Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (20732)	1/7/2005 5:34:17 PM
From: RealMuLan	Read Replies (1) \| Respond to of 116555

Foreign retailers tread carefully in China BEIJING - Foreign retailers have neither swarmed China, nor have they expressed a desire to change their status to wholly owned companies since the nation opened up the sector under World Trade Organization (WTO) requirements this year. Huang Hai, assistant minister of commerce, said no foreign retailer has applied to be solely foreign-funded despite the scrapping of the restriction according to China's commitments to the WTO. "We have accepted several applications to set up wholly foreign-owned companies in the commerce sector, but none of these are from retailers," Huang told China Daily on the sidelines of a high-level forum for Chinese and foreign retailers. Huang declined to name the applicants, but said they are all wholesalers. He added that the number of foreign retailers applying to open new stores had not increased because of the lifting of the restriction. Huang said China now has more than 10 wholly overseas-funded companies in the commercial business, all established under the Closer Economic Partnership Arrangement (CEPA), rather than the recent opening of the sector. The CEPA, a favorable trade arrangement similar to the free trade agreement, has allowed qualified Hong Kong or Macau-based companies to be solely overseas-funded since last January. The Chinese government lifted the restrictions on shareholding, locations and store numbers for all foreign-funded companies in the commercial sector as of December 11. Huang said he believed most of the foreign retailers would maintain their existing co-operation with local partners. "More foreign retailers will open new stores through mergers or acquisitions with local partners because of the good locations they have," he said. Li Fei, a professor with the School of Economics and Management at Tsinghua University, said most overseas retailers would not be eager to set up wholly owned companies. "They may depend on their Chinese partners to gain low-risk and low-cost access to business networks," said Li. "Anyway, the Chinese market is a mix given its vast territory, thus it is more efficient and safe for foreigners to obtain help from local partners." Foreign firms will pick up the pace of their expansion and march into the second-tier cities and the nation's central and western regions, according to Li. He said he believed the full liberalization of China's retailing market would not have much impact on domestic retailers. "So far, most local retail companies have not taken full advantage of their resources in terms of their specific public relations and rich knowledge of local consumer habits. Their urgent task is undertaking self-analysis and finding their unique advantages." Wal-Mart, the world's top chain retailing enterprise, has announced that given its good cooperation with its Chinese partners, it would not seek to set up a solely owned company at this stage. "Wal-Mart is actively evaluating the opportunities in China's provincial cities. We expect to open 10-15 stores in 2005 based on our current approvals and move into the first provincial cities in 2005," said John Xu, the director of external affairs for Wal-Mart China. The retailing conglomerate currently operates 42 stores in 20 cities, stretching from northeastern China's Harbin to southwestern China's Kunming. Last year, it pooled US$1 million in cooperation with Li's school to launch a Chinese Retailing Enterprises Research Center. According to statistics from the Ministry of Commerce, a total of 108 foreign retailing companies have been approved in China, with an accumulated investment of US$840 million. They opened 3,361 stores, covering a space of 6 million square meters. The investment only accounted for 0.15% of China's accumulated foreign direct investment. Singapore-based CapitaLand, a leading property company in Asia, is the latest to have jumped on the bandwagon. It has acquired two large stores in Beijing. The move is part of the company's aim to form its proposed China retail property fund with listing potential. CapitaLand Retail China Pte Ltd, a solely owned subsidiary of CapitaLand Ltd, one of Asia's largest listing companies, signed a cooperative agreement this week with Beijing Hualian Group Investment Holding Co Ltd to obtain two of Hualian's outlets in the capital city, namely its Anzhen and Wangjing stores, for 1.746 billion yuan (US$210.36 million). The two stores will be wholly owned by CapitaLand Retail China. Under the same agreement, a 50-50 retail-management joint venture will also be established with Beijing Hualian to provide marketing and retail management services for the under-construction Wangjing store as well as other properties that CapitaLand Retail China may acquire in the future. As one of the largest chain retailers in China, Beijing Hualian, with two listed subsidiaries on the Shenzhen and Shanghai stock exchanges, has a portfolio of 68 outlets comprising department stores, shopping malls and hypermarts spanning 35 cities in more than 23 provinces in China. (Asia Pulse/XIC) atimes.com

To: RealMuLan who wrote (20732)	1/7/2005 5:55:56 PM
From: RealMuLan	Read Replies (1) \| Respond to of 116555

Expect China to revalue yuan Jan 6 2005 Russell Luckock concludes his look at the future of manufacturing with a few signs of hope that the Chinese giant may be slowing down... There are few signs of hope. In so far as China is concerned, this year, we have had to do rush jobs, where Chinese goods have not appeared on time. One of the excuses offered is lack of electricity, and there is no doubt about it, China does have an energy problem. I think in the non-too distant future the Chinese are going to revalue the yuan. Should this occur it would not surprise me to see it move upwards by something ten to 20 per cent. This would cause a lot of sums to be recalculated. An important pointer towards my theory of revaluation is that 12 months ago the Chinese government started controlling both lending and investment. Further curbs on industry had been introduced this year, and, with China's Central Bank raising its interest rate on October 28, for the first time in nine years, I believe further control will be needed. Shipping charges have continued to rocket from the Far East over the last 12 months, due to a shortage of vessels, and I see no signs of these charges falling back. In addition, Chinese shop floor workers are seeking a better standard of life, together with all the modern facilities that first world countries take for granted. Despite the Chinese Government's refusal to permit satellite television, realisation is beginning to dawn that they could charge more for their product, and be competitive. Those of us with grey hair will remember this kind of competition from the Japanese in the 1950s. Here with the latest plant and equipment and lower manufacturing costs, Japan was able to compete anywhere in the world. Today, Japanese manufacturing costs are on a par with those of the UK and the US. Therefore, for those companies that have survived, there has to be a degree of hope. I feel that the Government is sooner or later going to be extremely concerned about the UK trade deficit, which is at the highest level since records began. Fifteen years ago, the government would have regarded this as a disaster. Today, such bad news amounts to two or three column inches in the newspapers. One of the solutions would be to take steps to regenerate British manufacturing by some imaginative tax changes that would provide companies with funds for investment. It would be helpful if manufacturing industry were excused council tax for say, three to five years. Corporation tax could be excused for all companies with turn overs of £5 million or less. This would assist the smaller companies teetering on the brink, and might bring in new investors into the business. 2005 is going to be a very tough year for manufacturing. Russell Luckock is head of Birmingham pressworks company AE Harris icbirmingham.icnetwork.co.uk