Archives April 2006

SKorea’s Hynix to invest new 230 million dollars in China

SEOUL (AFP) – South Korean chipmaker Hynix Semiconductor said its board of directors approved a plan to invest 230 million dollars in expanding operations in China this year.

A new Hynix-owned business entity will be launched to boost chip production at a joint venture plant under construction in Wuxi in China’s eastern province of Jiangsu, Hynix officials said.

Hynix, the world’s second largest memory chipmaker, and European giant STMicroelectronics, are to open the two billion dollar plant, Hynix-ST Semiconductor, in Wuxi this year.

“The new investment is to be used to launch a new unit, Hynix Semiconductor Wuxi, to increase production more than planned by the joint venture at the plant in China,” Hynix spokesman Kim Ah-Young told AFP.

She made the comment to clarify an earlier statement that said Hynix would build a new plant.

Hynix has been looking at China as a new production base to help the company defuse a trade row over its chip exports and boost earnings.

The South Korean company has been hit by punitive tariffs in the European Union and United States over allegations it has been supported by government subsidies.

Hynix was rescued in December 2002 by a multi-billion-dollar bailout arranged by South Korean creditors, some of whom were state-controlled.

Hynix officials told AFP Thursday that the Hynix-STSemiconductor plant would begin mass production as early as July in 2006. Hynix owns 67 percent of the joint venture while STMicro controls 33 percent.

Hynix and STMicroelectronics agreed to invest 500 million dollars each in the joint venture, with the local Chinese government and financial institutions to put up one billion dollars.

“We expect to start mass-producing new products on the eight-inch (200 millimetre) wafer line in July and on the advanced 12-inch (300 millimetre) wafer line in December,” a Hynix official told AFP.

Hynix posted a net profit of 1.85 trillion won (1.9 billion dollars) in 2005, up seven percent from a year earlier, on 5.9 trillion won in sales.

http://news.yahoo.com/s/afp/20060406/tc_afp/skoreaitchinahynixinvestment_060406101625

Asia Times: AmCham bullish on China

BEIJING – Intellectual property rights and power shortages are problems in both Shanghai and Beijing but the outlook for business in both cities remains overwhelmingly positive, says the “White Paper 2005 American Business in China” released September 1.

The white paper, the seventh annual report of its kind, was jointly prepared by the American Chamber of Commerce in China (AmCham) and the American Chamber of Commerce in Shanghai, and outlined the current state of business for a number of industries, ranging from manufacturing, trade and distribution to services. Released annually, the paper is the result of surveys and consultation among nearly 2000 member businesses of both chambers.

City-specific challenges for Beijing, Shanghai
It also points out a number of city-specific challenges faced by Beijing and Shanghai as they develop a more international business environment. Despite growing government attention, intellectual property rights protection remains a prominent problem in both cities. While progress has been made, AmCham says the lack of protection is forcing business to reconsider plans in both Shanghai and Beijing. A lack of enforcement by local governments was cited as a major issue.

Energy supply is also a concern. Both cities faced shortages this summer and had to “borrow” power from neighboring areas. The stop-gap measure kept both cities operating, but long-term solutions are needed, says AmCham.

Still, said James Green, AmCham Shanghai’s director of government relations, the biggest challenge is human resources. “Finding, training and keeping management,” Green said. “It’s a hot, hot labor market and people are in high demand.”

In Beijing, said AmCham, there has been progress in reducing red tape for businesses and transparency is better. There is, however, an acute lack of water and growing traffic woes that may hamper the city’s ability to meet long-term goals. Air quality in the city is also a problem. The number of airborne particles rose last year and, the report points out, the Chinese Academy of Social Sciences ranked Beijing 14th among China’s cities on that count.

Shanghai businesses tended to focus on the practical side of business and lifestyle. A stable supply of electricity was a concern alongside slow Internet connections, which make it difficult to do business online. One concern, which affects Beijing as well, is a lack of regulations for distribution companies: “… lack of progress on distribution rights is especially noteworthy in Shanghai.”

As in Beijing, intellectual property rights are a concern but they may have a more direct impact in a city looking to attract high technology businesses to its 140 foreign-invested research and development centers. Many companies don’t expand beyond a representative office “for fear of losing proprietary information and technology.”

Other concerns for Shanghai businesses included daily-life issues. Health care was a top concern, as was traffic safety. Education for expatriates also posed a challenge: businesses said their employees had trouble finding spots in accredited foreign schools at reasonable fees. Ultimately, however, the outlook is positive, said AmCham Shanghai chairman Jeffrey Bernstein.

US firms upbeat
A huge majority of US businesses operating in China reported increases in annual revenues last year, according to the white paper. About 86% of respondents said they posted higher revenues in 2004 compared to the previous year; and 68% were “profitable” or “very profitable” last year.

The nationwide survey also showed that US companies had great confidence in China’s business environment. “The vast majority of survey respondents, 93%, report that China’s economic reforms have improved the climate for US businesses, and 92% said their five-year business outlook in China is ‘optimistic’ or ‘cautiously optimistic’,” the white paper said.

At the same time, US businesses are facing increasing competition from both local companies and foreign rivals. Profitability in 2004 was slightly lower that in the previous two years, indicating more challenges. “We attribute the leveling margin to both improved markets elsewhere and to US firms’ financial performance in China more closely tracking their global performance as China revenues grow,” the white paper said.

It explained that factors such as price pressure from major customers, as well as changes in market and commodity prices, and salaries, are driving down margins. But the white paper added this was minor compared to the continuity of higher profitability since China joined the World Trade Organization. Despite increasing challenges, most US companies said they would increase business activities in China.

Emory Williams, chairman of AmCham China, said the annual white paper made suggestions not only to the Chinese government but also to the US administration. For example, he said, the US government should relax restrictions on issuing visas to Chinese. According to the chamber’s survey, visas issued to Chinese nationals were up 23% compared to the previous year, but still lower that the level before September 11, 2001.

China suffering shortage of civil aviation specialists

BEIJING (AFX) – China will need to employ at least 240,000 civil aviation specialists over the next two decades, the official Xinhua news agency reported, citing an industry expert.

‘China’s civil aviation business will suffer a shortage in specialists for quite a long time in the future,’ said Du Yefu, an expert from the Civil Aviation University of China, according to Xinhua.

China aims by 2020 to have a civil aviation market that is on a par with that of the US now, but there is currently a large gap between the two nations, the news agency said, citing Du.

Less than 200,000 people work for aviation companies in China compared with over 700,000 in the US, Xinhua said.

The average ratio between staff members and aircraft in international air companies is 100 to one, whereas in China it is 200 to one, the news agency added.

http://www.forbes.com/business/feeds/afx/2006/03/27/afx2625840.html

Volvo to sell China-made luxury cars

MONDAY, MARCH 20, 2006

BEIJING The Swedish carmaker Volvo said Monday that it would start selling locally made S40 luxury sedans in China.

Ford Motor’s joint venture in China will produce 10,000 units of the S40 sedans a year from Changan Ford’s plant in the western city of Chongqing, said Frederik Arp, president and chief executive of Volvo Cars.

Volvo will start selling the S40 sedan this summer, which is from June to August in China.

“Local production is the key to remain competitive in China,” Arp said at a press conference. The company is facing a situation where its “main competitors are already producing their volume models locally.”

Rising incomes in China have generated an increasing number of buyers for premium cars. Car sales in China rose 21 percent in 2005 to 3.97 million units and could grow 17 percent this year, according to the China Association of Automobile Manufacturers.

So far, Volvo has imported cars into China. Last year, it sold 4,786 units, an 84 percent increase over 2004. Sales of the S40 accounted for nearly a third of the total.

Bayerische Motoren Werke said sales of cars made in China rose 77 percent to 15,300 units last year, compared with a 9.9 percent sales gain worldwide. BMW, which set up its China venture in 2003, makes five models at its venture in the northeastern city of Shenyang.

DaimlerChrysler’s venture in China, which started to sell locally made Benz sedans in December, increased sales of imported Benz cars by 39 percent to 16,128 units last year. The company is making two E-class models at its venture in Beijing. Chrysler Group plans to start making 300C sedans this year.

The decision to start local manufacturing was made because of “the significant growth of the overall market combined with the fact that the lion’s share of the growth is happening from local manufacturers,” Arp said. “So being an importer only is not necessarily a long term success situation.”

Depending on the demand, the output for the S40 from the Chongqing plant may rise, Arp said, without giving details. The sedan accounted for nearly a fifth of Volvo’s global sales last year.

“It’s a great advantage not to have to invest in all the facilities in a joint venture,” Per Norinder, Volvo Cars’ general manager in China said. “Changan Ford already has a factory up and running.”

A locally made Honda Civic

Honda Motor plans to sell locally made Civic compact cars in China.

The company, which produces the Civic in 12 countries, said it planned to sell 50,000 Civic units in China this year.

“Civic is more important for Honda in China than its other models like Accord, as the popular compact car model is more attractive to consumers with its cheaper price and fuel efficiency,” said Yale Zhang, an analyst with CSM Asia in Shanghai.

BEIJING The Swedish carmaker Volvo said Monday that it would start selling locally made S40 luxury sedans in China.

Ford Motor’s joint venture in China will produce 10,000 units of the S40 sedans a year from Changan Ford’s plant in the western city of Chongqing, said Frederik Arp, president and chief executive of Volvo Cars.

Volvo will start selling the S40 sedan this summer, which is from June to August in China.

“Local production is the key to remain competitive in China,” Arp said at a press conference. The company is facing a situation where its “main competitors are already producing their volume models locally.”

Rising incomes in China have generated an increasing number of buyers for premium cars. Car sales in China rose 21 percent in 2005 to 3.97 million units and could grow 17 percent this year, according to the China Association of Automobile Manufacturers.

So far, Volvo has imported cars into China. Last year, it sold 4,786 units, an 84 percent increase over 2004. Sales of the S40 accounted for nearly a third of the total.

Bayerische Motoren Werke said sales of cars made in China rose 77 percent to 15,300 units last year, compared with a 9.9 percent sales gain worldwide. BMW, which set up its China venture in 2003, makes five models at its venture in the northeastern city of Shenyang.

DaimlerChrysler’s venture in China, which started to sell locally made Benz sedans in December, increased sales of imported Benz cars by 39 percent to 16,128 units last year. The company is making two E-class models at its venture in Beijing. Chrysler Group plans to start making 300C sedans this year.

The decision to start local manufacturing was made because of “the significant growth of the overall market combined with the fact that the lion’s share of the growth is happening from local manufacturers,” Arp said. “So being an importer only is not necessarily a long term success situation.”

Depending on the demand, the output for the S40 from the Chongqing plant may rise, Arp said, without giving details. The sedan accounted for nearly a fifth of Volvo’s global sales last year.

“It’s a great advantage not to have to invest in all the facilities in a joint venture,” Per Norinder, Volvo Cars’ general manager in China said. “Changan Ford already has a factory up and running.”

A locally made Honda Civic

Honda Motor plans to sell locally made Civic compact cars in China.

The company, which produces the Civic in 12 countries, said it planned to sell 50,000 Civic units in China this year.

“Civic is more important for Honda in China than its other models like Accord, as the popular compact car model is more attractive to consumers with its cheaper price and fuel efficiency,” said Yale Zhang, an analyst with CSM Asia in Shanghai.

BEIJING The Swedish carmaker Volvo said Monday that it would start selling locally made S40 luxury sedans in China.

Ford Motor’s joint venture in China will produce 10,000 units of the S40 sedans a year from Changan Ford’s plant in the western city of Chongqing, said Frederik Arp, president and chief executive of Volvo Cars.

Volvo will start selling the S40 sedan this summer, which is from June to August in China.

“Local production is the key to remain competitive in China,” Arp said at a press conference. The company is facing a situation where its “main competitors are already producing their volume models locally.”

Rising incomes in China have generated an increasing number of buyers for premium cars. Car sales in China rose 21 percent in 2005 to 3.97 million units and could grow 17 percent this year, according to the China Association of Automobile Manufacturers.

So far, Volvo has imported cars into China. Last year, it sold 4,786 units, an 84 percent increase over 2004. Sales of the S40 accounted for nearly a third of the total.

Bayerische Motoren Werke said sales of cars made in China rose 77 percent to 15,300 units last year, compared with a 9.9 percent sales gain worldwide. BMW, which set up its China venture in 2003, makes five models at its venture in the northeastern city of Shenyang.

DaimlerChrysler’s venture in China, which started to sell locally made Benz sedans in December, increased sales of imported Benz cars by 39 percent to 16,128 units last year. The company is making two E-class models at its venture in Beijing. Chrysler Group plans to start making 300C sedans this year.

The decision to start local manufacturing was made because of “the significant growth of the overall market combined with the fact that the lion’s share of the growth is happening from local manufacturers,” Arp said. “So being an importer only is not necessarily a long term success situation.”

Depending on the demand, the output for the S40 from the Chongqing plant may rise, Arp said, without giving details. The sedan accounted for nearly a fifth of Volvo’s global sales last year.

“It’s a great advantage not to have to invest in all the facilities in a joint venture,” Per Norinder, Volvo Cars’ general manager in China said. “Changan Ford already has a factory up and running.”

A locally made Honda Civic

Honda Motor plans to sell locally made Civic compact cars in China.

The company, which produces the Civic in 12 countries, said it planned to sell 50,000 Civic units in China this year.

“Civic is more important for Honda in China than its other models like Accord, as the popular compact car model is more attractive to consumers with its cheaper price and fuel efficiency,” said Yale Zhang, an analyst with CSM Asia in Shanghai.

BEIJING The Swedish carmaker Volvo said Monday that it would start selling locally made S40 luxury sedans in China.

Ford Motor’s joint venture in China will produce 10,000 units of the S40 sedans a year from Changan Ford’s plant in the western city of Chongqing, said Frederik Arp, president and chief executive of Volvo Cars.

Volvo will start selling the S40 sedan this summer, which is from June to August in China.

“Local production is the key to remain competitive in China,” Arp said at a press conference. The company is facing a situation where its “main competitors are already producing their volume models locally.”

Rising incomes in China have generated an increasing number of buyers for premium cars. Car sales in China rose 21 percent in 2005 to 3.97 million units and could grow 17 percent this year, according to the China Association of Automobile Manufacturers.

So far, Volvo has imported cars into China. Last year, it sold 4,786 units, an 84 percent increase over 2004. Sales of the S40 accounted for nearly a third of the total.

Bayerische Motoren Werke said sales of cars made in China rose 77 percent to 15,300 units last year, compared with a 9.9 percent sales gain worldwide. BMW, which set up its China venture in 2003, makes five models at its venture in the northeastern city of Shenyang.

DaimlerChrysler’s venture in China, which started to sell locally made Benz sedans in December, increased sales of imported Benz cars by 39 percent to 16,128 units last year. The company is making two E-class models at its venture in Beijing. Chrysler Group plans to start making 300C sedans this year.

The decision to start local manufacturing was made because of “the significant growth of the overall market combined with the fact that the lion’s share of the growth is happening from local manufacturers,” Arp said. “So being an importer only is not necessarily a long term success situation.”

Depending on the demand, the output for the S40 from the Chongqing plant may rise, Arp said, without giving details. The sedan accounted for nearly a fifth of Volvo’s global sales last year.

“It’s a great advantage not to have to invest in all the facilities in a joint venture,” Per Norinder, Volvo Cars’ general manager in China said. “Changan Ford already has a factory up and running.”

A locally made Honda Civic

Honda Motor plans to sell locally made Civic compact cars in China.

The company, which produces the Civic in 12 countries, said it planned to sell 50,000 Civic units in China this year.

“Civic is more important for Honda in China than its other models like Accord, as the popular compact car model is more attractive to consumers with its cheaper price and fuel efficiency,” said Yale Zhang, an analyst with CSM Asia in Shanghai.

http://www.iht.com/articles/2006/03/20/bloomberg/sxford.php