China Economy: News & Discussion

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China Mobile becomes world's-largest and most-profitable mobile operator

China Mobile is the world's-largest and most-profitable mobile operator with "half-year profits topping $9.6 billion."

China Mobile becomes world's biggest mobile operator. The Register

"China Mobile becomes world's biggest mobile operator
By Bill Ray
Posted in Business, 25th August 2011 13:18 GMT

China Mobile's half-year profits topped $9.6bn, making it the largest mobile operator in the world by customers and profits, and six times bigger than the nearest local competition.

That $9.6bn profit is based on revenue of almost $40bn, stomping all over the local competition and topping Vodafone's annual figure of $18.82bn. The local competition is compared with this pretty graph at Penn Olson, which shows that China Telecom only managed one-sixth of its rival's takings, while China Unicom lagged well behind with a profit of only $406m despite (or because of) having an exclusive on Apple's iPhone.

That exclusive is costing China Unicom a huge amount in handset subsidies. Unicom is the only company of the three Chinese operators to see a decline in profits in the first half of 2011, and that's despite increasing revenues more than 22 per cent. It seems much of the cash, $478m to be precise, went on subsidising 3G handsets – most of which will have been iPhones.

China Mobile makes about £6.68 in revenue from each user each month (ARPU), which compares badly to Vodafone UK, which rakes in an average of £21.70 from every prepaid customer (£37.10 from those with contracts). But if you compare this with Vodafone India's ARPU of £2.34, it looks far more healthy.

China's mobile industry is still expanding as penetration is still some way off saturation. Around 900 million mobile subscriptions serve a population around 1.3 billion, so there's still room for expansion within China.

Not that the operators are limiting their horizons to their home country. China Telecom has been talking about launching a UK MVNO aimed at Chinese people living abroad (400,000 of them in the UK, according to the company) and recently expanded its European operations to look specifically at acquiring Western companies.

China Mobile is state-owned, so its profits go to the Chinese government. And its profits are unlikely to fall any time soon, especially with Tim Cook (now Apple's CEO) seen dropping by for a visit to lend weight to the rumours that Unicom's exclusive won't last long and that China Mobile will be getting the next iPhone for its 4G network.

Competition has certainly driven the Chinese mobile industry, but it is not clear how, or if, that competition can be maintained with one player dominating the market to such a large extent."

 

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Three-way international patents tie

It is almost a dead-heat in international patent applications for the world's three-largest economies.

1. Japan: 337,497 World Intellectual Property Organization (WIPO) patent applications
2. United States: 326,945
3. China: 313,854

Reference:

Analysis: China's telecom patent boom heralds innovation era | Reuters

"Analysis: China's telecom patent boom heralds innovation era
By Rachel Armstrong
SINGAPORE | Wed Aug 24, 2011 10:32pm EDT


Two new cloud-based smartphones called "Vision" made by Huawei Technologies Co Ltd, the world's No. 2 network equipment maker, can be seen during an official launch ceremony in Beijing August 3, 2011. (Credit: Reuters/David Gray)

(Reuters) - China's telecom giants are building up a war-chest of patents to help give them an edge in the legal battles raging between the world's smartphone makers, aided by Beijing's push to transform the country from workshop to innovator.

Huawei Technologies Co Ltd and ZTE Corp, China's top two telecommunications equipment makers, are stealing a march on rivals both in traditional network gear and, increasingly, high-end phones.

ZTE was the second highest filer of international patent applications in the world last year according to the World Intellectual Property Organization, making 1,863 different filings. Huawei was the fourth most active filer with 1,528 applications, having been in the top spot in 2009.

Patent filings are soaring across most sectors in China -- last year there were 313,854 patents registered in the country according to the Thomson Reuters Derwent World Patents Index, a 12 percent rise from 2009.

China was the third highest filer of patents in 2010, just behind the U.S., which registered 326,945 and Japan with 337,497. Japan has been the leading patent filer in the world for the past decade but its lead is narrowing, with its filings volume down 12 percent since 2006. China is up 83 percent.

The China telecom space in particular is seeing a lot of action as the likes of ZTE and Huawei, along with Taiwan's HTC move from being contract manufacturers for big foreign firms to making smart phones and tablets under their own brands.

"A lot of know-how flows through the contract manufacturer. The next logical step for these contract manufacturers is to climb up the value chain," said Elliot Papageorgiou a partner at intellectual property law firm Rouse in Shanghai.

And as they move up the value chain, they use patents to protect some of the knowledge and ideas they've picked up as contract manufacturers in order to give them room to manoeuvre in the increasingly competitive market.

"The more this market matures the more you are searching for the margins and China is now probably the biggest mobile phone market in the world," said Papageorgiou.

IP LAWYERS IN DEMAND

The flow of China filings means big business for patent lawyers in a country where trying to enforce intellectual property (IP) rights was seen by many companies as a largely pointless exercise until recently.

"In the last year and especially this year, demand for IP work is growing very fast," said Anthony Chen, a patent lawyer for Jones Day in Shanghai.

Douglas Clark, a barrister specialising in intellectual property cases who has worked in China since 1993 says the size of the industry has surged in recent years.

"The last 10 years have seen a huge growth in the number of IP lawyers employed in firms and in-house," he said.

"At the very top level for partners there's very strong competition for talent and strong salaries."

He estimates an IP partner in an international law firm in China can now expect to earn around $1 million to $2 million depending on how well their firm does that year. Partners in some Chinese firms are likely to earn even more.

COURTROOM BATTLES

The surge in the size of patent portfolios is causing a corresponding rise in litigation.

ZTE filed a lawsuit in China in April saying Huawei infringed on its fourth generation technology. The move came a day after Huawei sued ZTE in several European countries saying its rival had infringed on a series of its patents.

"Huawei and ZTE have sued each other in Europe and now are taking action in China because they both made good progress in selling their mobile communication products and now they're using patents as a competition tool," said Jones Day's Chen.

These lawsuits are hardly surprising given that their foreign counterparts such as Apple, Google and Samsung are all trying to use an armory of patents to stifle competition in the global smartphone industry.

Google Inc's biggest deal ever, the agreement to buy Motorola Mobility Holdings Inc this month for $12.5 billion, is an attempt to buy insurance against increasingly aggressive legal attacks from rivals such as Apple Inc.

So far though the likes of Apple and Samsung have stayed out of legal battles in China, wary of finding themselves at the wrong-end of a court order in a country they rely on for their manufacturing.

But for Chinese firms being sued in Europe or the United States, many are now using their home turf for retaliation.

ZTE has filed a patent infringement lawsuit against Ericsson's China unit after the Swedish telecoms giant filed patent lawsuits against ZTE in Britain, Italy and Germany.

"I expect more and more Chinese firms that may have 'lost face' by finding themselves as losing defendants in foreign jurisdictions to strengthen their position in China and take retaliatory action," said Rouse's Papageorgiou.

CHINA'S INNOVATION PUSH

The influx of patents not only underscores China's growing strength in the telecom sector, it also reveals a change afoot in the country's attitude toward intellectual property.

While the change is hardly air-tight, China is moving more toward recognising ideas and their origins, rather than copying and proliferating.

Intellectual property civil litigation cases filed in China rose by 37 percent to 41,718 last year according to the country's Supreme People's Court.

This is driven in part by China's plan to become a high-tech power house, with a target for 2.5 percent of its gross domestic product to come from research and development by 2020. It's trying to reach this goal by subsidising the cost of patents for Chinese companies and stricter enforcement of intellectual property rights.

"While traditionally in China you are supposed to share knowledge, the government is also aware that if you don't protect IP rights you don't attract investors and the nation can't develop the high-tech industries it wants," said Isabella Liu, a partner at Baker & McKenzie in Hong Kong.

(Editing by Lincoln Feast and Michael Flaherty)"

 

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China's tax revenues: $1.55 trillion vs. U.S. tax revenues: $2.16 trillion

In general, the amount of tax revenues collected by a country will constrain the budgetary size for the armed forces. As China's fiscal revenues start to match U.S. federal government tax receipts, the two countries' military budgets should become roughly equal on a sustainable basis in the next few years.

China's 2011 tax revenues: $1.55 trillion (72% of U.S. tax receipts)
U.S. 2010 tax revenues: $2.16 trillion

References:

China

"China's 30% Gain in Tax Revenue Counters Risks from Local-Government Debt
By Bloomberg News - Jul 19, 2011 2:04 AM ET

China's tax revenue rose 29.6 percent to 5 trillion yuan ($773 billion) in the first half of the year, giving officials more room to maneuver as they grapple with swelling local-government debt.

The gain, reported by the Ministry of Finance on its website today, compared with a 32.4 percent increase in the first quarter from a year earlier. (article continues)"

United States federal budget - Wikipedia, the free encyclopedia

Right-hand-side chart shows "U.S. Federal Tax Receipts - Fiscal Year 2010" of $2,162 billion.

[Note: To estimate China's 2011 tax revenues, double the half-year tax revenue of $773 billion.]

 

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Surprise! ZTE is world's fifth-largest phone manufacturer

ZTE claims two million sales for the ZTE Blade / San Francisco. (Source: ZTE claims two million sales for the ZTE Blade / San Francisco)

ZTE now 5th largest mobile phone maker - China.org.cn

"ZTE now 5th largest mobile phone maker
China.org.cn, August 12, 2011

ZTE has become the fifth largest phone maker in the world, its market share growing from 1.8 percent to 3.0 percent.

Overall sales of mobile devices to end users totalled 428.7 million units in the second quarter this year, up 16.5 percent from the same period in 2010, said Gartner, an industry research firm based in the U.S., in a report released Thursday, Sina.com reported Friday.

According the report, Nokia sold 97.87 million phones, compared to 111.5 million in the second quarter of 2010. Its market share dropped from 30.3 percent to 22.8 percent. Samsung's market share fell from 17.8 percent to 16.3 percent. LG's overall share slid from 8 percent to 5.7 percent. Apple came in fourth, going from 2.4 percent to 4.6 percent. ZTE has become the fifth largest phone maker in the world, its market share growing from 1.8 percent to 3.0 percent.

"We expect manufacturers and distributors to remain cautious about raising their stock levels in the second half of 2011, following the recent uncertainty on the world financial markets," said Gartner analyst Annette Zimmermann.

The industry research company also expects the overall market of mobile devices to grow by 12 percent in 2011."

 

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Huawei overtakes ZTE in device sales

Handsets become key factor in full year sales target of $31bn, which would bring it close to Ericsson

By CAROLINE GABRIEL

Published: 15 August, 2011

ZTE has, until now, been well ahead of its larger compatriot Huawei in penetrating the smartphone market, but now it is losing its lead. Huawei has overtaken its rival in overall mobile device shipments, and is looking to move upmarket into own-branded, high end handsets for key markets like the UK.


Huawei shipped 12m more mobile devices than ZTE in the first half of this year, according to TelecomsAsia. Its shipments were up 42% year-on-year to 72m units, compared to ZTE's 60m. That figure includes dongles and other gadgets, but the Chinese giant's performance was even more impressive in handsets, which doubled their sales in the period. The main driver of that growth was the family of midmarket Android smartphones.


Overall, Huawei reported an 11% rise in revenues during the period, compared to the first half of 2010, reaching CNY98.3bn (16bn) and an operating profit of CNY12.4bn. The firm said it was confident of hitting its target of full year sales of CNY199bn ($31.13bn), which would represent 7% growth on 2010. This would be far slower than its 2010 trajectory, which saw revenue rising by 24% on 2009, but would bring it within striking distance of Ericsson, whose full year sales are forecast to reach about SKR227.6bn ($35bn).


However, a stronger devices business, plus relatively new but powerful pushes into cloud services and the enterprise, could boost growth rates again. And of course, the Chinese firm has managed its impressive performance while virtually excluded from major deals in the north American market - the one that has been Ericsson's chief driver in the past year. A relaxation of security agencies' restrictions on Huawei, however unlikely in the US, could enable it to overtake its Swedish rival. In 2010, it had 16% of the network infrastructure market, compared to Ericsson's 20%.

http://www.rethink-wireless.com/2011/08/15...evice-sales.htm

 

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China grows by "a Germany" in electricity consumption this year

Work on Xiluodu, China's second-largest hydroelectric power station after the Three Gorges Dam, is expected to be completed in 2015. (Photo/Xinhua)

Last year, China consumed 4,190 Terawatt-hours of electricity. Electricity consumption growth for this year is 12%, which means China's projected total 2011 electricity consumption is 4,693 Terawatt-hours.

The growth in China's 2011 electricity consumption will be 503 Terawatt-hours, which is nearly the total amount of electricity consumed in Germany or India for an entire year! China will consume as much electricity this year as the United States and India combined!

[Note: Caption credit -- WantChinaTimes.com. Xinhua photo of Xiluodu dam (shown above) is from March 22, 2009.

In a previous post, I noted CNN reported China's Three Gorges Dam (84.7 billion kilowatt-hours) produces the electricity of 21 Hoover Dams (4 billion kilowatt-hours). (See China fills Three Gorges Dam to capacity - CNN)

China's new Xiluodu dam is expected to generate 64 Terawatt-hours (TWh), which is equivalent to 16 Hoover Dams. (See right-hand-side chart at Xiluodu Dam - Wikipedia, the free encyclopedia)]

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China's power consumption up 12.2 pct in first seven months of 2011

"China's power consumption up 12.2 pct in first seven months of 2011
English.news.cn 2011-08-14 11:25:28

BEIJING, Aug. 14 (Xinhua) -- China's National Energy Administration (NEA) announced Sunday that the country's total electric power consumption rose 12.2 percent from a year earlier to 2.69 trillion kilowatt-hours (kwh) during the first seven months of this year. (article continues)"

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From my post earlier this year:

China overtakes United States as world's-largest electricity consumer

In 2010, China became the first country in the world to exceed the 4,000 terawatt-hours threshold. China consumed 4,190 terawatt-hours of electricity. The United States fell into second place by consuming only 3,876 terawatt-hours of electricity. All hail the new king!

China's power consumption up 14.56 pct in 2010 -Xinhua | Energy & Oil | Reuters

"China's power consumption up 14.56 pct in 2010 -Xinhua
Mon Jan 17, 2011 2:18am GMT

BEIJING Jan 17 (Reuters) - China's total power consumption in 2010 rose 14.56 percent year on year to more than 4.19 trillion kilowatt-hours, official news agency Xinhua said, citing data from the China Electricity Council."

2011 Electricity Demand To Fall Slightly On More Normal Temps - EIA - WSJ.com

"2011 Electricity Demand To Fall Slightly On More Normal Temps - EIA
JANUARY 11, 2011, 2:16 P.M. ET

NEW YORK (Dow Jones)--Electricity demand consumed across the U.S. is expected to fall in 2011 after surging higher last year on extreme hot and cold temperatures, according to the Department of Energy's short-term energy outlook released Tuesday.

Electricity consumption closely tracks growth in economic activity. But last year unusually hot and cold weather caused demand to rebound sharply as households cranked up their air conditioners and heaters, depending on the season. This activity snapped a rare two-year decline in power demand, caused by the housing crisis that deepened into the worst economic downturn seen in the U.S. in decades.

Total U.S. energy consumption, which rose 4% last year to 10.62 billion kilowatt hours a day, is now expected to significantly lag economic activity amid the return to "more normal temperatures," according to the Energy Information Administration's monthly short-term energy outlook."

[Calculation: 10.62 terawatt-hours a day * 365 days per year = 3,876 terawatt-hours of electricity consumed by U.S. in 2010]

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From my post last year:

Is China's Real Economy Already the Size of the U.S.?

Electricity is a good reflection of the real size of an economy. According to Lester Thurow (a famous economist and former dean at the MIT Sloan School of Management), electricity is a fundamental component of economic activity. The measurement of electricity consumption does not suffer from monetary exchange rate distortions caused by currency traders.

In 2009, China consumed almost as much electricity as the United States (i.e. 3,643 vs. 3,741 terawatt-hours). Using electricity consumption as the measurement standard, China's economy is already approximately the size of the U.S. economy.

Why do we think that China's economy will keep booming for the next ten years? China has been busy signing Free Trade Agreements (i.e. FTAs) with Southeast Asia and Latin America that come into effect this month. (See Kevin Holtsberry: The Big Thing in the New Year? It's in Asia and China-Peru FTA to take effect in mid-Jan)

Based on new information, I amended the data in the following table on estimated Chinese power consumption.

Electricity - consumption(kWh) 2010 country ranks, By Rank

Rank.....Country.............Value (kW-hours)............Date of Info
1..........United States....3,741,485,000,000.......2009 (actual, see below)
2..........China................3,643,000,000,000.......2009 (actual, see below)
3..........European Union....2,884,000,000,000..........2007 est.
4..........Russia................1,023,000,000,000 ..........2007 est.
5..........Japan.................1,007,000,000,000 ..........2007 est.
6..........India.....................568,000,000,0 00...........2007 est.
7..........Germany................547,300,000,000. ..........2007 est.
8..........Canada..................536,100,000,000 ...........2007 est.
9..........France...................447,200,000,00 0...........2007 est.
10........Brazil.....................404,300,000,0 00...........2007 est.

References:

United States: International Energy Statistics

China: China's power consumption grows 6% in 2009_English_Xinhua

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VIDEO: Dailymotion - POWER CONSUMPTION GROWS - a News & Politics video

 

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China Construction Bank net profit jumps 31%


To put the net profit of China Construction Bank into perspective, let's compare the 2011 net profits of the two-most profitable Chinese and American companies from each country. As you can see, Chinese companies have achieved the same gargantuan profit levels as their American counterparts.

1. Exxon Mobil: $32.3 billion
2. Industrial and Commercial Bank of China (ICBC): $31 billion
3. China Construction Bank: $29 billion
4. Microsoft: $23.2 billion

References:

Exxon Mobil: The 10 Most Profitable Companies In 2011 - 24/7 Wall St. - Business - The Atlantic
ICBC: ICBC's net profit may rise 21% - China.org.cn
China Construction Bank: See article below and double the first-half profit
Microsoft: Dodge & Cox Finds Value in Tech: Microsoft and HP

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AFP: China Construction Bank net profit jumps 31%

"China Construction Bank net profit jumps 31%
(AFP) – 12 hours ago

SHANGHAI — China Construction Bank said its first-half net profit jumped 31 percent thanks to higher interest rates and strong growth in fee-based businesses such as financial consulting and advisory services.

The bank, in which Bank of America owns a 10 percent stake, earned 92.8 billion yuan ($14.5 billion) in the six months to the end of June, compared with 70.7 billion yuan a year earlier, the company said in a statement filed to the Shanghai Stock Exchange late Sunday.

Net interest income, which accounts for more than 70 percent of its profit, grew 23.7 percent year-on-year in the first half to 145.7 billion yuan after the government hiked benchmark interest rates a number of times this year.

Fee and commission income also surged 41.7 percent from the same period last year to 47.7 billion yuan.

"The group was actively engaged in service and product innovation which boosted the growth in the fee-based businesses. As a result, net fee and commission income rose substantially," the bank said.

Shanghai-listed shares in China Construction Bank closed down 0.89 percent at 4.45 yuan in a weak market.

Lending growth of Chinese banks has slowed since China introduced a slew of measures to rein in liquidity to fight inflation, which hit the highest level in three years at 6.5 percent in July.

The central bank raised its benchmark interest rates twice in the first half of the year and the amount of money banks must keep in reserves with the central bank six times.

China Construction Bank said its outstanding loans stood at 5.99 trillion yuan as of the end of June, up 8.3 percent from the end of December. That growth was slower than the 11.1 percent recorded in the first half of 2010.

But net interest margin, a gauge of lending profitability, widened to 2.66 percent at the end of June from 2.41 percent the same time a year ago on the interest rates hikes, the bank said, offsetting the negative impact of slower growth in new loans.

The bank's non-performing loan ratio stood at 1.03 percent at the end of June, lower than 1.14 percent at the end of Decemb

 

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China Overtakes U.S. as Largest Market for PCs
QBy Bloomberg News - Aug 23, 2011 1:09 PM GMT+0800

China probably overtook the U.S. as the largest personal-computer market last quarter, after three decades of American dominance in an industry pioneered by Apple Inc. (AAPL) and International Business Machines Corp. (IBM)

Personal-computer shipments in China rose 14 percent to 18.5 million units during the second quarter, the first time they surpassed the number in the U.S., where they fell 4.8 percent to 17.7 million, Bryan Ma, an analyst at research firm IDC, said in an interview today. On a full-year basis, China will likely pass the U.S. in 2012, he said.

The estimates highlight the growing importance of China's consumers to the global economy after the country passed the U.S. in 2009 as the largest auto market. Hewlett-Packard Co. (HPQ), the world's largest PC maker, indicated this month it may pull out of that business, while China's Lenovo Group Ltd. (992) posted quarterly profit that almost doubled.

"This was going to happen sooner or later, just like with the car market, and the time has come," said Toshihiro Nagahama, chief economist at Dai-ichi Life Research Institute Inc. in Tokyo. "China has a huge population and their income is rising."

The value of computer shipments in China in the second quarter was $11.9 billion, compared with $11.7 billion for the U.S., IDC's Ma said. China accounted for 22 percent of the global PC market by shipments, a percentage point more than the U.S., he said.

HP's Late Entry
Still, shipments in China will probably end at 72.4 million for the year, about a million shy of those in the U.S., Ma said. Next year, shipments in China will probably rise 18 percent and surpass the estimated 76.6 million units in the U.S., he said.

Hewlett-Packard, a relatively late entrant to the personal- computer market in the early 1990s, vaulted atop the industry with its 2002 acquisition of Compaq Computer Corp. Years before, Hewlett-Packard had turned down a proposal by one of its engineers to buy the design for a home computer he invented. The employee was Apple co-founder Steve Wozniak, who turned the idea into the Apple I in the mid 1970s.

Though Apple helped pioneer the market with the Apple I, IBM spread the use of of the product category with the release of its first PC in 1981. Lenovo, China's largest computer maker, bought IBM's PC business in 2005.

Lenovo is now poised to benefit from both China's rise as the largest PC market, and Hewlett-Packard's potential exit from the industry, Henry King, a Hong Kong-based analyst at Goldman Sachs Group Inc., wrote in a report to clients today.

"We think Lenovo's proven execution track record may help it gain more market share outside China without compromising profitability," King wrote. "We believe it would gain potential market share from HP during the transition period."

http://www.bloomberg.com/news/2011-08-23/c...rcher-says.html

 

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Lenovo expects to beat Dell in PC sales by year's end
Lenovo currently holds the number three spot in global PC sales
Michael Kan


--------------------------------------------------------------------------------
Lenovo's chairman believes the company will overtake Dell to become the world's second-largest PC vendor by the end of this year.

Lenovo chairman Liu Chuanzhi made the remarks on Thursday while speaking to the Chinese media. A Lenovo spokeswoman confirmed he made the comments.

In the previous quarter, the Chinese PC maker edged out rival Acer to take the third spot for global PC sales, according to research firm IDC. Lenovo's market share was at 12.2 percent, putting the company right behind Dell, which had a 12.9 percent share. Top-ranked HP had an 18.1 percent share.

Lenovo's chairman made the claim as the company has seen the fastest growth among the world's top five PC vendors. In the last quarter, the company's PC sales increased by 22.9 percent year-over-year. In comparison, Dell's PC sales only grew by 2.8 percent.

Analysts have said PC shipments have declined because of sluggish spending due to broader economic conditions, and because the popularity of tablets has eaten into PC sales. Lenovo, however, has put its fast growth down to expanding into developing markets in Latin America, Africa and India, while also protecting its home turf in China, where it has a 31.7 percent share.

Last quarter, China also overtook the U.S. in PC sales and shipments, according to IDC. While the U.S. is expected to reclaim the top spot later this year, China will become the biggest PC market throughout 2012.

 

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Alibaba Group will IPO as a Whole - Not as Parts

The author is a Forbes contributor. The opinions expressed are those of the writer.

Overnight, the COO of eTao — the official search engine product owned by Chinese Internet juggernaut Alibaba Group — Qian Xue spoke to Sina Tech (SINA) about the company and the parent Alibaba Group.

The search engine doesn't plan to earn any profits in the next three years. It simply wants to grow market share and try to establish itself compared to its dominant rival Baidu (BIDU).

More interesting to Yahoo! (YHOO) investors was her suggestion that instead of Alibaba Group holding IPOs for several of its portfolio companies (like Taobao, Alipay, eTao, etc.), Alibaba Group was likely to list as a whole.

Jack Ma has been trying to negotiate for well over a year with Yahoo! to buy back part of Yahoo!'s large stake in his company before Ma proceeds with an Alibaba Group IPO. With the latest upheaval at Yahoo!, there have been many rumors of Ma being involved to buy back some of Yahoo! in a larger transaction with other partners.

I've speculated that an Alibaba Group IPO would put a $40 – 60 billion valuation on the company. It would also help Alibaba better compete with Baidu, Tencent, and 360Buy which should IPO in the next 5 months at a blockbuster valuation.

[Jackson was long SINA and YHOO at the time of publication]

 

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Alibaba's Jack Ma interested in buying Yahoo
Relations between Yahoo and Alibaba had sunk to a low recently over an online payment unit
By John Ribeiro | IDG News Service | Published 15:24, 03 October 11

Alibaba Group chairman and CEO Jack Ma announced on Friday that he was interested in acquiring Yahoo at an event at Stanford University, according to reports, making this the first public overture by the Chinese company which is about 40% owned by Yahoo.

John W Spelich, vice president for international corporate affairs at the Chinese internet giant, confirmed that Ma had said at Stanford that he was interested in acquiring Yahoo. "In response to a media question as to whether he was interested in acquiring all of Yahoo, he said he was on behalf of Alibaba Group," Spelich said on Monday.

Ma did not elaborate further, he added.

Yahoo's CEO Carol Bartz was fired from her job on September 6, and replaced on an interim basis by the company's chief financial officer, Tim Morse. The company's board said it was commencing a search for a permanent CEO and expected to engage the services of a nationally recognised executive search firm to help it identify candidates for the position as expeditiously as possible.

One of the issues for which Bartz reportedly drew flak, apart from her inability to turnaround the company, was her handling of an already difficult relationship with Alibaba Group which has managed Yahoo's brand and services in China since 2005.

Yahoo said it was caught by surprise when it found out that Alibaba Group had spun off its Alipay online payment unit to a Chinese company controlled by Ma.

Alibaba Group officials countered saying Bartz and other officials were fully aware of Alibaba Group's plan to divest itself of Alipay in order to meet new Chinese regulations.?? An agreement was eventually reached in late July over what Yahoo and other investors considered fair compensation for the loss of value from the Alipay divestiture.

Ma is also reported to have said previously that he would like to acquire Yahoo's stake in Alibaba Group, a level of ownership which he can now achieve by acquiring Yahoo.

Privacy groups are however worried about the implication to Yahoo users if the company comes under Chinese control, according to the Financial Times newspaper.

Alibaba Group runs e-commerce site Alibaba.com that was listed in 2007 on the Hong Kong Stock Exchange. Group company Taobao, China's largest online retailer, was split in June into three separate companies to better address its target markets.

 

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dear cir,
the gloom is bought by big companies bringing in big changes and improvement. the articles, if you had read highlighted about the apathy of small and medium size companies. what all you are showing or posting is only showing big company's big performance and achievement or in 1-2 cases the human development index activities.
this articles is written with SME in mind. not big companies like huawei or zte or geely or lenovo.

Commercial Times: China's small business policy could impact Taiwan

Central News Agency
2011-10-02 02:40 PM Fonts Size

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The mainland Chinese government has just put forth a new policy on the long-term development of small and medium-sized enterprises (SMEs) in conjunction with its five-year economic development plan. As Taiwan has rich experience in developing such businesses, China's new move merits close watching and an effective response from Taiwan. China's new initiative highlights expanding loan channels for SMEs, relaxing restrictions on their access to the market, granting them preferential tax treatment and increasing their share of government procurement budgets. All these supportive measures are critical and therefore, if and when implemented, will give them a robust incentive to thrive. As a matter of fact, the Chinese economy has developed to an extent where it must indeed push forward a strong policy for developing SMEs because that will effectively rectify a polarized society plagued by widening rich-poor and rural-urban gaps. What SMEs can do best is increase employment. They are most capable of industrializing and urbanizing rural areas. More important, the appearance of SME bosses will serve as a buttress of the middle class, thus helping to stabilize society. It is in this sense that China will seriously carry out a well-rounded SME development policy, and 2011 can be taken as year one of China's SME development. We can expect the Chinese authorities to take steps to help their SMEs grow, including assisting them in getting loans, cutting their taxes and opening up some monopolized areas -- currently held by state-run businesses -- to them. In this connection, China could take a look at Taiwan's experience, which includes the establishment of a loan guarantee mechanism and a special banking system for SMEs. China could also learn from Taiwan's experience in building an open, fair and transparent government procurement system that offers fair opportunities to all business operators. To the government here, we would like to suggest that it should not hesitate to help the Chinese government develop SMEs because this is clearly stated in the cross-Taiwan Strait Economic Cooperation Framework Agreement (ECFA). Of course, romantic and unrealistic visions about cross-strait cooperation for developing Chinese SMEs should be avoided since China has long been a strong rival of Taiwan, particularly in the export market. Mainland Chinese businessmen have resorted to stalking foreign purchasers of Taiwanese products, cut-throat price wars and plagiarizing or illegal copying, creating great pressure for Taiwanese businesses. Therefore, the Chinese authorities would do well to build a good business environment by eliminating inappropriate business practices while developing their SMEs. And the government in Taiwan should work hard to protect Taiwanese businessmen's rights and interests while cooperating with the Chinese government in developing SMEs on the mainland. Through frank and effective negotiations, both sides of the Taiwan Strait could create an environment conducive to developing SMEs that could also expand the room for cooperation between the businesses on both sides while reducing abnormal competition. If this can be done, the real benefits of the ECFA will be felt by the people on the two sides of the strait, and the landmark treaty will have achieved real significance. (Editorial abstract -- Oct. 2, 2011) (By S.C. Chang)

 

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China factory activity picks up, export orders recover
Sun Oct 2, 2011 10:47pm EDT

(Repeats story from Saturday)

* Input prices sub-index eased to 56.6 in Sept from Aug's 57.2

* Official PMI rises to 51.2; HSBC PMI unchanged at 49.9

BEIJING, Oct 1 (Reuters) - China's factory activity picked up in September for a second month in a row and export orders strengthened, offering some reassurance that the world's second-largest economy can weather the global economic turmoil.

The official purchasing managers' index showed inflation pressures eased slightly, but probably not enough for Beijing to relax in its battle against soaring prices.

China's PMI inched up to 51.2 from August's 50.9, largely in line with a median forecast of 51.3 in a Reuters poll .

The new export orders index rebounded to 50.9 from 48.3 in August, which was a 28-month low. The 50-point mark is the dividing line between expansion and contraction.

China is by no means immune to slowdowns in the United States and Europe, its two biggest export markets. However, strong domestic demand and solid Asian export growth have provided some insulation.

Still, investors have grown increasingly concerned that China's economy may slow more sharply than anticipated. Beijing has tried to orchestrate a modest cool-down to help curb inflation, but a deepening debt crisis in Europe threatens to trigger a recession there, which could trip up global growth.

Saturday's data suggested fears of a more pronounced China slowdown may be somewhat overblown. September's PMI reading was the highest since May. The index had steadily declined from March through July as growth in new orders slowed.

"September's PMI should provide some support to global investor confidence, if only at the margin," said Alistair Thornton, an economist at IHS Global Insight in Beijing.

"However, this does little to clarify policy stance, with authorities still eyeing the situation in Europe and the United States for their cue to loosen," he added in a note.

The People's Bank of China reaffirmed on Friday that it would keep monetary conditions tight in its effort to rein in stubborn inflation, adding that containing domestic price pressure remains its top priority.

The official PMI pointed to a slight ease in inflationary pressure, with the input price sub-index edging down to 56.6 last month from August's 57.2.

However, a separate survey by HSBC, released on Friday, showed the same sub-index climbed to a four-month high of 59.5 in September from 55.9 in August.

The official PMI, compiled by the China Federation of Logistics and Purchasing on behalf of the National Bureau of Statistics, provides a snapshot of business conditions in factories before official monthly output data.

"The small rise in September PMI indicates a rising likelihood that the downward trend in economic growth is stabilising," said Zhang Liqun, a researcher with the Development Research Centre, a think-tank under China's cabinet.

"But considering all factors, there is still high possibility the economy could continue to slow. Small firms are facing many difficulties right now," he added in a statement accompanying the data release.

The HSBC PMI painted a gloomier outlook of Chinese factory activity. That survey showed manufacturing shrank for a third successive month in September, with a headline reading of 49.9, unchanged from August but up from a preliminary reading of 49.4.

HSBC's report captures more small private firms which have been hit harder by domestic credit curbs and slack global demand. The official PMI includes more state-owned companies.

"China needs to increase its policy support for the small and medium-sized enterprises as soon as possible," Zhang said.

The sub-index for overall new orders picked up to 51.3 from previous month's 51.1, reversing a downward trend since March.

Although the official PMI sub-index for new export orders improved, it lagged behind the readings for the same month of the past few years, excluding the ultra-weak readings recorded in the midst of the global financial crisis.

"That means the year-on-year growth of China's exports will fall in the next two quarters under the weakening global demand," said Dong Xian'an, chief economist of Peking First Advisory. (Reporting by Langi Chiang; Editing by Emily Kaiser

 

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China's Red-Hot Growth Gives Policymakers Pause
by Frank Langfitt
October 3, 2011

The U.S. economy is struggling to grow. The European Union is trying to contain a debt crisis. And, in a case of bad timing, the world's fastest-growing major economy, China, is trying to slow down.

Shanghai has been one of the world's hottest real estate markets, but it's too hot for Chinese officials who are fighting high inflation and what some fear is a housing bubble.

Earlier this year, the Shanghai government tried to slow down real estate sales by restricting people from outside the city from buying more than one property.

James Ye of Shanghai Pujing Real Estate sits in an office filled with agents hunched over computers. He says the government policy is working; deals for existing homes are bad.

"Last year, I sold one property a month," he says. "Now, I sell one property every two or three months."

The real estate policy is part of a broader plan by the Chinese government to slow the country's staggering growth.

Andy Rothman, who follows China's economy for CLSA, an independent brokerage and investment group, says the Chinese government wants to slow down the economy and improve the quality of what it produces.

"Here in Shanghai over the last 10 years, the government has raised the minimum wage by 160 percent," he says. "And this is a deliberate effort to get out of the business of focusing on low-value-added shoes and toys and move more upmarket for better quality jobs that pay better."

Rothman says he expects China's economic growth to fall below 9 percent next year — the slowest rate in a decade, but still fast by global standards.

"Strong growth is China will put a floor under the global slowdown, but it's not going to save the world," he says.

One reason: Most Chinese just don't have the purchasing power.

"Chinese consumers are spending a lot. Retail sales growth is 17 percent," Rothman says. "But the Chinese consumer doesn't have enough money to make up for American consumers not going shopping."

Rothman has a point. China is getting wealthier, but most Chinese still don't have that much money.

Xiao Yandong makes a living standing in Shanghai's financial district selling pancakes each morning for about 50 cents each. He makes 200 Chinese breakfast pancakes a day, seven days a week. He earns just $500 a month. Xiao doesn't have much disposable income. He hasn't taken his wife and 8-year-old daughter out to eat all year.

"We buy groceries to cook at home, because eating out is too expensive," he says. "Each meal out costs between $40 and $50, and then it's gone. So, we take the subway to friend's house to eat dinner."

Whitney Wang, an English teacher, strolls by on her way to work. She earns more than three times what Xiao does, but she's saving most of it for an apartment. That leaves little to spend on Shanghai's pricey merchandise.

"Jewelry's something I haven't buy for a long time," she says.

During the global slowdown in 2008, the Chinese government spent billions of dollars on roads and bridges to prop up growth. This time, another dose of government stimulus spending seems less likely — unless demand for Chinese exports from Europe and the U.S. plummets.

"If millions of migrant workers who are in factories, especially in southern China, making iPads and microwave ovens and DVD players lose their jobs, then you'll see a few quarters of stimulus to find temporary jobs for those folks," says Rothman of CLSA.

The U.S. and Chinese economies remain highly interdependent, but China faces its own unique challenges: Its leaders are certain to focus on the risks to their economy before addressing the problems facing the U.S. and the EU.

 

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China trade surplus shrinks as global woes deepen

China's trade surplus narrowed for a second straight month in September to $14.5 billion, with both imports and exports lower than expected, reflecting global economic weakness and domestic cooling that will deepen policy quandaries facing Beijing.

The trade data issued on Thursday laid bare trends at the heart of Beijing's debate about how to handle U.S. pressure for a higher yuan while seeking to protect both export-driven jobs and tame inflationary pressures.

Moments after the data was released, a deputy chief of China's customs agency staked out one position in that debate, saying a higher yuan is already hurting exports.

"The rise in the renminbi exchange rate may limit the room for export growth," Lu Peijun, the deputy head of the Chinese customs administration, said at a news conference about the data. The renminbi is another name for the yuan.

"China is still facing relatively big imported inflationary pressure and trade conditions are also deteriorating," said Lu.

Many traders are already wagering Beijing will tighten its leash on the yuan, which fell against the dollar on Thursday after the central bank set a sharply weaker mid-point for daily trading. Forwards markets are pricing in depreciation of the currency in the year ahead.

http://www.reuters.com/article/2011/10/13/us-china-economy-trade-idUSTRE79C0K620111013

 

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Gamesa Corp plans to sail into a prosperous future

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2011-09-07
Source:China Daily

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Workers prepare a wind turbine for shipment at the Gamesa factory in
Tianjin. The company said it will invest in two new plants in China.
[Photo / China Daily]

Gamesa Corp Tecnologica SA, a leading Spanish wind turbine manufacturer, plans to invest 90 million euros ($128 million) by 2012 in China, the world's largest wind power country, said Jose Antonio Miranda, the newly appointed chairman of Gamesa China.That figure includes investments in two new plants in Jilin province and the Inner Mongolia autonomous region this year.

China is planning to greatly expand its offshore wind power capacity to 5 gigawatt (gW) by 2015, and wind turbine manufacturers are preparing to capture the demand. Gamesa is set to launch its first offshore prototype, the 5 megawatt (mW) G11x model, in the US next year. Meanwhile, it is developing the larger, 6 or 7 mW G14x wind turbine, which is expected to be operational in two or three years. The new chairman hopes the G11x will be installed in China in two years. But the Chinese manufacturer Sinovel Wind Co Ltd has already made a 6 mW wind turbine and is looking into following through with 10 mW turbines.

Though China represents more than 20 percent of its revenue globally, Gamesa's market share has been declining since 2005, when it commanded one-third of the market.The wind power sector is seeing a trend of focusing on quality, while in the past it was growth, Miranda said.

"People have started to think about the quality of the machines and the real value of high quality products after the incidents in Gansu province," he said. Four major incidents happened this year in Jiuquan, Gansu province, one of the country's major wind power bases, in which equipment failures led to 2,978 turbines being disconnected from the grid, raising concerns about the Chinese wind turbines. The energy cost of running an offshore turbine will be huge in 20 years and low quality machinery that will eventually damage the investment return is a poor idea, Miranda said.

By the end of 2010, China's overall wind power capacity amounted to 44.73gW, up 73.3 percent from the previous year. From 2006 through 2009, the growth rate of the country's installed wind-energy capacity averaged 113 percent. "We are seeing consolidation in the onshore market and hopefully we will gain even more market share in the process, " Miranda said. Growth in the onshore wind power sector will slow due to tightening financing, and a switch of focus to quality, he said. Seeing itself as more than just a wind turbine maker, Gamesa is also looking at the wind farm business and has more than 2,900 mW of capacity in the pipeline to be developed in China.

 

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Dome installed at Ningde 3

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by World Nuclear News
07 September 2011

Construction of the third unit at China's Ningde nuclear power plant has reached a major milestone with the dome of the reactor building being lowered into place.

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Installing the lid on Ningde 3 (Image: CNECC)

Plant constructor China Nuclear Engineering and Construction Corporation (CNECC) announced that the reactor dome was successfully lifted by crane and placed on top of the containment building on 26 August. This, the company said, was 80 days ahead of schedule. Construction of the unit officially began in January 2010.

Four Chinese-designed CPR-1000 pressurized water reactors are currently under construction at the Ningde site, near Fuding city in Fujian province. Work on the first Ningde unit started in February 2008, with construction of units 2 and 4 beginning in November 2008 and September 2010, respectively. All four units at the site are scheduled to come online between late 2012 and 2015. The construction of two further CPR-1000 reactors is planned for Phase II of the Ningde plant.

The CPR-1000 is a standardized Chinese design developed from the two Areva PWRs imported for the Daya Bay plant in Guangdong province, starting up in 1994. Those units were built to the French three-loop standard, outputting 944 MWe. The CPR-1000 builds on that to produce 1080 MWe. The CPR-1000, along with Westinghouse's AP1000, is a mainstay of China's planned near-term nuclear capacity expansion, with 18 CPR-1000s already under construction.

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The Ningde nuclear power plant under construction in southeast China's Fujian Province on Dec. 28, 2010.

 

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China Primed for a Bright Solar Future

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By Edwin Huang, Suntech
renewableenergyworld.com
September 12, 2011

China's announcement this summer that it plans to establish new nationwide feed-in tariffs has unleashed a wave of renewed optimism in the solar industry. The policy stands to substantially boost domestic demand for solar technologies, making China not only the biggest manufacturer of solar panels worldwide but potentially also the largest consumer of solar energy. The proposal also indicates how serious the Chinese government is about adopting solar power as a substantial share of the country's renewable energy mix.

Solar energy makes sense for China. With its booming economy and massive population, which is undergoing the largest urban migration in human history, the country has an overwhelming demand for electricity that will only continue to increase in the future. Ensuring that China has enough resources to sustain its economic growth is a top priority for the government. Facing more environmental challenges at home as well as the worldwide issue of climate change, the government is well aware that it cannot rely only on fossil fuels. Solar energy is the best renewable energy solution for today's energy crisis, combating climate change and providing access to basic electricity to a quarter of the world's population.

In its latest five-year plan, released in March, Beijing outlined an ambitious goal to build 235 gigawatts (GW) of power generation capacity from clean energy sources over the next five years. The government plans to add five GW of solar capacity by 2015. Clearly, China intends to maintain its global lead in clean energy investment. Via initiatives like solar FITs (feed-in tariffs), it is further reaffirming its commitment to the utilization of renewable energy.

The new tariffs would also boost the government's existing Golden Sun program. Launched in 2009, Golden Sun offers government subsidies of up to 50 percent of investment for solar projects as well as power transmission and distribution systems that connect to grid networks. For independent solar power generating systems in more remote regions, subsidies of up to 70 percent are available. The aim of the Golden Sun is to support the deployment of 500 megawatts of large-scale solar projects by 2012 and to add at least a gigawatt every year after that.

The proposed FITs will encourage more investment in the construction of large-scale solar plants in China's south and west, a region ideal for solar installations. Electricity generated by such infrastructure can be easily connected to the grid and fed to urban areas in the east via ultra high voltage transmission lines that power companies have been building out as part of a new national smart grid system. The subsidies will additionally encourage individuals and businesses in cities, like Beijing and Shanghai, to install small-scale distributed solar systems to integrate into urban smart grid systems that are now being planned and implemented.

Critics consider the FITs as only a temporary fix, raising doubts as to whether they will ultimately boost domestic consumption of solar power. It is important to point out that this is only the beginning of what likely will be more favorable changes implemented to bolster the sector. It is also important to highlight the fact that nationwide FITs for wind energy initiated in 2009 led to explosive growth of the country's wind energy market. In 2010, China outpaced the U.S., emerging as the biggest market for wind power capacity, for example. Similar growth for the solar sector will undoubtedly occur once the government outlines and implements its proposed FITs.

The China FIT will boost the profitability of the sector as well as open doors for more investment and further development of efficient and affordable solar technologies for China and for the world.

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A huge façade of photovoltaic panels greets visitors at Suntech headquarters in Wuxi, China.


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Suntech Manufacturing plant in Wuxi

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Suntech Manufacturing plant in Wuxi

 

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Russia and China cooperate on floating plants

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world-nuclear-news.org
16 September 2011

A high-level meeting of Chinese and Russian nuclear leaders has resulted in an agreement to 'develop cooperation' on floating nuclear power plants. "Our Chinese partners have shown great interest in the Russian project," said Rosatom chief Sergei Kiriyenko, referring to the first floating plant, the Akademik Lomonosov, being built in Saint Petersburg. Early plans for the plant had foreseen the Russian marine power reactors being fitted to a Chinese-built barge.

The countries are also discussing cooperation for space nuclear power systems, and from mid-2012 Russia will supply radioisotope thermal generators to the Chinese space program.

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The Akademik Lomonosov, a floating nuclear power station, is launched at Baltiyskiy shipyard
in St. Petersburg, taken June 30, 2010.

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The hull of the Akademik Lomonosov before its launch in June 2010


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The Akademik Lomonosov: An artist's rendering of a floating nuclear power
station currently under construction in Russia.

 

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China to build new polar icebreaker
(People's Daily Overseas Edition)
14:08, September 19, 2011

Edited and Translated by Han Shasha, People's Daily Online

China will build a new polar icebreaker with a displacement of 8,000 tons and endurance of 20,000 nautical miles during the 12th Five-Year Plan period, an oceanic official said.

The new icebreaker, capable of breaking ice more than 1.5 meters thick, can operate in temperatures below -35 centigrade degrees, said Liu Cigui, head of the State Oceanic Administration at a meeting on oceanic technology.

Equipped with helicopters, robots, workboats and other facilities, the ship is designed to conduct ice operation, examine marine environment as well as explore and investigate resources in the polar region.

China to build new polar icebreaker - People's Daily Online