China will sell 25 jets to a US company, which is a “breakthrough” deal that marks the country’s entry into the big-plane market dominated by European and US players.

According to Guangzhou Daily on October 31, the Commercial Aircraft Corporation of China (CACC) developed the ARJ21-700 regional aircraft independently, and will sign a 5-billion-yuan ($735 million) contract on Tuesday. Read more…

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Aircraft, China Business, dominate, European, North America

In 2000, BASF and Sinopec set up their 50-50 joint venture BASF-YPC Co Ltd in Nanjing. This year, the two sides have reached an agreement to spend $900 million to expand their joint project to meet increasing demands in the domestic market.

The two companies have submitted the technical and commercial feasibility study for the expansion of the steam cracker from 600,000 to around 750,000 tons of ethylene per year and the expansion of manufacturing facilities of other petrochemical products. The expansions are expected in phases starting this year and the cracker expansion is scheduled between 2009 and 2010.

“The completion of the feasibility study marks an important step in the cooperation between Sinopec and BASF… it is expected to make a significant contribution to meet the domestic market demand,” said Wang Tianpu, president of Sinopec Corp.

And for the German company, “the expansion strengthens BASF’s close partnership with Sinopec. It is another significant demonstration of the company’s commitment to China’s chemical market,” said Martin Brudermuller, member of the board of executive directors of BASF.

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BASF, China Business, joint venture, Sinopec

Ping An Insurance Co last month announced its plan to acquire a 50% stake in Fortis Investment Management for 2.15 billion euros from Fortis Band based in Brussels, aiming to increase its presence on the international asset management market.

In 2007, the company’s net profit rose to 19.2 billion, up by 140.2% compared with the year before, which was attributed to its “comprehensive earning mode” that seeks to balance income from insurance, banking and investment. And the total revenue last year amounted to 137 billion yuan, up 55.4% from the year before. Earnings per share was 2.61 yuan, compared with 1.27 yuan in 2006. Its rate of investment return improved from 7.7% in 2006 to 14.1% in 2007.

“The proposed equity investment in Fortis is an effective way to strengthen our competitiveness in the asset management business,” said Ma Mingzhe, chairman and CEO of Ping An Insurance. “The cooperation will enable both parties to diversify earning resources and seek greater growth in different markets.”

If approved by the managements of Ping An and Fortis Bank, the name of the joint venture will be changed to Fortis Ping An Investments, in which the two sides are equal partners.

The company looks forward to benefiting from Fortis’s asset management expertise of the highest international standard while Fortis is in a position to leverage on Ping An to expand its business in the emerging markets in the Asia-Pacific region.

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China Business, Fortis, investment, Ping An

Ericsson has signed GSM expansion framework agreements with Chinese mobile operators, China Mobile and China Unicom, aiming at expanding its Global System for Mobile Communications (GSM) networks. The deals are worth about USD 1.3 billion and USD 140 million respectively.

Ericsson will be one of the main providers of core and radio network equipment as well as related technical support and services for China Mobile so as to expand GSM/GPRS coverage and capacity in 19 regions across China. Moreover, both companies have already signed the “Green Action Program”, intending to reduce energy consumption in mobile networks and carbon-dioxide emissions.

For China Unicom, Ericsson will act as the main supplier, helping expand GSM networks in 10 regions across China. What’s more, Ericsson will also offer multimedia solutions for WAP services to provide attractive multimedia services and applications.

Carl-Henric Svanberg, president and CEO of Ericsson, said they would continuously support China’s rapidly expanding telecom industry with their “global expertise and proven competence”, while the new framework agreements would further strengthen Ericsson’s position as the leading mobile communications supplier in the Chinese market.

According media report, the projects are expected to be completed in 2008.

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China Business, China mobile, china unicom, communication, Ericsson, GSM, WAP

According to a China Ports Future Forum, the container throughput of Shanghai’s seaport is expected to see steady annual growth of about 10% until 2010, which is attributable to the booming economy in the Yangtze River Delta and preparations for the 2010 Shanghai World Expo.

Last year, container throughput at the port rose to 560 million tons, up by 4.2% compared with 2006 and the city’s cargo shipments increased by 26.15 million TEUs, overtaking Hong Kong as the world’s second-largest container seaport after Singapore.

Although China’s port industry still faces challenges, such as the shortage of large deep-water berths and land and energy as well as insufficient number of professional port pilots, container handling equipment supplier Kalmar Industries foresees plenty potential in China’s port facilities market. Ken Loh, president of its Asian operations, said construction has begun on the second phase of its Lingang plant in Shanghai. The $20-million facility will boost production capacity and help the firm to maintain its position as a market leader on the mainland.

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China Business, Shanghai Port

Founded in 1996, Beiqi Foton is one of the largest commercial vehicle producers in China, which went public on the Shanghai Stock Exchange in June 1998. Headquartered in Beijing, it has assets exceeding 7 billion yuan and more than 20,000 employees. Up until now, the company has sold more than 2 million vehicles in both the domestic and overseas markets, the brand value of which is estimated at 17.54 billion yuan. Currently, the company has mapped out an ambitious plan to improve its competitiveness at home and abroad by enhancing brand awareness, strengthening R&D and promoting international cooperation during the 11th Five-Year Plan period (2006-2010). Foton expects a sales volume of more than 1 million vehicles, 20% of which to be sold overseas, and projected income surpassing 80 billion yuan by the year 2010.

Starting its globalization strategy five years ago, its exports are now sold in West Asia, North Africa, Eastern Europe, South Asia and Southeast Asia. With its high-quality and value-for-cost products and services tailored to clients in each region, it has been widely acknowledged among overseas dealers and clients.

To further promote the globalization process, Foton continues to strengthen cooperation with foreign research institutions and companies such as AVL in Austria, the Bosch Group in Germany, Lotus Co in the UK, MIM Design in Japan and Eaton International Corp in the US.

Besides drawing upon experience of overseas partners, the company also attaches great importance to self-innovation and independent R&D. It has established an innovation approach that combines the Beiqi Foton Academy of Automobile Engineering in Beijing working in conjunction with overseas R&D centers in Japan and Europe as well as China’s Taiwan province. It also works closely with domestic and overseas universities, research institutions and suppliers to track the latest development in the global automobile industry and keep pace with current needs and trends.

The company has invested over 3 billion yuan in developing new products and building a well-structured technology innovation system and major breakthroughs have been made in core expertise. Its emission reduction laboratory became operational in August 2007 to make sure its vehicles meet international standards. It has also imported the latest technologies, techniques and equipment from foreign partners to ensure its product quality to provide customers with satisfactory products and services.

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automobile, China Business, Foton Motor, globalization

In a sales satisfaction index (SSI) released by the Asia-Pacific branch of J. D. Power, an authoritative US researcher, Tianjin FAW was rated No 1 last September among China’s self-developed automobile brands. And a 2007 passenger car customer satisfaction survey by the China Association for Quality also ranked Tianjin FAW at the top—for its Vita model rated No 1 in its category of compact cars. Both help to demonstrate that Tianjin FAW is one of the shining stars among domestically designed and produced brands.

Tianjin FAW has followed closely the global trends to further develop its manufacturing processes and products, improve quality controls and enhance sales and service to meet international standards. And it has successfully shown its product quality to customers both at home and abroad through the three grueling cross-continental road trips across Asia, Africa, Australia and Russia on its way to the Arctic Circle. Covering nearly 60,000 km, the Vita cars have overcome the harsh challenges of deserts, high-altitude plateaus, high temperature, high humidity and extreme coldness, showing Chinese cars can also survive all kinds of sever conditions.

With over 20 years of history in developing compact cars and benefiting from successful cooperation with Toyota, the company now is capable of producing high-quality compact cars and components like engines. Furthermore, due to its competitive prices and improvements in product quality, its compact cars will definitely enjoy a promising market.

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automobile, China Business, Tianjin FAW

According to the report by ISPO, Marks & Spencer—the largest retailer of clothing and food of Britain, plans to open more than 50 stores in China within the next five years. M&S said it will enter China either in Beijing or Shanghai, with more shops to follow in both cities. It looks forward to open the first store this year, and then five to ten within two years. “After that I would want to go much faster, up to 50 or so after five years.” said the CEO Sir Stuart Rose of M&S.

With 760 stores in more than 30 countries around the world, the British retailer is the largest clothing retailer in the country, as well as being a multi-billion pound food retailer. Since 2000, it has expanded into other ranges such as home wares and furniture.

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China Business, clothing and food, Marks & Spencer, retailer

American Express, the world leader in traveler’s checks, is working with Chinese travel agencies to promote the use of travel’s checks in China.

“Traveler’s checks have gained some popularity in China. However, they are not as popular as they should be simply because not many Chinese are familiar with them,” said Diannie Tsai, vice-president and general manager of American Express’s global traveler’s checks and prepaid services division, Greater China. “American Express has partnered with China International Travel Service for promotional purposes and is seeking opportunities to forge cooperation with other travel or overseas educational agencies.”

Altogether 40.95 million Chinese went overseas in 2007, with an average expenditure of $928. And the number is expected to reach 44.8 million this year. China has already overtaken Japan to become the top country in Asia regarding outbound tourists, the number of which is anticipated to be the largest in the world by the year 2020.

Traveler’s checks are available in 7 currencies and 28 denominations and can be cashed through more than 120,000 service outlets around the globe. They do not expire and are refundable when lost or stolen. The convenience and safety they provide will ensure them a promising market among Chinese tourists, students and businessmen.

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American Express, China Business, tourism, traveler's checks

European plane maker Airbus plans to set up a joint venture with AVIC Ⅱto make aircraft components, hoping to gain a larger share in the world’s fastest growing aircraft market.

China’s passenger traffic is expected to grow fivefold and passenger aircraft will triple to around 4,000 on the mainland. Besides, freighter traffic is projected to grow six fold, creating a demand for 130 new freighters over the next 20 years, compared with 45 in 2007. Recognizing the upcoming boom for the aviation sector and trying to gain an edge over its competitors, Airbus has agreed to assemble its single-aisle model Airbus 320 in China and expects to use the joint venture to produce composite material parts for its Airbus A350 model in partnership with AVIC Ⅱ. It’s also trying to sell more of its super jumbo A 380 in China as it expects carriers to opt for much larger aircraft in the future for flights between mega cities.

“Our aim is to reach 50% (of the market share) in 2011,” said John Leahy, chief operating officer, customers of Airbus. “In the next 20 years, the greatest demand for passenger aircraft will come from China, second only to the US.”

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Airbus, China Business, joint venture