U.S. Commercial Service - American Embassy, Beijing
Vol. 2 No. 126
The China Commercial Brief is a biweekly publication including 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: David Snodgrass
Contributing Specialists: CS Shanghai, Shen Yan, Grace Cao, Cindy Wang, Qiu Jing , Wan Xiaolei
News Briefs
In the interests of providing news from all over China, 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, in addition to the five article summaries provided by CS Beijing.
1. CNOOC Confirms New Pipeline (CS Shanghai)
2. Beijing To Boom With New Chain Giants
3. Plastics Consumption in Automobile Industry To Keep Rising
4. China Gradually Deregulates Aviation Fuels Market
5. Weather Forecasts Become Most Popular TV Program
6. Plastics Machinery Has Promising Market in China
1. CNOOC Confirms New Pipeline
China National Offshore Oil Corp. (CNOOC) has confirmed a plan to build a 2,000-kilometer natural gas pipeline along the Chinese coast to strengthen its position in the energy-hungry Eastern areas. The proposed pipeline, pending government approval, would carry imported natural gas and liquefied natural gas from Guangdong Province to Jiangsu and Zhejiang provinces in East China. The gas would be imported from Indonesia and Australia.
CNOOC’s move is designed to compete with PetroChina Co., the country’s largest oil producer, analysts said. The introduction of CNOOC’s natural gas to the region will bring competition to PetroChina’s West-East Gas Project, which could lead to price reductions in that project.
China’s Eastern and Southern regions, including Shanghai and Jiangsu and Zhejiang provinces in the East and Fujian and Guangdong in the South, will account for two-thirds of China’s total gas demand by 2010, the International Energy Agency said in a report.
(Source: Jiefang Daily, 12/24/2002 - Translated by Shanghai Post)
2. Beijing To Boom With New Chain Giants
With several foreign chain retail outlets entering Beijing next year, a new round of serious competition is expected in the capital city.
Sources from the Beijing Commerce and Trade Committee revealed that three home decoration and solution providers will be among those to move into the Beijing market. They are British-based BandQ, Germany's OBI and Leroy Merlin from France.
Seven-Eleven, the world's largest convenience store operator, and Spain Discount, an internationally famous retailer, will be in the capital next year. After nearly two year's market research, Wal-Mart, the world's number one chain supermarket giant, and French-based Auchan, also plan to officially launch their outlets in Beijing next year.
All of the giants have had a presence in China for several years after establishing themselves in Shanghai or other cities in China. Meanwhile, a few joint venture retailers, including Ikea, Carrefour and Ito Yokado, are expected to expand their operations in the city very soon.
Such moves can be attributed to the rapid economic development of the capital and the huge opportunities brought by the Beijing 2008 Olympic Games - as well as the country's accession to the WTO in 2001.
According to official statistics, there are already 17 joint venture retailers in Beijing. The total retail sales volume reached 7.72 billion yuan ($930.1 million) last year, making up 4.8 per cent of the city's total retail sales.
(Source: Beijing Daily, 12/13/2002 - Translated by Shen Yan)
3. Plastics Consumption in Automobile Industry To Keep Rising
Plastic consumption per auto is consistently regarded as one of the statistics to measure technology levels in auto production. Currently, plastics consumption per auto in China averages 70 kg, about six percent of the total auto weight, equal to levels reached in developed countries during the mid-1980s. China's total plastics applied in auto production mainly include PU-polyurethane (26%) , PP-polypropylene (25%), ABS resin (13%), PVC-polyvinyl chloride (10%) and PE-polyethylene (7%) and other varieties of plastics (19%).
According to information from China Automobile Corporation, domestic auto output reached about 2.55 million units in 2002, consuming about 54,400 tons of PP-polypropylene and 14,000 tons of PE-polyethylene.
In line with the 10th Five-Year Plan and the 2010 plan for China’s automobile industry, domestic auto output will reach 3 million to 3.2 million units by 2005, and 4.6 to 4.8 million units by 2010. Plastic consumption is expected to reach 90 kg per auto by 2005. In particular, PP-polypropylene consumption is expected to reach 32.2kg per auto. Plastic demand by buses, light-duty autos and trucks will continue to rise, reaching 350,000 tons by 2005 and 413,000 tons by 2010.
(Source: China Chemical Week, 12/20/2002 - Translated by Grace Cao)
4. China Gradually Deregulates Aviation Fuels Market
China will gradually deregulate the aviation fuels market to allow oil and petrochemical enterprises to become shareholders of China Aviation Fuels Corporation (CAFC). Deregulation of the air fuels market aims at reducing fuel suppliers' costs and aviation fuels' price to spur the development of China’s air transportation industry.
In a recent interview, president of the newly launched CAFC, Lai Changbing, said that the State would deregulate the aviation fuels market in steps with opening the oil products market. Qualified aviation fuels suppliers can obtain air fuels supply contracts and involve themselves in the air refueling businesses through bidding and consultation with CACF. In addition, oil loading facilities at the airport will also provide fair competition for those qualified oil suppliers to help establish market access and a compensative service system under the supervision of the government.
Lai Changbing also indicated that CAFC is considering participation of Sinopec Corp., PetroChina and other aviation companies, adding that no specific stock ratio has been determined.
Price of aviation kerosene adjusted - On November 29th, 2002 the China State Planning Commission issued a circular to adjust the price of aviation kerosene. Under the stipulations set in the circular, the ex-works price of (standard) aviation kerosene has been lowered to RMB2540 per ton from RMB2900 while the prices of other nonstandard products are determined according to the quality-based rates set by the State. The circular was effective as of December 1, 2002.
(Source: China Oil & Gas, 12/2002 - Translated by Cindy Wang)
5. Weather Forecasts Become Most Popular TV Program
Weather forecasts ranked number one in the 2002 national TV viewer's survey of most popular TV programming . Other programming that scored high includes: domestic news, TV dramas, international news, movies, live report programs, arts programs, news critics, legal programs, singing and dancing programs.
The survey showed that China's TV audiences aged 4 years and above reached 1.115 billion by end the of September 2002. That accounts for 93.9 percent of China's population that are above 4 years old. 95.9 percent of the TV audience claimed that they watched TV "often" or "almost everyday." The percentage for newspaper, magazine, radio and Internet were 28.1%, 18.7%, 13%, 2.8% respectively.
The average TV viewing time is 174 minutes daily on weekdays, and 208 minutes daily during the weekend.
(Source: China Youth Daily, 12/202002 - Translated by Qiu Jing )
6. Plastics Machinery has Promising Market in China
Four categories of plastics machinery will have a promising market in China in the next few years, according to the China Plastics Processing Industry News Agency. Most demand for plastic products comes from the agriculture, packaging, construction, and engineering industries.
Agricultural Plastics Products - China’s priority will be on different types of membranes with various functions related to the development of vegetables, flowers and plants, and other economic crops. In addition, different water-saving irrigation products are also required.
Packaging Plastics Products - Opportunities exist in the areas of packaging materials for food, beverage, and medicine.
Construction Plastics Products - China has a need for different types of pipes including sewage pipes, heat water pipes, gas pipes, compound pipes; including other heat preservation products, waterproof products, and decoration products.
Engineering Plastics Products - There is a priority on the development of electronics, electrical appliances, vehicles, transportation, postal communication, office equipment and other spare parts for general plastics and engineering plastics.
(Source: International Business Daily, 12/26/2002 - Translated by Wang Xiaolei)
Embassy News
Amidst camera flashes and applause in front of a blue banner which read "everyone cares about environmental protection," in Chinese, The Wireless Source, a Michigan-based U.S. company, announced a strategic partnership with Beijing Digital Telecom on September 25, 2002. The two parties decided to pool their efforts to collect second-hand cell phones, refurbish them and redistribute them throughout China. The deal was a direct result of the U.S. Commercial Service's assistance...
See the complete story with photographs online at http://www.buyusa.gov/china/en/wirelessdeal.html.
The very latest in digital, audio, and video compression technology is coming to China from California. On December 20, 2002, U.S. Commercial Service officials presided over the signing ceremony of a $2.185 million sales contract between San Jose, CA-based company, Vweb and Hangzhou, China-based company, Handsome Electronics Inc. (Handsome) in Beijing, China...
See the complete story with photographs online at http://www.buyusa.gov/china/en/vwebdeal.html.
Consulate News: CS 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:
Shanghai has been capturing headlines for its success in producing "firsts": The first Masters Tennis tournament in China this fall, the first Maglev high-speed train trip outside Germany last month, next year's Formula One auto race -- a first for Asia, this year's ground-breaking for the world's tallest skyscraper, a novel agreement with Universal Studios for a theme park, and of course World Expo 2010. In a city whose upwardly mobile middle class has taken to Starbucks like North Americans, and who frequent the upscale restaurants of Xintiandi and the designer shops of Plaza 66 as much as they once haunted Huaihai Lu, there seems to be an insatiable appetite for buying and driving expensive Western cars such as the BMW, and for engaging in Western leisure activities such as indoor rock climbing, indoor skiing (Shanghai's latest sports joint venture with the Japanese), and now, recreational boating.
CS Shanghai notes an increase in the number of pleasure boat manufacturers (motor and sail) interested in China, as well as a growing number of marina and yacht harbor developers talking with the authorities about the development of the Huangpu River waterfront. As ocean-going shipping and barging is moved down river to port areas closer to the Yangtze River Delta, the city is planning to gentrify the riverfront, transforming this potential multi-billion dollar land area into prime real estate for residential and commercial development. Pleasure boating will come to the river and to nearby lakes, taken up by the wealthy and those aspiring to the yachting lifestyle. For Shanghai the development of the yachting industry can only enhance its reputation for conspicuous consumption. And with more and more Shanghainese traveling to Asia's garden spots on tourism, the interest in pleasure boating will increase. There is even talk of establishing a Louis Vuitton sailing regatta off Shanghai's ocean shore in a few years, an event that is sure to be a magnet for corporate investment and for an influx of wealthy, free-spending spectators.
For more information about Shanghai, visit our website at http://www.buyusa.gov/china/en/shanghai.html.
Ping Ping's Picks
Finding out what you need to know is often difficult to do in China. To make the process easier, we feature a different source of commercial information in this section every week.
Available for FREE in PDF format on our website http://www.buyusa.gov/china/en/contact_china.html, or in print for $10/copy, Contact China 2003 is published by the U.S. Commercial Service as a resource guide for U.S. exporters. The handbook contains key information for American firms entering the Chinese market, including a section explaining the different sections of the U.S. Embassy, a complete listing of available services offered by the Commercial Section, sector briefs on key industries that include major shows and exhibitions, and a vast section dedicated to key contacts.
Whether American businesses are trying to decipher the maze of Chinese ministries, researching on their industries, or choosing the right business partner, Contact China will serve as an invaluable tool for all business endeavors in China.
Print copies of Contact China can be ordered for $10 plus shipping by sending an email to the CS Beijing Commercial Library beijing.office.box@mail.doc.gov .
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Ping Ping (Jenny) Xie is the Information Guru for CS Beijing.
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 e-newsletter published by the U.S. Embassy- Beijing.
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INTERNATIONAL COPYRIGHT, U.S. COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2002. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.