Posts tagged ‘Chinese Super League’

06/01/2014

What could happen in China in 2014? – McKinsey Insights

Extracted from: http://www.mckinsey.com/Insights/Winning_in_Emerging_Markets/What_could_happen_in_China_in_2014?cid=other-eml-alt-mip-mck-oth-1401

The year ahead could see companies focus on driving productivity, CIOs becoming a hot commodity, shopping malls going bankrupt, and European soccer clubs finally investing in Chinese ones. McKinsey director Gordon Orr makes his annual predictions.

January 2014 | byGordon Orr

1. Two phrases will be important for 2014: ‘productivity growth’ and ‘technological disruption’

China’s labor costs continue to rise by more than 10 percent a year, land costs are pricing offices out of city centers, the cost of energy and water is growing so much that they may be rationed in some geographies, and the cost of capital is higher, especially for state-owned enterprises. Basically, all major input costs are growing, while intense competition and, often, overcapacity make it incredibly hard to pass price increases onto customers. China’s solution? Higher productivity. Companies will adopt global best practices from wherever they can be found, which explains why recent international field trips of Chinese executives have taken on a much more serious, substantive tone.

2. CIOs become a hot commodity

There is a paradox when it comes to technology in China. On the one hand, the country excels in consumer-oriented tech services and products, and it boasts the world’s largest e-commerce market and a very vibrant Internet and social-media ecosystem. On the other hand, it has been a laggard in applying business technology in an effective way. As one of our surveys1 recently showed, Chinese companies widely regard the IT function as strong at helping to run the business, not at helping it to grow. Indeed, simply trying to find the CIO in many Chinese state-owned enterprises is akin to hunting for a needle in a haystack.

3. The government focuses on jobs, not growth

Expect the Chinese government’s rhetoric and focus to shift from economic growth to job creation. The paradox of rising input costs (including wages), the productivity push, and technological disruption is that they collectively undermine job growth, at the very time China needs more jobs. Millions and millions of them. While few companies are shifting manufacturing operations out of the country, they are putting incremental production capacity elsewhere and investing heavily in automation.

4. There will be more M&A in logistics

As everyone pushes for greater productivity, logistics is a rich source of potential gains. State-owned enterprises dominate in capital expenditure–intensive logistics, such as shipping, ports, toll roads, rail, and airports; small mom-and-pop entrepreneurs are the norm in segments such as road transportation. This sector costs businesses in China way more than it should. With upward of $500 billion in annual revenues, logistics is an industry ripe for massive infusions of capital, operational best practices, and consolidation. Driven by the pressure to increase productivity, that’s already happening at a rapid pace in areas such as express delivery, warehousing, and cold chain. Private and foreign participation is increasingly encouraged in many parts of the sector, and its competitive intensity is likely to rise.

5. Crumbling buildings get much-needed attention

While China’s flagship buildings are architectural wonders built to the highest global standards of quality and energy efficiency, they are unfortunately the exception, not the rule. Much of the residential and office construction in China over the past 30 years used low-quality methods, as well as materials that are aging badly. Some cities are reaching a tipping point: clusters of buildings barely 20 years old are visibly decaying. Many will need to be renovated thoroughly, others to be knocked down and rebuilt. Who will pay for this? What will happen if residential buildings filled with private owners who sank their life savings into an apartment now find it declining in value and, perhaps, unsellable? Alongside a wave of reconstruction, prepare for a wave of local protests against developers and, in some cases, local governments too.

6. The country doubles down on high-speed rail

When China inaugurated its high-speed rail lines, seven years ago, many observers declared them another infrastructure boondoggle that would never be used at capacity. How wrong they were: daily ridership soared from 250,000 in 2007 to 1.3 million last year, fuelled partly by aggressive ticket prices. Demand was simply underestimated. Now that trains run as often as every 15 minutes on the Shanghai–Nanjing line, business and retail clusters are merging and people are making weekly day-trips rather than monthly two-day visits. The turnaround of ideas is faster; market visibility is better; and many people come to Shanghai for the day to browse and shop. There are already more than 9,000 kilometers (5,592 miles) of operational lines—and that’s set to double by 2015. If the “market decides” framing of China’s Third Plenum applies here, much of the investment should switch from building brand-new lines to increasing capacity on routes that are already proven successes.

7. Solar industry survivors flourish

Many solar stocks, while nowhere near their all-time highs, more than tripled in value in 2013. For the entire industry, and specifically for Chinese players, it was a year of much-needed relief. By November, ten of the Chinese solar-panel manufacturers that lost money in 2012 reported third-quarter profits, driven by demand from Japan in the wake of the Fukushima disaster. (Japan’s installed capacity quadrupled, from 1.7 gigawatts in 2012 to more than 6 gigawatts by the end of 2013.) Domestic demand also picked up as the State Grid Corporation of China allowed some small-scale distributed solar-power plants to be connected to the grid, while a State Council subsidy program even prompted panel manufacturers to invest in building and operating solar farms—an initiative that will ramp up further.

8. Mall developers go bankrupt—especially state-owned ones

Shopping malls are losing ground to the online marketplace. While overall retail sales are growing, e-retail sales jumped by 50 percent in 2013. Although the rate of growth may slow in 2014, it will be significant. Yet developers have already announced plans to increase China’s shopping-mall capacity by 50 percent during the next three years. For an industry that generates a significant portion of its returns from a percentage of the sales of retailers in its malls, this looks rash indeed. If clothing and electronics stores are pulling back on the number of outlets, what will fill these malls? Certainly, more restaurants, cinemas, health clinics, and dental and optical providers. But banks and financial-service advisers are moving online, as are tutorial and other education services.

9. The Shanghai Free Trade Zone will be fairly quiet

In early October, there was much speculation about the size of the opportunity after the State Council issued the Overall Plan for the China (Shanghai) Pilot Free Trade Zone (FTZ), and the Shanghai municipality issued its “negative list” of restricted and prohibited projects just a few days later at the end of September. For the FTZ, the only change so far appears to be that companies allowed to invest in it will not have to go through an approval process. As for the negative list, while there’s a possibility that Shanghai will ease the limitations, for the moment the list very much matches the categories for restricted and prohibited projects in the government’s fifth Catalog of Industries for Guiding Foreign Investment. This ambiguous situation gives the authorities, as usual, full freedom to maintain the status quo or to pursue bolder liberalization in the FTZ in 2014 if they see a need for a stimulus of some kind. On balance, I’d say this is relatively unlikely to happen.

10. European soccer teams invest in the Chinese Super League

I know, I know—I’m making exactly the same prediction I did a year ago. True, Chinese football has battled both corruption and a lack of long-term vision. It’s also true that the Chinese Super League still trails Spain’s La Liga and the English Premier League in television ratings. That’s in spite of roping in stars such as Nicolas Anelka and Didier Drogba (who both returned to Europe this year) and even David Beckham (as an “ambassador”).

21/06/2013

China: Panic during David Beckham’s visit

keeper @ chindia-alert:

What a performance – not by David – but by the crowd.

Originally posted on China Daily Mail:

Two officers are crushed when police lose control of the crowd during David Beckham's visit to a Shanghai university

Two officers are crushed when police lose control of the crowd during David Beckham’s visit to a Shanghai university

Drama ended David Beckham‘s visit to Shanghai at one of the universities.

When the Englishman entered the stadium, seven people were trampled.

Beckham is a recently retired footballer who flew to China to promote the game for a week, at the request of the local league.

The drama took place during the Thursday meeting with students from Tongji University and the collegiate football team.

According to Chinese media, the stadium was in panic when the Englishman walked through the gate.

Then the students had a meeting scheduled with former PSG player, who played for AC Milan, Real Madrid and Manchester United.

When the car he was in was mobbed, seven people were injured.

Four of them are police officers and security guards, one is a foreign…

View original 135 more words

04/03/2013

* David Beckham takes up China football ambassador role

BBC: “David Beckham has become a global ambassador for Chinese football to help the image of the country’s game.

David Beckham

The Chinese Super League has recently been hit by the exit of ex-Chelsea striker Didier Drogba, while also suffering from a match-fixing scandal.

Beckham, 37, will combine the role with playing for Paris St-Germain.

“I am honoured to have been asked to play such an important role at this special time in Chinese football history,” he said in a statement.

His role will involve attending league matches in China and visiting clubs to help promote the game to children.

“I’m excited by the prospect of promoting the world’s greatest game to Chinese sports fans as I’ve seen first hand the growing interest in football there,” added Beckham.

“This is a wonderful sport that inspires people across the world and brings families together, so I’m relishing the opportunity of introducing more fans to the game.”

Drogba, 34, joined Chinese side Shanghai Shenhua in June 2012 on a two-and-half-year deal after helping Chelsea to win last season’s Champions League.

But the Ivory Coast international left the Chinese club in January 2013 for Turkish side Galatasaray, in a controversial loan move.

Drogba’s former Chelsea team-mate and ex-France striker Nicolas Anelka also left Shanghai in a short-term loan move to Italian side Juventus.

The departures have been a blow to the Chinese game ahead of the 2013 Chinese Super League season starting on 8 March.

There have also been problems with corruption, which resulted in the country’s former top referee being jailed and 58 officials being banned for match-fixing by Fifa and the Chinese Football Association.”

via BBC Sport – David Beckham takes up China football ambassador role.

14/07/2012

* China football fans greet Didier Drogba at Shanghai

BBC: “Ivory Coast football star Didier Drogba has arrived to a hero’s welcome in China, to take up a contract to play for Shanghai Shenhua.

Hundreds of fans of the struggling Chinese Super League team greeted the 34-year-old former Chelsea star at Shanghai’s Pudong airport.

Drogba’s reported $300,000 (£193,000) a week salary makes him one of the world’s highest paid footballers.

Drogba is among many foreign stars who have made recent moves to China.

He joins former Chelsea colleague Nicolas Anelka at Shanghai Shenhua.

Soon after his arrival, Drogba insisted he had not come for the money.

He said: “It would have been easier for me to stay in Europe, but I chose China. Money is not the most important [thing]. I am here for a whole new experience.””

via BBC News – China football fans greet Didier Drogba at Shanghai.

First cheap plastic toys, then mid-level products, onto hi-tech gadgets; and now international football?

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