June 23, 2021. Wuhan, China – Innovative business models and new ideas will trump investment and resources in generating economic growth, an audience at the CEIBS 2021 Wuhan Innovation Forum heard today.

The event, which attracted more than 400 participants, focused on corporate transformation and economic development in Wuhan and Hubei province.

In her welcome address, CEIBS Assistant President Yvonne Li noted Wuhan’s extraordinary post-pandemic rebirth and place as one of the top ten cities in China in terms of economic output in 2020.

Wuhan’s strategic location in the middle reaches of the Yangtze River, she added, makes it “an important pillar for China’s growth” and bodes well for the city’s continued development in the coming years.

During his keynote speech, CEIBS Honorary Professor Xu Xiaonian pointed out that following years of China’s rapid development, the model of relying solely on investment to drive economic growth has come to an end.

At the same time, he added, the market has gradually shifted from an economy of scarcity to an economy of surplus; and, as such, from one which favours sellers to one which favours buyers.

“In the post-industrial era, the core competitiveness of an enterprise is not the integration of resources, but the ability to innovate,” Prof. Xu said.

In order to address these changes, he went on, enterprises will need to either create their own markets with new products and technologies or on expand on existing markets by creatively use existing technologies to solve the pain points of their customers.

Faced with intense competition, companies which fail to differentiate themselves and adopt an innovation-driven business model will be rapidly eliminated from the market, he added.

During a subsequent roundtable session, Prof. Xu discussed a range of topics from corporate innovation to carbon neutrality with local business leaders and CEIBS alumni. Amongst other things, the panel agreed that enterprises should be more proactive in preparing for strategic transformation and upgrading.

The CEIBS 2021 Wuhan Innovation Forum was co-organised by CEIBS and the Hubei chapter of the CEIBS Alumni Association.

The Hubei chapter has nearly 300 members, many of whom have made major contributions to promoting the region’s economic prosperity and social development.

Today’s event was the sixth stop on this year’s forum series. The next, and final, stop on the CEIBS 2021 Innovation Forum Series will take place in Zhuhai, in southern China.

June 22, 2021. Shanghai/Accra – What is the African Continental Free Trade Area (AfCFTA)? When and how will it come into effect? And what opportunities is it creating for businesses in Africa and beyond?

CEIBS Africa, together with our Global EMBA programme, recently hosted an exclusive webinar for students and alumni on the topic of intra-Africa trade featuring AfCFTA Policy Network Executive Director Louis Yaw Afful.

The African Continental Free Trade Area (AfCFTA) is an intra-African trading agreement that has been designed as a vehicle to liberalise the continent’s trading market and simplify trade participation both within Africa and beyond. Despite being founded in 2018, trading under its rules only started at the beginning of 2021.

While all 54 African member states have signed AfCFTA, not all are currently active participants within it. For one, many states still require their parliaments to ratify their inclusion before they can complete their membership in the trade agreement.

According to Mr. Afful, the situation is emblematic of the uneven pace of progress regarding trade amongst African states. Furthermore, like many agreements of this magnitude, AfCFTA is still in flux:

“There are three main phases of the agreement. Phase 1 covered trade in goods, trade in services and the settlement of disputes and free movement of people. This phase has been fully negotiated,” Mr. Afful says.

With regards to Phases 2 and 3, AfCFTA will strengthen and more clearly define its trading rules through continued dialogue between member states.

“Negotiations for Phase 2 are ongoing, and they cover intellectual property rights, investment, and competition policy,” Mr. Afful adds.

Once fully established, the free trade area will encompass an integrated market of about 1.2 billion people, with an estimated revenue of $2-4.3 trillion USD.

“Phase 3 focuses on e-commerce. However, since the pandemic has painfully demonstrated how many barriers there are to cross-border trade in Africa, e-commerce has taken on even greater importance, so this phase is being fast-tracked for negotiation alongside Phase 2,” he says.

Building bridges between African nations, and beyond

AfCFTA aims to liberalise (remove) tariffs from 90% of the products and services being traded within the free trade area over the course of the next five to fifteen years, while ultimately working towards a zero-tariff trading environment for all member states.

This process will not be a linear one for all member states, however. Since national economies within Africa are vastly different, members have been split into three categories:

Developed economies: Including Ghana, South Africa and Kenya. Economies belonging to this group will liberalise tariffs within a period of five years.

Developing economies: Those liberalising over a period of about 10 years.

“The Group of Six”: The least developed economies in Africa (including Niger and Malawi), and those who would not adequately bear the economic shock of tariff liberalisation. Under AfCFTA, these six economies will gradually liberalise over the course of 10-15 years, but under a system of credit support that will extend for a period of two years after all related tariffs are removed.

The wider aim behind this liberalisation of cross-border trade within Africa is to level the playing field and encourage the participation of all manner of businesses and individuals.

“The whole idea of trying to liberalise trade is to make sure that everybody gets employment, that income brackets are pulled above the poverty line, that women and the youth population engage in trade, and that African economies can move away from an agrarian to a manufacturing basis,” Mr. Afful explains.

By removing barriers, AfCFTA hopes not only to strengthen trade between member states, but also encourage the development of the entire continent’s trade infrastructure – from trade facilitation and financing to market segmentation and logistics – while increasing trade volumes overall.

“Boosting intra-African trade, this is a central pillar of the African continental free trade strategy, as it will lead to the overall development and evolution of the continent’s mechanisms to trade with itself,” Mr. Afful says.

Enlisting the support of multilateral organisations

One organisation which is helping bring AfCFTA’s vision to life is the African Export-Import Bank (aka Afreximbank), an institution created under the auspices of the African Development Bank to finance and promote intra- and extra-African trade.

“To facilitate African trade at this level, we need banks that are going to take it upon themselves to support the infrastructure development activities of member states. Afreximbank should be commended for being proactive in this regard, and hopefully others will follow its example,” Mr. Afful says.

A key facet of Afreximbank’s role is to ensure that trades can be agreed on and carried out smoothly on a rapidly rising scale. At the same time, it is also helping to close Africa’s $70-100 billion (USD) infrastructure financing gap by providing capital for large-scale development projects.

“Only by developing sufficient infrastructure and making traders feel comfortable in their trades can we unlock Africa’s true trade potential,” Mr. Afful says.

Afreximbank is assisting in other ways, too.

For example, every year, large quantities of African-produced goods made to export to the EU and other key markets are rejected or fined due to non-compliance with various trade and customs regulations. Through Afreximbank-financed African Quality Assurance Centres (AQACs), traders who are penalised with non-compliance fines and technical barriers are given support to make their goods compliant. From providing regulation-specific testing, to compliance training and advice, these AQACs are an essential component in the wider effort to boost the consistency of export trade beyond Africa.

A crucial phase in AfCFTA’s development

AfCFTA has now entered a crucial phase in its development. In addition to ironing out various trading rules and agreement clauses, it is also working to tackle fraud and develop provisions for promoting women in trade, amongst other initiatives. Ultimately, its proponents envision AfCFTA as an umbrella framework and trade regulator, as Africa moves towards a time when all trade on the continent will come under a single customs union.

The Africa Continental Free Trade Area and Opportunities for Businesses in Africa webinar was moderated by CEIBS Africa Executive Director and Professor of Management Practice in Accounting Mathew Tsamenyi.

The event is one of a series of webinars that the CEIBS Africa will continue to host throughout 2021. The series is part of an initiative to provide an online platform for executives from all industries and sectors to come together and discuss the most pressing issues and opportunities related to intra-African trade, as well as Africa’s growing confidence as a global exporter.

June 12, 2021. Shanghai – Having a vision, possessing endurance and demonstrating a willingness to take on challenges are amongst the keys to successful leadership a CEIBS Executive Forum audience learned today.

“If you want to be successful, you have to challenge yourself,” Guangxi LiuGong Machinery Chairman Mr. Zeng Guang’an told a packed auditorium at CEIBS Shanghai campus during the event.

LiuGong is a Chinese state-owned construction equipment manufacturer and the largest producer of wheel loaders in the world. Mr. Zeng began his career at LiuGong as an engineer in 1985 and was appointed Chairman in 2013.

“You must also have the vision for yourself, for your employees and for your team. Otherwise you will not know where you are going,” Mr. Zeng continued.

The company began building a global presence in 2002, and now employs more than 14,000 employees. Its equipment is used in 170 countries and regions around the world.

“The challenge is not expanding the market, but how we enhance the capabilities of management. This is the biggest challenge for LiuGong and for myself – to get good people, to train people and to improve the management of the company,” Mr. Zeng explained.

LiuGong was the first in its industry in China to develop an overseas strategy. According to Mr. Zeng, if you really want to have a good strategy, you must ask three important questions.

“First, what is the organisation supporting your strategy? Second, what kind of people are you putting in your organisation to support your strategy? Third, what kind of processes do you build for your people and your organisation?” he said.

For LiuGong, answering these questions has meant major organisational changes, setting up overseas functions, developing new capabilities, and building an international leadership team.

“You need global resources, including people,” Mr. Zeng affirmed.

Despite being a latecomer to the global construction machinery business, LiuGong has grown into one of the largest players in the industry over the past decade. Nevertheless, Mr. Zeng said the current VUCA environment, emerging technologies and shifts in the global geopolitical landscape represent major challenges ahead.

“Everything is changeable and unclear. All of this will affect the new leadership. You can’t see the future. So this is the challenge for our industry,” he said.

Added to this, Mr. Zeng told the audience that shifting values also present challenges for many established organisations.

“For the younger generation, they have a totally different values for the future, for their life, for their job, for their companies. So, how do you handle that?” he asked.

In addition, as Mr. Zeng explained, construction equipment manufacturing is a very tough business and, in order to succeed, you need people who possess what he calls “strategy endurance.”

“You have a strategy, a big picture, a nice dream, but you must be patient. You must have the capability to suffer and to endure difficulties and loss,” he said.

Ultimately, Mr. Zeng said that it takes experience to learn how to lead a global organisation and that real leaders are those who seek out and develop new and different opinions.

“If other people say something is OK and you say it is OK, you’re not a leader, you’re a follower. If people say something is impossible and you say it is possible, that’s a leader,” he said.