Institutional investor adviser Don Straszheim of Straszheim Global Advisors says, "If you own a company that is not already operating in China, or does not have pretty concrete plans to become involved, sell it."

Some corporate strategies in China:

• Pfizer says its drug sales in China are growing at a double-digit pace, making it the largest multinational drug company in one of the world's 10 biggest markets. Pfizer says China's drug market is expected to reach nearly $13 billion in three years.

• General Motors expects car sales in China to make the Asia-Pacific region its most profitable market worldwide this year. Last year, GM's share of an affiliate's profits in China - its largest growth market - were $417 million, the company says.

• Wal-Mart and partner Citic Pacific plan to invest $250 million over five years' time to open hundreds of stores in China, the Hong Kong-based partner announced last week. Wal-Mart already operates 42 stores in China, up from 22 in 2002.
Other examples: General Electric recently disclosed receiving its first order from China's Ministry of Rail in nearly 20 years for locomotives, parts and train-control systems; Merrill Lynch, having discovered strong mutual fund sales elsewhere in Asia, has launched a joint venture in China; Continental Airlines is seeking permission to fly two routes to China from its Newark, N.J., hub.

Part of China's near-term potential reflects a speculative currency-arbitrage opportunity.
The recent surge of investment should strengthen China's currency, the yuan, in foreign exchange markets, reflecting a normal supply-demand relationship. But because the central government does not allow its currency to float freely, the yuan is a bargain relative to the dollar, economists say.

Nevertheless, China's expansion trajectory - nearly three times faster than the U.S. economy's - is attraction enough for many investors.

In tallying gross domestic product for 2004, China's National Bureau of Statistics said industrial profit rose 38% to $138 billion last year, and consumer spending rose 13.3% to $652 billion. Per capita disposable income of China's urban population rose 7.7% to $1,140, the agency said.

Greg Fager, director of the IIF's Asia department, warns that investors are likely to face unpleasant surprises when a country grows so quickly, from calculated frauds to honest mistakes. But, he adds, "Ten years ago it was always the woes of doing business in China. It has turned around."
 

Sources: USA Today

U.S. carmaker General Motors Corp. said its China sales grew nearly 30 percent last year, lagging the pace it set in 2003 but outpacing estimates for 2004 growth in the whole China market.

The world's largest automaker also predicted a positive 2005.

It sold 492,014 units, up 27.2 percent, while sales from its Shanghai GM joint venture, which makes sedans primarily, climbed 25.7 percent to 252,869 units last year, double analysts' estimates growth for overall China car market growth of 10 to 15 percent.

Market share rose to about 9.3 percent at the end of 2004 from 8.5 percent at the end of 2003, it said.

Rival Volkswagen is estimated to have commanded a quarter of the market last year, but if all vehicles from trucks to buses are included, that falls to about 13 percent.

"Last year, China's vehicle market moved from a state of unusually high growth to a state of steady and sustained growth," GM's China chief Phil Murtaugh said in a statement.

"We remain confident in the overall prospect of China and expect 2005 to be another positive year."

China's car market is expected to grow 10 to 15 percent last year, well off a near doubling to some two million units a year ago.

Nationwide sales data for 2004 are expected later in January.

GM's 2004 sales were half the 46 percent of 2003. Volkswagen, which counts China as its largest market outside Germany, earlier last week posted a 6 percent drop in sales from its two China ventures, pounded by price wars and government-ordered credit curbs.

It sold some 160,000 more units than GM last year, but has been in China more than a decade longer and has more capacity.

 
Sources: Shenzhen Daily