Taking first step of foreign investment: Chia Tai Conti

By Zhang Hongpei Source:Global Times Published: 2018/2/12 21:08:40

A view of the original site of Chia Tai Conti Co on the Shennan Road in 1987 Photo: Courtesy of Chia Tai Conti

The headquarters of Tencent now stands on the site of the original factory of Chia Tai Conti Photo: Chen Qingqing/GT

Located in the Shekou Industrial Zone of Shenzhen, where property and financial services companies are gathered, a manufacturing company occupying 23,064 square meters stands out. That's not only because of the space it takes at such an expensive site but also because of its historic significance - the first solely foreign-funded company in the Chinese mainland.

Chia Tai Conti Co was established by Thailand's Chia Tai Group and US Continental Grain Co in 1981 as a 50-50 joint venture, a structure that remains the same today. On the company's certificate of approval, it shows the number "0001," being the very first.

Sensing opportunities at the onset of China's nascent reform and opening-up and driven by a sense of patriotism, Dhanin Chearavanont, the long-serving chairman of Chia Tai Group, also the fourth son of Xie Yichu, founder of the Thailand-based transnational group, known as Charoen Pokphand Group outside China, expressed to his father his willingness to invest in China to his father and he promoted the foundation of Chia Tai Conti Co.

The birth of Chia Tai Conti was also the beginning of China's feed industry, which was starting from nothing, Wu Long, president of Chia Tai Conti Group, told the Global Times on Wednesday.

"Before Chia Tai Conti's entry, China's traditional concept of feed for poultry, pigs and other farm animals was such things as bran and slops," Wu said.

He noted the feed industry is an emerging one with dozens of kinds of raw materials to be processed scientifically and manufactured automatically, adding that animal food is actually much more complicated to produce than food for human beings.

"Laying the initial foundation for China's feed and husbandry industry, Chia Tai Conti brought in modernized manufacturing technology and equipment as well as advanced management concepts, greatly boosting the local economy and the industry's development in China," Wu noted.

Xue Zengyi, vice chairman of Chia Tai Group Agro-Industry & Food Business in China, told the Global Times on Wednesday that over the past four decades, Chia Tai's business in China has grown in line with the country's economic development since the reform and opening-up policy began.

However, it was not easy to persuade overseas talent or experts from Hong Kong to stay and contribute in the first foreign company at that time, as living standards in Shenzhen were far worse than in Hong Kong or Bangkok, Xue noted.

According to the recollection of Chen Jianli, administration manager of Chia Tai Conti who has worked at the company for 37 years, foreign and local employees lived together in a shabby dormitory with more than 20 people huddling on one big bed.

"The original establishment site of Chia Tai Conti is now occupied by skyscrapers including the headquarters of Tencent Holdings. At that time, the company offered only one bucket of bath water brought from the Shekou port … I still remember when the lunch box was opened, a swarm of flies rushed out," Chen recounted. And looking at today's Shenzhen, "you could never have imagined the super-fast development speed," Xue said.

Chia Tai Group has not only been a witness but also a beneficiary. For example, most of Chia Tai's food production machines are domestically manufactured now, saving the trouble of importing such items, he said.

In terms of the foreign investment environment, Xue said that foreign companies should realize that China's investment policies are always changing.

"Preferential policies for foreign companies are intended for the early phase of their existence and are only temporary," he added. "Foreign companies should take a long-term view and keep pace with economic changes instead of only requesting preferential policies from the government."


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