Category Investing in China

China’s growth presents opportunity for Latin America

China’s economic growth presents an opportunity for Latin America, said a report of UN Economic Commission for Latin America and Caribbean (ECLAC) on Wednesday.

The report said China became the fourth-largest economy in the world in 2005, replacing Britain and that China’s share of the world trade volume has jumped from 1 percent to 6 percent in less than 20 years.

China has been the primary target of anti-dumping cases in recent years, the report pointed out, adding that many emerging economies harbored bias against China over its strong competitive edge from low labor costs, with some even blaming China for their poor exporting performance.

However, the report said China’s enormous domestic market presents an opportunity to many countries, adding that Latin American countries will continue to benefit from China’s economic growth and its ever-expanding domestic demand. Brazil’s exports to China has quadrupled over the past four years, it added.

Meanwhile, the ECLAC stressed that there is no direct trade competition between China and Latin America in the U.S. market.

China’s trade increase has little impact on Paraguay, Venezuela, Bolivia and Panama and China is a net importer of raw materials while Latin America is rich in natural resources.

Therefore, the report said China’s economic growth and its integration in world trade would “obviously” benefit Latin America, the report added.

Foreign investment meets city’s target for 2006

FOREIGN investment is expected to continue to pour into Shanghai at a healthy pace after contracted funding paced by the service industry met forecasts in 2006.

The city approved 4,061 foreign-invested projects with contract value totaling US$14.6 billion last year, a 5.4 percent increase over 2005, the Shanghai Foreign Economic Relations and Trade Commission reported yesterday.

Among the new projects, 2,962 deals worth US$9.8 billion were in the service industry, the city’s trade and investment authority said.

“Contracted foreign investment in the service industry jumped 33.5 percent in 2006,” said the commission’s Chen Zhangyuan.

The service sector contributed 67 percent of contracted foreign investment to the city’s total last year.

Shanghai’s foreign direct investment – the amount actually received – exceeded US$7 billion in 2006, compared with US$6.9 billion a year ago, the authority said.

“The retail sector, which featured a batch of world-famous brands landing in the city, some service outsourcing projects and rapidly expanding overseas financial service projects fueled the growth in the service sector,” Chen said. “In addition, investments in energy, environmental protection, information technology and petrochemicals were very active in the past year.”

Shanghai is no longer posting double-digit growth in attracting foreign funds as it focuses on attracting high-value-added investment projects that help optimize the city’s industrial mix.

Shanghai is now home to 154 multinational regional headquarters and 196 research and development centers.

China’s West Attracts 300 Bln Yuan Investment from East

Firms based in the east of China have invested more than 300 billion yuan (about US$37.5 billion) in western China, Fu Ziying, assistant minister of Commerce, said on Wednesday.

The 10,000 east China-based enterprises include state-and private-owned enterprises as well as foreign companies, Fu said at a press conference at the 11th China Chongqing Investment and Global Sourcing Fair (CCISF).

Abundant resources, preferential policies, and cheap land and labor in the region spelt opportunities for investors. The rapid expansion of manufacturing, high-tech, power, and tourism industries in the region has added to its attractiveness.

The CCISF, held every two years, promotes trade and investment in west China. It is a platform that allows the western region to seek investment from outside, according to Fu.

The 11th CCISF will be held between April 18-21, 2007 in Chongqing Municipality, focusing on the theme of “Global sourcing and investment.”

China launched the western development program in 2000 to narrow the economic gap between the region and the country’s east.

In 2005, the region generated a total of 3.37 trillion yuan in gross domestic output, up 12 percent on 2004, significantly higher than the national average of 9.9 percent.

Jefferies ups the ante in China

AMERICAN investment bank Jefferies & Co expects to arrange 10 deals worth US$1 billion in transaction value for China-based clients next year, its Vice Chairman Paul Deninger said.

The deals, which include public offerings and stake transactions, compare with six China-related mandates worth US$500 million in transaction value for the past two years, he said. The Chinese clients cover alternative energy, shipping, natural resources and industrials, according to Wei Hopeman, the firm’s chief representative in Shanghai.

One third see China as opportunity

Dec.5 – One third of Europeans and Americans see China’s rapid economic growth to be an opportunity, while nearly 60 percent remain wary of China’s rising economic power, an opinion poll showed on Monday.

The survey, by the German Marshall Fund, a transatlantic think tank, comes as policymakers in Brussels and Washington are planning to update trade and investment ties with China, wary of its new economic might but keen for more of its huge market, the Reuters reported.

China skeptics worrying about China’s economy see its inexpensive goods export and their companies relocating to China as a threat, according to the poll which covered France, Germany, Italy, Poland, Slovakia, Britain and the United States.

Of the six European countries covered, 70 percent of people in France and only slightly fewer in Poland, Italy and Slovakia expressed jitters over China’s emerging economy, said the Reuter report.

Traditionally free-trading Britain had more people who saw China as an opportunity than a threat, the survey found.

With European manufacturing coming under pressure from Asia, the European Commission has imposed anti-dumping duties on a range of Chinese exports, including leather shoes.

EU and Chinese negotiators are due to begin talks next month on a broad new bilateral agreement, including economic issues. And, US Treasury Secretary Henry Paulson is leading a high-level Washington delegation to China later this month.

In potentially good news for attempts to break a deadlock in world trade talks, the poll showed 52 percent of respondents favored globalization in general, up from 46 percent in 2005.

Possibly behind that was a fall in dissatisfaction about the local economy — 41 percent of Americans and 27 percent of Europeans were satisfied with their own economy, up from 30 and 20 percent respectively in 2005, the survey found.

But in a sign of how sensitive an issue free trade remains, two thirds of the French and over half the American respondents in the poll favored keeping trade barriers when local companies are at risk, even if it means slower economic growth at home.

The poll heard the views of about 1,000 people in each of the seven countries between September 5 and 25.

Investment in China increases

Recruitment companies have increased their investments in China, according to a new study by the1, the M&A specialists for the human capital sector.

The study identified a cumulative total of 156 investments in China by 106 foreign recruitment or human capital groups over a 20-year period.
China as a whole, including deals made in Hong Kong, has seen a 70% boost in investments, from 40 transactions in the 1995-1999 period, to 68 in the post-2000 period.

Director Mark Dixon says: ¡°China is the human capital sector¡¯s number one opportunity long-term, with a population of 1.3 billion, you don¡¯t have to be a rocket scientist to do the maths. It¡¯s a numbers game, with some very big numbers.¡±

The growth was fastest (132%) for investments in Mainland China (58 post-2000 versus 25 in the prior period), the first empirical evidence that foreign human capital companies have stepped up their investment on the Mainland.

Huge rail investment announced

SHANGHAI, Nov.23 – China will invest 1.5 trillion (US$190 billion) to increase the nation’s rail network to over 90,000 kilometres by 2010.

“We will invest 300 billion yuan (US$38 billion) in railway construction next year,” Li Guoyong, transportation director of the National Development and Reform Commission, said Wednesday at the China Railway Financing Forum.

The investment, described by Li as “the biggest in China’s history,” would increase the size of China’s rail network by almost 20 per cent.

The 1.5 trillion yuan (US$190 billion) investment includes 250 billion yuan (US$31.6 billion) for vehicle purchasing, over 600 billion yuan (US$76 billion) for railway lines and over 625 billion yuan (US$79 billion) for civil engineering.

China’s 11th Five-Year Plan (2006-10) states that solving hardware problems, such as the network and machinery, are the core issues for the development of the nation’s railways.

“The transportation turnover rate for railways will double with the completion of main trunk lines in 2010,” said Long Hua, an analyst from Industrial Securities Co.

“The railway industry’s boom is expected to last over 10 years.”

Slow and relatively poor-quality services and busy trunk lines remain the major problems confronting China’s rail industry.

A lack of services will remain a problem in 2010, but the Ministry of Railways expects this to be solved by 2015.

“We plan to set up an inter-city passenger transportation express, which will reach a speed of at least 200 kilometres per hour,” said Li.

China to be the biggest energy producer

¨C China is working hard to improve its energy efficiency, and it is planning to expand the energy market scale to 10 trillion yuan before 2020. It is estimated that China will overtake USA in 2 years to become the biggest energy producer in the world.

Though China is well on the way to developing more energy resources, and the country does have a great potential in this field, it will still be wise for it to use energy in a sustainable way.

Besides fossil energy development, great achievements have also been made in developing clean energies like windpower, hydropower and solarpower.

Environmental protection will pose a great challenge, too, as even rapid growth of energy industry in the country should never harm eco-environment.

China will stick to the open-market policy in the future, which will bring mutual benefit to both China and the world.

Currently, a law on renewable energies is under being in preparation, and specific regulations on the development of clean energies will be made, too, to ensure energy security.

4th Chinese private enterprise summit opens in east China

HANGZHOU, Nov. 4 (Xinhua) — The fourth Chinese Private Enterprise Summit, the largest of its kind in China, opened Saturday in east China’s Zhejiang Province.

More than 3,000 private entrepreneurs both at home and abroad attended the two-day summit held in Hangzhou, the provincial capital.

With the theme of “Innovation, Credibility and Harmony”, the summit had a series of forums on innovation, real estate development and Chinese private entrepreneurs.

“Weakness in innovation and enterprise management now hinder the development of private enterprises in China,” said Jiang Zhenghua, vice-chairman of the National People’s Congress Standing Committee, China’s top legislature, at the opening ceremony.

Chinese private enterprises should make use of the opportunities in globalization and nurture their own brands on the basis of good management, he said.

The summit was sponsored by the Private Economic Studies Centerunder the Chinese Academy of Social Sciences, Zhejiang Provincial Administration for Industry and Commerce, and Zhejiang Private (Non-Governmental) Enterprises’ Association.

A key sector in the province’s economy, private enterprises hold 90 percent of jobs and 70 percent of the gross domestic product in Zhejiang. Enditem

China to provide 500,000 USD for human resource development in Central Asia

China will give half a million U.S. dollars to Central Asian countries to support their human resources development, said China’s Vice Finance Minister Li Yong.

The money will come from the Regional Cooperation and Poverty Reduction Fund (RC Fund) set up by China at the Asian Development Bank (ADB), said Li at the Ministerial Conference on Central Asia Regional Economic Cooperation (CAREC) in Urumqi.

“China actively supports regional economic cooperation in Central Asia,” said Li.

China provides technological aid for the area’s agricultural development, environmental protection and capacity building through the RC Fund, and supports cooperation in prevention and control of AIDS and bird flu, said Li.

China is committed to providing 20 million U.S. dollars to Central Asian countries between 2005 and 2009. It established the RC Fund last March to promote regional cooperation in reducing poverty among the developing member countries of the ADB.

In June 2004, China gave Kyrgyzstan 60 million yuan (7.5 billion U.S. dollars) in aid to build a 937-kilometer highway linking the country with China and Uzbekistan.

From 2006 to 2008, the ADB, together with the European Bank for Reconstruction and Development, the International Monetary Fund, the Islamic Development Bank, the United Nations Development Program and the World Bank, will invest 2.3 billion U.S. dollars in regional transport, energy and trade infrastructure in Central Asia, with 1.4 billion coming from the ADB.

Created by the ADB in 1997, CAREC is a regional cooperation mechanism focusing on transport, trade and energy initiatives that are critical to the economic performance of the region.

It is also financing infrastructure projects in order to improve living standards and reduce poverty in CAREC countries.

Source: Xinhua