Swiss companies in China to boost investment

http://www.swissinfo.ch/

Despite the strong Swiss franc and weak Swiss exports to China, the majority of Swiss companies based there plan to increase their investments.

According to the 2015 Swiss Business in China survey, 72% of Swiss firms will boost their local investment. Moreover, 78% expect “higher” or “substantially higher” sales in China this year, compared with just 1% expecting lower sales.

The survey, compiled by the China Europe International Business School, the Swiss Center Shanghai, the Swiss Embassy in China, Swissnex, SwissCham and China Integrated, comprises responses of 62 Swiss companies out of the total 368 foreign-owned enterprises. All together, some 254 Swiss companies are registered with SwissCham China.

The first half of 2015 saw a decline in Swiss exports to most major markets, including a 6.6% drop in exports to China and Hong Kong. Yet the take-in is still significant.

“In the first six months of 2015, Swiss goods in the value of CHF7.2 billion ($7.5 billion) have been exported to China and Hong Kong. That means China remains the third biggest market for Swiss goods behind Germany and the United States,” explained Nicolas Musy in a statement released on Monday. Musy is the managing director of the Swiss Center Shanghai, a non-profit organisation facilitating the market entry of Swiss companies in the Far East.

Switzerland’s free trade agreement with China has been in effect for just over a year.

Low cost, high efficiency

Many of the managers surveyed cited lower production and purchasing costs as reasons for their confidence.

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MARK SCHLARBAUM - Experienced in China - US business partnerships. Never giving up for those that never stop fighting! Help me join the fight against blood cancer and reach my fundraising goal! Visit My Fund Raising Page

China Approves Merger of Cosco, China Shipping

The restructuring comes as China is reforming its state-owned enterprises

By JOANNE CHIU and COSTAS PARIS

China’s two state shipping giants will combine their container-shipping assets among other restructuring efforts, as part of a multibillion-dollar merger to strengthen the nation’s competitiveness in an industry battered by weak demand and persistent overcapacity.

China’s State Cabinet on Friday approved the merger between China Ocean Shipping (Group) Co., or Cosco Group, and China Shipping (Group) Co., according to statement posted on the website of China’s state-owned Assets Supervision and Administration Commission, ending years of speculation among analysts that the government would ultimately combine the two groups to boost efficiency.

The planned merger comes as the nation attempts to reform its state-owned businesses, in the hopes of creating bigger and stronger national champions that can better compete abroad

As reported by The Wall Street Journal, the merger involves combining Cosco and China Shipping’s listed container-shipping operations to create the world’s fourth-biggest container-shipping line, after AP Moller Maersk Group, Mediterranean Shipping Co. and France’s CMA CGM SA.

China Cosco Holdings Co. said in an exchange filling that it plans to consolidate the container-shipping operations with its state-backed rival China Shipping Container Lines Co. through acquiring a total of 33 container-shipping related units and affiliates from CSCL for 1.14 billion yuan ($177 million) and leasing its container ships.

Meanwhile, the Hong Kong and Shanghai-listed flagship of Cosco Group plans to sell all its dry-bulk shipping businesses to its state parent for 6.77 billion yuan.

The asset restructuring also covers the two groups’ ports and oil-tanker-shipping operations. Cosco Pacific Ltd., the Hong Kong-listed port-operating arm of Cosco Group will pay 7.63 billion yuan to buy the port-operating business of China Shipping (Group) Co. Cosco Pacific also plans to sell its container leasing business—Florens Container Holdings Ltd.—to a unit of China Shipping Container Lines Co. for 7.78 billion yuan.

China Shipping Development Co., the oil-and-bulk-shipping unit of China Shipping Group, also plans to buy the oil shipping business from China Cosco Group, it said.

The slew of deals comes as the two shipping groups seek to reorganize their businesses, with Cosco Group focusing on the container-shipping sector and China Shipping Group becoming a shipping financial-service provider, it added.

The merger would prevent the two shipping groups from competing against each other at home and abroad, in an industry swamped with oversupply and depressed freight rates. China’s economic slowdown has also hurt the prices of commodities, such as oil, iron ore and coal, damaging the shipping firms’ profitability.

Parts of the deal, such as the merger of the container-shipping businesses, are subject to regulatory approvals around the world, including the U.S. and Canada.

China Cosco has been particularly hard hit by the prolonged industrywide woes in part due to its ill-timed expansion by chartering high-cost ships during the height of the commodities boom, which left the company with high debts and reduced operational efficiency.

The shipping conglomerate only managed to return to profitability in 2013 after two straight years of steep losses, because of one-time gains from asset sales to Cosco’s state-owned parent.

It recorded a first-half net profit of 1.90 billion yuan ($295.1 million) in 2015, helped by nearly four billion yuan worth of government subsidies.

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China building 110 nuclear power plants

China to operate 110 nuclear power plants by 2030; to build 6-8 plans annually for 5 years

BEIJING: China is set to build six to eight nuclear power plants annually for the next five years and operate 110 plants by 2030, a plan authorities believe would meet the urgent need for clean energy, the media reported on Friday.

China will invest 500 billion yuan ($78 billion) on domestically-developed nuclear power plants, the China Daily reported.

Zhou Dadi, vice director of the China Energy Research Society, on Thursday said that China is capable of building and managing a large number of nuclear power plants.

“After decades of development, China boasts advanced technology and valuable experience to build more nuclear power plants,” he added.

According to analysts, the country plans to increase its electricity generation capacity to 58 gigawatts by 2020, three times the 2014 level.

More than 110 nuclear power plants will be put into operation by the end of 2030, exceeding the number of plants in the US.

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Mark Schlarbaum

U.S., China Progress Trade Deal

U.S., China Make Progress Toward Trade and Investment Deal

U.S. business groups cautiously optimistic over signs of movement

By WILLIAM MAULDIN And MARK MAGNIER

Wall Street Journal
Updated Sept. 25, 2015 6:56 p.m. ET
0 COMMENTS
The U.S. and China made progress this week toward what could someday be a far-ranging trade and investment agreement that would open up closed sectors of China’s economy, U.S. officials said.

In talks connected with Chinese President Xi Jinping’s visit to Washington, senior U.S. officials said they were able to get China to shrink the list of sectors it is seeking to exclude from the framework, known as a bilateral investment treaty, or BIT.

“We agreed to step up our work toward a high-standard bilateral investment treaty that would help level the playing field for American companies,” President Barack Obama said.

China took a variety of moves to open up its economy when it entered the World Trade Organization in 2001, but many U.S. politicians and business groups have long complained that Beijing should take much deeper steps. China isn’t included in a group of 12 Pacific countries seeking to finish a major trade agreement, the Trans-Pacific Partnership, next week in Atlanta.

Mr. Obama and Mr. Xi on Friday reaffirmed their commitment to the investment treaty as a “top economic priority,” the White House said in a statement.

U.S. business groups operating in China expressed cautious optimism over signs of movement in the BIT, which could be stepping stone toward a future free-trade agreement.

James Zimmerman, chairman of the American Chamber of Commerce in China, said he was “pleased that the two sides are making progress” but wants a final deal to materialize soon so that international companies can participate in China’s economic rebalancing.

“We are concerned that anything other than immediate and unfettered market access will allow the Chinese government to continue to pick and choose both the timing and scope of market-access reform, and to limit the role of market forces in China’s economy,” Mr. Zimmerman said.

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China’s next push is smartphone

ZTE who? China’s next push is smartphone brand names in US

George Chen

Try and guess which company is the No4 smartphone in the US market after Apple, Samsung and LG? It’s a Chinese company.

Many American smartphone users may not know ZTE, one of the two largest telecoms equipment makers in China, but ZTE is already the fourth largest smartphone vendor in the US, with a nearly 8 per cent market share, according to consultancy firm Strategy Analytics.

The bigger story behind ZTE’s No4 position in the US market is about the long-term strategy that many Chinese technology firms are now going to take more seriously following President Xi Jinping’s recent state visit to America.

The reason why American smartphone users never hear about Chinese brands like ZTE, or Huawei – its biggest rival on the mainland – is because many Chinese manufacturers provide their products to major mobile network operators including AT&T and Verizon without promoting their own brands.

But the situation is changing.

After years of partnerships with US mobile network operators, both ZTE and Huawei are more keen to put themselves directly in front of consumers in North American markets. In other words, their business strategy is shifting from the B2B (business to business) to a B2C (business to consumer) model.

The latest effort by ZTE to raise its brand awareness in the US was to put its latest ZTE smartphone, under a subsidiary brand called Axon, on the tables of a welcome banquet for the Chinese delegation at the Westin hotel in Seattle, with many VIPs accompanying Xi proudly showing off their Axon smartphones.

Such a high-profile promotion, which must have received the blessing from China’s foreign ministry that was in charge of protocol for Xi’s visit, immediately went viral on global social media, attracting a lot of attention from the US media and public.

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China Communist Theme Park

China Just Opened A Communist Party Theme Park

Alexandra Ma

Theme parks are booming in China right now, thanks to the rise of the country’s middle class. Disney Resort is gearing up to open its doors in Shanghai in early 2016 and Universal Studios, which Steven Spielberg will help design, is slated to arrive in Beijing in 2019.

Not to be outdone, the Chinese government opened its very own Communist theme park on Monday in the city of Wuhan. The opening of the three million-square-foot “educational park” conveniently comes just days before the “Golden Week,” a seven-day public holiday from Oct. 1 to 7 commemorating China National Day.

The park focuses on highlighting important facets of Communist Party history and “outstanding Communist deeds,” according to a statement in Chinese by the Wuhan municipal government’s propaganda department.

And instead of roller coasters, waterslides and people dressed up as movie characters, the park features 29 statues of “great Communist figures” with 100-character-long biographies.

The park is carefully divided into sections, and is organized to show the Communist Party’s greatest glories. It features sculptures, interactive experience areas, and galleries themed on the Chinese flag, the lives and work of major Communist Party figures and the party’s history.

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Hating Chinese Rich Kids

Children of the Yuan Percent: Everyone Hates China’s Rich Kids

The fuerdai, China’s second-generation rich kids, are the most loathed group in the country. They’re also its future.

Christopher Beam

Emerging from a nightclub near Workers’ Stadium in Beijing at 1:30 a.m. on a Saturday in June, Mikael Hveem ordered an Uber. He selected the cheapest car option and was surprised when the vehicle that rolled up was a dark blue Maserati. The driver, a young, baby-faced Chinese man, introduced himself as Jason. Hveem asked him why he was driving an Uber—he obviously didn’t need the cash. Jason said he did it to meet people, especially girls. Driving around late at night in Beijing’s nightclub district, he figured he’d find the kind of woman who would be charmed by a clean-cut 22-year-old in a sports car.

When I heard this story from a friend who had also been in the car, I asked for the driver’s contact info. I introduced myself to Jason over WeChat, China’s popular mobile app, and asked for an interview. He replied immediately with a screen shot that included photos of women in various states of undress. “Best hookers in bj :),” he added. I explained there had been a misunderstanding, and we arranged to have coffee.

When we met at a cafe in Beijing’s business district, it was clear that Jason, whose surname is Zhang, was different from other young Chinese. He had a job, at a media company that produced reality TV shows, but didn’t seem especially busy. He’d studied in the U.S., but at a golf academy in Florida, and he’d dropped out after two years. His father was the head of a major HR company, and his mother was a government official. He wore a $5,500 IWC watch because, he said, he’d lost his expensive one. I asked him how much money he had. “I don’t know,” he said. “More than I can spend.” So this was it: I had found, in the wild, one of the elusive breed known in China as the fuerdai, or “second-generation rich.”

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