Category: News of China

03/03/15

Permalink 09:44:44 am, by dacare, 147 words, 22 views   English (US)
Categories: News of China

58.com acquires Anjuke

Chinese online classifieds market 58.com Inc will buy 100 percent of Shanghai-based real estate Internet platform Anjuke Inc in stock and cash valued at US$267 million.

The deal also includes the issuance of nearly 5.1 million new ordinary shares of 58.com and US$160 million in cash, the company said yesterday.

Zhuang Jiandong, senior vice president of the company, will head the newly combined 58 Anjuke Real Estate Business Group, while Mike Liang, former CEO of Anjuke, is leaving to start a new business related to property.

"There is still very robust demand for real estate in China and the opportunity for the best online real estate platform remains massive," Yao Jinbo, CEO of 58.com, said yesterday.

"After the deal, we hopefully will be the biggest information provider of real estate market by users and revenue." Yao added.

Before the deal, Anjuke had raised US$72 million in four rounds of funding.

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03/02/15

Permalink 01:44:04 pm, by dacare, 967 words, 45 views   English (US)
Categories: News of China

Changes crucial to boost new energy car industry


Visitors look at a Dongfeng electric car. Industry insiders warn against Chinese new energy carmakers falling into the "same trap" of allowing foreign automakers to dominate the Chinese market.

Fresh outlook, policies and subsidies key to hit goals and harness opportunities

The Chinese government is considering new preferential policies for the emerging new energy car industry.

The Ministry of Science and Technology issued a draft of the government's plan to support research and development of new energy vehicles to gain public opinion on Feb 16.

Beijing authorities also announced that the city would be friendlier to new energy car owners, by allowing them to pay less in parking fees and highway tolls by the end of March.

In 2012, the State Council set a goal of getting 5 million new energy vehicles on the road by 2020.

To meet this target the government plans to establish a research and development system and industrial chains for electric cars by 2020.

According to the China Association of Automobile Manufacturers, the output and sales of new energy vehicles in China were 78,499 and 74,763 in 2014, 3.5 and 3.2 times the figure in 2013.

Despite the growth, there is still a way to go to reach the central government's goal to have 500,000 new energy cars on the road by the end of this year.

Compared with sales of more than 23 million cars in China last year, the sales of new energy vehicles only accounted for a small proportion.

Dong Yang, secretary-general of the automobile manufacturers association, said he did not think the government would hit its new energy car goals unless it offered new preferential policies, as projected sales this year are about 150,000 to 200,000.

Ambition

The draft plan said electrification of power, lightweight structure and vehicle intelligence were the core technologies for the future development of new energy cars.

The next five to 10 years will be a period of strategic importance for the reorganization, transformation and upgrading of the global automobile industry.

According to the Ministry of Science and Technology, the Chinese automobile industry faces three challenges: the transition from a global sales leader to a leading manufacturing power, pollution control of car exhausts and energy security and national development at a low carbon level.

The government wants to achieve three goals through developing the country's new energy automobile market: upgrading the automobile industry, protecting the environment and using less fuel.

Several industry insiders believe that with the huge domestic market, electric cars will offer China new opportunities to grow. However, they warned that the Chinese automobile industry should not fall into the "same old trap" where foreign carmakers take the main share of the market.

The government has different attitudes towards electric cars and hybrid electric cars. It offers financial backing for technology research and development, as well as high subsidies for electric car buyers. For hybrid electric vehicles, the government only financially supports technology and promotion.

Big State-owned automobile enterprises' position in the two markets may be the reason why the government acts differently.

In the past 50 years, many Chinese automobile companies established joint ventures with foreign car manufacturers to learn advanced techniques. The result was that foreign players now dominate the Chinese auto market.

The government policies mean that electric cars from foreign companies are not eligible for subsidies, but those from joint venture companies are.

As a result, foreign companies tend to produce electric cars with local joint ventures, which is the "same route" as the development of fuel cars in China.

Industry insiders question whether Chinese companies will learn techniques through the electric vehicle joint venture process to help themselves grow competitively.

So far, the performance of Chinese automobile giants in the new energy industry has fallen flat. FAW's plug-in hybrid car Hongqi is still a concept and Dongfeng Motor Corporation has kept a low profile on new energy vehicles.

Private carmaker BYD is the only real "early bird" in the field.

"With central and local governments' strong support, China now has embraced the best environment for the growth of the new energy vehicle industry," said Hu Xiaoqing, PR and marketing director of Shenzhen BYD Daimler New Technology Co.

Emerging force

With State-owned big names showing lackluster performance in big- and medium-size cities, smaller brands have potential to enter the market, especially in small cities, townships and villages.

Most smaller brands offer low-speed electric cars, which run at speeds of less than 80 kilometers per hour and are sold for between 25,000 yuan ($3,997) to 50,000 yuan. Many electric motorcycle producers can also manufacture the cars.

Public security departments in many places do not issue plates to low-speed electric cars, as they do not consider them "real" vehicles.

However this could change after the government recognized low-speed electric cars as "normal" electric vehicles, in a draft standard for the industry in November.

Unlike big cities, small cities, townships and villages have plenty of land to build charging posts, which is an important foundation for the niche market ignored by many big enterprises.

Jia Xinguang, a Beijing-based independent industry analyst, said the government should focus more on promoting the sale and use of new energy automobiles in medium- and small-sized cities. "The subsidies in the smaller places are much lower than Beijing and Shanghai. They need more battery-charging stations and better after-sales service facilities," he said.

Learn from Germany

The German government's policies for new energy cars could provide inspiration for the Chinese government.

The German authority believes the development of electric cars should be a systemic plan that includes not only vehicles but also intelligent transportation and smart grids.

With this in mind it plans to create a new energy car environment, which will involve vehicles, city planning and an energy and industry chain.

Instead of subsidizing electric cars buyers, the German government financially backs companies in fields such as automobile manufacturing, energy and electric power to develop related products.

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02/25/15

Permalink 11:02:04 am, by dacare, 445 words, 211 views   English (US)
Categories: News of China

Amway sales dip in largest market


An outlet of Amway Corp in Yichang, Hubei province. The company's revenues fell 8 precent to $10.8 billion in 2014.

Amway Corp, the world's largest direct sales company, announced its revenues fell 8 percent to $10.8 billion in 2014 due to a dip in Chinese mainland sales and fluctuations in currency exchange rates.

A survey by China Knowledge Economy's Direct Selling magazine found that Amway's revenue in the Chinese mainland decreased from 29.3 billion yuan ($4.72 billion) in 2013 to 28.7 billion yuan last year, but the Chinese mainland still remained the company's biggest market.

It is the first decline for the Amway in the Chinese mainland after growth rates hit 27 percent over the previous five years and 45 percent for the decade, according to company reports.

"Sales in 2014 reflect the significant efforts by Amway business owners and employees who continue to do well around the world despite challenging operating environments found in several nations that are major markets," said Amway Chairman Steve Van Andel.

"We continue to see great strength globally as select markets hit record sales numbers and others show resilience that point to strong results in 2015," he said.

Some of the company's most-mature markets, including South Korea and Taiwan, registered strong growth in 2014. Sales in Brazil, Mexico, Argentina, Costa Rica, Guatemala, Chile, Panama, Italy and Spain saw double-digit growth, while markets influenced by political unrest and economic slowdowns?Russia, Thailand and Ukraine?showed resilience and produced solid results, according to the company.

Amway's top 10 markets in 2014 were the Chinese mainland, South Korea, Japan, the United States, Thailand, Russia, Taiwan, India, Malaysia and Ukraine.

The company's sales were concentrated in nutrition, beauty, durables and home care, with nutrition products continuing to lead the way, accounting for 43 percent of direct sales revenue.

Beauty products contributed 25 percent, followed by durable products at 19 percent and home care products at 8 percent.

Amway President Doug DeVos said the company is optimistic and well-positioned for growth in 2015 and beyond as it opens five new manufacturing facilities, many new Amway experience centers and improves the online experience.

According to Direct Selling magazine's survey at the end of January, 49 companies had direct sales permits on the Chinese mainland and 46 were operational. Together they generated 159.91 billion yuan in total sales, a 24.3 percent increase over 2013.

The increase shows steady progress in the direct sales industry in the country, said the survey, as domestic companies catch up with foreign peers.

Following Amway, Malaysia-based Perfect China Co Ltd ranked No 2 in China with 28 percent growth in sales to 22.3 billion yuan last year. Herbal health product maker Infinitus China Co Ltd soared 37.5 percent on sales of 16.5 billion yuan. Revenues for skin care and nutrition product maker Nu Skin declined from 6.4 billion yuan in 2013 to 4.4 billion last year.

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02/16/15

Permalink 08:33:44 am, by dacare, 310 words, 327 views   English (US)
Categories: News of China

Property developers’ sales revenue slumps in Jan

Shanghai-listed property developer Gemdale Corp announced over the weekend its sales volume fell by 19.8 percent year-on-year in January, making it the latest of a long list of developers which reported declining sales performance in the first month of 2015.

Gemdale Corp said Friday in a statement posted on the Shanghai Stock Exchange that its transaction area fell by 8.6 percent in January from a year earlier, while sales revenue also decreased by 19.8 percent year-on-year.

The announcement came after statistics showed that the total sales revenue of China's 10 leading property developers, including Vanke Co and Poly Real Estate Group Co, fell by 5 percent year-on-year in January and decreased by 58.4 percent from the previous month, according to a report from news portal caixin.com released on Thursday.

Vanke Co, the country's second-biggest developer by sales, registered sales revenue of 23.2 billion yuan ($3.7 billion) in January, falling by 16.1 percent year-on-year.

The slump in transaction areas and sales revenue in January is due to strong purchases from consumers in December under preferential home prices, which reduced the demand for housing in January, Liu Yuan, a senior research director at real estate consultancy Centaline Group in Shanghai, told the Global Times on Sunday.

Most of China's property developers experienced a hard time last year amid a slowing economy and offered price concessions in December in order to reduce the inventory pressure facing their companies, Liu said.

"According to our statistics, transaction areas in 40 major Chinese cities dropped nearly 30 percent in January from a month earlier, but the slump is temporary," Liu said.

The transaction areas and sales revenue are both expected to rebound slightly this year following a raft of forecasted loosening measures such as a potential interest rate cut, which will help to reduce the financing costs of housing loans, Zhang Xu, an analyst with Homelink Real Estate Agency in Beijing, told the Global Times on Sunday.

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02/15/15

Permalink 10:51:09 am, by dacare, 218 words, 140 views   English (US)
Categories: News of China

Xiaomi aims to bite Apple on its turf

Xiaomi Corp will initially start small by selling products like smart wristbands and mobile power chargers when it opens an online store in the United States, the Beijing-based company said yesterday.

The store marks the first step for the start-up Chinese smartphone vendor to penetrate the US market, and key products like smartphones and tablets won't be sold initially, said Xiaomi.

The new US online store, called Mi.com, will sell products such as bands, chargers and headphones, Xiaomi said at its first press conference in the US yesterday.

"We will bring more exciting software and hardware products to more consumers in overseas markets," Lin Bin, Xiaomi's president, said in a statement.

Xiaomi currently sells its products in China and seven other markets, including Singapore and India.

By the third quarter of last year, it ranked the No. 1 smartphone vendor in the Chinese market, the world's biggest.

Xiaomi yesterday also said that a total of 100 million users globally are using its MIUI operating system.

Xiaomi expects to sell 100 million phones this year after it sold 61.1 million units last year, a 227 percent jump from 2013, beating its annual target of 60 million units.

In 2014, Xiaomi's revenue surged 135 percent to 74.3 billion yuan (US$11.91 billion).

After the firm raised US$1.1 billion in December, privately-owned Xiaomi is said to be valued at US$45 billion.

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02/13/15

Permalink 09:27:07 am, by dacare, 664 words, 175 views   English (US)
Categories: News of China, Manufacturing & Industry

Manufacturing sector reaches critical juncture

Closures, overseas investments illustrate plight facing local factories

Now is not a good time to be a Chinese factory owner. According to recent media reports, a growing number of local manufacturers are opening plants in the US as they seek to avoid the badge that comes with selling "Made in China" products.

Meanwhile, many other local factories are struggling with labor shortages, rising costs, overcapacity problems and thinning demand. In response to such pressures, low-end manufacturers are increasingly investing in Southeast Asia, where production costs are more competitive.

Both of these trends signal the need for change in China's manufacturing sector. Over recent decades, Chinese factories have become synonymous with low-quality, low-value-added products. Local manufacturers need to shake off this image by moving up the production chain. And with China's GDP slowdown weighing on the country's industrial sector, the need to advance is more pressing than ever.

According to reports, several of China's largest and historically most successful manufacturing enterprises have not been immune to the challenges brought by changing times. Silitech Technology Co, a major supplier for Nokia, has suspended production since November. At its peak, the Suzhou-based company had more than 10,000 employees, but has reportedly struggled since Nokia sold off its handset division to Microsoft last year.

In December, United Win Technology Co, also in Suzhou, Jiangsu Province, announced its closure due to a financial crisis. It had previously been a major supplier for Apple Inc and had also cooperated with Chinese smartphone brand Xiaomi. The company's closure is said to have left more than 2,000 workers unemployed.

Similar shutdowns are also said to be plaguing many of China's traditional manufacturing hubs - including Dongguan, Guangdong Province, and Wenzhou, Zhejiang Province.

Of course, not all of the worries facing factory bosses are bad. Improvements in Chinese labor laws have made workers more willing to fight for better pay and conditions. For instance, upwards of 2,000 workers at Yue Yuen, a shoe factory in Dongguan, reportedly protested recently in front of the company's gate for greater social security benefits. Yue Yuen is an assembler and producer for a host of big-name global brands, including Reebok, New Balance, Puma and Timberland.

But while China's manufacturing sector has been expanding at a rapid clip for decades, most local factories remain at the bottom of the technological food chain, where they subsist on rock-bottom unit pricing and outdated technologies. Without upgrades and reforms, producers will become even more marginalized. Those who cannot adapt will be weeded out by the market.

Chinese planners have suggested that the country's path toward a "new normal" pattern of development will necessitate greater innovation in the manufacturing sector. In a report issued Tuesday, research firm IDC described the agonies facing Chinese factory owners, while also putting forward predictions for the year ahead. During 2015, analysts at IDC foresee - among other things - the rise of intelligent factories, cloud computing and industrial robots (the latter of which could soon put many low-skilled Chinese workers out of jobs).

Chinese manufacturers will have to pursue these and other technological innovations if they want to stay in business. Fortunately, China is rapidly emerging as a research powerhouse. In 2012, the country overtook the European Union in terms of research spending as a percentage of GDP, according to a report issued in 2014 by the Organization for Economic Co-operation and Development.

The need to transform through innovation and research is particularly great among manufacturers focused on the highly competitive consumer market. If given the choice, many Chinese will purchase Japanese or South Korean-made goods. Such products typically carry high-price tags but are widely seen as being of higher quality than Chinese-made equivalents.

Chinese manufacturers need to focus especially on technologies that will help them become more specialized. They must also build brand value through higher-grade products. Ultimately, companies will have to choose development models that conform to their own conditions. Finding the right path forward won't be easy, but sitting still in changing times is a surefire way to fail.

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