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| Oct 2002 |
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| COMPANY IN ACTION |
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Overseas Manufacturers Speed up Shifting Purchase, R&D Center to China
(September 06, 2002) Recent years have seen new trends of overseas manufacturers
shifting their production to China, including purchasing and research and
development.
At China's first equipment manufacturing industry fair ongoing in Shenyang, the
US-based General Electronics, the ninth corporation on world top 500 list,
announced that before 2005 its purchase volume in China's mainland would reach 5
billion US dollars. While its R&D center set up in Shanghai has become one of
its three such centers worldwide.
Motorola's China branch also said that it plans to put in over 10 billion yuan
for research and development work in the mainland in coming five years, taking
up one third of its world total and with an expected yearly output over 10
billion US dollars. In fact, by now Motorola has shifted both its production
base and R&D center to the mainland, with its energy system department, software
and mobile phone research already taken root. The R&D transfer will continue and
efforts will be made on basic researches, according to Motorola's China branch
chairman.
The integrated shift proves China's growing manufacturing industry, expert said,
all these show that China will by no means serve as only a production base for
transnational corporations.
As early as before China's WTO accession, experts predicted more and more
transnational corporations would choose China as a base for market sale, raw
material purchasing, pricing or even new product developing and human resources,
so as to provide all-round services to their productive branches in Asia.
Nearly 400 of Fortune listed world top 500 enterprises have invested more than
2000 projects in China, according to statistics released by the United Nations
Conference on Trade and Development (UNCATD). World major manufacturers of
computer, electronics products, telecom equipment, petrol and chemical products
have extended their production network to China.
Since 1990 China's mainland has absorbed a foreign capital reaching 230 billion
US dollars, taking up 45 percent of Asia's total. Meanwhile, transnational
giants have been moving rapidly their production links to China, from production
to purchasing, and R&D centers.
In past few years Microsoft, Motorola, General Motors and Siemens have
established over 100 R&D centers and more production bases in China.
Sources: People's Daily
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Goldman Sachs to Invest in Semiconductor Industry
(September 24, 2002) The world's leading investment bank Goldman Sachs said it
has planned to invest a "considerable" amount of funds into the Chinese
mainland's semiconductor industry.
"China has favorable conditions for developing the semiconductor industry and
the industry's growth and potential areimpressive," Jonathan Ross, senior
official with Goldman Sachs' Hong Kong office, its Asia-Pacific regional
headquarters, said Sunday at a technology conference here.
Ninety percent of Goldman Sachs' investment in Asia has gone tothe Chinese
mainland in the past two years, according to the company.
Ross noted that the mainland attracts semiconductor manufacturers from Japan,
the United States, Singapore, and some European countries due to its huge market
potential, low cost, flexible government policies and skilled personnel.
The number of semiconductor designing companies on the Chinese mainland has
risen from 20 three years ago to more than 200.
The technological level of the semiconductor industry here has also greatly
improved in the last couple of years. Semiconductor Manufacturing International
(Shanghai) Corporation (SMIC), a localsemiconductor foundry, has launched and
produced in volume a fullyqualified 0.18um logic technology, which allows the
production of a more powerful silicon chip.
A few years ago, local companies had just developed 0.5um to 0.35um logic
technologies. And now SMIC has started to develop 0.13um logic technology, its
most powerful so far.
"Shanghai has become a center of China's semiconductor industry," Ross said. The
city is also China's financial center.
More than 10 billion U.S. dollars has been invested in semiconductor companies
in the city so far. The industry's total output value has increased by 30
percent annually in Shanghai, twothirds of the mainland's total output.
About 80 integrated circuit manufacturers have gathered in Zhangjiang's
high-tech park, regarded as Shanghai's Silicon Valley,including SMIC and
Shanghai Hua Hong NEC Electronics, a Sino-Japanese joint venture.
Sources: Xinhua News Agency
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Cisco, China Telecom Team up
(September 6, 2002) Cisco Systems announced yesterday that it was selected by
Shanghai Telecom, a subsidiary of China Telecom, to supply networking technology
for the creation of a city-wide multimillion-US-dollar broadband network.
Cisco products, primarily the Cisco 12400 Series Internet Routers, will provide
the IP backbone network and services for the construction of the second phase of
the Shanghai Telecom Metropolitan Area Network (MAN), Shanghai's largest IP
backbone exchange and access network. Upon completion of Phase II construction,
the Shanghai MAN is expected to be China's largest urban communications network.
The Shanghai MAN Phase II construction, which is scheduled to begin by the end
of this year, will use Cisco's routers and switches to upgrade the existing
network. The upgrade will create one of the most comprehensive information
infrastructure systems in China and will allow Shanghai Telecom to deliver rapid
communications services, such as high-speed Internet access, Virtual Private
Network, and Multicasting, to its users.
After the second phase expansion is completed, Shanghai Telecom will immediately
provide full network point-to-point Virtual Private Network services to private
users and commercial buildings, including those equipped with older Ethernet and
copper connections.
Sources: China Daily
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FedEx Offers Money-back Guarantee in China
(September 24, 2002) World express delivery companies are racing to see who can
dominate Chinese market the fastest.
FedEx Express (FedEx), the world's largest express transportation company,
yesterday announced that it will offer its money-back guarantee to customers
throughout China. It will be the first and only international express carrier to
offer a money-back guarantee in the China market.
Under the terms of the guarantee, if a shipment arrives later than FedEx's
promised delivery time, the company will provide a full refund.
This latest move comes at a time of quick expansion by FedEx's major global
competitor, United Parcel Service (UPS), in China.
UPS opened two representative offices in Shenzhen and Qingdao last week, and
four more offices are planned in Xiamen, Dongguan, Hangzhou, and Tianjin, for
the end of this year and early next year.
The company says it plans to have 21 offices in China by the end of 2003.
The FedEx announcement follows the company's pioneering next-business-day
delivery service to major Asian and North American cities in 2000.
FedEx will also enhance its services in China, especially in Southern China and
the Pearl River Delta region.
For example, FedEx will upgrade the aircraft serving Shenzhen from the current
DC-10 to an MD-11, which will add 30 tons in freight capacity.
"These business adjustments are aimed at providing better services for our
customers in China, which demonstrates FedEx's commitment to long-term
development in the market," said Eddy Chan, regional vice-president of FedEx's
China and Mid-Pacific operation.
The newly launched money-back guarantee demonstrates the company's confidence in
its services in China, Chan added.
Meanwhile, UPS' second quarter report showed its international business growth
helped offset declines in the US domestic package business.
The company's international segment, especially its Asia-Pacific operations,
paced the second quarter's results, growing substantially in excess of the
market and showing a strong increase in profitability, said UPS Chief Financial
Officer Scott Davis.
The company benefited from the opening of an intra-Asia air hub in the
Philippines, which improved service levels within Asia and to Europe, he said.
Business in China showed a surge of 30 per cent, Davis said.
Since entering the Chinese market in 1988, UPS has seen high growth in its
business volume in the country. Its sales revenue grew over 35 per cent annually
since it gained the right to operate direct flight service to China in early
2001.
Sources: China Daily
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Coca-Cola Has over 50 Percent Market Share in China
(September 04,2002) Coca-Cola (China) Beverages Limited announced recently
that its product series have had a share of over 50 percent on the Chinese
beverage market, according to latest poll results of ACNielsen, an established
market investigation institution.
As an old-brand transnational corporation, Coca-Cola has achieved an astonishing
growth rate this year on the Chinese market, said Nick J. Moore, regional
manager of the company. In Chengdu, a typical city of west China, Coca-Cola has
maintained a growing trend for eight successive months, with a local market
share as high as 48 percent in May, a percentage achieved in only five years.
Although the company has entirely localized, with staff employment and raw
material purchasing all done in China, Nick J. Moore warned that it is still
essential for a transnational corporation to choose a good partner. He told that
Coca-Cola is very careful in choosing partners and pays great attention to their
marketing experiences, sales network, financial conditions, especially the need
for both parties to have common business philosophy.
When asked about the impact of Coca-Cola's huge market share on China's economy,
the regional manger explained that according to a joint research conducted by
Peking University, Tsinghua University and the University of South Carolina of
the United States, the company's US$1.1 billion investment in China has actually
created upwards of 410,000 job opportunities. Besides, competition has helped to
expand the domestic beverage market and bring benefits to all parties, including
consumers, to the game .
Source: People's Daily
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