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| July 2003 |
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Foreign Investment Flows Into China after SARS Crisis
(July 13, 2003) The epidemic of severe acute respiratory syndrome (SARS) has not
affected foreign investors' confidence in China's economic future as a host of
new foreign investment plans take shape.
On June 24 when the World Health Organization (WHO) removed Beijing from its
list of SARS-infected areas and lifted its travel advisory against the city,
Motorola said all its China investment plans would be implemented.
The company will continue to expand in China and plans to build a research and
development (R&D) center in Beijing, invest one billion US dollars for R&D
purposes and hire 4,000 R&D staff in the next five years.
Motorola's annual output value and total investment in China will amount to 10
billion US dollars respectively by 2006, sourceswith the company said.
Meanwhile, manufacturing giant Toshiba said the Chinese market will be the
mainstay of its global operation by 2008 as the company plans to increase its
investment in China by stages in thenext five years.
Like Motorola and Toshiba, foreign manufacturing enterprises such as Siemens,
Shell and Samsung, which were not much affected by SARS, are also confident in
developing their businesses in China.
Siemens plans to increase its sales in China to 11 billion euros by 2005 and
employ another 6,000 people. At present, the German company employs 25,000
people in China.
By 2005, Shell's total investment in China will amount to five billion US
dollars. Meanwhile, sales of Samsung in China's mainland will be increased to 14
billion US dollars, making China the largest overseas market for the Korean
company.
Although heavily hit by SARS, the retail and tourism industriesare experiencing
rapid growth and attracting wide attention from overseas investors.
World retail giant Wal-Mart opened a supermarket in Beijing in June and plans to
establish 80 Wal-Mart outlets in 20 Chinese cities by 2005, with annual sales
totaling 30 billion yuan (3.63 billion US dollars).
In the next three years, Carrefour will open 70 new stores in China, bringing
its China operations to 100 and increasing its annual sales to 30 billion yuan
(3.63 billion US dollars).
Foreign travel agencies have been allowed to establish branchesand share-holding
companies in China since July 2003, further boosting China's tourism market.
Travel agent JTB Corp. has filed an application to establish branches in the
major Chinese cities of Shanghai and Guangzhou. The number of Japanese tourists
coming to Shanghai through JTB totaled 130,000 in 2002.
American Express, a major credit card, financial and travel service provider,
established a business travel management center in China. An American Express
survey shows that annual travel and related expenses total 10 billion US dollars
in China with business travel expenses amounting to some five billion US
dollars,almost the same as that of European developed countries such as France
and Germany.
American Express plans to extend its travel network to some 40 Chinese cities
before March 2004.
After the outbreak of SARS, food, pharmaceutical and insurance industries
quickly attracted wide attention from investors worldwide due to huge market
potentials being demonstrated in China's nationwide fight against the epidemic.
GlaxoSmithKline Biologicals Shanghai Ltd. has decided to localize all its
product lines in the next one or two years. Sources with the pharmaceutical
giant said people will attach greater importance to health care and disease
prevention after SARS, further boosting the Chinese pharmaceutical market.
Since SARS hit China's mainland early this year, American giant Amway faced
difficulty meeting the huge demand for some of its Nutrilite health-care food
and detergents. Amway announced that the company will increase the registered
capital of its China operation by 50 percent to a total of 120 million US
dollars.
At the same time, world insurance giant American International Group, Inc. (AIG)
expected that its life insurance premiums would increase by 40 percent this year
in China, demonstrating an increasing awareness of Chinese people to prepare for
the risks caused by sudden crises such as SARS.
Sources: People's Daily
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Wal-Mart Opens First Sam's Club in Beijing
(July 11, 2003) Wal-Mart Stores Inc., the world largest retailer, opened its
first Sam's Club in Beijing on Friday.
Located in the western Shijingshan district, roughly 10 km from downtown
Beijing, the new shop attracted thousands of curious residents on its first day
and the parking lot with capacity of over 1,000 vehicles was almost full.
"We, of course, wanted to come have a look because it's Wal-Mart," people
gathering around the store told Xinhua.
Tom Mclaughlin, vice president of the Sam's Club of Wal-Mart China Co., Ltd,
said Sam's will provide local consumers with quality products at considerably
low member-only prices.
The store named after retail giant Sam Walton, founder of Wal-Mart, is a
warehouse shopping club with a membership system. It offers exceptional value on
famous-brand merchandise at member-only prices for both business and personal
use.
Even though most Beijing residents don't have the concept of a membership-based
store, they do know the shop offers good products with low prices. The aisles
were full of customers and people lined up in front of the reception desk for a
membership application.
Since the first Sam's Club opened in the United States in 1983, it has opened
over 500 chain stores across the world. In China, the first Sam's opened in
Shenzhen on Aug. 12, 1996 and Wal-Mart plans to set up five in Beijing.
Sources: Xinhua News Agency
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Starbucks Opens 1,000th Cafe in Asia-Pacific Region
(July 17, 2003) Starbucks, the best-known international coffee retailer from the
United States, opened a new outlet Wednesday in Beijing, marking its 1,000th
shop in the whole Asia-Pacific Region.
The new Starbucks, the 34th in China's national capital, is located in the
Zhongguancun area, the country's center for computer business dubbed as "China's
Silicon Valley".
Starbucks operates more than 6,500 coffee shops around the world.
Since it opened its first cafe on China's mainland in 1999, the number of
Starbucks shops has exceeded 70.
Two more are expected to open next month in Tianjin, a port city 100 kilometers
southeast of Beijing.
Sources: Xinhua News Agency
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Omron's China Procurement Center Set up in Shenzhen
(July 25, 2003) Upbeat about the industrial matching capacity and products'
quality of suppliers in Shenzhen, world prestigious industrial automatics
control and electronic equipment manufacturer Omron set up its China procurement
center in Shenzhen recently. The center comes in the wake of the establishment
in Shenzhen of the electronic business group, with Omron 's largest investment
across the world.
Sources say, the center will facilitate the 5 Omron plants in China and the
Omron Japan to procure parts and components and raw materials in China. The 2003
procurement scale of the center is expected to reach RMB1.65 billion. With the
implementation of Omron China strategy, the sum is expected to reach RMB3
billion in 2005.
Sources: China Economic Information Network
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UPS to Move Its Regional Headquarters to Shanghai
(July 4, 2003) United Parcel Service (UPS) of America, one of the world's top
500 companies, will move its regional headquarters from Hong Kong to Shanghai.
Perry A Chao, an executive for UPS operations in greater China, said that along
with China's improved capabilities in the manufacturing sector, the demand for
high value added products that require fast delivery had been soaring, which had
brought huge business opportunities for air cargo service.
Export business volume has risen above 35 percent since 2001 when UPS
inaugurated direct air service between China and the United States, and the
company's China business volume rose by 45 percent last year, much higher than
the growth rate in other Asian countries and regions, said Chao.
He said Shanghai was chosen as the new site for the regional headquarters
because of its good investment environment and increasingly improved
infrastructure.
Chao said the new headquarters would be responsible for business planning and
development on the Chinese mainland, Hong Kong, Macao and Taiwan.
After the regional headquarters is moved, Shanghai will become a center of
logistics for UPS in greater China.
Sources: People's Daily
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