The Chinese version of this paper has been written by Tong
Pingya, then translated and edited into English by CCM and issued in CCM’s
latest monthly newsletter, Seed China News 1304. Tong Pingya, Researcher in the Chinese Academy
of Agricultural Sciences, has been involved in the scientific study on corn and
agricultural development strategy for a long time. With his great experience,
Mr. Tong acts as a senior consultant for both government departments and
non-government organizations.
With its huge market, China is the
second largest consumer of crop seeds, attracting great attention from
multinational seed companies. The Chinese seed market has a great potential for
commercial interests. Indeed, for multinational seed companies, China is not
only a large consumer market, but also an unmatched production base for crop
seeds. Entering the Chinese market and developing along with the development of
the Chinese seed industry becomes an important strategy for multinational seed
companies to achieve a global victory in the intense competition of seed
market.
Considering the disparity of culture
and values between China and
the West, multinational seed companies know well that they have to adopt a
localization strategy to settle, develop and expand in China ,
especially workforce localization. Following the saying "When in Rome, as
do as the Romans do", they try to tap into Chinese economy and society as
soon as possible in terms of talent training and reserve, from germplasm
resources collection to variety breeding, corporate culture to the public
welfare, technology transfer from home to R&D in China, etc. With a solid
base for the localization in China ,
multinational seed companies have a clear path to achieve a rapid expansion.
There are generally four major
strategies for multinational seed companies to achieve their localization in China .
The first is setting up joint
ventures. Multinational seed companies clearly understand that they can't set
up a company and dominate the Chinese market by themselves in a short time.
Nevertheless, they can do so by cooperating with large seed companies in China . For
example, in the 1990s, Monsanto respectively set up joint ventures with local
seed companies in Hebei Province and Anhui
Province , successfully introducing its
Bt cotton variety in China .
Some other multinational enterprises like DuPont, Syngenta and KWS followed
this kind of strategy and successfully tapped into the Chinese seed market.
The second is setting up R&D
bases. Aiming to strengthen technology export and market-oriented R&D,
multinational seed companies have built a variety of R&D institutes in China . For
example, in Oct. 2008, Syngenta established a biotechnology R&D center in Beijing , China 's
first agricultural biotechnology research institution set up by foreign
capital. Then, in Oct. 2012, Syngenta jointed the Hubei Academy of Agricultural
Sciences to set up an innovation center for natural products in Wuhan City , Hubei
Province. Besides, in 2009, Monsanto established a R&D company named
Monsanto Biotechnology Research (Beijing )
Co., Ltd. The same year, Monsanto started conducting a collaborative research
with the Chinese Academy of Agricultural Sciences in
various ways by signing a Memorandum of Understanding with the latter.
The third comes with the employment
of senior consultants. This is another crucial step for multinational
enterprises to achieve their localization in China though it demands some
preparatory work. For example, some multinational seed companies or
international consulting institutes provided a financial aid for a number of
scientific researchers who went abroad for study or training in the 1980s and
1990s. After returning China ,
most of these researchers occupied a position in research institutes,
universities, associations or even government agencies. Many of them became
senior consultants in multinational seed companies, including those who were
promoted as academicians or important officials influential in certain field.
With the combination of their senior consultants and capital strength,
multinational seed companies are likely to influence the Chinese political,
economic and scientific decision-making, helping to accelerate their
localization in China .
Training professionals is another
far-sighted and prepared strategy for multinational seed companies to
completely tap into the Chinese market. Since 2000, DuPont has established
scholarships in China 's key
universities such as Tsinghua University , Peking
University , China
Agricultural University, etc., with a total annual grant of USD100,000 divided
among 2,000 students. In Oct. 2010, with the help of China 's
Ministry of Agriculture, Monsanto launched the Monsanto Scholarship Program in
the Chinese Academy
of Agricultural Sciences, China
Agricultural University , Shandong
Agricultural University, etc. Monsanto tends to award the outstanding
undergraduate and graduated students determined to engage in R&D or
industry in agriculture and life sciences' fields. It is worth mentioning that
some masters and PhD hold key positions in research institutes and seed
companies that had granted them, like Monsanto.
The disorder and underdevelopment of
the Chinese seed industry means a great business opportunity for multinational
seed companies. Their localization strategy paves the way to their sole
proprietorship in the future. Currently, multinational seed companies are still
prohibited for sole proprietorship or operation holding in China , but
their acceptance is only a matter a time after their localization in the
Chinese market. After all, being confident with the Chinese seed market, policy
and law, multinational seed companies will transfer their joint ventures into
sole proprietorship rather than withdraw their investment,
In the operating strategy,
multinational seed companies comply with the Law of Global Chain, namely
"customers' following" and "global key accounts". They tend
to study seriously the local seed market, sales network, management
localization and appropriate partners before expanding their business chains
into a country. They won't hesitate to tap into a market when they believe that
there is an opportunity with desirable customers or appropriate partners.
Therefore, the Chinese seed market is not only facing world-class leading
multinational seed companies, but also the huge and effective international
industrial chain.
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in 2012
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in 2012
Shandong Denghai performance sees
growth in 2012
Second batch of seed enterprises
gain operation license nationwide
Multinational seed companies achieve
localization in China
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vigorous development
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to become bigger
Large grain growers: thriving but in
straits
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subjective gauge rather than objective standard
Seed
China News, a monthly publication issued by CCM at the end of every
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