U.S Commercial Service - American Embassy, Beijing
Vol. 2 No. 175
The China Commercial Brief is a biweekly publication featuring summaries about developments in China's various commercial sectors, tips on doing business in China, and U.S. Embassy news. This publication is free of charge; please forward it to your colleagues and friends who are interested in China.
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Editor: Matt Gettman,
Contributors:CS Shanghai, Cao Shujuan, Shen Yan, Cao Yue, Wang Ling, Qiu Jing
News Briefs
In addition to the article summaries provided by CS Beijing, our four China branch offices - Chengdu, Guangzhou, Shanghai and Shenyang - submit summaries of commercial articles from their local press to the CCB on a rotating schedule. This week we are pleased to feature a contribution from our Shanghai post.
1. Corporate Incentive Trips Booming in China
2. China's Electronic Components Products
3. Franchise Opportunities Continue to Grow
4. Beijing To Make Efforts To Get Sandstorms Under Control
5. Forecast of China’s LPG Market 2005
6. China's printer market to grow slowly
1. Corporate Incentive Trips Booming in China
American Express, the world's biggest travel agency, recently released a white paper on the corporate travel market in China. They found out that among 150 enterprises in Beijing, Shanghai and Guangzhou, 36% of employees had been rewarded with incentive trips to domestic or international destinations. The statistics also show that business travel accounts for 53.77% in the total outbound overseas traveling market, higher than leisure travel. The annual growth rate in corporate travel has reached double-digits, even faster than the GDP growth rate. Current total market value of corporate travel is USD 5 billion (RMB 41.32 billion).
The white paper also stated that enterprises in the financial services, insurance, real estate and business consulting industries spent much more on the business trips, almost triple those enterprises in the manufacturing and retailing business. 65% of corporate travel is spent on economy class travel, 25% on business class travel, and 10% on first class travel.
(Source: Shanghai Jiefang Daily, 05/11/2005 - Translated by FCS Shanghai)
2. China's Electronic Components Products
According to statistics from the China Customs Office, the import and export trade within the electronic components industry has maintained steady growth throughout 2004. The total trade volume was USD 46.9 billion (RMB 387.63 billion), an increase of 23.9%.
The top five imported products into China and their value in 2004 were:
- Mixed integrated circuits: USD 5.7 billion (RMB 47.11 billion)
- Printed circuits: USD 5.1 billion (RMB 42.15 billion)
- Capacitors: USD 3.8 billion (RMB 31.4 billion)
- Electronic connectors: USD 3.8 billion (RMB 31.4 billion)
- Micro-motors: USD 1.8 billion. (RMB 14.87 billion)
Generally speaking, the increasing rate of such imports are greater then the exports. Technical products and small, precise operating components account for the major value of the imported products. Some examples include: blade multipliers magnetism capacitance, pressed electricity crystallite, printed circuit board, and flexible board.
(Source: China Business Times, 04/28/2005 - Translated by Cao Shujuan)
3. Franchise Opportunities Continues to Grow
According to a survey recently conducted by the China Chain Store & Franchise Association, the franchise sector has grown rapidly in China during the past few years.
The survey shows that by the end of last year, over 2,000 companies had about 120,000 franchise stores and 1.8 million employees. These companies cover nearly 50 business fields ranging from catering to retail business, from education to service sectors. In 2004, franchise revenue grew by 41.5 per cent and the number of franchise stores increased by 38 per cent.
However, the survey also shows that the market needs to be further regulated. Problems such as the weak management system and relatively poor marketing concepts are getting in the way of development.
(Source: Beijing Daily, 04/27/2005, - Translated by Shen Yan)
4. Beijing To Make Efforts To Get Sandstorms Under Control
According to the Sandstorm and Desertification Treatment Office of the Beijing Forestry Bureau, Beijing is going to make efforts to control sandstorms and bring them under control by focusing on the source.
Two main projects are highlighted as follows:
Project 1: Three Rivers and Two Barren Beaches
This Beijing City project is supposed to be launched in the second half of this 2005.
Beijing plans to spend more than USD 28.1 million (RMB 234 million) this year to handle and control the sources of sandstorms along three major rivers and in the two sandy barren beaches.
The “Three Rivers and Two Barren Beaches” refer to: Yong Ding River, Chao Bai River, Wen Yu River, Nan Kou Barren Beach, and Kang Zhuang Barren Beach. The related areas cover Beijing’s 7 counties’ sandy land, covering almost 183,800 mu (13,333 hectares). The 7 counties are: Da Xing, Tong Zhou, Shun Yi, Chao Yang, Hai Dian, Feng Tai, and Fang Shan.
As part of the project, Beijing will plant tress within the 11,333 hectares of sandy land, launch 882 water-saving and water resources treatment projects, and relocate 2,000 local residents.
Project 2: Beijing-Tianjin Sandstorm Desertification Project
This central government project began in 2000 and is supposed to be completed by 2010. While the overall project addresses sandstorm sources in 75 counties in Beijing, Tianjin, Hebei, Shanxi and Inner Mongolia in north China and will cost a total of USD 6.02 billion (RMB 50 billion), Beijing alone will invest USD 361million (RMB 3 billion) as part of this project. This project covers 6 counties in Beijing, including: Ping Gu, Mi Yun, Huai Rou, Shi Jing Shan, Yan Qing and Men Tou Gou.
Through the end of 2004, Beijing has already developed forests totaling 255,000 hectares and turned 13,000 hectares of sandy lands into grasslands. In addition, water treatment has been applied to over 482.5 sq km.
According to Beijing officials, this Project has greatly improved Beijing's biological environment and air quality.
(Source: www.chinagate.com.cn, 05/08/2005 and telephone interview on 05/11/2005 – Edited by Yue Cao)
5. Forecast of China’s LPG Market 2005
In 2004, China’s LPG output stood at 12 million tons, a 11.7% increase over the previous year; net import 6.3542 million tons, a 0.2% increase; apparent demand 18.35 million tons, a 7.3% increase.
80% of LPG imported by China in 2004 meets the demand of South China market (nearly 6 million tons). Driven by international crude price, the imported LPG was up to USD 544- 605 (RMB 4500 – 5000) per ton in 2004. According to the forecast, the imported LPG in 2005 will be about USD 484 (RMB 4000) per ton.
In 2004, China’s LPG consumption was 15.5 kg per capita. Compared with developed countries like Japan and the U.S., there is still a big gap. With the development of its national economy, the West-East gas pipeline project, and LNG import projects in China’s coastal provinces, LPG consumption in some of China’s cities will be replaced by consumption of natural gas. However, in most of the rural areas in China, the increase of LPG demand has a great potential. Meanwhile, China’s LPG product production capacity is far from satisfying the demand.
It is also expected that LPG resellers will be more cautious on LPG imports in 2005, and the domestic LPG price will still hover at an elevated level.
(Source: China Petroleum & Petrochemical, 04/2005 -Translated by Ling Wang)
6.China's printer market to grow slowly
The Chinese computer printer market has entered a mature stage and is estimated to shrink 4.9 percent in the next five years, said American research company International Data Corporation (IDC) in a recent report.
According to last year's report, the sales in China's printer market reached 7.32 million, a rise of 4.9 percent from the previous year. The total sales revenue in the year was USD 1.32 billion (RMB 10.9 billion), a drop of 4.3 percent year on year. After years of rapid growth, laser printers are becoming popular and the printer market has become mature.
IDC predicts that ink jet photo printer and color laser printer sales will increase rapidly in the next five years because of market demand. In 2004, the sales of ink jet photo printer reached 890,000 units. According to the IDC report, color laser printer saw fastest growth in 2004 with 70,000 pieces sold in the year, a rise of 110.3 percent from 2003.
The driving force to this market came from the price drop in the low-end products and the popular concept of color printing. IDC predicted that the sales of color laser printer would reach 310,000 sets in 2009.
IDC said that demand for printers that can also serve as copy machines fax machines or scanners are on the rise. In 2004, the sales of multifunctional printers reached nearly 1 million, a rise of 30.2 percent over 2003.
(Source: CEI News, 05/11/2005 -Translated by Qiu Jing)
Consulate News: Shanghai
In keeping with our goal of making the CCB a more integrated publication, our four China branch offices - Chengdu, Guangzhou, Shanghai and Shenyang - submit consulate news to the CCB on a rotating schedule. This week, we are pleased to feature a contribution from CS Shanghai.
China's booming microelectronics manufacturing industry
China has become one of the world's electronics manufacturing hubs. A study by the International Finance Group (IFC) indicated that 16% of all electronics manufacturing currently takes place in developing nations, with China already accounting for half of that. By the end of 2005, China will be manufacturing an additional USD 65 billion (RMB 537.22 billion) worth of electronics products, an increase of 135% over production values in 2003, bringing in contracts valued at an estimated USD 247 billion (RMB 2 trillion). The IFC study also shows that more than 77% of the growth of manufacturing in developing countries will be in China, increasing its share of global electronics production from 8% to 14%. Major electronics manufacturers are located in the East China region and yearly trade events are held to provide global equipment and material suppliers access to the industry.
For more information on CS Shanghai and the Shanghai consular region, visit our website at http://www.buyusa.gov/china/en/shanghai.html
DISCLAIMER: CS China does not guarantee the veracity of the original sources of our news summaries. While we do our best to report accurate and timely articles and news sources, you should always check the source for further information.
The China Commercial Brief is a free newsletter published by the U.S. Embassy - Beijing.
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INTERNATIONAL COPYRIGHT, U.S. COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2005. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.