Blog about Virtual Assistant, Outsourcing, KPO, BPO and China

“The nation’s consumer marker is not only a major driver for its own growth but also a propeller for the world economy,” Yu Guangzhou, vice-minister of commerce said at the three-day China Development Forum.

China’s GDP expanded 11.4% last year, making it the world’s fourth largest economy. And according to the forecast made by the IMF, the nation was expected to overtake the US as the largest contributor to world economic expansion last year.

With the rising domestic consumption goes the nation’s increasing demand for imported products. Since its accession to the WTO, China’s imports have grown at an average of 26% annually. And in the first two months this year, the country’s imports ballooned by 3 billion yuan.

“China’s economy is now shifting to one driven by consumption,” said Yu. “Meanwhile, rising purchasing power of people means greater demand for high-end products.” China now takes up 23% of the world’s luxury market and is the biggest consumer of such luxury brands as LV and Bentley. Meanwhile, Chinese travels are expected to make 100 million trips abroad in 2015.

Although domestic consumption accounted for less than 50% of the nation’s total output, consumer spending has been growing at an average annual rate of 13.1% over the past five years. And as Yu put it, “Even if it grows at only 10% annually, China’s domestic consumption will grow 3.5 times to 30 trillion yuan by 2020.”

Popularity: 8%

BPO, China Business, China Business News China Business, consumer market

Triggered by China’s rapid economic development, Shanghai plans to expand its two airports in the coming years, hoping to become the largest cargo-mover by 2010 in Asia.

A new terminal, runway and cargo facility at Pudong International Airport has already been unveiled by the Shanghai airport authority in late March.

The new terminal will be 500m north of the existing one and linked with other terminals by three walkways, making it easier for passengers to find a bus, train or taxi. The top floor of the three-story building will be for international departures, the second for international arrivals and the first for domestic arrivals and departures. Currently the airport can accommodate 28 million passengers and 2.5 million tons of cargo a year and will be allowed by the new facilities to handle 40 million more passengers and 1.2 million more tons of cargo.

And a second terminal building and runway will be opened at Hongqiao International Airport by 2010 to increase the city’s annual airport capacity.

Since 2004, Shanghai’s airports have been struggling hard to meet passenger and cargo demand. But now with the airport expansion that will help alleviate pressures on it, the city will be better equipped for this Summer’s Beijing Olympics and the Shanghai World Expo in 2010.

Popularity: 9%

BPO, China Business, China Business News airport expansion, China Business, Pudong

HSBC, Europe’s largest lender, announced its plans in early April to open branches in China as soon as it gets permission from relevant authorities and expand its presence by more than 50% before the end of this year.

Last year, the bank saw its operating income up by 44.2%, or $451 on the mainland, thanks to China’s sustained economic growth and the opening of new business areas in line with the country’s WTO commitments.

Richard Yorke, president and CEO of HSBC China, stressed the bank’s strong commitment to the mainland by saying, “Since our local incorporation a year ago, HSBC China has strengthened its position as the leading international bank.” The bank’s “robust growth was achieved despite the associated costs of our rapid network expansion, which saw a 74.3% increase in service outlets. This shows HSBC China is profitable and that our rapid expansion is being conducted at a sustainable pace,” he added.

Already increasing its outlets from 35 to 66 last year, the bank, which holds a stake in Bank of Communications, said it will add 2,000 to 2,500 staff member to its current 4,900 in China.

Popularity: 11%

BPO, China Business, China Business News China Business, cooperation, HSBC

The value of the Chinese yuan has been a sore spot in United States-China relations in recent years. The US, faced with a US$256.3 billion trade deficit with China for 2007, a threefold increase since 2000 ($83.8 billion), has called on Beijing to revalue its currency based on the presumption that it is set artificially low against the dollar - maybe by as much as 40%.

The popular perception of fear is also based in part on China’s success in becoming a global financial power. Over the past three decades, the Chinese leadership has pursued a modernization program largely built on traditional economic development models: heavy industrialization, labor- and capital-intensive manufacturing industries, export-led growth, low labor cost and high environmental damages.

As part of China’s development paradigm, Beijing is following a basic premise laid out by old school mercantilism on the accumulation of wealth: export as much as possible while discouraging imports where feasible, and the larger the trade surplus, the richer and stronger the state. This dogma has kept China’s currency value low for most of the past 30 years.

Rather than let the yuan’s exchange rate be decided by the market, the government set a fixed exchange rate by pegging the yuan to the US dollar. As long as GDP continues to grow by close to double digits every year, and exports expand further with a low currency value against the dollar, both central and local authorities can claim success.

A stronger yuan, will certainly have an impact on China’s export volumes, and potentially affect some manufacturing jobs. But the impact will be limited given the size of the Chinese economy. Furthermore, China’s imports will become cheaper, thus canceling out any negatives that may come from the reduced exports. Ultimately, such macro-level adjustment will make the Chinese economy much healthier and more competitive.

With the US and global economy in so much trouble, there are now opportunities for China to pour in much-needed Chinese capital around the world. Britain and Japan, for example, have expressed particular interests in CIC investment in their countries. The world today does not seem to long for any “currency wars”. Rather, it needs a well-managed process to bring down China’s trade surplus without creating a self-fulfilling prophecy, increase the value of the yuan with minimal negative impact and integrate China into the world financial system to create the “win-win” situation that it needs.

Popularity: 7%

China Business, China Business News China Yuan

Mega Macao is currently being held at the Venetian Convention and Exhibition Center in Macao for global buyers and sellers.
On-going investment in Macao has brought about world-class hotels, resorts, entertainment and trade fair facilities, making the city an appealing new destination for business events in Asia. Naturally, Macao was chosen as the location for Kenfair International to extend its renowned “Mega Show” portfolio of trade fairs.
The fair is scheduled to complement the Canton Fair in Guangzhou and Hong Kong-based trade fairs. And the free shuttle service between the Canton Fair and the Venetian convention hall offers easy access to the new location close to the Pearl River Delta region, providing global traders with additional sourcing opportunities within minimal travel time.
The last fair in October 2007 was attended by over 8,789 qualified buyers from the well-established markets in the US and Europe. And at this fair, companies from the mainland, Hong Kong and Taiwan province, Indonesia, Pakistan, the Philippines, Thailand and Vietnam, many of whom are exclusive to the Macao Fair, will make their presence. In addition, more than 1,500 well-known manufacturers and companies new to major trade fairs will also present their latest ranges of products to buyers looking for high-volume and low-cost goods in which Asian companies excel.
A broad range of products with competitive prices will be on display at the fair, featuring gifts, premiums, houseware, toys, consumer electronics, apparel, home textiles, fabric and accessories, and travel and luggage, ensuring that Mega Macao will again be a major stop on the international buying circuit this April.

Popularity: 10%

BPO, China Business, China Business News Canton Fair, China Business, Mega Macao, trade fair

Georgia announced on April 2nd that it will set up a business advisory center in Beijing, the first in the Chinese capital by a US state and the 11th international office of the US state, aiming to attract more trade and investment from China.
With its container port, good transportation network and highly efficient labor, Georgia, one of the fastest growing economies in the US, expects to attract more trade and investment from China. Meanwhile, several Chinese companies have foreseen the benefits the state offers and have set up offices there. Since 2005, China has risen to rank the second from sixth as Georgia’s trade partner.
The center will, on one hand, help Chinese companies to find foreign direct investment opportunities in Georgia and on the other hand assist Georgian companies to find new business partners in China and introduce Georgia’s scenic spots to Chinese tourists.
Leading a delegation of around 40 people on board Delta AirLine’s inaugural non-stop daily flight from Atlanta to Shanghai, Sonny Perdue, governor of Georgia, said, “The center will introduce Georgia’s opportunities in commerce and tourism to the world’s fastest growing economy” and by setting up the center “we can come to China and introduce our business opportunities to Chinese people face-to-face.”

Popularity: 9%

BPO, China Business, China Business News China Business, Georgia, investment, trade