shoes-Industry Magnate, China Genuine Leather Mark Brand. It reaped the laurels of King of China Genuine Leather Shoes, China Genuine Leather Shoes Leader, China Famous Brand for 8 consecutive years. It has won more than 200 prizes so far including Special Award of Genuine Leather Mark Shoes Design. It has established over 1700 exclusive stores in China. Meanwhile, it has been widely sold in over 20 countries and regions in Europe, America, East Asia and Hong Kong. Since the January 2001, Kangnai exclusive stores were opened in large and medium cities in 7 countries such as Paris France, New York USA, Rome, Prato, Milan, Naples Italy, and Barcelona Spain. Kangnai is the first brand exclusive store in international market. At present, Kangnai Industrial Park with an area of 160 mu has been established and will become the shoe-making base at world's top.

7.8 Household Appliance Manufacturing Industry

7.8.1 Qingdao Haier Co., Ltd.

The predecessor of Qingdao Haier Co., Ltd. is Qingdao Refrigerator Factory. In 1993, it was restructured to be a share-holding enterprise and open for public offering. So far, it has set up a scale of over 3000 types of products in 10 series. Its export volume accounts for one third of China's export. Haier refrigerator has passed relevant certification in the USA, Germany and Canada and so on. Haier has become the only international enterprise with both International Quality Assurance System and Environmental Management System. In 1996, it won five star diamond prize which is the top honor of international star service. Qingdao Haier is involved in daily household appliance manufacturing industry with products including refrigerator, freezer, marine refrigerator, microwave oven, vacuum package machine, air conditioner, electromagnetic pipe, washing machine, water heater, electric fan, electric cooker and fittings, and communication apparatus.

7.8.2 Gree Electric Appliances Inc. of Zhuhai

In December 1989, Gree Electric Appliances Inc. came into being when Zhuhai Special Economic Zone Development General Corporation initiated reorganization of its subordinated companies including Air-condition Factory of Zhuhai Special Economic Zone Air-conditioning Engineering Co., Ltd., Plastics Industry Co., Ltd. and Guanying Trade Co., Ltd. in Zhuhai Special Economic Zone and established Zhuhai Heli Air-conditioning Engineering Co., Ltd. with certain shares from public offering. Gree Electric Appliances Inc. was approved twice in 1991 and 1992 for capital and stock increase to enlarge production scale. Upon the commissioning in December in 1996, its annual output capacity stood at 2.5 million air-conditionings and Gree became the largest air-conditioning production base. The inner management passed ISO9001 international certification. In July 1997, Gree air-conditioning won The 22^nd International Award for The Best Brand Name of 1997 by European Entrepreneurs' Association. In 2006, Gree reaped the laurels of China World Brand by General Administration of Quality Supervision, Inspection and Quarantine of China and China Promotion Committee Top Brand Strategy, China Quality Award by China Quality Association and Exemption from Export Inspection by General Administration of Quality Supervision, Inspection and Quarantine of China. In July 2007, Gree won the title of Advanced Entity for Chinese Quality Management by Ministry of Personnel, and General Administration of Quality Supervision, Inspection and Quarantine of China.

Gree Electric Appliances Inc. belongs to daily household appliance manufacturing industry. Its business scope includes importing relevant products like raw materials, equipment, instrument, fittings and their technology needed in the export, production and research process of its self-made products; processing imported materials and the three-processing and one compensation; manufacturing and marketing products such as household and commercial air-conditioning, household appliance, cleaning and sanitary ware, stereo equipment, public-address system, mould, plastic products; and installation of commercial air-conditioning.

7.8.3 Konka Group Co., Ltd.

Konka Group Co., Ltd. is located in Shenzhen City and founded in 1979. It's the first Sino-foreign joint venture electric enterprise in China operated by Shenzhen Overseas Chinese Township Holding Co., Ltd. (OCT) of Shenzhen Special Economic Zone and Hong Kong China Group Limited. In August 1991, it's reorganized to be a joint-stock group company by Chinese and foreign shares. On March 27^th 1992, Konka A and B shares got listed on Shenzhen Stock Exchange Market simultaneously. After over two decades' development, Konka has become a large electric information industrial group with a total asset value of 10 billion yuan, a net asset of 3 billion yuan and an annual turnover of more than 13 billion yuan. It's also a public shareholding enterprise listed both at home and abroad. The company owns 602 million shares in total and OCT is the first majority shareholder.

Konka Group belongs to household audiovisual equipment manufacturing industry. Its business scope mainly covers production and marketing of black and white television, color television, radio cassette, audio equipment, fax machine, interphone and other film, sounding and telecommunication products. It produces over 450 types of products in 14 series such as Caiba TV, Jinli audio equipment, Haoyuntong communication series. Konka is a fixed key manufacturer of color TV in China and an electric export magnate with an annual output capacity of 2 million sets. Its color TV export accounted for 1/5 of China's total export volume. Konka ranks first in China's Top Ten Enterprises with Export Foreign Exchange and Top Ten Profitable Enterprises. It has obtained international standard certification and took the lead to get the ISO9001 International Quality Assurance System Certificate in China's color TV industry. Konka now owns 11 million users at home and abroad.

7.8.4 Midea Group

Midea Group was founded in 1968 and formally entered the household appliance industry in 1980. It has up to 80,000 employees and owns over ten famous brands, namely Midea and Welling etc. Apart from its headquarter in Shunde, the Group has established production bases scattered in Guangzhou, Zhongshan, Wuhu, Wuhan, Huai'an, Kunming, Changsha, Hefei, Chongqing and Suzhou etc. A base in Pingyang, Vietnam has put into production. Midea Group industrial base covers a total area 7 million square meters. Possessing an extensive marketing network spreading all over China, the Group also has established 13 overseas branch subsidiaries in countries and areas such as U.S.A., England, Germany, Dubai, Japan, Hong Kong, Korea, Canada, Russia, Panama, France, Malaysia and Vietnam.

Midea Group belongs to daily household appliance manufacturing industry. Its business scope covers production, manufacturing and sales of household appliances, TV, communication equipment and their fittings, technology consultancy service, and management of homemade mould, equipment and hotel; electric products and daily articles sales; importing relevant products like raw materials, equipment, instrument, fittings and their technology needed in the export, production and research process of its self-made products by the Group and its members; processing imported materials and the three-processing and one compensation. Midea products mainly include series of small household appliances such as air-conditioning, electric fan, high-grade rice cooker, microwave oven, electric heater, as well as electric motor of air-conditioning and compressor.

7.9 Cultural, educational and sports goods industry

7.9.1 China First Pencil Co., Ltd

In 1935, China Standard Home Product Pencil Co., Ltd, the first omnipotent pencil enterprise of China, was established in Shanghai. The enterprise got new vitality for the hard works of staff and workers especially after liberation and was renamed China No.1 Pencil Factory.

After experiencing trails, hardships and flourishing over half of a century, China No.1 Pencil Factory was reformed into China First Pencil Co., Ltd, a joint-stock enterprise. Since then the company has become the first place of the same trade with the general advance of the excellent technology, high quality and wide varieties.

At present, China First Pencil Co., Ltd produces and sales stationeries of such as graphite pencil, color pencil and adjustable pencil marking with the brands of "Chunghwa" or "Great Wall", "Glamor" pencil machinery, "Good Student" eraser and "Alice" series of cosmetic pencil. The products with brands of "Chunghwa" and "Great Wall" are the most representative brands of the light industry of our country, are the first choice of working and learning goods for consumers.

In May 1992, with approval by The People's Government of Shanghai Municipality, China First Pencil Co., Ltd. was restructured into China First Pencil Joint-Stock Co., Ltd. of domestic and foreign investment, which started a new era for its blooming.

During the past half century, China First Pencil Joint-Stock Co., Ltd. has experienced hardships and frustrations as well as struggle and success. The founders of the company make concerted efforts with all employees. They have made great achievements with wisdom and painstaking effort. China First Pencil Co., Ltd. will lighten China's pencil industry forever.

7.9.2 Huamao Group

Huamao Group was founded in June 1971 and located in Ningbo, a famous cultural city in the economic center in the south of Yantze River Delta. During over 30 years' development, Huamao Group stayed grounded in education and has developed a comprehensive industrial group. It mainly focuses on producing teaching aid, basic instrument, and popular science products, as well as running private school and education theory service, meanwhile concurrently engaged in international trade, real estate, financial investment. It owns 30 wholly-owned and holding subsidiaries including Huamao Group Stock Co., Ltd., Ningbo Huamao Culture And Education Co., Ltd., Ningbo Huamao Foreign Languages School, American Huayuan Stock Co., Ltd. and research centers.

Huamao Group ranks first in the same grade for consecutive years in terms of business scale and overall economic results. It has won the honors of China Top 500 Industrial Enterprises, Top 10 Key Profitable Enterprises, Leading Enterprises of China Industrial Enterprises, Top 10 Competitive Cultural Products Manufacturers, The First of Top 10 Profitable Enterprises of Cultural Products Manufacturing Industry, Top 10 Effective Brands of China Private Education, AAA Enterprise of Quality, Service and Honor in China.

During the past 30 years, Huamao Group gradually developed in three jumps cause from education product to education practice and education ideas. Huamao adheres the corporate spirit of "faith is essential to survival; brand is essential to development; education is essential to business". It insists on the mission of "base on educating, support education as an honor" and forms a style of "pioneering, innovation, refinement, practicality".

Huamao education industry determined its strategic business. Huamao board of directors proposes a "3-3-1" development strategic goal: to set up 3 specials and create 3 projects. To make it more detailed, 3 specials refer to special corporate culture centered in "promoting economic benefit with social benefit", special industrial structure with education industry and business stimulating each other and special management system focusing on system over president; create the largest education product provider in China, create first rank Huamao Foreign Languages School in China and create an international education forum known at home and abroad. Huamao is aimed finally to build a brilliant Huamao of one hundred years' history.

7.9.3 Taishan Sports Industry Group

Taishan Sports Industry Group, founded in June 1978, has now developed into a great national corporation group with the core of Taishan Sports Industry Group Ltd. it is the largest sports facilities provider for Olympics in history. The group has more than 2300 employees at present. It covers an area of 336,000 m² and the registered capital is 160 million yuan, the real assets 500 million yuan, the intangible assets of Taishan brand up to 11.8 billion yuan. The main products of Taishan Sports include artificial turf, plastic racetrack, sports equipment, serials of special protection mat, roadside gym equipment, track and field equipment, wrestling mats, judo mats, taekwondo mats, trampoline, springboard, artistic gymnastic floor, boxing ring, free combat platform, weight lifting platform, barbell, Wushu field, species of sports balls and various of assistant training equipments.

As a cooperator of International Gymnastics Federation and a member of both China Track and Field Committee and Chinese Athletic Equipment League, the group has already passed the ISO9001 Certification of Quality Management System, ISO14001 Certification of Environmental Quality System and the GB/T28001 Certification of Occupational Health and Safety Management System successively. Many special products have already passed the certification of International Gymnastics Federation, Field & Track Association, International Judo Federation, International Wushu Federation, International Football Federation, The International Federation, world Taekwondo Federation, China Track and Field Association and China Football Association.

Taishan Sports Industry Group has been awarded the following titles as "China Famous Trademark", "China Top Brand" and "National Products Exemption from Quality Surveillance Inspection". The group is selected as Shandong Province Credible and Law-abiding Enterprise and it is an AAA Credit Unit whose line of credit reaches 300 million Yuan conferred by Agricultural Bank of China. It is the appointed manufacturer of Chinese Athletics Association, Chinese Football Association, Chinese Gymnastic Association, Chinese Skill Association, Chinese Wrestling Association, Chinese Boxing Association, Chinese Judo Association, Chinese Weighing Lifting Association, Chinese Taekwondo Association and Chinese Wushu Association. Artificial Turf and the new type martial art field which under the brand name of "Taishan" are both the single recommended and appointed products by Chinese Football Association and Chinese Wushu Association.

As the manufacturer and supplier of excellent equipment, Taishan Sports industry group has already occupied more the 90% of China contest sports market. On the tenth national games of 2005, more than 92% of the equipments of athletics kinds were from Taishan group. Equipments and artificial turf under the brand of "Taishan" are exported to various nations and such as North and South America, EU, Russia, countries and regions in Southeast Asia and Africa. Cooperating with J&F Company in Holland, Taishan group became one of the suppliers for Athens Olympics in 2004 and Beijing Olympics in 2008.

7.9.4 Guangzhou Pearl River Piano Group

Guangzhou Pearl River Piano Group is leading enterprise of China’s instrument, the largest piano manufacturer in the world, the only high-tech enterprise with national-class technology center in China’s instrument industry, China’s Outstanding Enterprise in Quality Management, National Culture Export Key Enterprise, one of 16 International Competitive Chinese Enterprises Marching to World Top Brands, and one of provincial government-supported 13 key enterprises to become world famous brand. In January 2006, the "Milestone Award" was conferred on the group by the International Music Products Association, the first time ever such an honor had been granted to a non-American musical instrument maker since the association was founded 104 years ago.In December 2007, Pearl River Piano Group won the honorable title Advanced Unit in China’s Light Industry.

Pearl River Piano Group has established a development course majored in piano, digital instrument and music education. At present, its annual output capacity reached 100.000 pianos. By early 2006, a total of one million pianos had been turned out by PRPG, which enabled it to be China's first piano builder with an output surpassing one million pianos.

By adopting the operating strategy of science and technology first, brand-driven and globalization, PRPG is dedicated on technology, quality and sales innovation. In the same industry in China, Pearl River Piano Group firstly established national-class enterprise technology center, provincial key project technology research center and large wood processing base. It took the lead to promote ISO9000 Quality Management System, ISO4000 Environment Management System and ISO10012:2003 Measurement Management System. It initially set up complete marketing network at domestic and overseas instrument market. It moved the first step to the world high-grade piano market. It developed successfully and promoted professional high-grade self-made piano brand Pearl River Kayserburg. It has upgraded the product and industry structure consistantly and improved its international competitiveness.

PRPG has so far more than 30 registered trademarks like Pearl River, Ritmüller, Hongmian and Xilinmen, of which Pearl River piano has been awarded the titles of Well-known Trademark in China, China Famous Brand Product, and Export Brand preferentially fostered by the Ministry of Commerce. Whereas, Ritmüller won the titles of Guangdong Famous Trademark, and Guangdong Famous Brand Product. Being listed as 2008-2009 national key new product, Pearl River Kayserburg high-grade piano brand has won priase from many piano masters such as Liu Shikun and Yin Chengzong. Pianos of the newly-developed Ritmüller Classic Series, Pearl River Master Series, Senior Series are highed regarded by consumers. The three brands of Pearl River, Ritmüller,and Kayserburg have taken up more than 20% of the domestic market share and marketed in more than 100 countries and regions all around the world and have led the country in terms of output, sales revenue, pre-tax profits, the rate of value-sustained and value-added (state-owned) assets and the contribution rate.

7.10 Arts & Crafts Products Manufacturing

7.10.1 China National Arts & Grafts (Group) Cooperation

Established in 1970s, China National Arts & Grafts (Group) Cooperation, is a leading enterprise in China Arts & Crafts industry with expeirence of scores and one of the 166 state-owned big enterprises managed by the State Asset Management Committee under the State Council. It is the only state-owned arts & crafts culture industry in China and the world largest comprehensive arts & crafts enterprise. China National Arts & Grafts (Group) Cooperation has made full use of state-owned capital as the main channel and industry leader in this area. As a member of board of director council of China Art & crafts Association, it plays comprehensive functions of industrial planning, guidance, international organ representative, export driver, and regulating and organizing the market and so on.

The Group has adopted a series of reform measures to conduct structure adjustment and operation reorganization with great effort. As a result, the Group headquater has become the investment management center, financial center and human resource center of the Group, while the second-class companies become the profitable centers of the Grup. At present, the Group has 19 wholly-owned, holding and jointly stock enterprises distributed in Beijing, Shanghai, Guangzhou, Henan, Jiangsu, Zhejiang, and Hebei etc. and branches in the USA and Hong Kong. China National Arts & crafts (Group) Cooperation is mainly engaged in R & D, service, trade with arts and crafts raw materials and products as the leading position, commercial real state development and property management etc. By the end of 2005, the total asset of the group reached 3.22 billion yuan; the sales turnover stood at RMB 8.469 billion; the total profit was RMB 176.62 million.

7.11 Other Sectors

7.11.1 China National Light Industry Corporation

China National Light Industry Corporation is a central government enterprise under State Property Management Commission of the State Council, reorganized from three central government enterprises including former China National Light Industry Corporation, China Haisum International Engineering Investment Academy, China Light Industrial Corporation for Foreign Economic & Technical Co-operation upon the approval by State Council at the end of 2008. The business scope of China National Light Industry Corporation covers: development and application of light industrial raw materials and products; light industry and relevant projects outsourcing, planning, consultancy, designing, construction, supervision, and technology service at home and abroad; R & D, manufacturing, marketing, and service of light equipment; international economic and labor cooperation, import & export, exhibition and industry investment. Headquatered in Beijing, it has established more than one hundred subsidiaries and branches in over 20 large and medium-sized cities in China such as Beijing, Shanghai, Tianjin, Chongqing, Guangzhou, Fuzhou, Jinan, Zhengzhou, Shenyang, Wuhan, Changsha, Xi’an, Chengdu, Nanning, Xiamen, Dalian, and Ningbo. It develops overseas business in over 20 countries and regions including Japan, Vietnam, Mali, Guyana, Algeria, and Morocco. China National Light Industry Corporation gathers the most advanced technology and the best talents in light industry. Professional technologists account for 2/3. It boasts the largest consultancy design company which took the lead to get listed, 4 national-class research institutes, and 24 research, inspection, standard and information centers. It has accomplished more than 3100 various national class research projects, consultancy, design and outsourcing of more than 10,000 large and medium light industry and relevant projects. It has won over 1700 national and above-provincial technology prizes and obtained over 110 authorized patents. China National Light Industry Corporation is base for sci-tech innovation and promotion in light industry especially in key paper-making, food, daily chemicals, leather and a leading enterprise in areas of light industry, science research, project service, light industry raw materials trade and foreign economic cooperation and so on.

7.11.2 China National Salt Industry Corporation

Established in 1950, China National Salt Industry Corporation is a large national enterprise under State Property Management Commission of the State Council. In 2006, it achieved its first step target in advance and formed a harmonious development situation of salt monopoly, salt-making chemical engineering and emerging business. Its asset size stood at over 26 billion yuan; salt output exceeded 12 million tons; salt chemical products exceeded 1.5 million tons. It became the first salt enterprise in Asia by providing salt directly to 410 million Chinese people, covering 36% of national area. The corporation owns 40 wholly-owned and holding subsidiaries distributed in 22 provinces and cities with more than 40,000 employees. It is on the list of China Top 500 Enterprises and China Top 500 Manufacturing Enterprises. Along with accelerating development, the corporation persists to put emphasis on the promotion of two cultural constructions. It has won honors of Central State Organ Models and Capital Civilized Unit for 12 consecutive years. In 2008, it won the title of National Advanced Unit for Spiritual Civilization Construction for the first time.

Chapter 8 Feature Towns of Light Industry in China

8.1 The Famous Classic Furniture Town in China-Sanxiang, Guangdong

Classic furniture industry is the competitive industry in Sanxiang. The town ranks first in antique furniture scale and American and European classical style color paint furniture scale in China furniture market. Sanxiang is well-known in the world as the largest distributing center of Ming & Qing antique furniture in China. The enterprise group there involving in American and European classical style color paint furniture enjoys the highest reputation and the strongest overall power in the industry all around the world.

Sanxiang antique furniture market is mainly located in Guhe Village and Qianlong Village. At present, specialized traditional culture market of scale include Huge Dragon Antique City, Zhongshan Huacai Antique City and Sanlian Ming & Qing Antique Furniture Market. Sanxiang antique market has a large capacity. The annual production value of antique furniture, archaized furniture and American and European classical style furniture exceeds RMB 3 billion. Thousands of merchants trade ten thousand of goods in a store area of more than 200,000 m². There are also more than 300 antique furniture factories and workshops. The market scale and the merchants are growing up continually. The furniture industry in Sanxiang is developing towards production model along with the enterprise scale gradually enlarged.

There are about 20 strong manufacturers of American and European classical style furniture in Sanxiang. With great production and design capacity, each of them can monthly export ten to hundreds cargo boxes of furniture, which ranks high and medium grade in the world. In spite of their strong competitiveness, they are not famous because they manufacture original furniture for international brands. However, they currently consider creating their own brands and exploring domestic market since foreign countries conduct anti-dumping policy and China has adjusted export policy. The town government decides to improve the occasion, making use of advantages and guide the industry to take a step.

In terms of supporting industrial development, Sanxiang government plans to reallocate resources. According to industry special project, four miles road section from Guhe to Qianlong will develop into a classical furniture mall, while the frontage shops will become specialized show market of classical furniture. Relevant preferential policies will be issued to attract classical furniture manufacturers and merchants to make Sanxiang a large and featured specialized market and production processing base. The town government aims at creating "The famous classic furniture town in China" and building up a higher platform and adds new vitality for industrial development. It is targeted to integrate, package and promote classical furniture industry, to promote Sanxiang as the famous classic furniture town in China and the make classical furniture industry a pillar industry for future Sanxiang.

8.2 China's Leather and Fur Garment City-Xinji

With a long history of over 400 years,