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Full steam ahead for Shanghai Disney in 2015

Visitors take photos of Mickey and Minnie Mouse at the exhibition commemorating the Walt Disney Company’s 90th anniversary in Zhengda Square in Shanghai on Dec 18, 2013. Provided to China Daily

Shanghai Disney Resort will have completed operational plans this year for traffic and safety, as well as coping with a flock of visitors ahead of the resort’s opening at the end of 2015.

“We’ll make plans taking into consideration the particulars of the domestic market based on the experience of holding the 2010 Shanghai World Expo,” said Fan Xiping, chairman of Disney’s Chinese joint venture partner in Shanghai Disney Resort, Shanghai Shendi Group.

“For example, large visitor flows are expected during the National Day holiday and the weekend after the national college entrance exam,” Fan said on Wednesday.

“We’ll be committed to ensuring a safe and orderly operation, especially when there’s a huge visitor flow or bad weather, to keep the best service standards and create an immersive and unforgettable experience for guests,” said Fan.

Construction of six themed zones in the resort as well as two Disney-themed hotels and retail, dining and entertainment districts are also on track in the 3.9-square kilometer resort in Pudong.

Construction of a “mountain”, an attraction in the resort’s Magic Kingdom-style theme park, started last week. The mountain will be the second highest structure at Shanghai Disney Resort after the Enchanted Storybook Castle. On completion, it will stand as the highest mountain in Pudong, according to the public communications department of Shanghai Disney Resort.

“The main projects in Disneyland will be completed this year and people will see the outlines of the castles and themed lands,” Fan said.

They are also promoting the development of surrounding projects in the Shanghai International Tourism and Resorts Zone, which will include an outlet complex and ecological gardens.

Some political advisers urged Shanghai to introduce more world-class cultural and entertainment projects to build the zone into an international attraction.

“The Shanghai tourism department may talk to more first-class projects that have global recognition, who I believe will be interested and confident of the prospects of the zone in Shanghai, to build the city into a destination for travelers from around the world,” said Guo Guangchang, a member of the Shanghai Committee of the Chinese People’s Political Consultative Conference and chairman of Fosun International, which is involved in industrial operations and asset management.

These projects should be complementary to Disneyland so that visitors will have rich and novel experiences, he said.

Chen Chao, another committee member, said prestigious cultural influence is an important factor when tourists look for a destination.

Chinese tertiary industry soars in 2013

Economic numbers from China’s tertiary industries have exceeded those of the country’s secondary industries for the first time in 30 years.

Tertiary industries include things like the service sector.

The new numbers suggest a change in direction for the Chinese economy, including a stronger focus on enforcement in tertiary sectors.

NBS Commissioner Ma Jiantang says those sectors combined to make up more than 46% of China’s economy last year.

NBS spokesperson Sheng Laiyun says researchers are now trying to figure out whether the emergence of the tertiary market last year is a trend, or just a blip.

He states that he believes the change is the result of years of policy changes and adjustments, affecting business structure and development.

Chen Fengying, director of the Institute of World Economic Studies, says changes in the Chinese economy fit nicely with current global trends.

“The world economy has experienced a downturn in the past few years, China has seen a decline in its exports in the past two years. China cannot rely on exports alone; it must stimulate domestic consumption as well. The rise in its tertiary sectors is a success for the central government and its policies regarding economic transformation.”

Lu Zhengwei, chief economist at Industrial Bank, says e-commerce is one result of the transformation in economic structure.

“New shopping habits and powers have emerged, such as the young generations’ shopping online; 2013 has seen a significant rise in e-commerce. This is different from the trend in commodity sales and it shows the power the young generation has in e-commerce.”

As a manufacturing power traditionally, China’s secondary industry faces new challenges.

Chen Fengying says that China stills needs it to create more jobs and boost the economy.

Career development main reason for job-hopping

Career development and more room for personal growth are the primary reasons that Chinese change their jobs, global recruitment consultancy Robert Walters reported on Tuesday.

Eighty-one percent of the 400 Chinese respondents surveyed said they will change jobs in 2014. Of those, 47.1 percent said the reason was to seek more room for personal growth, while 20.2 percent of them sought promotions in new companies, according to the Robert Walters 2014 Global Salary Survey.

Salary increase, though not weighing as much now as in the past, is still a significant driver of job-hopping. People who stay in their current position can expect a salary increase of between 8 and 10 percent. But for those who change jobs, salaries can jump 15 to 25 percent.

Arthur Wang, managing director of Robert Walters China, said employers should help their employees to map out a clear career path. “If promises are not kept, employees will definitely leave the company,” he said.

Lenovo said to be eyeing IBM’s server unit

China’s Lenovo Group, the world’s largest personal computer vendor by shipment, said Tuesday that the company was in preliminary talks about a potential acquisition, which some insiders said would be International Business Machines Corp (IBM)’s server division.

A filing posted on the Hong Kong Stock Exchange on Tuesday showed that Yang Yuanqing, Lenovo’s chairman, refused to disclose detailed information of the third party as well as the deal.

“The company has not entered into any definitive agreement in relation to the potential acquisition,” Yang said.

Unnamed sources familiar with this matter was quoted by Reuters as saying that Lenovo has restarted negotiations of purchasing IBM’s low-end (X86) server business after the two failed to reach a deal in early 2013 due to their divergence on the cost.

According to media reports in May last year, IBM expects to offer the unit for sale for between $4 billion and $6 billion while Lenovo was only willing to put in $2.5 billion.

Lenovo refused to comment on the possible acquisition when reached by the Global Times on Tuesday. IBM did not reply to the Global Times’ e-mail inquiry by press time.

In pursuit of high profits, IBM is very likely to sell its lower-end server operation at a satisfactory price, largely because this segment has become increasingly mature, leaving little room for robust growth, Cao Yujie, director of consultants for Beijing-based IT market research agency CCW Research, told the Global Times Tuesday.

According to Morgan Stanley’s estimates as quoted by media reports Monday, IBM’s X86 server unit generated around $4.9 billion of the total $15.4 billion in its overall server business in 2012.

Data from the US IT research firm Gartner released in December indicated that in the third quarter of 2013, worldwide X86 servers saw low levels of growth at 2.1 percent year-on-year in shipments, with revenue rising 4.4 percent. The whole server revenue declined 2.1 percent year-on-year in the third quarter.

Despite the low margin, an acquisition of a server business run by market veterans like IBM would significantly boost Lenovo’s market share and enable it to stand out from domestic competitors as well as better compete with foreign peers, said Cao.

Lenovo bought IBM’s Thinkpad PC unit in 2005 for $1.75 billion, which helped it leap to the top of the worldwide PC market.

In the fourth quarter of 2013, the company accounted for 18.1 percent of worldwide PC shipments, ranking first, according to Gartner.

The company has already dipped its toe into the server market in an attempt to diversify its product range beyond PCs.

In early January 2013, it set up a joint venture with the US computer storage service provider EMC Corp to further develop its X86 server business.

However, it does not perform well in this sector due to its lack of advanced technology and brand recognition, Zhang Yi, CEO of Shenzhen-based Internet research firm iiMedia Research, told the Global Times Tuesday.

According to Gartner, Lenovo ranked seventh with a market share of 2.3 percent by worldwide server shipments in the third quarter of 2013, while HP topped the rankings with 26.9 percent and IBM was in third with 7.9 percent.

Zhang believed that Lenovo could win more customers if the acquisition of IBM’s low-end server unit can be finalized successfully.

But he was concerned that the deal may invite scrutiny from US authorities, as servers pose a more important security issue than PCs and handsets due to their being used by governments and enterprises for data storage and processing.

In October 2012, Huawei and ZTE, China’s two leading telecommunications equipment makers, faced charges by a US congressional panel of posing a national security threat to the US.

ZTE aims to sell 60m smartphones in 2014

ZTE Corp, China’s second-largest telecom equipment maker, said it aims to sell more than 60 million smartphones this year and to become the world’s third-largest smartphone vendor by 2016.

Zeng Xuezhong, ZTE’s executive vice-president, said the company sold more than 40 million smartphones last year and that it expects a significant increase in sales this year.

Zeng took the helm of ZTE’s terminal business 20 days ago, after the Shenzhen-based company announced a major restructuring move.

“The Chinese market will likely become a global focus this year and will probably see the fastest growth rate among all the markets,” Zeng said at a news briefing in Beijing on Monday.

He also said ZTE will launch affordable smartphones costing about 1,000 yuan ($165) per unit, in the Chinese market this year.

Demand for next-generation smartphones will surge in the near future, since Chinese telecom carriers are stepping up efforts to set up fourth-generation networks and offer 4G services, said Xiang Ligang, a Beijing-based telecom expert.

China Mobile Ltd – the world’s largest telecom operator by subscriber base – plans to buy about 100 million 4G smartphones from all of its handset partners this year.

Meanwhile, even though Apple Inc recently signed a multiyear agreement with China Mobile to sell its iPhone devices in the Chinese carrier’s stores, analysts said that Apple may only get a small share of China Mobile’s business.

“Apple’s iPhone handsets are too expensive for many Chinese customers,” Xiang said.

Domestic mobile phone players, such as ZTE andLenovo Group Ltd, are more capable of attracting low to mid-end 4G phone buyers, which account for the most important part of the Chinese market.

Ni Fei, head of ZTE’s Nubia smartphone unit, said in a recent interview with The Wall Street Journal that Apple surely will not eat all of China Mobile’s 4G cake.

“There will be big pieces for major Chinese vendors like ZTE,” Ni said.

ZTE launched the Nubia smartphone brand in 2012. The brand relies on online channels to distribute its products and targets high-end smartphone buyers.

Zeng said on Monday that ZTE fully supports Nubia’s development and expects the brand to see much faster growth this year.

He added that because the majority of smartphone users are people under age 35, ZTE said its mobile team should be led by young managers.

“More young people, mostly from the post-1980s generation, will emerge in the high-level management space of ZTE’s terminal sector,” Zeng said.

In addition, the company will pay more attention to mobile phone design, user interfaces and applications, instead of merely focusing on good hardware, he added.

On Monday, ZTE also said its net profit in 2013 ranged between 1.2 billion yuan and 1.5 billion yuan, after it recorded a net loss of 2.84 billion yuan in 2012.

ZTE said stringent controls over low-margin contracts, improved margins for global projects and cost-control measures helped it to improve its performance.

First-tier cities draw capital into offices

First-tier cities, led by Beijing and Shanghai, remain preferred sites for office investment in China despite rather low net yields, CBRE concluded after tracking 15 major Chinese cities.

Boasting stable returns with a low level of risk, underpinned by a well-developed market and resilient demand from foreign and domestic clients, first-tier cities rank higher in CBRE’s MarketScore system, a strategic framework to evaluate real estate investment potential according to their risks and returns.

The key challenge for most first-tier cities, however, is aggressive pricing as net yields for office investments in these cities range from 4 percent to 5 percent.

“As economic and social development varies significantly across different Chinese cities, it can be challenging for investors to choose where to invest and where to buy,” said Frank Chen, executive director and head of CBRE Research China. “The scoring exercise aims to identify the most attractive real estate market from an investor perspective, based on fundamental drivers.”

Beijing topped the MarketScore ranking due to its strong historical rental performance, low vacancy rate and limited future supply.

Shanghai was second due to a strong net take-up and the highest investment liquidity.

Wuhan was third although abundant future supply will curb rental growth in the near term, CBRE said.

Huawei’s revenue set to rise 10 pct annually over 5 years

Huawei Technologies expects revenue to grow 10 percent annually over the next five years as it taps the booming consumer, enterprise and software business as well as reap the benefits of its huge investment in research and development.

Its revenue in 2013 may hit 238-240 billion yuan (US$39.4-39.7 billion), a year-on-year growth of 8-9 percent, the Shenzhen-based company said yesterday.

Profit may reach 28.6-29.4 billion yuan last year, up 40 percent from the previous year, Chief Financial Officer Cathy Meng said in Beijing.

All the financial figures were unaudited.

Meng also predicted a 10 percent annual rise in Huawei’s revenue over the next five years.

The country’s No. 1 telecommunication equipment maker invested 33 billion yuan in research and development in 2013, up 9.6 percent from a year earlier.

It plans to invest US$600 million on 5G technology by 2016, according to Meng.

Huawei said in October that it planned to invest US$2 billion in Britain within five years.

In the global telecom equipment market, Huawei ranks second after Ericsson.

WB projects global economy to grow 3.2 pct in 2014

The global economy is estimated to expand at 3.2 percent this year from 2.4 percent in 2013, with growth picking up in developing countries and high-income economies, the World Bank said Tuesday.

But growth prospects remain vulnerable to U.S.tapering, the global lender said in its semi-annual Global Economic Prospects report.

The firming of growth in developing countries is being bolstered by an acceleration in high-income countries and continued strong growth in China, it said.

However, global growth outlook will be sensitive to headwinds from rising global interest rates and potential volatility in capital flows, as the U.S. Federal Reserve begins withdrawing its massive monetary stimulus, the report noted.

Growth in developing countries will pick up from 4.8 percent in 2013 to a slower-than-expected 5.3 percent this year, reflecting a cooling off of the unsustainable turbo-charged pre-crisis growth.

For high-income economies, the drag on growth from fiscal consolidation and policy uncertainty will ease, helping to boost economic growth from 1.3 percent in 2013 to 2.2 percent this year.

Among them, the recovery is most advanced in the United States, as it is projected to grow by 2.8 percent this year after expanding for ten quarters.

The Euro Area, after two years of contraction, is projected to grow by 1.1 percent this year board.