How to Development Business in China

This paper will introduce how a international firm entry China market and achieve fast growth profitably. We didn't image to enter China market suffered much more than the company estimated. They initially predicted that the market would be relatively easy entry, with a strong services business compensating for a sharp increase in new power plant investment and construction. Instead, the overall power market growth for Automation in China is just average 10 percent between 2007 and 2009. Even with an increase approaching 15 percent for metso, most marketing and sales activities are pretty close to or a bit above what competitors did in 2008-2010, at least in the 600MW power plant process automation systems business. The market for power plant is at a point where suppliers serving the installed base are probably more stable than those that must rely more heavily on project business. Suppliers ate through a huge chunk of their project backlog while new projects were postponed or canceled. After 2011, growth will accelerate, but since traditional marketing and sales activities will not make Metso to reduce the market share distance with those major competitors like Emerson, ABB, Siemens etc., in a short period, it's better if establish joint venture with one of 5 IPPs or one of 3 EPCs so that our market share will be changed very markedly right away.

The power plant automation market continues its recovery in the first quarter of 2010

and beyond. Almost all leading manufacturing purchasing manager indices (PMIs) show expansion and key indicators, such as industrial production and capacity utilization, continue to edge up. With serious study Metso believe they will approach the double levels of growth than their major competitors if JV success established.

Market Analysis

Advantage of JV

(1) The cooperation coincide with China related product policy and planning

(2) National industrial policy encourage develop large power plant integrated designing and automation technology developing

(3) Develop major project automation system is a key point of equipment manufacturing industry promotion

(4) Match national policy of "The planning of adjustment and revitalization for electronic information industry"

(5) Match national "The eleventh five-year plan of information technology and medium and long term plan summary by 2020"

(6) Have strong technological advantage and sustainable technological innovation

(7) Have technical basis, engineering experience and industry resources advantage

(8) Have good