Archives November 2017

China’s cloud computing market projected to reach 686.6 bln yuan by 2020

China’s cloud computing industry will grow by at least 30 percent year on year on average in the coming five years, the latest industry report showed.

By 2020, the aggregate market size of the country’s cloud computing industry is expected to hit 686.6 billion yuan (about 103.6 billion U.S. dollars), according to the Report of Prospects and Investment Strategy Planning on China Cloud Computing Industry (2017-2022) published by Forward Intelligence Co., Ltd., a special market research institute.

The country’s cloud computing industry has experienced robust growth since 2010 and its market size reached 178.2 billion yuan in 2016, up 18.8 percent year on year, said the report.

The growth was propelled mainly by public departments, who serve both as the customer and the government, as well as by telecom operators, the service provider.

Cloud-based infrastructure or infrastructure-as-a-service (IaaS) is playing a key role in the industrial development, while factors include the adoption of platform-as-a-service (PaaS) and software-as-a-service (SaaS) are also growing fast, according to the report.

The central government attaches great importance to using emerging information technology, including cloud computing and the Internet of Things, to shore up the digital economy, as information consumption, mobile payments and e-commerce grow rapidly in the country.

The cloud computing market is expanding fast worldwide. Last month, American market research firm Gartner’s latest worldwide public cloud services revenue forecast showed the cloud computing market would reach 411 billion U.S. dollars by 2020, driven by robust growth of services including IaaS, PaaS and SaaS, according to media reports.

Cloud computing, also called on-demand computing, is the delivery of on-demand computing resources over the internet.

China expects favorable trade environment in 2018

China’s foreign trade environment will remain favorable in 2018, although the trade protectionism risks still keep growing, the commerce ministry said on Monday.

The Chinese government is implementing policies to cool the property sector and deal with debt risks in the economy. China’s stronger than expected trade performance this year has provided support for the economy.

“Looking forward to 2018, China’s foreign trade conditions are generally favorable as the global economy steadily recovers, and China’s economy grows smoothly,” the ministry said.

“But there are still many external risks and uncertainties with economic and non-economic factors intertwined. As trade protectionism continues to grow, domestic costs also continue to rise. As a result, pressure on business has increased, and the development of China’s foreign trade continues to face many difficulties and challenges.”

After several years of contraction, China’s foreign trade has recovered this year, even though the government has not set a specific target for international trade growth in past two years.

Growth in foreign trade may slow down, but will remain at a high level in the fourth quarter, a ministry report said.

Economists expect China’s exports have risen 7.2 percent on-year in October, slower than 8.1 percent the previous month.

Economists are positive about the Chinese export outlook due to the improvement in the global economy. Capital Economist Evans-Pritchard, still feels that China’s imports may face “a sharper slowdown,” because of that the support to the economy from a loose fiscal policy reverses. And local governments are forced to rein in spending in the final months of the year to meet budget targets.

With a GDP growth of 6.9 percent in the first half, China’s economy is also on firmer footing this year, contributing to brisk import growth.

The IMF raised its forecast for China growth for the fourth time this year in its latest report. The IMF predicts that China’s economy will grow 6.8 percent this year, and 6.5 percent next year, both 0.1 percentage point higher than its previous forecasts.

Sodexo Group strengthens integrated support services for mainland corporates

Sodexo Group, a French services giant specializing in traditional segments such as catering and engineering, is expanding in the Chinese mainland market, its largest target in Asia, by enhancing its integrated corporate services in 50 Chinese cities.

Such services include asset lifecycle management, workplace setting improvement, facility and equipment maintenance.

As China opened up its services sector to strengthen industry, Sodexo started developing its business in more mid-western cities. Its on-site offerings now include business support services, lifestyle services and scientific services.

Optimal use of human resources; design, installation and maintenance of aesthetically appealing entrance areas, inner courtyards, terraces and floral decoration; upkeep of sophisticated buildings … all these functions are now performed by Sodexo for its clients.

“We will cater to diverse segments as our clients are increasing,” said Bruno Vaquette, CEO of Sodexo China. “For example, we’re introducing wellness services in China as part of our ‘Mindful’ project.”

The services, including staff training courses, have already become popular in some metropolises, thanks to agreements with corporate icons such as JD.com Inc and St Luke’s Hospital in Shanghai.

The Sept 1 agreement with JD was for upgrading Sodexo’s supply management.

Sodexo’s wellness services include entertainment sessions and enjoyable short breaks during off-work periods, which are designed to raise awareness of fitness among employees of its corporate clients.

“Chinese companies have recognized the significance of employees’ fitness to their business, and are investing more to improve the quality of their life. Their leaders know that employees’ happiness is key to the company’s success,” Vaquette said.

“We will respond to industry trends and needs via innovation and more services.”

With 425,000 employees worldwide, Sodexo takes the 19th rank among the world’s largest employers and figures in the Global 500 list. Its China unit company employs 12,000 staff.

“Our Chinese on-site employees are all local people, and are supported by thousands of in-house experts, which helps in delivering services in time as per clients’ demands,” said Vaquette.

Paul Junck, managing director of the Luxembourg Private Equity & Venture Capital Association, said, “Opening up the services market is mutually beneficial for foreign investors and Chinese domestic players. Companies’ development is stimulated by competition between players, and industry standards rise thanks to such development.”

Employment demand sees negative growth in first tier cities

Employment demand across China’s first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen saw negative growth year-on-year for the first time, according to a report issued on Thursday by China Institute of Employment Research with Renmin University of China.

The CIER index, designed to monitor China’s job climate, rose to 2.43 in the third quarter from 2.26 in the second, indicating continuous improvement in employment.

Increasing recruitment demand among enterprises, decreasing job-hopping in the job market and relatively less job hunting among graduates led to the rising CIER index, said Zeng Xiangquan, director of China Institutefor Employment Research.

The CIER index shows a progressive increase trend in China’s first-tier, emerging first-tier, second-tier and third-tier cities, with that of first-tier cities seeing a slight drop over last month.

Employment demand in first-tier cities saw year-on-year drop for the first time, at 7 percent, according to data by recruitment website Zhaopin.

Urban resource optimization, a declining registered permanent residence quota and relocation of outdated industries are the main reasons behind decreasing demand, Zeng said, adding that the trend would continue.

More job applicants are supposed to flow to emerging first-tier cities, he said.

In the IT/Internet sector, which saw the highest employee increase, employment demand in emerging first-tier cities and third-tier cities increased 121 percent and 82 percent respectively, much higher than the national average level of 60 percent, while demand in first-tier cities saw negative growth, with a fall of 2 percent.

Employment in Northeast China saw and uptrend , with the CIER index rising to 1.42 from 1.33 in the second quarter. Employment demand in this region increased 57 percent over last year, much higher than 33 percent in East China.

Factory output posts slowest rise in 4 months

China’s manufacturing activity was stable last month but production increased at its slowest rate in four months, a report released yesterday showed.

The Caixin China General Manufacturing Purchase Managers’ Index stood at 51 for October, the same as September, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media Co Ltd.

A reading above 50 indicates expansion, while a reading below reflects contraction.

Sub-indices showed that new orders rose slightly faster, while output growth fell for the third straight month.

At the same time, companies continued to shed staff amid company-downsizing and efficiency-raising efforts, the report said.

The sub-indices for input costs and output prices both eased from the previous month but remained rather high.

“China’s manufacturing sector expanded steadily in October,” Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group said. “But the stringent production curbs imposed by the government to reduce pollution and relatively low inventory levels have added to cost pressures on companies in midstream and downstream industries, which could have a negative impact on production in the coming months.”

Released yesterday, the official PMI in October fell to a three-month low of 51.6.

Divergence of the official data from Caixin data is common as the official manufacturing PMI survey covers 3,000 large and small companies, while the Caixin PMI covers 500, with a focus on small and medium sized businesses.

Wang Tao, chief China economist of UBS, said she expected October data to show softer activity with weaker industrial production and property investment, lower export growth, and largely stable overall fixed asset investment growth.

She said consumer inflation may be warmer last month but factory gate inflation was likely to be cooler.

Shanghai to host first China International Import Expo

The first China International Import Expo, or CIIE, will be held from November 5 to 10, 2018, in Shanghai to further optimize the country’s trade structure with rest of the world, the Ministry of Commerce announced.

The ministry established the China International Import Expo Bureau earlier this week to gear up preparation for the first expo.

Fu Ziying, China’s international trade representative and vice-minister of commerce, said the expo is expected to host businesses from more than 100 countries and regions.

The sponsors of the expo will be the Ministry of Commerce and the Shanghai Municipal Government.

The total exhibition area of the CIIE will exceed 240,000 square meters, covering both national trade and investment fair and business fair.

Xi’an to build new energy auto base

An intelligent manufacturing headquarter for new energy vehicles is to be laid in Xi’an High-Tech Industries Development Zone, according to an agreement signed on Oct. 30.

Thanks to the combined efforts of the Xi’an municipal government and the Skywell New Energy Vehicle Group, a total investment of 10 billion yuan ($1.5 billion) will be used to establish a manufacturing base that will have a profound influence across northwestern China.

Liang Gui, vice-governor of Shaanxi province, extended congratulations to the successful signing of the project, noting that the new energy vehicle industry is a typical sunrise industry which will likely spur the development of the real economy and bring unprecedented prosperity to the city.

The partnership with the leading commercial automobile manufacturer is bound to further upgrade the new energy car industry chain and enhance core competence.

Liang urged the government departments to actively support the construction of the base, and create a favorable environment to achieve a win-win result.

Chairman of the Skywell Huang Hongsheng appreciated the help from the authority and gave recognition to Xi’an’s strategic role in the development of West China.

The company will exert its edge in research and production, boost related industries to settle in Xi’an and contribute to the economic and social progress.