Icbccss&p500usd Discussion Threads

[edwards45] 12/1/2005 20:32

Aim listed RC Group(Holdings)Ltd (RCG) closed 7p higher, or up almost 54%, to 20p as the Hong Kong-based international developer and distributor of biometric products said it sees both sales and post-tax profit for the year to December 2004 "substantially" above its budget.

The company said business has continued to grow since its admission to Aim in July 2004, with a number of new contracts signed and strategic investments sealed.

Sinopec and Chinese Tobacco already using their technology
website

[grupo] 12/1/2005 18:02

4 of 6
A Malaysian worker is busy making lion heads for the Chinese New Year festivities that will start on 9 February.

[grupo guitarlumber] 07/1/2005 09:40

CHINA: RETAIL SALES INCREASED 13% IN 2004
China's retail sales rose 13% to 5.3trn yuan (E482.82bn) in 2004, the official Xinhua news agency reported, citing data from the Ministry of Commerce. Retail sales are expected to increase more than 10% in 2005, the report said. The rise represents a pickup from the 9.1% growth in retail sales in 2003, despite the first interest-rate increase by China's central bank in nine years in late October and the government's tightening measures that were stepped up in April. A Ministry of Commerce spokesman said that while the latest investment data suggest 2004 will be down from the previous year, the two figures may not be directly comparable, as China adopted a new calculation method in 2004.

[grupo guitarlumber] 06/1/2005 18:31

China's champions

The struggle of the champions

Jan 6th 2005










China wants to build world-class companies. Can it succeed?

THE floor of the darkened room is strewn with mattresses and scattered shoes. Sleeping bodies stir under duvets. Nearby, others nap at their desks, heads on arms. It is a Friday afternoon at the headquarters of Huawei-one of China's most dynamic and ambitious companies and one of a handful, alongside Haier in white goods, Lenovo in personal computers, TCL in televisions and steelmaker Baosteel, whose names are starting to be heard around the world.

The scene is reminiscent of a place on the other side of the globe: Silicon Valley at its most breathless, when programmers on the go "24/7" collapsed with exhaustion at their workstations. Huawei's astonishing campus on the outskirts of the southern city of Shenzhen is straight out of the technology bubble too, with four football fields, swimming pools, apartments for 3,000 families and a fantastical Disney-esque research centre with doric pillars and marbled interior.





The hubris at Huawei, which makes telecoms equipment like routers and switches, is also vintage 1990s America. Hu Yong, a vice-president, is proud of being in more than 70 countries, that over 3,000 of the group's 24,000 employees are overseas nationals and that two-fifths of its more than $5 billion revenues in 2004 will be made outside China. "Are we a global player? Fortune magazine says that is when international sales exceed 20% of your total," he says. "So the answer is yes."

Huawei is also starting to impress abroad. François Paulus, head of the network division at Neuf Telecom, a French firm that uses Huawei's optical transmission equipment to sell voice, data and video services, says: "When we first saw Huawei we couldn't believe a Chinese company could match an occidental one-we were wrong. Their technology was better and they were 30% cheaper." Nigel Pitcher at Fibernet, a British telecoms firm that uses Huawei's ethernet equipment, calls the company "world class". Huawei is spending millions of dollars building a global brand-its print ads lyrically recount how its engineers toiled in the Algerian Sahara to install mobile-phone base stations "ahead of schedule and under budget".

Yet the true extent of Huawei's international reach is hard to gauge. Much of its overseas business is in emerging markets where there is little competition. Though it is pushing into Europe, it lacks the muscle of rivals. In France it has only around 80 support staff compared with Alcatel's thousands. Mr Paulus worries that rivals are catching up with Huawei's technology. And while Huawei has won contracts in the growth area of third-generation mobile networks-the latest is in the Netherlands-many are in minor markets. That Cisco, the industry leader, successfully sued Huawei for intellectual-property theft suggests weaknesses in its technological base.

Back home in Shenzhen, Huawei is just as opaque. Its ornate buildings on campus are oddly deserted and Huawei is vague about what they are all for. While it insists that it is a private company owned by its employees, Ren Zhengfei, one of its founders, was an officer in the People's Liberation Army. The company denies, but admits it cannot shake, speculation that it is really controlled by the military. It denies even more hotly rumours that its overseas offices, some run from Chinese consulates, spy for China. William Xu, another vice-president, insists Huawei has no government links. Yet its multi-billion-yuan campus, lavish marketing and relentless expansion overseas are hard to square with it being a private company that made just $300m of profits last year. Nor is it clear why Huawei has not yet gone public (as some rivals have).

The contradictions at Huawei are mirrored to some degree by all of the country's emerging multinationals and ultimately reflect those of China itself. The economy is still in transition between dirigisme and free markets. Its political system can harness enormous resources, but ultimately undermines its own objectives in a paranoid desire to retain control.

That China intends to create world-class companies is indisputable. Appalled by the speed of western development and, rightly, attributing much of that to the success of western corporations, the central government decided some years ago that 30-50 of its best state firms should be built into "national champions" or "globally competitive" multinationals by 2010. At home, these companies would enjoy tax breaks, cheap land and virtually free funding via the state-owned banks. Abroad, the government would help them to secure contracts or exploration rights.

This has prompted fears that the Chinese, like the Japanese in the 1980s, are about to out-compete and to buy up the rest of the world. And undoubtedly a small group of Chinese companies has become bigger, more efficient and internationally acquisitive in the past several years. But this also raises questions about what kind of companies China is fit to build. Arthur Kroeber, managing editor of the China Economic Quarterly, argues that China's "unique combination of first world infrastructure and third world labour costs" and its focus on capacity building rather than technological innovation mean that corporate successes are more likely to be component manufacturers or processors of intermediate goods than global consumer brands such as South Korea's Samsung.



Energetic dragons
China's best companies bear this out. The most impressive are the resources groups. Three big oil companies, PetroChina, Sinopec and CNOOC, are aggressively buying overseas and building pipelines across central Asia to satisfy China's fuel demands. They are in more than a dozen countries: CNOOC, for example, is Indonesia's largest offshore oil producer.

Shanghai-based Baosteel, China's top steel producer, already sits on the Fortune 500 list of the largest global companies by sales. It will more than double capacity by 2010 to become the world's number three producer. In Brazil it is negotiating the biggest overseas investment ever made by a Chinese company.






Like Baosteel, Chalco, China's leading aluminium group, and Yanzhou Coal, the largest listed coal producer, are relatively new companies created to consolidate fragmented domestic industries and then to expand internationally. China Minmetals, the biggest base metals company, has gone further with its recent approach to buy Noranda, a Canadian copper and nickel miner, for a reported $7 billion. And in components Wanxiang, an auto parts group started by a farmer's son as a bicycle repair shop, has $2 billion of annual sales in 40 countries and owns research assets in America.

By contrast, China's consumer-brand and technology companies are struggling. The latest to grab the headlines is Lenovo, China's top PC-maker which in December bought IBM's personal computer business, three times its size, for almost $2 billion. Having failed to turn its own marque into a global brand-the reason it changed its name from Legend-it bought an international business, but one that even IBM could not make consistently profitable, to prop up its overseas sales. In China, Lenovo's profits from PCs are rising by just 1% per year and its market share is being squeezed as Dell makes inroads in expensive computers and private-label firms undercut prices on basic machines. Far from being world-class, Lenovo is less efficient than its domestic peers, says Joe Zhang, an analyst at UBS in Hong Kong. Some put its early success down to good government connections-it is majority-owned by the Chinese Academy of Sciences.

Another much-heralded company is Qingdao-based Haier. Having built up commanding domestic market shares of 20-70% for most home appliances, the group has offices in more than 100 countries and overseas revenues of over $1 billion. However, most of its international sales are in niche markets, and Haier lacks the cost control, production discipline, market dominance and sales support it needs to compete with foreign rivals outside China. Even at home it has had to resort to price wars to regain market share lost to better foreign products.

In cars, Shanghai Automotive Industry Corp (SAIC) aims to be among the world's top six car companies by 2020. In October it trumped a domestic rival to buy Ssangyong Motors, South Korea's fourth largest carmaker, and it is also in talks to rescue MG Rover in Britain. Yet these are defensive acquisitions of technologies and design skills to catch two nimbler rivals, Chery and Geely, which already make own-brand cars at home (Chery plans to launch models in America by 2007). Domestic joint-ventures with General Motors and Volkswagen have constrained SAIC and made it uncompetitive, says Paul Gao of McKinsey.

TCL has made a better fist of things. At home it remains the most profitable TV producer. Internationally, buying the TV business of France's Thomson in early 2004 turned it into the world's biggest volume TV maker. "Our goal is to be a Chinese Sony or Samsung," says the chairman, Li Dong Sheng. Despite the boast, at home TCL is depending on Thomson's rear-projection technology to make thinner sets to defend itself against Samsung. And in mature markets it does not intend to use TCL's brand at all, but is trying to revive Thomson's ailing RCA marque. Vincent Yan, managing director of TCL International, admits that, "no Chinese company is ready to build a global brand. You need technology and products. Just spending money on ads without good products doesn't make sense."



Reality check
Over the past decade, then, China has created some quite large companies. More than a dozen are in the Fortune 500 list, though almost all of those are domestic monopolies or near-monopolies, such as telecom operators or big commodity producers. A handful of others are starting to compete internationally, though mostly in niche markets and on price rather than with technology or brands.

But the global footprint of Chinese companies is still rather faint. Their outward foreign direct investment was just $2.9 billion in 2003, compared with the more than $50 billion that flowed into the mainland. China's stock of outward FDI amounts to $33 billion, less than half a percent of accumulated world FDI. These facts have led some long-term observers of the Chinese economy to the conclusion that China's industrial policy since the early 1980s essentially has failed. That might turn out to be premature. But one contrast is revealing: 20 years after the start of its rapid economic development a decade earlier, South Korea had built successful heavy industry groups and was beginning to lay the foundations for the technology and consumer brands people know today.

If anything, the gap between Chinese and foreign firms is widening, as the latter merge, reinvest the profits yielded by their scale economies and continually hone their management systems. One only has to think back to China's first crop of potential champions. A decade ago, Zhurong was hailed as the original Huawei. Both Founder and Stone were well ahead of Lenovo in the PC market and Yuchai, a diesel engines maker, and Kunming Machine Tool were seen as the next big technology plays. D'Long, a conglomerate spanning food and financial services, was lauded as a smart operator that bought tired foreign brands for a song and cut costs by taking manufacturing to China-until last year when it collapsed with huge debts.

These companies all had access to capital, cheap labour and a big domestic market. George Gilboy, an affiliate researcher at the Massachusetts Institute of Technology and for the past decade a senior manager at a multinational firm in Beijing, says they failed not because of poor products, but because of organisation and business strategy: "The issues that plagued them are still very much present." These issues are grounded in China's political and economic system and they lie in wait to trip up today's aspirants to world-class status.



Over here or over there?
Whereas policymakers in Japan and South Korea deliberately nurtured strong private companies (albeit often with close political ties), the Chinese government, deeply afraid of a politically independent private sector, implemented reforms that have given state firms privileged access to capital, technology and markets. But in order for the economy to grow faster, the central government has allowed foreign companies into China at a much earlier stage of its development and these now control the bulk of the country's industrial exports, have increasingly strong positions in its domestic markets and retain ownership of almost all technology. The result is a corporate landscape of a few big private companies such as Huawei, a mass of lumbering state-owned firms and increasingly powerful foreign multinationals.

China's unreformed political system has a second unintended consequence. Like the bosses of South Korea's chaebol before them, Chinese managers respond to regulatory inconsistency and opacity by pursuing short-term returns and excessive diversification rather than by investing in long-term technological development. Most are unwilling to develop "horizontal" networks with customers, suppliers and trade bodies-which in other countries establish technology standards and foster confidence in long-term research. In China, a company's best defence against corruption and the direct political linkages that benefit rivals is often to avoid business collaboration entirely and instead build vertical links up the Communist Party hierarchy and curry favour with local bureaucrats.

The power of officials to change policy at a moment's notice (suddenly appointing a successful boss as governor of a province, for example) or implement it in different ways for different firms, combined with the impossibility of achieving economies of scale through mergers because targets enjoy political patronage, together explain why Chinese managers tend to leap from one opportunity to the next, trying to grab a profit before the rules and the competition catch up. A year ago mobile phones were hot-Lenovo, TCL and Haier all invested, with little success, against Motorola and Nokia. Sun Jianmin, a management professor at Beijing's People's University, notes a cultural bias for financial services over "mere" manufacturing. Haier, TCL and even Baosteel all have subsidiaries in banking or insurance. "How can a long-term company emerge in such a short-term environment?" asks Mr Gilboy.

Nowhere is this more obvious than in technology. In recent years China has averaged a $12 billion annual trade deficit in electronic goods, components and machinery, according to the Ministry of Commerce. Most of its "high-tech" manufacturing is actually low-value-added assembly. The really smart bits, such as integrated circuits, are imported. The government continues to direct research spending, focusing on risky "big bang" projects (like sending a man into space). Indeed, China's low wages actually provide a disincentive to such investment, since Chinese firms can often boost short-run profits by replacing capital with additional labour.

Not surprisingly, therefore, foreign companies control virtually all the intellectual property in China and account for 85% of its technology exports. No wonder that Lenovo lacks Dell's ability to innovate and that Huawei tried to catch up with Cisco by bending the rules. Haier's furious product development-15,100 specifications across 96 categories, including a washing machine that also cleans sweet potatoes-typifies the lack of focus that is evident at many Chinese firms. As J.P. Huang, who runs JPI, a mergers & acquisitions boutique, puts it: "We Chinese like the romance of memorising Confucius. The discipline of the laboratory is not in our blood."



New wisdom needed
Nor, yet, is modern management thinking. Chinese companies struggle with challenges such as negotiating a cross-border partnership or exiting a loss-making activity, argues Gordon Orr at McKinsey in Shanghai. While multinationals import their most sophisticated business systems to China, improving productivity by 15% a year, Chinese companies still resort to "brute force"-throwing more labour and capital at problems, rather than thinking about new processes. Unless they improve, they do not stand a chance against world-class competitors, either outside their borders and soon not even on their home turf, warns Mr Orr.

China has so far failed to build world-class companies. Even the natural monopolies and resources companies are mostly just big rather than particularly efficient. In manufacturing, technology and consumer areas, a few companies are groping towards international competitiveness, but none are there yet. Nor will China necessarily produce a Sony or a Samsung. "People assume it is just a matter of time before China develops world-class brands," says Mr Gilboy. "But Chinese firms may not develop like Japanese or Korean ones did. China may be building a distinct model of capitalism with distinct firms." While American firms broadly excel at breakthrough innovations, and Japanese ones at process and incremental innovations, "China capitalism may simply be best at making things a lot cheaper." If so, China might do well to focus on building no-name component suppliers as Taiwan has, rather than home-grown brands as in Japan and South Korea.

For unless China institutes far-reaching political and structural reforms that give Chinese managers the confidence to invest in long-term technological development, it cannot readily build a globally competitive corporate sector. Those sleeping employees at Huawei might just have been working too hard. But perhaps they had little better to do. Workers napping on the job are nothing new at a Chinese company

[pljohnson] 06/1/2005 07:41

I suppose it has been said before but how about LDC?

[maywillow] 04/1/2005 10:13

FRANKFURT (AFX) - Allianz AG is planning 'considerable' investments in China
as the Chinese insurance market continues to open up to foreign investors,
according to a Focus Money report to be published tomorrow, citing management
board member Werner Zedelius.
"Considerable investments are lined up in China," he told the magazine,
while declining to comment on the possible volume of such investments.
[e-mail]
ms/lam

[maywillow] 03/1/2005 18:33

ATLANTA, Jan. 3 /PRNewswire-FirstCall/ -- The Home Depot(R), the world's
largest home improvement retailer, announced today that it is conducting its
investor and analyst conference on January 13th, 2005. The company will be
providing a live webcast to begin at 8:30 a.m. EST.
(Logo: )
The presentation will be webcast live over the internet
at . From the home page, select "Investor Relations"
and a link will be displayed under "Events and Presentations." The webcast
will be archived and available at the same location.
Founded in 1978, The Home Depot(R) is the world's largest home improvement
specialty retailer and the second largest retailer in the United States, with
fiscal 2003 sales of $64.8 billion. The company employs approximately 325,000
associates and has 1,853 stores in 50 states, the District of Columbia, Puerto
Rico, nine Canadian provinces and Mexico. The company recently announced the
creation of a business development operation for retail expansion into China.
Its stock is traded on the New York Stock Exchange (NYSE: HD) and is included
in the Dow Jones Industrial Average and Standard & Poor's 500 Index. HDE


SOURCE The Home Depot
Web Site:
Photo Notes:
AP
Archive: PRN Photo Desk,
[e-mail]

[tpaulbeaumont] 28/12/2004 17:31

didnt china air list on LSE last week?

[waldron] 19/12/2004 11:13

GUILIN, China (AFX) - For centuries, farmers thought nothing of picking a
shrub-like herb from the lush hills in southern China's Guangxi province to
treat fevers.
Formerly considered wild grass, the sweet wormwood, or "qinghao", is now
nicknamed "golden grass" by locals as worldwide demand surged this year after
the herb was discovered to be highly effective in treating malaria.
But supplies are severely limited, threatening global efforts to save lives.
The World Health Organization and other health agencies this year pushed for
countries everywhere to use drugs made from sweet wormwood to treat the disease
that strikes 300 mln people each year, killing one mln, mostly
children.
Older malarial medicine, such as chloroquine, has lost its effectiveness as
many strains resistant to the drug have developed.
Combined with another anti-malarial drug, sweet wormwood's ingredients form
a treatment called artemisinin-class combination therapy (ACT), which can cure
patients within three days with few problems of drug resistance.
But the supply of the herb is critically low after 24 additional countries
switched to ACT this year. The shortage is expected to worsen as 60 countries,
including Kenya, Thailand and Peru, adopt the new drug by next year.
Chinese pharmaceutical companies are moving quickly to expand production,
experimenting with large-scale cultivation instead of relying on harvesting wild
plants.
Large swathes of pine forests in Guangxi and arable land in Wulin mountain
in southwest China have been earmarked and farmers are tilling the land in
preparation for planting in January.
"We are doing our best to meet the demand," said Yan Xiaohua, president of
Guilin Pharmaceutical, one of only two Chinese companies converting the herbs
into raw material for ACTs.
The company located in Guilin city recently reached agreements with six
towns in Guangxi province's Baise district to plant the herbs in 333 hectares
(822 acres) of their land, increasing the company's supply by 10 to 20
pct.
It plans to boost cultivation to 2,000 hectares next year.
Kunming Pharmaceutical, the other Chinese supplier, and its sister company
Chongqing Holley have similar plans to increase cultivation six-fold to 6,670
hectares next year.
Inside the Guilin company's grounds, workers this month feverishly packaged
malaria pills to be shipped overseas.
Hundreds of tubs of artemisinin -- the potent substance extracted from the
herb's leaves -- awaited processing into drugs.
But despite the efforts, China will be hard-pressed to come up with the
goods in a short period of time given that the planting, harvesting and drug
production cycle takes about a year, industry sources said.
"There's no way to meet the world's demand. China will only be able to
supply half of the world's needs next year," Yan said.
Sweet wormwood is found in other parts of the world, but almost all of the
global supply comes from China which has the right climate and soil conditions
for its cultivation.
The WHO estimates the world will need up to 140 mln treatment courses of
ACTs by 2005, doubling in 2006. This year, only about half of the world's demand
of 13 mln courses was met.
Malaria-suffering countries, meanwhile, will have to make difficult
decisions -- giving the limited supply of ACTs to vulnerable patients such as
children, while having no choice but continuing to treat others with less
effective older drugs, which suffer up to 70 pct resistance.
"It's clearly unreliable to continue to give a drug that can kill in such a
high proportion," Dr. Andrea Bosman, head of the WHO's malaria control team,
warned.
Efforts are underway to create a synthetic version of the ingredients to
eliminate dependence on crops, but they have yet to yield results.
Health experts said one way to increase the supply is to grow the plant in
other countries, but they complain that China is tightly guarding the leaves and
seeds of high-quality plants to protect its commercial interest.
"There are too few companies that produce ACT, so the more players the
better. This is exceedingly important for the public good. It's a life-saver for
potentially millions of people around the world," said Jon Liden, head of
communications for The Global Fund to Fight AIDS, Tuberculosis and Malaria.
"That's why we can't treat development of ACT the same as other products
that come out of China."
The Chinese government, however, prefers not just to provide the raw
material to foreign pharmaceuticals, as it has been doing for France-based
Sanofi and Swiss firm Novartis, but to make the final drugs.
"The way the Chinese government sees it, since we already can make
artemisinin and its derivatives, why not make the final drug ourselves," said
Guilin Pharmaceutical's Yan, who has participated in Chinese officials'
meetings on the subject.
Guilin Pharmaceutical already makes its own version of malarial pills which
it sells to a few countries. The company and Kunming Pharmaceutical now plan to
make versions that meet WHO requirements.
They are confident their drugs will gain WHO pre-qualification, which will
greatly boost sales.
cs/mp/th/tr

[waldron] 13/12/2004 08:38

China Nov. Retail Sales Rise 13.9% From Year Earlier (Update6)
Dec. 13 (Bloomberg) -- China's retail sales grew 13.9 percent to the second-highest level on record in November as rising incomes spurred consumers to spend more on digital cameras, eating out and decorating their homes.

Sales rose to 496.6 billion yuan ($60 billion) from a year earlier, the Beijing-based National Bureau of Statistics said in a statement on its Web site today. Sales in October rose 14.2 percent to a record 498.3 billion yuan.

Spending at KFC restaurants and B&Q home improvement stores is helping sustain the world's fastest-growing major economy as the government curbs investment in manufacturing to ease shortages of raw materials. President Hu Jintao last month predicted economic growth will slow to 9 percent in 2004 from 9.3 percent last year, avoiding a sudden slowdown in the world's largest consumer of cement and steel.

``Steady growth in consumption will essentially reduce the risk of a hard landing for the whole economy even if investment is slowing down,'' said Qu Hongbin, senior economist at HSBC Holdings Plc in Hong Kong. ``That's why policymakers like to see retail sales picking up.''

Middle Class

Retailers including Yum! Brands Inc., Wal-Mart Stores Inc. and Carrefour SA are opening stores to take advantage of growing affluence in the world's most populous nation. Disposable incomes in urban areas, home to a third of China's 1.3 billion people, rose 7 percent in the first nine months of this year to 7,072 yuan per capita, according to government figures.

China ``has been fantastic for us,'' David Deno, chief Financial officer of Yum! Brands, operator of the Taco Bell, Pizza Hut and KFC chains, said in an interview on Dec. 8. ``People talk about China, but we're doing it, building restaurants.''

Louisville, Kentucky-based Yum! Brands has 1,200 stores in China, the company's second-biggest profit center, and plans to open 300 a year in the country.

The Ministry of Commerce forecast yesterday that retail sales this year would rise by more than 13 percent, or 9.8 percent adjusted for inflation, to a record 5.2 trillion yuan. That compares with growth of 9.1 percent last year. The ministry forecast sales in 2005 might rise by more than 10 percent.

Foreign-owned retailers are benefiting from a government decision to remove limits on the number of wholly-owned stores they can open, meeting pledges China made on joining the World Trade Organization in 2001.

Home Improvement

Kingfisher Plc's B&Q chain, the U.K.'s largest home- improvement retailer, said this month it plans to almost double outlets in China to 39 next year. Wal-Mart, the world's largest retailer, plans to open between 12 and 15 stores, adding to its 40 outlets in major cities.

The median forecast of five economists in a Bloomberg News survey was for a 14 percent increase in retail sales in November.

Sales of building materials and home-decoration items jumped 50.6 percent in November, up from 37.9 percent growth in October. Telecommunications equipment sales rose 36.3 percent, compared with 27.7 percent in October, led by cell phones with cameras and color screens. Catering sales rose 18.8 percent.

The State Information Center, a think-tank, said on Nov 6. that consumer spending will probably account for 57.5 percent of gross domestic product this year, 2.1 percentage points more than in 2003.

``Chinese consumers have not only woken up and stood up, but in increasing numbers they are getting rich and starting to spend,'' Credit Suisse First Boston analysts said in a Nov. 30 report.

Interest Rates

CSFB estimates the value of Chinese household consumption spending this year will rise to $704 billion and grow 18 percent a year until 2014, compared with 2.1 percent growth in the U.S.

China's central bank raised interest rates for the first time in nine years on Oct. 29 to keep borrowing and spending from fueling inflation. Consumer prices rose 2.8 percent in November from a year earlier after climbing 4.3 percent in October, a report last week showed.

China's top four retailers by sales, all of them locally owned, had a combined 5,232 stores as of June 30 and 98.1 billion yuan in 2003 sales, according to the Commerce Ministry. The government has encouraged mergers among domestic retailers to prepare them for overseas competition.

Shanghai-based Lianhua Supermarket Holdings Ltd., the nation's biggest grocery chain, said it plans to spend 600 million yuan this year to take its number of outlets to more than 3,000.

Auto sales rose 11.8 percent in November, recovering from growth of 2.1 percent in October, today's report said. Furniture sales growth slowed to 14.1 percent from 32.9 percent. Gasoline sales rose 42.6 percent, compared with a surge of 56 percent in October. Sales of cosmetics rose 26.8 percent and of jewelry, 27 percent.

[waldron] 11/12/2004 07:22

Wal-Mart, Carrefour Plan Expansion as China Fully Opens Its Retail Market




Wal-Mart, Carrefour Seek Expansion as China Opens Market Fully
Dec. 11 (Bloomberg) -- Wal-Mart Stores Inc. and other overseas retailers that gain full access to China today won't overrun domestic rivals in a consumer market forecast to grow to more than $600 billion this year, analysts said.

``The threat posted by foreign retailers won't be as prominent as some have anticipated,'' said Xu Xiaofang, an analyst with Guotai Junan Securities. Overseas companies' share of the market may grow to 10 percent in three years from 7 percent now, he said.

Overseas retailers are allowed to wholly own stores for the first time, as China honors commitments made when it joined the World Trade Organization three years ago. Bentonville, Arkansas- based Wal-Mart, the world's largest retailer, last month said it plans to expand its 40-store China network by more than a third in 2005.

The four largest Chinese retailers have more than 20 times as many stores as the combined total of Wal-Mart and Carrefour SA, the largest overseas retailer in China by sales. Wumart, the biggest supermarket chain in Beijing, added 22 outlets in the third quarter and plans more acquisitions, Chairman Zhang Wenzhong said Oct. 26.

``Local companies won't ``die suddenly'' as competition increases, said Mabel Wong, an analyst at CLSA Ltd. in Hong Kong. ``Foreign and local companies have different competitive advantages and can carve out their own niches.''

Expansion

Wal-Mart, which has 5,500 stores in 10 countries, on Nov. 2 announced plans to open as many as 15 stores in China next year, adding to 40 it operates now in Beijing, Shenzhen and other cities. Paris-based Carrefour, Europe's largest retailer, last month said it planned to boost its supermarkets and larger supercenters in China to 59 this year from 53 at the time.

Carrefour had a 20 percent sales increase in China in the first half, China's commerce ministry said Aug. 6 in its latest report on overseas retailers. In the same period, Wal-Mart's revenue in the nation jumped 32 percent.

James Lo, regional manager at Carrefour, and Wal-Mart spokeswoman Sharon Zhang weren't available for comment.

As a market, China offers the world's largest population and an economy that grew 9.1 percent in 2003, with economists predicting similar expansion this year. Incomes in urban areas, home to about a third of the population, rose 40 percent from 1999 to 2003 and topped $1,000 a month for the first time last year.

Retail sales in the world's seventh-largest economy surged 14.2 percent in October to a record 498 billion yuan ($60 billion). The Commerce Ministry has forecast sales will rise this year to more than 5 trillion yuan. Chinese consumers were the most confident in a survey of 38 industrialized economies published Nov. 24 by AC Nielsen.

Chinese Partners

Foreign retailers in the past were required to have Chinese partners and could own no more than 65 percent of those ventures. Their operations also were limited to provincial capitals and big cities such as Beijing and Shanghai.

Kingfisher Plc's B&Q chain, the U.K.'s largest home- improvement retailer, said that it plans to almost double outlets in China to 39 next year now that restrictions are lifted. The company is spending $13.2 million buying five stores in China that will be transformed into B&Q outlets.

``The opportunities are there next year because of the availability to go wholly owned,'' Ian Strickland, managing director of B&Q China, said at a forum in Shanghai on Dec. 1. ``We will not turn it down.''

Wal-Mart and other multinationals will continue to rely on local partners, CLSA's Wong said. The diversity of the nation's economy means the same formula for expansion used in big cities may not work everywhere, she said.

About 2 percent of China's households owns a car, compared with an average two vehicles per U.S. household. Many people still rides for shopping, placing more emphasis on convenient store locations, said Wong.

``Local partners can help find good locations and with other formalities,'' Wong said. ``China is a collection of markets, not just a single market. So I don't think foreigners will just go it alone.''

[waldron] 06/12/2004 06:04

BEIJING (AFX) - China's economic growth should come in at about 9 pct this
year and slow to below 9 pct next year due to ongoing macro-economic tightening
policies begun to prevent the economy from overheating, the China Economic Times
reported.
Citing a report by the Development Research Center (DRC) of the State
Council, China's cabinet, the newspaper said total price levels will also fall
next year due to increased agricultural product supply and a balancing of
overall product supply and demand across the economy.
The report said the government should reduce its issuance of long-term
construction treasury bonds, cut government investment products that are used to
fund economic development and strengthen the management and implementation of
taxation.
The government should also loosen administrative controls over bank lending,
set a loan growth target of around 17 pct next year and expand the floating
range of exchange rates, the report said.
The China Economic Times added that China's top economic planning body, the
National Development and Reform Commission (NDRC), echoed the DRC report.
The NDRC said the government should focus on reigning in domestic and
foreign expectations of China's continuing economic growth, and prevent
inflation.
It also said the government should consider following a recent rise in
interest rates with further hikes in order to keep consumer price index (CPI)
growth in check, although it called for the government to keep the loan interest
rate unchanged.
On Oct 28, China's central bank raised the one-year lending and deposit
rates by 0.27 percentage points to 5.58 pct and 2.27 pct, respectively.
The country's CPI grew by more than 5 pct year-on-year for four consecutive
months until September this year, although it began to slow in October to 4.3
pct.
[e-mail]
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[grupo] 05/12/2004 07:38

Filed 05/12/2004)

Don't fear the rise of India and China

Amid all the billions of pounds, and almost as many words, spilling out from Gordon Brown as he delivered his pre-Budget report, one of his most important messages got lost. In a separate document, the Treasury laid out its vision of how the development of India and China would affect the world economy. Forget the 10-year strategies for childcare and the forecasts for government borrowing and debt. This is the really big issue.

Inexorable trends

Let us be clear about the scale of what is happening. In 1820, China accounted for about a third of the world economy. She then missed out on the industrial revolution and suffered the best part of two centuries of misgovernment. But over the last 25 years she has been clawing her way back. Our top chart shows the scale of recent outperformance.



Over the last 10 years, Chinese growth has averaged just over 9 per cent. If that rate is sustained, then China would achieve a GDP 10 times its current level within 27 years. India's performance looks much less impressive, but by comparison with the usual suspects lined up behind her in the chart, her growth rate is also spectacular.

Shouldn't we in Britain be worried about this prospect? No. As I argued in my recent book, Money for Nothing, we should be delighted by it. Some people are appalled by the prospect of China and India becoming much larger economies than us because they confuse relative and absolute prosperity.

Short of some political or economic catastrophe, our fall in relative prosperity is inevitable. Many people think that this implies that we will be worse off because they subscribe to what I call "Beckhamism", that is to say the notion that economic life is just like a game of football. If there is a winner then there must be a loser.

But economic life is not like this. We can all be winners - even if we cannot all be the largest economy. The continued use of this wretched word "competitiveness" obscures this simple but vital truth. China's development improves our position because it increases the flow of cheap goods and services to us, it enlarges the market for our goods and services and it adds to the rate of increase of the stock of human knowledge.

Yet how on earth can we compete when their labour costs are so low? If they take all our manufacturing what will we be able to sell to them? There is no doubt in my mind that as India and China continue to develop, more and more of our manufacturing will shift east. And something similar is already happening in the service sector through the process of so-called offshoring or outsourcing.

We will continue to produce high-value added and high-tech manufactured goods but the bulk of what we sell them, I suspect, will be in the business services area, where the UK is in many fields a world leader. The City of London, far from being overtaken by some Asian financial centre, is likely to benefit from the burgeoning demand for financial services. Similarly for accountancy, civil engineering, advertising, educational and medical services and a whole gamut of other services.

Real Wealth

But, I hear some of you say, this is not real wealth. We cannot earn a living like this. You could not be more wrong. This is the view of the world which I call "thingism". It is a gross delusion. People increasingly want to buy services. Meanwhile, the upsurge of manufacturing capacity in China and India provides us with basic manufactures more cheaply than we could produce ourselves. The terms of trade are turning in our favour. It is just like the position in the late 19th century with the arrival of ultra-cheap food from the new world.

This is all very well, you may say, but already India is a major world centre of software expertise. What will happen when they can do all the things which we can? The implication is that we can now only sell umpteen billions of goods and services to Germany and the United States because we can produce these but they cannot. But this is nonsense.

We sell successfully into these economies because even the most sophisticated country faces limited resources and limits to what it can produce in total. It therefore pays it to concentrate on producing those things in which it is relatively most efficient and import those in which it is relatively least efficient. And these matters are decided at the micro level of individual firms.

It is true, though, as the Treasury notes and as our lower chart confirms, that British exports to India and China, although growing fast, are currently pitifully small, each accounting for about 1 per cent of the total. Regrettably, Britain's exports are still heavily concentrated on the slowly growing euro zone.

What can be done to improve our position and make it more likely that we will successfully be able to sell advanced services in the economy of the future? The chancellor is surely right that the answer lies with enhancing our historic strengths, including our scientific prowess and the quality of our universities. Yet the present plight of our world-class universities is pitiful and while this Government continues to wail about elitism it will continue to be. How can a world class university be anything other than elitist?

Ah, but hold on. We cannot all work in science or in selling services to the Chinese. True, but so what? The bulk of value creation and employment does not occur in the production of exports but rather in the production of goods and services for domestic consumption.

In activities such as restaurant meals, theatres, hairdressing and dry cleaning, there is no international competition. As we continue to get richer, the demand for such things will continue to rise and more and more people will be employed in producing them.

Better – or worse

What can be done to promote success here? It is the usual issues surrounding the increase of productivity growth, the enhancement of service quality, the acquisition of skills, etc. Is the chancellor doing everything possible to encourage these results?

He thinks so. Yet look at the substance of the pre-Budget Report. The inexorable rise of India and China is not a threat to the continued prosperity of this country. But the government's obsessive meddling, regulating, taxing and spending most assuredly is.

• Roger Bootle is managing director of Capital Economics and economic adviser to Deloitte. You can contact him at roger.bootle@capital economics.com
source:moneytelegraph

[briarberry] 04/12/2004 22:46

China's US holdings...




In contrast to Japan, China's money managers, while selling little of their existing Treasury holding, have not been buying much more. China's foreign currency reserves rose by $111.3 billion in the first three quarters of the year, according to official Chinese data. But its Treasury holdings, American filings show, climbed by only $16.4 billion.

Instead, officials at the State Administration of Foreign Exchange in Beijing have been seeking higher yields by plowing billions of dollars a month into bonds backed by mortgages on houses across the United States, according to bankers who help Beijing manage the money. By helping keep mortgage rates from rising, China has come to play an enormous and little-noticed role in sustaining the American housing boom.

The proportion of China's hoard in Treasury securities has dropped to about 35 percent, they say, compared with the roughly 90 percent of Japan's foreign currency reserves still parked in Treasury securities.

[grupo] 04/12/2004 11:35

Alcatel Deploys 3G Trial In Beijing
By Susan Rush
December 3, 2004
news@2 direct


China Netcom Group wants to test the waters of 3G, and has called on Alcatel to make it happen. Although terms of the newly signed deal were not disclosed, Alcatel will launch a 3G field trial network in Beijing.

Through its Chinese company Alcatel Shanghai Bell, Alcatel will supply its Evolium UMTS solution, which is based on products developed by Alcatel's joint venture with Fujitsu, Evolium SAS. Specifically, UMTS multistandard base stations, a radio network controller and core network elements will be deployed for the trial, Alcatel says.


Once the trial network is up and running, China Netcom says it will be able to test high-quality voice, data and multimedia wireless services in "true-to-life conditions" in Beijing.

Earlier this year, Alcatel deployed a similar 3G trial with China Telecom.

[energyi] 04/12/2004 10:05

Here are China's own companies:

[heartless112] 04/12/2004 02:45

Any news on China raising interests again??? Would be interested in any devlopments on this front