Manufacturing | CHINDIA ALERT: You'll be living in their world, very soon

14/10/2012

* China’s trade climbs in Sept amid bottoming-out

“One swallow does not a summer make” But it sure is reassuring after all the bad news in recent months. There are also signs in the US that the 2008 recession is finally bottoming out. Let’s hope it’s for real. And even more importantly, let’s hope both nations and individuals don’t get carried away with getting into deep depth, again.

China Daily: “China’s exports significantly expanded in September while imports resumed growth after a decline in August, suggesting a recovery in overseas markets and a moderate improvement of domestic demand amid a bottoming-out in the world’s second largest economy.

Economists and analysts are still cautious about China’s foreign trade outlook owing to the medium and long-term pressure from the festering EU debt crisis and worrisome fiscal outlook in the US despite improvement in overseas demand.

China’s exports increased by 9.9 percent in September from a year earlier, a record monthly high and much higher than the 2.7-percent growth in August. Imports, meanwhile, stepped out of the 2.6-percent fall in August, registering a gain of 2.4 percent in September, according to data from the General Administration of Customs on Saturday.

Total foreign trade in September grew by 6.3 percent year-on-year while the trade surplus widened to $27.67 billion from $26.7 billion in August.

Foreign trade from January to September went up by 6.2 percent from a year earlier with exports rising 7.4 percent and imports gaining 4.8 percent, yielding a trade surplus of $148.31 billion.

“The full year is likely to see a trade surplus of over $200 billion,” said Wang Jun, a senior economist with China Center for International Economic Exchanges.

“Trade figures of September are relatively satisfactory. China’s exports in the coming two or three months will keep up the momentum as the manufacturing index [also known as the purchasing managers index, or PMI] improves in the US and EU, in addition to Christmas demand and the central government’s measures to boost China’s foreign trade,” Wang said.

The State Council introduced a raft of measures in September to stabilize trade growth, including speeding up export tax rebates, reducing administrative costs for companies, lowering financing costs for small and micro-sized enterprises and increasing credit to exporters.”

via China’s trade climbs in Sept amid bottoming-out |Economy |chinadaily.com.cn.

Posted in China alert, economic inter-dependence, Economics, exports, Good news, Import, Manufacturing, Trade | Leave a Comment »

Tags: China, European Union, export, General Administration of Customs, International trade, United States

05/10/2012

* Diaoyu islands dispute hammers Japanese car sales in China

If the September drop in sales continues, the future for Japanese cars in China is very bleak indeed. There are lots of competitors both indigenous and foreign that can take up the slack. If Japanese car factories close as a result, the impact on Chinese employment will be non-trivial. So the anti-Japanese sentiment cuts both ways.

South China Morning Post: “Toyota’s sales in China halved last month from August levels, damaged by anti-Japanese sentiment in a row over disputed islands in the East China Sea, the Yomiuri newspaper reported on Friday, citing the carmaker.

Showroom traffic and sales have plunged at Japanese automakers since violent protests and calls for boycotts of Japanese products broke out across China in mid-September over Japan’s acquisition of a group of disputed islands.

A prolonged sales hit of this scale could threaten profit forecasts at Toyota, Nissan and others as China, the world’s biggest car market, makes up a bigger portion of their global sales. Toyota sold about 75,300 cars in China in August.

As demand evaporates, Toyota, Nissan, Honda and others have been forced to cut back production in recent weeks in a slowing, but still promising Chinese market.

A source told reporters late last month that Toyota’s production cutbacks could extend through November, a move that would almost certainly put the company’s goal of selling 1 million cars in China this year out of reach.

A Toyota spokeswoman in Tokyo declined to confirm the newspaper report, saying the company would announce its Chinese sales for September on Tuesday.

On Thursday, Mazda said its China sales tumbled by more than a third last month from a year earlier, providing the first concrete numbers to point to Japanese automakers’ troubles in China.

via Diaoyus dispute hammers Japanese car sales in China | South China Morning Post.

Toyota pays for cars smashed in China riots (wantchinatimes.com)
Dispute hurts Japanese carmakers’ production in China (wantchinatimes.com)
Japanese Automakers Bracing for Bashing in China Protests (bloomberg.com)

Posted in China alert, Economics, GeoPolitics, Manufacturing, Neighbour conflict, Politics, Retail, Territorial dispute | 2 Comments »

Tags: Anti-Japanese sentiment, cars, China, East China Sea, Honda, japanese car sales, Nissan Motor, Toyota

31/08/2012

* Shandong Heavy seeks stake in Germany’s Kion

China Daily: “Shandong Heavy Industry Group Co Ltd, the Chinese construction machinery producer, is seeking a 25 percent stake in German fork-lift manufacturer Kion Group GmbH, according to a report in German newspaper Handelsblatt, citing sources with knowledge of the negotiations.

Wiesbaden-based Kion belonged to industry group Linde AG until 2006 and now is owned by finance houses Goldman Sachs Group Inc and KKR & Co LP.

With an expected price of around 700 million euro ($879m), the transaction would be the biggest investment yet by a Chinese company in Germany, Handelsblatt said.”

via Shandong Heavy seeks stake in Germany’s Kion |Companies |chinadaily.com.cn.

Posted in China alert, Economics, Foreign acquisition, Investment in tangibles, Manufacturing | Leave a Comment »

Tags: China, Germany, Handelsblatt, KION Group, Kohlberg Kravis Roberts, Shandong, Wiesbaden

10/08/2012

* China Deal to Acquire U.S. Battery Maker A123 is Just the Beginning

WSJ: “As the script now reads, Wanxiang — China’s largest auto parts maker — plays the role of a clever opportunist in the unfolding tragedy of American competitiveness.

Here is an excerpt from the most recent episode:

A leading American maker of batteries for electric vehicles, A123 Systems, secures hundreds of millions of dollars in grants from Washington D.C and the State of Michigan.

A123 Systems, recently offered a $450 lifeline by China’s Wanxiang Group, makes lithium-ion car batteries at this plant in Michigan.

A123 quickly earns awards for both its innovative culture and its technical advances. But before long, the company encounters business difficulties, faces imminent bankruptcy and scrambles for money.

Wanxiang arrives with fistfuls of cash, takes control of A123 and inherits some of the world’s most advanced battery technology. Wanxiang is further encouraged as policy makers in Beijing promise $10,000 rebates to Chinese electric car buyers. The future is bright.

It is fair to say that Wanxiang, a private company based in Zhejiang, has broken no rules. Wanxiang sees a straight-up business deal in which it pays market price for a cash-starved company that is on the verge of failure.

However, what many American taxpayers see is bad business, a sham. And they sense a deeply troubling pattern for the future: America develops technology – subsidized with generous tax dollars – only to see it purloined, borrowed or, in this case, purchased on the cheap by firms from competing nations.

How can America possibly sustain its culture of innovation when assets are so vulnerable to cherry picking by cash-rich Chinese companies? This issue — not last month’s unemployment rate — should be the central issue as the U.S. tries to decide who will be its president for the next four years.”

via China Deal to Acquire U.S. Battery Maker A123 is Just the Beginning – China Real Time Report – WSJ.

Posted in China alert, Economics, Foreign acquisition, Manufacturing | Leave a Comment »

Tags: A123 Systems, advanced battery technology, american competitiveness, cars, China, lithium ion car batteries, transportation, United States, wanxiang group

09/08/2012

* China factory output growth at three-year low, spurs easing hopes

Reuters: “Annual growth in China’s factory output slowed to its weakest in more than three years in July, missing market forecasts and increasing expectations that Beijing will take further policy steps to support an economy that has been sliding for six straight quarters.

Official data released on Thursday also showed China’s annual consumer inflation fell to a 30-month low in July, suggesting that the central bank has ample scope to ease policy again after rate cuts in June and July to keep the economy on track to meet an official 2012 growth target of 7.5 percent.

China’s economy faces powerful headwinds as the euro zone debt crisis and a sluggish U.S. recovery keep global growth at a low ebb, the main factor that pushed China’s new export orders in July into their steepest fall in eight months.

“The government underestimated the pace of slowdown and there needs to be more aggressive stimulating policies,” said Alistair Thornton, an economist at IHS Global Insight in Beijing.

“The government has signaled that it’s taking a more aggressive line on stimulus measures … But it’s yet to feed into the real economy, which is why we are seeing such weak activities data for July.”

Hopes of further easing from China boosted riskier assets, with Asian shares rising to a three-month high and the commodity-sensitive Australian dollar testing a 4-1/2-month peak.

China’s industrial output growth slowed to 9.2 percent year-on-year in July, its weakest since May 2009, down from 9.5 percent in June and below the 9.8 percent forecast in a Reuters poll.

Annual growth in fixed-asset investment, in the likes of real estate, roads and bridges, came in at 20.4 in January-to-July, unchanged from the January-to-June period and just below the 20.5 percent forecast.

Growth of retail sales, the biggest driver of the economy’s expansion in the first quarter, eased to 13.1 percent, short of the forecast of 13.7 percent.”

via China factory output growth at three-year low, spurs easing hopes | Reuters.

Posted in China alert, Economics, Manufacturing | Leave a Comment »

Tags: Beijing, China, economy

29/07/2012

* Tailored in China, for Team World

China Daily: “The record number of Olympic teams clad in clothes bearing Chinese innovations brings a “made-in-China” to “created-in-China” paradigm shift to the London Games. Erik Nilsson, Wu Ying, Cecily Liu, Wang Zhenghua and Tiffany Tan report.

While much ado has been made about the fact that Team USA‘s uniforms for the London Olympics are made in China, less attention has been given to the record number of foreign teams’ uniforms not only manufactured, but also designed, by domestic companies.

Leading the pack is home-grown label Peak, which sponsors seven countries that will participate in 20 events in London, a major backer at the Games after Nike and Adidas. Because the design process takes months – it may take up to a year until manufacturing is complete – Peak had to turn away 10 countries that approached it for the 2012 Games.

Next up is Li-Ning, named after and founded by the Chinese Olympic champion, which sponsors teams from eight countries and more than 600 individual athletes from 17 countries across the five continents – one for every Olympic ring.

Other companies with foreign clients include Adivon, Qiaodan, Erke, 361 and Xtep. A far greater number of domestic companies manufacture uniforms, apparel and merchandise developed at home and abroad.

“The phenomenon indicates domestic sportswear companies are rapidly growing and earning a say on the international stage,” says Jian Jie, senior sponsorship products manager of Li-Ning’s sports resources products department.

“It also shows that brand influence becomes increasingly important in the sportswear field and ‘made in China’ is gradually transforming to ‘created in China’. The alliance between a domestic brand and an international brand can internationalize Chinese brands and generate greater access to the partner’s market.

“The alliance during the Olympics can also increase the exposure of the domestic brand, promote its brand value and further its recognition at home and abroad. Through cooperation with the foreign brands, domestic brands can also improve.””

via Tailored in China, for Team World[1].

Olympic Torch: Reid Call to Burn China-Made Uniform (foxnews.com)

Posted in China alert, Chinese labels, Economics, exports, Manufacturing | Leave a Comment »

Tags: Adidas, Business, China, design, London, Olympic, Olympic Games

19/07/2012

* India arrests after riot at Maruti plant leave one dead

BBC News: “At least 80 people have been arrested after violent clashes between workers and managers at a Maruti Suzuki factory near the Indian capital, Delhi.

One person died and more than 85 were injured, including two Japanese nationals, in the riot at the Manesar plant on Wednesday evening.

Maruti, India’s biggest carmaker, has halted production at the factory.

Managers and workers blame each other for starting the clashes, which follow months of troubled labour relations.

The violence at the vast factory in Haryana state is believed to have erupted after an altercation between a factory worker and a supervisor.

Workers reportedly ransacked offices and set fires at the height of the riot. A charred body was found afterwards in a damaged conference room – the identity of the person who died has not yet been established.

Dozens of staff, both management and shop-floor workers, were taken to a nearby hospital.

Security has now been tightened at the plant, which employs more than 2,000 people and produces more than 1,000 of Maruti’s top-selling cars each day, and accounts for about a third of its annual production.

Maruti Suzuki, a joint venture between Maruti and Japan’s Suzuki Motor Corporation, has a 50% share of India’s booming car market.

It has been hit by a series of strikes since June 2011, when workers went on a 13-day strike demanding the recognition of a new union.”

via BBC News – India arrests after riot at Maruti plant leave one dead.

Indian Economic tensions
Maruti Suzuki to invest Rs 4,000 cr in Gujarat car plant (news.in.msn.com)
Maruti Suzuki unveils India’s first Life Utility Vehicle – ‘Ertiga’ (bellwort.wordpress.com)
Suzuki’s stake in Maruti to go up (thehindu.com)

Posted in Economics, India alert, Labour unrest, Manufacturing, Politics, unrest | 2 Comments »

Tags: cars, Delhi, Haryana, India, Japan, Manesar, maruti india, Maruti Suzuki, Suzuki, suzuki motor corporation, top selling cars, transportation

15/07/2012

* Google Tries Something Retro – Made in the U.S.A.

NYTimes: “Etched into the base of Google’s new wireless home media player that was introduced on Wednesday is its most intriguing feature. On the underside of the Nexus Q is a simple inscription: “Designed and Manufactured in the U.S.A.”

The Google executives and engineers who decided to build the player here are engaged in an experiment in American manufacturing. “We’ve been absent for so long, we decided, ‘Why don’t we try it and see what happens?’ ” said Andy Rubin, the Google executive who leads the company’s Android mobile business.

Google is not saying a lot about its domestic manufacturing, declining even to disclose publicly where the factory is in Silicon Valley. It also is not saying much about the source of many of its parts in the United States. And Mr. Rubin said the company was not engaged in a crusade.

Still, the project will be closely watched by other electronics companies. It has become accepted wisdom that consumer electronics products can no longer be made in the United States. During the last decade, abundant low-cost Chinese labor and looser environmental regulations have virtually erased what was once a vibrant American industry.

Since the 1990s, one American company after another, including Hewlett-Packard, Dell and Apple, has become a design and marketing shell, with production shifted to contract manufacturers in Shenzhen and elsewhere in China.

Now that trend may be showing early signs of reversing.

It’s a trickle, but some American companies are again making products in the United States. While many of those companies have been small, like ET Water Systems, there have also been some highly visible moves by America’s largest consumer and industrial manufacturers. General Electric and Caterpillar, for example, have moved assembly operations back to the United States in the last year. (Airbus, a European company, is said to be near a deal to build jets in Alabama.)

There is no single reason for the change. Rising labor and energy costs have made manufacturing in China significantly more expensive; transportation costs have risen; companies have become increasingly aware of the risks of the theft of intellectual property when products are made in China; and in a business where time-to-market is a competitive advantage, it is easier for engineers to drive 10 minutes on the freeway to the factory than to fly for 16 hours.

That was true for ET Water Systems, a California company. “You need a collaboration that is real time,” said Pat McIntyre, chief executive of the maker of irrigation management systems, which recently moved its manufacturing operation from Dalian, China, to Silicon Valley. “We prefer local, frankly, because sending one of our people to China for two weeks at a time is challenging.”

Harold L. Sirkin, a managing director at Boston Consulting Group, said, “At 58 cents an hour, bringing manufacturing back was impossible, but at $3 to $6 an hour, where wages are today in coastal China, all of a sudden the equation changes.”

The firm reported in April that one-third of American companies with revenue greater than $1 billion were either planning or considering to move manufacturing back to the United States. Boston Consulting predicted that the reversal could bring two million to three million jobs back to this country.”

via Google Tries Something Retro – Made in the U.S.A. – NYTimes.com.

This cost difference is continuing to erode away as China has been increasing its basic wages by between 10-15% per annum for the last 10 years and intends to continue doing so in order to improve the standard of living of the working person thereby passing on the benefits of the improving GDP.

* 5m greener vehicles on the Chinese streets by 2020

China Daily: “China has set a target of producing and selling 500,000 energy-efficient and alternative-energy vehicles a year by 2015, and five million vehicles by 2020.

The blueprint, announced by the State Council on Monday, has outlined generous subsidies to consumers and producers of the new generation of greener vehicles, as it aims to ease the country’s heavy dependence on imported oil, cut emissions, and speed up the restructuring of its automobile sector into a more environmentally sustainable model.

According to the details, there will be heavy government investment in the core technology needed to build a strong and globally competitive new-energy vehicle industry.

The short-term emphasis will be on developing pure electric and plug-in hybrid vehicles, as well as wider usage of hybrid vehicles and energy-saving combustion engine automobiles.

The world’s largest auto market has set an accumulated production and sales target of 500,000 units of pure electric and plug-in hybrid vehicles by 2015, and that will be increased tenfold to more than 5 million units by 2020.”

via 5m greener vehicles on the streets by 2020 |Economy |chinadaily.com.cn.

Continuing on the path to a ‘greener’ China – https://chindia-alert.org/economic-factors/greening-of-china/

China Adopts Energy Saving And Green Car Industry Plan (earthtechling.com)

Posted in China alert, Economics, Good news, Green, Manufacturing, Sustainable development | Leave a Comment »

Tags: Automobile, Automotive industry, cars, China, Electric vehicle, Energy conservation, environment, Hybrid vehicle, Plug-in hybrid, State Council of the People's Republic of China, transportation

10/07/2012

* Chinese Firm Pursues Hawker

WSJ: “A Chinese bidder is in advanced talks to buy the bulk of aerospace company Hawker Beechcraft Inc.’s businesses for $1.79 billion, an approach that could raise political concerns given U.S. sensitivities about previous Chinese attempts to buy American assets.

Superior Aviation Beijing Co. will have an exclusive right for 45 days to negotiate to buy Hawker’s corporate jet and propeller plane operations, the U.S. company said. If a deal is reached, Superior would serve as the opening bidder in a bankruptcy auction in which other suitors could try to top its offer.

Hawker Beechcraft filed for bankruptcy protection in May. Above, an employee shown last year working on a jet at its Wichita, Kan., plant.

Superior, which has ownership ties to Beijing’s municipal government, won’t be bidding on Hawker’s defense unit because of potential U.S. national-security concerns about foreign purchases of such assets.

Hawker’s defense business houses military technology and sells military training and light attack aircraft to U.S. and foreign governments. The business, called Hawker Beechcraft Defense Co., will continue to operate and could later be sold separately. If sold, Hawker said, the company would refund as much as $400 million of Superior’s $1.79 billion purchase price.

A winning bid by Superior would further the ambitions of China’s aerospace industry to move deeper into jet production, as well as give Superior itself a bigger role in the industry. Makers of small aircraft have been looking to China recently as a key source of demand as the market for business jets shrinks.”

via Chinese Firm Pursues Hawker – WSJ.com.

This is in line with our analysis of Chinese acquisitions: https://chindia-alert.org/2012/02/13/pattern-of-chinese-overseas-investments/

Posted in Aerospace, China alert, Economics, Investment in tangibles, Manufacturing | Leave a Comment »

Tags: aviation, Beijing, Business jet, China, Hawker, Hawker Beechcraft, light attack aircraft, national security concerns, propeller plane, Superior, transportation

CHINDIA ALERT: You'll be living in their world, very soon

Chindia Alert: You’ll be Living in their World Very Soon

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* China’s trade climbs in Sept amid bottoming-out

* Diaoyu islands dispute hammers Japanese car sales in China

* Shandong Heavy seeks stake in Germany’s Kion

* China Deal to Acquire U.S. Battery Maker A123 is Just the Beginning

* China factory output growth at three-year low, spurs easing hopes

* Tailored in China, for Team World

* India arrests after riot at Maruti plant leave one dead

* Google Tries Something Retro – Made in the U.S.A.

* 5m greener vehicles on the Chinese streets by 2020

* Chinese Firm Pursues Hawker

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