U.S. Commercial Service - American Embassy, Beijing
Vol. 2 No. 155
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Editor: Matthew Gettman
Contributors:CS Chengdu, Wan Xiaolei, Zhao Peining, Xu Ye, Cindy Wang, Xi Xianmin
1. Information on Manufacturing Urged in Chengdu (Bonus article on Intel)
2. Rapid Increase in Foreign Trade of Hi-Tech Products
3. China Work Safety Market
4. China Sees Increasing Demand for Baby Food
5. China’s Demand and Supply of Oil Products in 2004
6. China Imported $1 billion Worth of Automatic Chip Mounters in 2003
1. Information on Manufacturing Urged in Chengdu (Bonus article on Intel)
Government officials, experts and managers in charge of large manufacturing enterprises from three provinces (Sichuan, Yunnan and Guizhou) and Chongqing Municipality proposed to speed up the process of gathering information on the manufacturing industry in the area. They recently convened in Chengdu to discuss strengthening the competition of the manufacturing industry in southwestern China by using information. Regional cooperation was also a major issue during the meeting. Chengdu Vice Mayor, Hao Kangli, put forward a strategic plan for the manufacturing industry of Chengdu encouraging international cooperation and regional cooperation in China to maximize the potential of Chengdu in the aerospace industry, IT industry, machinery, and numerical control manufacturing. The Chengdu Municipal Government has put forward a plan involving annual investment of over USD 363 million (RMB 3 billion) called the "Four 100s." This means "help evolve more than 100 elite enterprises of the digital entertainment industry, set up over 100 digital entertainment companies and studios, develop over 100 game software representing traditional Chinese culture, and create over USD 1.2 billion (RMB 10 billion) of revenue.
Intel Begins Construction on a USD 375 million (RMB 3.1 billion) Plant in Chengdu, Sichuan
On April 7, 2004, the Foundation Stone Laying Ceremony for Intel Products (Chengdu) Ltd.’s Assembly and Test Plant was held in the Chengdu Hi-Tech Zone. Mr. Zhang Xuezhong, Sichuan Party Secretary General, Mr. Zhang Zhongwei, Governor of Sichuan Province, and Dr. Barrett, CEO of Intel, attended the ceremony. On August 27, 2003, an agreement was signed between Intel and the Chengdu Municipal Government regarding construction of a facility for assembly and testing Intel semiconductor products in Chengdu. The total investment will be USD 375 million (RMB 3.1 billion) with an initial investment of USD 200 million (RMB 1.65 billion) and a second phase investment of USD 175 million (RMB 1.45 billion). Intel plans expect the new plan to be in operation sometime during 2005. The Intel project is the largest foreign investment project in Chengdu, and the Assembly and Test Plant will become the largest export enterprise in Chengdu. When Phase I is completed, the annual export volume will be up to USD 400 million (RMB 3.3 billion). Once Phase II is in operation, the annual export volume is estimated to reach USD 1 billion (RMB 8.26 billion) and will target the needs of Asian countries. At the ceremony, Dr. Barrett stated that the project in Chengdu is part of Intel's strategy in China. Intel will recruit more talented persons to join Intel and promote the Hi-Tech development in Chengdu and Sichuan province.
(Source: Chengdu Daily, 04/11/2004. Sichuan Economy Daily ,04/08/2004 - edited by CS Chengdu)
2. Rapid Increase in Foreign Trade of Hi-Tech Products
According to the statistics from China Customs, the total imports and exports of hi-tech products in 2003 reached USD 110 billion (RMB 909 billion) and USD 119 billion (RMB 983 billion) respectively, increasing by 62.6% and 44% respectively as compared to 2002.
China has continued its rapid increase in foreign trade in high-tech products in 2004, soaring by 52.1% in the first quarter. The total imports and exports of hi-tech products in the first quarter reached USD 66.54 billion (RMB 550 billion), accounting for 27.7% of the country's total trade in the same period. In the first three months, China exported USD 33.11 billion (RMB 274 billion) of hi-tech products, up 67.5%, and imports worth USD33.43 billion (RMB 276 billion).
From Chang Xiaocun, Director of the Science and Technology Department of the Ministry of Commerce, the country targets in 2004 an overall 20% increase in foreign trade of hi-tech products.
(Source: China Business Times, 04/09/2004 - Translated by Wan Xiaolei)
3. China Work Safety Market
China currently has more than 200 million workers and the supply of safety wear, for example, has reached over 80 million sets a year, worth more than 6 billion yuan (USD 726 million). Other safety wear includes an annual demand of over 2 million sets of fire-resistant and heat-proof protective clothing for people working under conditions involving extensive high temperatures, strong heat radiation and intense lighting. In addition, 5 million sets of anti-static protective clothing for the coal mining sector, 1 million sets for the petroleum and natural gas sector as well as 1 million sets for the nuclear industry and other sectors are now required annually. The petroleum industry alone annually needs more than 1 million sets of oil-and water-resistant clothes. More than 5-6 million sets of waterproof clothes are needed annually mainly for use in water sprinkling, spraying, drainage and aquiculture, mining and underwater operations on submerged tunnel. Over 2-3 million sets of protective anti-chemical clothing are required annually for the petroleum, chemical, metallurgical and mining sectors. Lastly, a great deal of radiation-proof clothing is needed each year.
Chemical industry workers use this protective wear the most, followed by petroleum sector workers.
(Source : China State Administration of Work Safety, 04/05/2004 - Translated by Zhao Peining )
4. China Sees Increasing Demand for Baby Food
In China, the baby food industry has a huge market potential. Companies both domestically and abroad had focused on developing milk powders and formula, however, the market for baby food (from weaning to 3 years old) has been left largely underdeveloped.
According to China’s Population Statistical Yearbook, there are 70 million babies between the age of 0 to 3, of which 10.9 million are from cities. Taking Beijing as an example, families with $181 monthly incomes spend an average of $64 for their babies per month. Families with $605 monthly incomes spend $137 for their babies per month. If only half of these expenditures are for food, the lowest monthly expenditure for baby food will be $32 per month. The estimated market demand for baby food will eventually, annually top several billion U.S. dollars.
(Source : China Business Times, 04/14/2004 – Translate by Xu Ye)
5. China’s Demand and Supply of Oil Products in 2004
In the oil supply sector, the growth for the naphtha demand is estimated to peak around 2010. Ethylene production, also increasing, will exceed 15 million tons in 2010, three times the production in 2000.
The growth rate for kerosene consumption is increasing sharply, due largely to aviation fuel demand. The domestic oil demand is estimated to grow at about 5 percent in 2004, slightly lower than the growth seen in 2003. Gasoline demand will increase 7 percent while demand for light oil will exceed 10 percent. Fuel oil consumption is expected to significantly drop during the same period. Although the rapid increase of private autos may raise the demand for gasoline, development of vehicles fuelled by substitute oils, the growth of diesel-fuelled vehicles and more fuel efficient vehicles will likely restrain the growth in gasoline consumption. Ethanol, LPG and CNG will likely be the key substitutes to gasoline.
In the long term, diesel consumption will likely be more concentrated in road transportation and industrial and construction fields. The rapid growth of natural gas usage in China will directly impact on the growth rate of LPG consumption. The growth rate for diesel consumption will drop to 5 percent from its highest growth rate in 2003. China’s oil imports are very likely to top 100 million tons in 2004. The net oil import, including LPG, will exceed 115 million tons.
(Source: International Petroleum Economics, Vol. 03/2004 - Translated by Cindy Wang)
6. China Imported $1 billion Worth of Automatic Chip Mounters in 2003
The development of ICT industry has created increased demand for electronics production equipment. According to the China Electronics Production Equipment Association (CEPEA), China imported 7,648 units of automatic chip mounters, worth USD 1.09 billion (RMB 9 billion) in 2003, up 52.4% and 66% respectively over the figures of the previous year. The average import price of the automatic chip mounters was USD 142,700 (RMB 1.18 million) per unit, an increase of USD17,000 (RMB 140,505) per unit as compared to last year.
(Source: CEPEA, 2004 - Translated by Xi Xianmin)
Consulate News: Chengdu
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 Chengdu.
National Software Expo Chinasoft 2004 Held in Chengdu
April 5-7, Chinasoft 2004 was held in Chengdu at the International Exhibition and Convention Center. The Second National Software Expo was hosted by the China Council for the Promotion of International Trade, Sichuan Provincial People's Government and the Chengdu Municipal People's Government. The three-day event consisted of hot-issue addressing conference, business matching meetings and technical seminars. Taking the event as an access to maximize the opportunity of entering the vigorously growing China software market, about 180 exhibitors from home and abroad participated in the Expo to showcase their products and services. American participants included United States Information Technology Office, New York Software Industry Association Delegation, China-US Association of Science and Technology, Sun Microsystems, Oracle Software Systems, Monta Vista Software, Inc., Cool Jinni Technologies, etc. Chinese and international VIP participants included senior officials and CEOs from China Ministry of Information Industry, Ministry of Commerce, Ministry of Science and Technology, China Software Industry Association, Software Information Industry Association, International Communications Association, Korea Culture & Contents Agency, Korea IT Industry Promotion Agency, International Enterprise Singapore, Canada China Business Council, Japan-China Economic Association, Hong Kong Trade Development Council, Industry Association of China Taipei, and CMC Ltd. (India). The Expo was chaired by Chengdu Vice Mayor Hao Kangli while Vice Provincial Governor Mr. Yang Zhiwen and Chengdu Mayor Mr. Ge Honglin delivered opening speeches at the ceremony. CG Jeffrey Moon attended both the Welcome Dinner Reception on April 4 and the Opening Ceremony on April 5 and was accompanied by CR Rose Nickel. CS Chengdu assisted in the coordination.
For more information on CS Chengdu and the Chengdu consular region, visit our website at http://www.buyusa.gov/china/en/Chengdu.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.
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INTERNATIONAL COPYRIGHT, U.S. COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2004. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.