Posts tagged ‘London’

21/07/2013

Hauling New Treasure Along the Silk Road

NY Times: “AZAMAT KULYENOV, a 26-year-old train driver, slid the black-knobbed throttle forward, and the 1,800-ton express freight train, nearly a half-mile long, began rolling west across the vast, deserted grasslands of eastern Kazakhstan, leaving the Chinese border behind.

Dispatchers in the Kazakh border town of Dostyk gave this train priority over all other traffic, including passenger trains. Specially trained guards rode on board. Later in the trip, as the train traveled across desolate Eurasian steppes, guards toting AK-47 military assault rifles boarded the locomotive to keep watch for bandits who might try to drive alongside and rob the train. Sometimes, the guards would even sit on top of the steel shipping containers.

The train roughly follows the fabled Silk Road, the ancient route linking China and Europe that was used to transport spices, gems and, of course, silks before falling into disuse six centuries ago. Now the overland route is being resurrected for a new precious cargo: several million laptop computers and accessories made each year in China and bound for customers in European cities like London, Paris, Berlin and Rome.

Hewlett-Packard, the Silicon Valley electronics company, has pioneered the revival of a route famous in the West since the Roman Empire. For the last two years, the company has shipped laptops and accessories to stores in Europe with increasing frequency aboard express trains that cross Central Asia at a clip of 50 miles an hour. Initially an experiment run in summer months, H.P. is now dispatching trains on the nearly 7,000-mile route at least once a week, and up to three times a week when demand warrants. H.P. plans to ship by rail throughout the coming winter, having taken elaborate measures to protect the cargo from temperatures that can drop to 40 degrees below zero.

Though the route still accounts for just a small fraction of manufacturers’ overall shipments from China to Europe, other companies are starting to follow H.P.’s example. Chinese authorities announced on Wednesday the first of six long freight trains this year from Zhengzhou, a manufacturing center in central China, to Hamburg, Germany, following much the same route across western China, Kazakhstan, Russia, Belarus and Poland as the H.P. trains. The authorities said they planned 50 trains on the route next year, hauling $1 billion worth of goods; the first train this month is carrying $1.5 million worth of tires, shoes and clothes, while the trains are to bring back German electronics, construction machinery, vehicles, auto parts and medical equipment.

DHL announced on June 20 that it had begun weekly express freight train service from Chengdu in western China across Kazakhstan and ultimately to Poland. Some of H.P.’s rivals in the electronics industry are in various stages of starting to use the route for exports from China, freight executives said.

The Silk Road was never a single route, but a web of paths taken by caravans of camels and horses that began around 120 B.C., when Xi’an in west-central China — best known for its terra cotta warriors — was China’s capital. The caravans started across the deserts of western China, traveled through the mountain ranges along China’s western borders with what are now Kazakhstan and Kyrgyzstan and then journeyed across the sparsely populated steppes of Central Asia to the Caspian Sea and beyond.

These routes flourished through the Dark Ages and the early medieval period in Europe. But as maritime navigation expanded in the 1300s and 1400s, and as China’s political center shifted east to Beijing, China’s economic activity also moved toward the coast.

Today, the economic geography is changing again. Labor costs in China’s eastern cities have surged in the last decade, so manufacturers are trying to reduce costs by moving production west to the nation’s interior. Trucking products from the new inland factories to coastal ports is costly and slow. High oil prices have made airfreight exorbitantly expensive and prompted the world’s container shipping lines to reduce sharply the speed of their vessels.

Slow steaming cuts oil consumption, but the resulting delays have infuriated shippers of high-value electronics goods like H.P’s. Such delays drive up their costs and make it harder to respond quickly to changes in consumer demand in distant markets.”

via Hauling New Treasure Along the Silk Road – NYTimes.com.

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30/05/2013

Royal Albert Dock set to become London’s third business district under £1bn deal

London 24: “London Mayor Boris Johnson has unveiled details of a £1bn deal to transform London’s historic docklands into the capital’s next business district forging links with China.

View of Royal Albert Docks

The state-of-the-art business district at Royal Albert Dock will act as a platform for financial, high-tech and knowledge driven industries, and will be largest development of its kind in the UK.

It is set to become the third financial district in the capital after the City and Canary Wharf, creating tens of thousands of jobs.

Owned by the Greater London Authority the 35-acre site will be transformed by commercial developer ABP Chinese (Holding) into a gateway for Asian and Chinese business seeking to establish headquarters in Europe, along with other businesses wanting to set up in the capital.

The deal is believed to be worth £6bn to the UK economy, generating £23m in business rates annually and acting as a catalyst for further development in the area.

Mr Johnson said: “For centuries the waterways of east London were the throbbing arteries of UK trade and commerce. This deal symbolises the revival of that great era, continuing the re-invention of this once maligned part of the capital into a 21st century centre of trade and investment.”

The deal is expected to deliver around 20,000 full-time jobs and boost local employment in Newham by 30 per cent.

Mayor of Newham, Sir Robin Wales, said: “The Royal Docks Enterprise Zone offers an unrivalled investment opportunity and this deal further strengthens Newham’s growing reputation as an ideal destination for international business.”

The deal represents one of the first direct investment by a Chinese developer in London’s property market.

Chairman of ABP, Mr Xu, said: “My vision is to develop a world class international business district which will initially target Asian businesses to help them secure a destination in London, which in China is seen as the gateway to both the United Kingdom and the wider European economy. Our plans aim to strengthen trade between east and west, provide new local jobs and deliver benefits for the wider London and UK economy.”

The area will become home to over 3.2 million square feet of high quality work, retail and leisure space, including 2.5 million square feet of prime office space along London’s waterways.”

via Royal Albert Dock set to become London’s third business district under £1bn deal – Politics – London24.

See also: https://chindia-alert.org/2012/02/13/pattern-of-chinese-overseas-investments/

13/04/2013

* France plans currency swap line with China: paper

Reuters: “China to make Paris a major offshore yuan trading hub in Europe, competing against London, the China Daily on Saturday cited Bank of France Governor Christian Noyer as saying.

A bank clerk counts Chinese yuan banknotes at a branch of Industrial and Commercial Bank of China in Huaibei, Anhui province, June 8, 2012. REUTERS/Stringer

Yuan deposits in Paris amount to 10 billion yuan ($1.6 billion), making it the second largest pool for the Chinese currency in Europe after London. Almost 10 percent of Sino-French trade is settled in yuan, also called the renminbi or RMB, according to French data cited by the official newspaper.

“The Bank of France has been working on ways to develop a RMB liquidity safety net in the euro area with due consideration of a supporting currency swap agreement with the People’s Bank of China,” Noyer told the English-language newspaper.

The yuan’s internationalization and bilateral financial cooperation could be among the main topics during French President Francois Hollande’s visit to China in late April, the paper said.”

via France plans currency swap line with China: paper | Reuters.

03/02/2013

* Number one rule of Royalty, ladies – no spitting! The woman set to cure China of its bad manners by importing a touch of British class

Mail on Sunday: “The woman who wants to cure China of its bad manners by importing a touch of British class

Elegance, to a tea: Sara Jane Ho charges thousands to teach manners to Beijing women

It is still acceptable behaviour in China to spit on the street, blow your nose in your hand, slurp your soup and unashamedly push ahead in a queue.

Hong Kong born Sara Jane Ho was brought up in London and has imported British manners to Beijing with her school of etiquette. Ms Ho charges up to £10,000 to improve manners in China’s high society.

They buy more Bentleys than the British, fill their luxury homes with more Swarovski crystal than the Swiss, and spend more on Louis Vuitton and Versace than the French or the Italians. But one precious commodity has eluded the Chinese in their extraordinary rise from peasant nation to superpower: good manners.

Officials are so exasperated by the tendency to spit, shout, slurp and push in at queues that they have taken to pleading and cajoling. It is not long since Shanghai launched a ‘Seven Nos’ campaign: no spitting, no littering, no vandalism, no damaging greenery, no jaywalking, no smoking in public places and no swearing. It was a  dismal failure.

During the 2008 Beijing Olympics, a squad of 1,500 supervisors was sent out to discourage fighting at bus stops. Paper bags were handed out by volunteers in uniforms emblazoned with the Chinese characters for mucus.

But when a Beijing university set  up a ‘civic index’ to calculate the level of politeness, researchers concluded glumly that the city was still a long way off international norms and the index was quietly dropped.

Now, however, a school of etiquette is about to open in Beijing with classes based on the deportment of the British aristocracy – and the decorous behaviour of the Duchess of Cambridge.

Sara Jane Ho, a Hong Kong businesswoman who grew up in London, is offering lessons in being classy to an exclusive clientele for an appropriately princely sum: courses at her Institute Sarita, based in the five-star Park Hyatt Hotel in Beijing, cost from £2,000 to £10,000.

Dozens of society wives have signed up for lectures on how to use a knife and fork properly, how to peel a piece of fruit, how to greet a prospective mother-in-law, how to walk in heels and how to eat soup without slurping. High-powered bosses of Chinese state-owned companies are also hiring Sara Jane for lessons on how to conduct themselves at business meetings in Europe and America.

She says a subtle pro-British snobbery is driving the desire of wealthy Chinese to improve themselves socially: ‘There is an aura of mystery about European royalty that Chinese people can’t resist. Any aristocracy in China was wiped out, so the Chinese are fascinated by the idea of a royal dynasty that stretches back hundreds of years.’

via Number one rule of Royalty, ladies – no spitting! The woman set to cure China of its bad manners by importing a touch of British class | Mail Online.

03/02/2013

* The slow boat back from China

Another article about the ‘return’ of manufacturing from China; this time to Britain.

Sunday Times: “Janan Leo had waited what felt like for ever to find a British shoemaker to help bring production of her ballet pumps to Britain from China.

Janan Leo makes ballet pumps

When Leo launched her company, Cocorose London, in 2007 the savings offered by cheap Chinese labour outweighed the benefits of British production. In recent months, however, her costs have gone up about 30% because of spiralling wages and raw materials prices in the Far East and rising shipping fees.

“In the early days we had the bags for our shoes made in London, but it was far too expensive so we sent everything offshore,” said Leo, 32, who had sales of £1m last year. “Now the cost advantages are less clear-cut.”

In 2011 she approached a family-owned factory in Northamptonshire, near the headquarters of the renowned Church’s and Loake shoe brands, to make a new range of pumps.

At first, the supplier was unsure. “They were worried about sourcing materials and the cost of the equipment needed just to make the samples. These aren’t problems I’ve ever had in China.”

The deal went ahead and Cocorose’s second luxury collection is now on sale. “British manufacturing is still not as cheap as in the Far East but the upsides more than offset the costs. Customers in Japan and South Korea are going mad for the British heritage [and] the quality is outstanding.”

It started as a trickle, but now a steady stream of small firms are bringing some or all of their manufacturing home as the gap between Chinese and domestic production costs narrows. Chinese pay has doubled over the past decade.

Small firms are also finding that supply chains stretching from Beijing to Britain are vulnerable to disruption. More than a fifth said cashflow complications from delayed orders had hurt their businesses, according to research by EEF, the manufacturers’ group.

“Companies in sectors as diverse as clothing, components and computer equipment are all weighing up whether to bring production back home,” said Simon Nicholson, an international trade adviser at Barclays. “It’s driven by cost and delivery, but firms are also catching on to the idea of Britain as a brand with real cachet in foreign markets.”

Yet factories here may be ill- equipped to meet this growing demand. “British firms have been quietly starting to bring contracts back home since about 2009, but it is taking time for them to find the right suppliers, and for producers to buy the plant and machinery needed,” said Lee Hopley, chief economist at the EEF.

Andy Loveland’s business, Earlyrider, has used a Chinese manufacturer to make its wooden Balance Bikes for small children since its launch in 2006. But Oxfordshire-based Loveland, 41, wanted a British company to make his latest product, a toddlers’ ride-on toy called the Spherovelo.

“We needed to work closely with an industrial designer and to control production because the Spherovelo is completely original — and, unlike our Balance Bikes, labour would be only 15% of overall production costs.”

Loveland’s experience with Inject Plastics, the Plymouth factory he commissioned to make the tools and produce the Spherovelo, was mixed. “The tooling was supposed to take three months, but in the end it was seven. It meant we had to let down a key customer, which was devastating.”

Inject went into administration but in December it was bought by Magmatic, the business behind the Trunki ride-on suitcase for children. Rob Law, Trunki’s founder, had moved production from China to the factory seven months earlier.

He said: “It was a long-held ambition to manufacture in Britain — for ourselves and other companies, such as Spherovelo — and shipping was going through the roof.” Magmatic’s door-to-door transport costs rose 58% in the first five months of 2012.

Since the move to Britain, Trunki’s lead times have shrunk from 120 days to 30. As a result, the firm holds less stock, and pressure on cashflow has been eased. “Best of all, we saved jobs and created new ones,” said Law.

Andrew Cock has also opted to take manufacturing into his own hands. In May his £30m-turnover company, Multipanel UK, will open a factory near Dover making panels for road signs and shop fascias. The £5m facility will use Taiwanese machinery and British recycled plastic to make about 60% of the firm’s output. The rest will continue to be made in China for sale to Asian customers.

“We took the decision a couple of years ago when Chinese costs started rising,” said Cock, 51, who reckons that labour has increased 30% over 18 months, while raw materials are up about 15% after currency movements are included.

“It’s not just a financial decision, it’s about quality too,” added Exeter-based Cock. “We want to win business by making the best product at the least cost. We also think that cutting our products’ carbon footprint will open the door to big corporate customers with a corporate social responsibility agenda.”

Multipanel’s investment has so far been funded from cashflow, but not all manufacturers in loan-starved Britain have access to expansion capital.

“We are working with lots of producers that have downsized during the recession but are now being asked to make small, high-quality batches,” said David Wright of Growth Accelerator, a government-backed advisory service. “They have the skills to adapt to new jobs but they lack the cash to scale up.””

via The slow boat back from China | The Sunday Times.

See also:

22/01/2013

* Asian Buyers Snap Up Half of New London Homes

WSJ: “If you’ve just moved into a newly built apartment in central London, don’t be perplexed if your neighbors speak mostly Chinese.

Market-cooling measures in Asia have helped fuel interest in London’s real estate market—long a popular destination for property buyers on the prowl, says property consultancy Knight Frank. Last year, overseas buyers spent $3.5 billion on apartments undergoing construction in central London, up 22% from the year earlier.

Together, buyers from Singapore and Hong Kong snapped up nearly 40% of all such apartments in central London. Adding in buyers from Malaysia and mainland China, Asian buyers accounted for roughly half of all purchases. By comparison, U.K. buyers made up just 27% of all purchases of apartments under construction, according to Knight Frank’s latest figures. Such figures were generally consistent with those seen in 2011.

Among overseas buyers, more than two-thirds bought for investment purposes, says Knight Frank, while another third said they were motivated to buy for a child enrolled at a local university.”

via Asian Buyers Snap Up Half of New London Homes – China Real Time Report – WSJ.

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].

19/04/2012

* HSBC issue of renminbi bonds in London

China Daily: “George Osborne, British chancellor of the exchequer, announced an initiative on Wednesday that reaffirms his support of London becoming an offshore yuan center. That came as the banking and financial services company HSBC Holdings Plc introduced the first yuan-denominated bond to be offered in London.

Meanwhile, the City of London Corp, which governs an area in central London, published a report showing that 109 billion yuan $17.3 billion worth of customer and interbank yuan deposits were held in the city at the end of December. “This is a significant moment,” Osborne said as he introduced a policy named “London as a center for offshore renminbi business”. “This builds on the progress London has already made toward becoming the Western hub for renminbi. “Today’s event emphasizes that we are not prepared to let anyone steal a march on us in terms of new products and new markets. We are the natural home in the West for those who want to invest in China’s economic success story.

“Osbornes comments came after HSBC announced the introduction of a 3-year yuan bond. HSBC’s term sheet for the bond issuance implied it was worth at least 500 million yuan, Reuters has reported. The proposed issuance comes amid reforms Beijing has made to advance its plans to make the yuan an international currency. London is working to make itself into a center for offshore yuan trade following an agreement that was reached between Britain and China last year.

via HSBC issue of renminbi bonds in London real|Europe|chinadaily.com.cn.

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