Ｔｉａｎｊｉｎ’ｓ Ｓｐａｎｉｓｈ Ｍａｅｓｔｒｏ

ＬＡＮＣＥ　ＭＡＵＧＨＡＮ

IT was a good year to be Spanish in China. In 2007 Beijing was treated to Flamenco, Picassos and the Instituto Cervantes Spanish cultural center. Yet the “Year of Spain” in China was as much about business as culture. After losing its vaunted leather shoe sector to Chinese competition, Spain has more urgently sought a larger share of the Chinese market for its exports.

Though Spain was a trading power in Asia before most of its European counterparts, sailing its galleys to the Philippines after conquering Latin America, it hasnt had the spectacular modern corporate success in China that its EU counterparts Germany and Finland have enjoyed. The most notable Spanish commercial presence has perhaps been food company Cola Cao, whose cheerful sweet milk products have been a hit with Chinese children. The companys former chief financial officer (CFO) in China, Juan Silvestre, is today guiding smaller Spanish firms into the PRC. A svelte 44-year-old with an accountants feel for figures and mileage cards from half a dozen airlines in his hip pocket, Silvestre left a comfortable job at Cola Cao in 2004 to set up BoxInves, an investment consultancy in Tianjin, an industrial conurbation one hours drive east of Beijing.

Born on Spains sunny southern coast, Silvestre set up BoxInves after four years in China, “because I had know-ledge and it was the right time to be here.” Years scrutinizing and guiding Cola Caos success on the Chinese market – the companys milk powder products remain top sellers – gave Silvestre a knowledge of the system which he sells to a mostly Spanish clientele seeking to invest in China. From his base in Magnetic Plaza, a gray glass tower of offices and Western-style retail stores, Silvestre advises clients on locations, human resources and logistics strategies.

Silvestre could have wound up in Bogota or Buenas Aires – both were options in a career with Cola Cao – but political and economic instability in the region quashed his plans to conquer the Latin American corporate scene. In China he saw the future. “I analyzed the political situation and peoples working style. They are people with a focus on the basic things like family values. But they dont have an education in running a business professionally.”

The bulk of BoxInves work comes from “making localization happen” – finding manufacturing and joint venture partners and the right locations for a clientele of mostly small and medium-sized Spanish companies. Silvestres proudest moment so far has been helping Spanish wind turbine specialist Gamesa establish three factories in Tianjin, “guiding them through pitfalls with partners and government agencies.”

Finding the right business associate is crucial for success here. “They [Gamesa] were looking for a partner for a very strategic component, but that partner had no knowledge about manufacturing the product. If you become involved with a local concern that has no knowledge of your business you have serious problems.” Tapping Chinas demand for green energy, Gamesa has now built its largest manufacturing plant in Tianjin, something that couldnt have happened, says Silvestre, “if they had gotten into that mess.”

Chinas future energy needs, and Spains ability to supply them, also figured in Silvestres decision to open BoxInves. Supportive government policies mean Spain does better than most EU counterparts in the generation of renewable energy. Now Spanish energy companies are seeking a way into China so they can sell energy efficiency technology already tested in Spain. The comparatively small size of Spanish firms means many turn to Silvestre.

Lately Silvestre has been spending a lot of time talking with Chinas policy-making National Development Research Council (NDRC) about how China can make better use of the Clean Development Mechanism, a system set out in the Kyoto Protocol to encourage Western polluters to offset their emissions by investing in environmental projects in developing countries. Spanish firms want to sell their technology through the scheme, yet the smaller size of Spanish enterprises makes it hard to compete with multinational conglomerates for the Chinese governments ear. While the NDRC has gradually become more receptive, Silvestre says it still “prefers to talk with large companies.”

The price of pollution is increasingly making local officials listen, however. A recent survey of European businesses in Tianjin suggests worsening traffic congestion and air quality are concerns for EU investors in the city. “The Tianjin local government had hitherto been solely focused on how to develop business without considering the environment, but every time we talk I say ‘you must respect the environment if you want foreign investors to stay a long time. We have repeated that so many times they have changed their view.”

Silvestre was also a key backroom strategist in Airbuss decision to build a jet assembly factory in Tianjin. Chinas government was keen to have the plant to fuel the growth of Tianjin and the surrounding Binhai region, a priority to balance explosive development in the southerly Pearl River and the Yangtze Delta surrounding Shanghai. “Getting the plant into Binhai is a boost for the districts growth because of the smaller businesses which will be enticed in,” says Silvestre, who recalls a season of late night negotiations in smoky rooms and toasts over elaborate banquets to get the deals finalized.

The Year of Spain is over but business between the European nation and China is growing. Silvestre sees a trickle of Chinese companies investing in Spain, and the Spanish tourist sector is seen as a model by Chinas tourism executives. “They are going to Spain to learn how to train and run a professional industry.” Investment in other sectors remains low key, and BoxInves hasnt yet seen outbound Chinese clients. “They prefer to deal with Chinese consultancies in Spain or with Spanish corporations like Telefonica who they supply here.”

Away from the office, Silvestre is regarded as one of Tianjins most eligible bachelors, but he is yet to find Mrs Right. Despite this, he has ruled out going back to Spain. “Id be more comfortable with the quality of life there, but here is where I find the real challenges.”