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Why New China is changing the way global hospitality works, by Zhang Shangzhi and David Baverez

Zhang Shangzhi, from the China Lodging Group board, and David Baverez, a French business angel and editorialist settled in Hong Kong, shared their perspectives about China and its future influence on worldwide hospitality. Focus on the main topics discussed during the 21st edition of the Global Lodging Forum.

  • "This year, the target for China's economic growth is 6.5%. Last year, our target was between 6.5 and 7%, we have thus lowered our objectives. But if we reach 6.5%, it's already a good rate." Zhang Shangzhi, Advisory Board Member, China Lodging Group

  • "There is a 'new China' developing really quickly that makes +10, +20, +30, +40%, and whose profits are reinvested to restructure 'old China', where, conversely, some of its activities are collapsing. The good news for tourism is that the richest 10% of the population - 100 to 150 million Chinese people who are exposed to this new China - is growing by 15 to 20% a year." David Baverez, Business Angel & editorialist

  • "If we take a look at the statistics, there is dramatic growth within the tourism sector in China, whether it is travel, hospitality or any other business related to this field." Zhang Shangzhi, Advisory Board Member, China Lodging Group

  • "The State sets a development program for every sector, but it used to be more mandatory. Now, it's more of an indication. There are two initiatives: the central power's and the territorial authorities'. Provinces and regions play an important role in national economic development." Zhang Shangzhi, Advisory Board Member, China Lodging Group 

  • "The genius of China is that there is a new, privately-owned China, as well as an old, publicly-owned China, that is under pressure from the private sector. For Chinese people, privatization is about transferring income from the public sector to the private one; they favor competition and let the private sector attack the public one, which forces it to modernize itself." David Baverez, Business Angel & editorialist

  • "The Chinese economic system is liberal, although control from the state and from the party remains, and that should not be neglected." Zhang Shangzhi, Advisory Board Member, China Lodging Group

    • "Nowadays we witness the new, private and competitive China grappling with old China. In the tourism sector it means that public groups that we managed to reform turn extremely competitive and will become national, even international champions. And there is also the new China which will revolutionize the hospitality industry. Ctrip, a new OTA, is for instance reinventing the travel agency profession." David Baverez, Business Angel & editorialist

    • "Through a private partnership in China [with Huazhu / China Lodging Group], AccorHotels has found a development path that is far more efficient than if the group was going there alone. China is a country that has been opening up for 30 years already; there are lots of Chinese people who have been trained for hospitality jobs." Zhang Shangzhi, Advisory Board Member, China Lodging Group

    • "In China, we must reason conversely to our traditional and Western thinking. Demand is everywhere in China since money is not in the hands of the old ones the way it is here, but in the hands of the young ones, which is not the case for us. So the big issue with investing is not to investigate demand, as we do here, but supply; and we must find a constraint, an entry barrier for the supply. The risk is entering into a market that scores +10 or +6.5% while the supply actually makes +20, +30, +40%. This is how we end up with 50 million empty apartments in China." David Baverez, Business Angel & editorialist

    • "For 2 or 3 months, there has been strict control over capital outflows and acquisition projects for Chinese companies settled abroad. In principle there shouldn't be any black list, anyone can do it, although control is increasingly severe. Approval from the central exchange control is necessary." Zhang Shangzhi, Advisory Board Member, China Lodging Group

    • "Western investment bankers need to stop systematically using Chinese societies to up the ante. The Chinese government does not want to prevent Chinese acquisitions abroad from happening; it wants to stop outrageously priced acquisitions from happening based on the fact that the buyers are Chinese." David Baverez, Business Angel & editorialist

    • "There are a few sectors that are considered non-priority in China, including hospitality, tourism, real estate and cinema. To this day, energy and technology have priority." Zhang Shangzhi, Advisory Board Member, China Lodging Group

    • "I think that the Chinese will contribute to revolutionizing the hospitality industry. Their behavior is very different since they are young, and thus, super-connected. For instance, when they visit Paris, they would need one full day per luxury hotel to take selfies in every one of them and show their relatives that they know Paris like the backs of their hands. The secret lies in automating a service while maintaining a human touch." David Baverez, Business Angel & editorialist

    • "Chinese tourism is evolving. There are more and more Chinese willing to get to know a country, a place in a deeper, more culturalyl-focused way." Zhang Shangzhi, Advisory Board Member, China Lodging Group

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