Tag: China

China: Largest Market for New Auto Sales in the World

US auto sales appear to be booming in China with the Ford Focus taking the position as the best-selling sedan in China last month and GM setting a new sales record in September.  GM has been making a concerted effort to win over wealthy Chinese consumers, and, according to Justin Hyde, the managing director of Yahoo Autos, it’s paying off.

As he said, “Right now half of GM’s sales in China come from Wuling, its joint venture brand with Chinese partners. GM wants to boost Cadillac and its other luxury models. The company is starting to build Cadillacs in China that are designed for the Chinese market.”

China is currently the largest market for new auto sales in the world. Ford is looking to double its share of the Chinese auto market to 5% from its current 2.5% by the fourth-quarter of the year. As Hyde said, “Ford is competing against a very crowded field of foreign and Chinese built competitors but Ford is getting a break. There is a new nationalistic streak that is pushing Chinese buyers to homegrown brands. The streak is hurting Japanese competitors and helping Ford.”

All eyes in the Chinese market are now on Tesla’s Model S.  While they have recently blogged that reservations are being taken for their Model S electric car, Hyde explains that things aren’t so simple. As he said, “Tesla has a lot of opportunity in China but the trick will be how it gets in there. The Chinese government controls access to its markets very tightly. It requires automakers who want to build in China to have a joint venture partner so the Chinese auto industry can learn and eventually build its own vehicles. Tesla has to consider whether it wants to partner and share its technology with a Chinese firm.”

Ad Age Adds Adam Roseman to 40 Under 40 List

Marketing and advertising journal Ad Age named Los Angeles businessman Adam Roseman to their annual list of 40 Under 40 in recognition of his achievements in the marketing and advertising industry.

Roseman is the CEO and Co-Founder of FansTang, a Western digital entertainment company selling content in China.

“I’m honored to be recognized by Advertising Age amongst all the other established, talented industry leaders,” said Roseman. “I’m extremely proud of what our business has achieved. Our strategy is built around utilizing our extensive data analytics and production capabilities to create positive and localized international content consistent with Chinese culture and appealing to Chinese millennial consumers. In 2016, we will continue to focus on producing and curating high quality digital content, expanding our brand partnerships and further developing our exceptional international team.”

Roseman founded FansTang in 2012. It is wholly owned by its parent company, China Branding Group, which specializes in providing western digital media to meet China’s growing demand for localized international content. With offices in Los Angeles, Beijing and Shanghai, Roseman and his teams have launched into new markets for their Chinese and Western entertainment content collaboration.

FansTang is China’s largest provider of localized international content of live events, social media, and non-studio Hollywood and related video content into the Chinese marketplace.

LinkedIn Comes to China

LinkedIn just launched their Chinese version, which will have to contend with strict censorship issues and other complications. China actually has the world’s largest online community with over 618 million users. Users, however, can’t use Facebook or Twitter, and they are confronted with a Great Firewall that blocks online forums or sensitive materials.

The new LinkedIn allows users to post public comments, but no group discussions are allowed. As chief executive Jeff Weiner said, “As a condition for operating in the country, the government of China imposes censorship requirements on internet platforms.” He promised that “government restrictions on content will be implemented only when and to the extent required” and that it “will be transparent about how it conducts business in China”.

He continued, “LinkedIn strongly supports freedom of expression and fundamentally disagrees with government censorship. At the same time, we also believe that LinkedIn’s absence in China would deny Chinese professionals a means to connect with others on our global platform.”

The English-language version of LinkedIn has already been available in China and has four million users. Now, the Chinese version hopes to attract more than 140 million Chinese users.

According to the China Internet Network Information Center, China’s online population (defined as anyone who has used the internet at least once in the past six months) is the largest in the entire world. Time will tell how LinkedIn does in this location.

China Adding 5 Privately Financed Banks

China’s banking regulator has recently announced that they will create as many as five privately financed banks to support economic growth. The goal is to promote “modernization of governance.”

China’s economic growth took a turn for the worst in the second quarter of last year with a low of 7.5%. In the third quarter, growth did rebound to 7.8% and the Cabinet is expecting growth for the full year of 7.6%. This would end up being the weakest performance since 1999.

The Chinese banking authorities will be supervising the new institutions, although they will be funded through private enterprise. As described in a recent article, “The new move is part of an effort by CBRC to ease to flow of foreign capital into the Chinese banking sector. According to Xinhua, the regulator will also be investigating the possibility of lowering the threshold required for foreign banks to enter the country.”

Car Sales on the Rise in China

In an interesting article recently about the global car industry, Yahoo Finance pointed out that China is showing itself to be a major growth spot for the global auto industry. As Carlos da Silva, an analyst at IHS Automotive explained, “For many years it’s been the Bric nations (Brazil, Russia, India and China) which have accounted for the growth of global sales, taking over from the more mature markets.”

Sales for cars in these BRIC countries are not all growing at the same rate. Russia may see car sales fall by 7% this year, according to IHS Automotive. In India, car sales are also expected to decline. Brazil expects their sales to remain stable at about 3.6 million cars, as IHS reports. But China appears to be the hot spot in this equation with sales continuing to rise if analysts are correct.

PwC is predicting that the sale of new cars in China may double from 2013-19. As Julien Marcilly, head of country risk with credit insurer Coface explained, Chinese houses have very little debt and the minimum wage has increased by about 20% in the country.

 

 

I

China Building Beyond Demand

The dream of China and the reality appear to be clashing, as China’s urbanization and construction frenzy are coming up against the reality of trying to attract businesses and residents.

The urbanization plans for China are predicted to see 250 million people move from rural areas to cities in the next 20 years, according to Premier Li Keqiang. As Li said in March in his first news conference as the premier, “Urbanization will not only drive tremendous consumption and investment demand, and create employment opportunities, but directly affect the well-being of the people.”

But the reality appears to be different from the dream. Tieling, a small city in northeastern China, for instance, has a ghost town of building waiting for someone to come and live there. Businesses in the area that were supposed to create local employment haven’t happened, and people have not moved as expected.

As Bo Yuquan, a middle-aged owner of one of the only stores in the area said, “Where are the people? There’s no one here. I’ll be out of business soon. My staff and I are discussing moving to Beijing to find work.”

Efforts from the government to draw people to Tieling have failed so far. And yet, Tieling has continued to build with plans by the municipal government to spend another $1.3 billion on projects for the new city. The saying goes, “If you build it, they will come. But in this situation, time will tell if anyone will actually do so.

China Predicts Slow Economic Growth

Four months ago, China set an official target of 7.5% for the country’s economic growth. Now, the finance minister has just announced that he expects the economy to grow 7% this year. Certainly, this is raising the ire of many and putting China’s financial stability into question.

Not only was the official announcement of the intended 7.5% growth mad during a Communist Party parliamentary meeting in March, but the target goal is usually offered with a conservative number so that the country may actually exceed that prediction.

China’s economy saw a 7.8% growth in 2012, which was actually the worst they had done in 14 years. The first quarter growth for this year has slowed to 7.7%.

As Lou Jiwei recently told reporters during a strategic and economic dialogue between China and the US last week, “Our expected GDP growth rate this year is seven per cent. Of course, it won’t be a big problem for us if we achieve growth of seven per cent or 6.5 per cent.”

Imports to America from China on the Rise

While most Americans may not be aware of it, more and more foods that end up on their tables come from China today. The US imported 4.1 billion pounds of food products from China by the end of last year, according to the Agriculture Department. The imports included half of the apple juice in the country, 80% of the tilapia and more than 10% of the frozen spinach.

These issues were recently in the news, as the largest takeover of an American company by a Chinese one just occurred. Recently, Smithfield Foods agreed to be sold to Shuanghui International, one of China’s largest meat processors.

The $4.7 billion deal has created fear among Americans about China’s expanding role in the American food supply world.

As Patty Lovera, the assistant director of the Food and Water Watch, recently said, “We are importing more and more food from China at the same time we are hearing more and more about food scandals involving Chinese companies.”

More bluntly, Jeff Nelken, a food safety expert, said “We should definitely give the Chinese an award for creativity in adulterating foods. They are a great resource for counterfeited foods, like honey products that don’t seem to have any pollen in them.”

Tensions Arise around the ASEAN Plus Three Meeting

The ASEAN Plus Three meeting in India included quite a few no-shows. Both China and South Korea skipped the meeting of finance chiefs from the Association of Southeast Asian Nations (plus Japan, China and South Korea).

The meeting was supposed to be an important opportunity for the finance chiefs of these countries to meet as they prepared for the Asian Development Bank’s annual meeting that began on Saturday.

The South Korean finance ministry official said that the chief wasn’t there because he was “busy” with internal issues in his country and “disappointed” that he couldn’t be there. The Chinese finance minister couldn’t be there because of “a domestic meeting.”

A former senior Japanese finance official in India said the Chinese and South Korean finance chiefs’ absence at ASEAN Plus Three was “apparently because of a deterioration” in Japanese-Chinese and Japanese-South Korean relations.

Chinese Immigration to Canada on the Rise

Apparently many wealthy Chinese have their eye on immigrating to Canada, according to BMO Financial Group. The number of high-net-worth people in China who have investable assets greater than $1.5 million reached 960,000 in 2011. 60% are interesting, or have already made an application to immigrate, as Gina Li at BMO Financial Group explained.

Li said that approximately 30,000 immigrants come to Canada each year from China. As Li explained, “A lot of high-net-worth Chinese are looking at diversifying investment, investing in Canada, finding homes for children while studying here and looking for global asset allocation.”

Chinese business people who relocate find many growing pains along the way. They aren’t used to how things work in China, and this becomes a process for them. As Ray Tseng, who helps immigrants with advice, training and mentoring explains, “In China, it’s different because there are so many people there, once you open the door, business just happens. Some of them may not even know how to calculate the break-even point.”