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| June 2002 |
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| CHINA BUSINESS HEADLINES |
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JP Morgan Bullish on China Market
(May 4, 2002) The China Research division of JP Morgan said Friday that
institutional investors have predicted that China's economy and the H-shares and
Red chip markets are on the verge of a rally.
Ken Ho, head of China research of JP Morgan in the Hong Kong Special
Administrative Region (HKSAR) said, "Domestic consumption would offer a strong
growth potential towards the second half of this year, and sectors benefiting
most from deregulatory changes include telecom, power, airlines, and oil and gas
- the four pillar industries."
Ko said mixed macroeconomic numbers for recent months, rising liquidity, both
internally and externally and the currently cheap valuations of shares are
pointing to the bullish direction.
"On the Telecom sector, we'll see a continued increase in subscribers at a very
fast rate on the introduction of competition. On the Airline industry,
consolidation is the trend of development.
"On the oil and gas sector, we can see an improvement in efficiency of the
companies which can expand their reserves via overseas acquisition as well as
exploration and commercialization of gas reserves," Ho said.
China's carrying out of progressive reforms has been recognized by institutional
investors from major financial centers, he said.
The investors expressed their confidence in the reforms at the China Conference:
Roadmap to China's Industrial Reform, which took place in London, Singapore and
Hong Kong SAR from April 29 and May 3, he said. The conference was organized by
JP Morgan.
"Industry experts expressed satisfaction that China's reform that is on-going
and progressing in a determined manner. During the conference, investors in
Europe want to know more about the general direction of reform, whereas the
Asian investors are more interested in the implementation details," he said.
Ho is also sanguine that the so called qualified domestic institutional
investors will appear in the second half of the year, acting as catalyst for the
China market. "H" shares will benefit most from their emergence to be followed
by the red chips," he said.
Source: People's Daily
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International Financiers Eye China's Private Venture Capitals
(May 26, 2002) Private venture capitals (VCs) will play an
increasingly important role in China's promising capital market, according to
professionals from venture capital circles of the United
States.
At the ongoing Fifth China
Beijing International High-tech Expo,William F.Miller, chairman of the U.S.
China Venture Capital Association, and his colleagues visited Legend Capital Co.
Ltd on Saturday to meet company leaders.
Miller said that compared with those VCs held by government or state-owned
companies, private VCs enjoyed more freedom when choosing investment targets.
He and his colleagues agree that China still has a fledgling capital market
compared with that of the United States where investments exceeded 32.1 billion
U.S. dollars in 2001.
Statistics released from China's Ministry of Science and Technology show that of
a total of more than 200 domestic VCs, over 80 percent are government-held.
However, private VCs are on the increase, with a surge in numbers of newly
established private VCs.
Legend Capital, a branch of Legend Holdings, is typical of those burgeoning
private VCs. Established in April 2001, the company has invested about 14
million U.S. dollars in new businesses in China's IT sector.
China is moving to improve the legal environment for domestic VCs. A set of
provisional regulations for managing venture investment in new businesses has
been revised three times and is expected to be issued soon, sources said.
Chen Hao, managing director of Legend Capital said that seeking overseas
partners to co-invest with and overseas funding were ways forward for his
company as normally the funds of private VCs were limited.
He also revealed that Legend Capital and U.S.-based Walden International had
co-invested in Precom Inc, an e-business software company.
Professionals from China and abroad reached the consensus that seeking overseas
venture capital is an important means of attracting overseas funds for new
businesses in China's IT sector.
Source: People's Daily
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In China, It's All About IT, Experts Say
(May 6, 2001) The Information Technology storage market in China will see a
robust increase in the coming three years, said a senior IT analyst with the
International Data Corporation (IDC), a worldwide IT market research firm.
Wilson Wan, IDC China's deputy general manager, predicted that by the year 2005,
spending by Chinese enterprises on storage will be four times the current
expenditure.
According to IDC's forecast, the sales of storage products will grow at an
average rate of 14 per cent a year by 2005, while the shipment of storage
products will grow by more than 80 per cent every year.
"The revenue from the storage market exceeded US$587 million last year and it is
expected to be over US$655 million this year," said Wan.
He believes that continuously decreasing costs will greatly stimulate the market
demand.
He also predicted that China's network storage market will grow at an annual
rate of 17.9 per cent, with market value exceeding US$830 million by the year
2005.
With the rosy picture of the market, both international and domestic companies
have been paying more attention to opportunities in China.
The International Data Group has introduced its worldwide Storage Networking
World to the country to provide storage solutions and services to China's
enterprises and organizations.
Its exhibition, entitled Storage Networking World/China 2002, will be held in
late May in Beijing, Shanghai and Guangzhou respectively.
The US-based Advanced Digital Information Corporation is also eyeing this market.
Source: People's Daily
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Mckinsey: China---New Pillar of World Economy
(May 24, 2002) China is a new pillar of the world economy, said Pan Wangpo,
board chairman of the US Mckinsey & Company, and concurrently general manager of
Mckinsey China Beijing Branch, at the forum on the WTO and China Economy.
Pan noted China is the sixth largest economic entity, with the annual gross
domestic product rising at more than 7 per cent, and a total of over US$ 1
trillion.
It is also the sixth largest exporter, its annual direct foreign investment
remains at above US$ 40 billion and foreign exchange reserves hits US$ 225
billion.
These figures show China has become a new pillar of the world economy, he said.
He added China already is the largest consumer market for refrigerators, washing
machines, color TV sets and mobile telecom services.
China is not only the engine of market demand, but also the largest low-cost
labor market, with per-hour cost standing at only US$ 4.88, equivalent to 18
percent of Japan's, 23 percent of the United States and 56 percent of India.
China is quickly becoming a world production base, said the business consultant.
Source: People's Daily
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Pearl Delta Shines As Economic Powerhouse
(May 25, 2002) The strong development momentum of high- and new-tech industries
has turned the Pearl River Delta into the nation's largest high- and new-tech
industrial belt, provincial government officials said.
The Pearl River Delta is the core economic powerhouse of Guangdong Province.
Located in the region are the cities of Guangzhou, Shenzhen, Dongguan, Zhuhai,
Foshan, Jiangmen, Zhongshan, Huizhou and Zhaoqing.
The nine cities achieved a production output value of 325.50 billion yuan
(US$39.22 billion) in high- and new-tech industries last year, making up 93
percent of the total the province realized, statistics from the provincial
science and technology department indicate.
The high- and new-tech industrial production output value in the region tops
other industrial belts of the like in China.
The delta region has become one of the largest manufacturing bases of electronic
products, telecom equipment and facilities in China and Asia.
The region has also become one of China's largest bases for ceramic electronic
elements and parts, bio-engineering and intelligent, energy-saving and
environmentally friendly household appliances.
The region boasts six State-level high- and new-tech development zones and three
province-level ones, specializing in research and development as well as the
industrialization of fields including information technology, bio-engineering,
new materials and optical, mechanical and electrical integration technology.
Statistics from the provincial customs administration indicate that the Pearl
River Delta is also the largest base for the exports of high- and new-tech
products in China.
Exports of high- and new-tech products in the region topped 130 billion yuan
(US$15.7 billion) last year, accounting for 40 percent of the total in China.
Lu Ping, an expert with the Guangdong Provincial Science and Technology
Department, attributed the dazzling achievements of the sector to the rapid
development of a growing number of non-State enterprises that have invested
generously in the research and development of high and new technologies and that
have helped form varied high-tech industrial chains in the region.
The region has 4,000 such enterprises, with the total income of technology,
industry and trade exceeding 112 billion yuan (US$13.5 billion).
The number of non-State enterprises soared 60 percent on a year-on-year basis in
the region in recent years. Their capital input in research and development
makes up for more than 75 percent of the total in the province.Source:
China Daily
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China's Real Estate Sector Continues to Grow
(May 22, 2002) The official index shows that China's real estate sector
continued to grow in April, propelled by soaring investment and land
development.
The real estate index for April inched up 0.73 points over March to 104.60
points, according to figures released by the National Bureau of Statistics (NBS)
on Tuesday.
NBS figures showed that a total area of 27.99 million square meters of land
were developed during January-April, a rise of 48.3 percent over the same
period last year.
In the same period, investment in real estate development totaled 146.7 billion
yuan (17.7 billion U.S. dollars), a leap of 38.8 percent from a year ago. The
NBS said the growth rate was the highest for the past few years.
According to the NBS, development financing also rose in April. During the
first four months of the year, developers ploughed 233.4 billion yuan into real
estate projects, up 30.6 percent from the same period last year.
However, real estates prices dipped around the country. For January-April, the
average price was 1.2 percent lower than a year ago.
Stockpiles of unsold buildings increased 6.4 percent over the 12 months to
April, compared with 4.7 percent in March and 4.0 percent in the same period
last year.Source:
China Daily
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