China remains a highly desirable destination for investment and a major global priority for US companies despite some concerns, the American Chamber of Commerce said in a report published on Monday.

More than 91 percent of the surveyed companies said they were optimistic about their outlook for the next five years in China.  Nearly 79 percent said their comnpany will expand investment in China this year, and more than 51 percent indicated that investment growth would exceed 10 percent.

“China’s economy still has the potential for rapid growth over the medium term, propelled by its second and third-tier cities, and assuming an appropriate policy mix,” the chamber said in its annual White paper on the stae of American business in China.

China Daily Business – 27th April 2010

Although the global investment environment is improving, Chinese investors are still very prudent and are unlikely to spend large amounts overseas in the short term, according to a report by the China Council for Promotion of International Trade (CCPIT).

The report, due to be published on Tuesday, said that 26 percent of corporate interviewees had plans to invest overseas in the next 12-months, while 30 percent said they had no plans to do so.

Their outlook was more bullish in the medium term, with 61 percent of companies saying that they would increase their overseas investment over the next two to five years.

But the investment volume is unlikely to be large, with 33 percent predicting they will inject funds of less than $1 million in the medium-term, and 36 percent planning to invest between $1 million and $5 million.

China Daily Business – 27th April 2010

Nation now third in terms of voting power at multilateral organisation

The World Bank has agreed to increase the voting power of China and other major developing countries in a move that analysts said marks the start of a gradual but new change in global economic governance.

China’s stake at the World Bank, in terms of voting power, has gone up to 4.42 percent from 2.78 percent, lifting it to the third spot behind United States and Japan in the 186-nation lending organisation.

This ranking is above a host of Western countries.like Germany, France and the UK, all having their voting power cut to a varied level.

The US’ share, however, remains unchanged at 15.85 percent, effectively still giving it the veto power.  Japan is in second place with a 6.84 percent stake, down from 7.62 percent.

China’s Minister of Finance Xie Xuren welcomed the move and said it increases the rationality of the World Bank governance structure and lays foundation for further reforms aimed at equalising voting power between the developed and the developing nations.

“This is the first time in the history of the World Bank that a reform of governance structure is mainly targeted at promoting representation and voices of developing countries,” he told reporters on Sunday.

China is expected to surpass Japan to become the second largest economy in terms of GDP this year.

China Daily Business – 27 April 2010

Japan’s largest carmakers made more cars in China last fiscal year than ever before, as surging demand in the booming Asian nation continued to drive a global recovery in car manufacturing.

Due in part to the global financial crisis, China has passed Japan and the US to become the world’s No 1 car market.  Carmakers are ramping up production in China to offset declining or stagnant developed markets.

Toyota Motor Corp said on Monday its China manufacturing rose 47 percent in the fiscal year through March 2010 from the previous year, to about 722,000 vehicles.

That was a new record for the Chinese market and its biggest increase outside of Taiwan, where it makes far fewer cars.

Toyota rolled out its first Camry made in China just four years ago.  It has partnerships with several domestic, state owned carmakers.

Chief rival Honda Motor Co also said it set a record for Chinese production last fiscal year, with output rising 28 percent to 652,596 vehicles.

Japan’s No 3 manufacturer, Nissan Motor Co, also made more vehicles in China than ever before, with production there soaring 58 percent to 613,183 vehicles.

Singapore Business Times – 28th April 2010

Chinese carmakers may have the world’s largest market to play in but face many hurdles including a shortage of original models, an overcrowded industry and a lack of overseas acquisition targets before they can challenge for global leadership.

None of this has dimmed the ambition of the country’s leading entrepreneurs, however.

BYD Co chairman Wang Chanfu, who has become China’s richest man after US billionaire investor Warren Buffet invested in his company, has said he wants to build BYD into the world’s biggest car company by 2025.

To be sure, the swift growth in car sales in China in the past couple of years has been nothing short of breathtaking.

Sales rose almost 50 percent last year to 13.7 million vehicles and are up 76 percent for the first three months of 2010.

But translating that strong growth at home and taking on the likes of Toyota Motor Co, General Motors and Ford Motor Co on the global stage is a mission that could take China’s top carmakers decades.

“Topping China’s market is relatively easy, but topping the world market by 2025? I would say that’s a shot too far.” said Anil Sharma, a car sector researchh analyst at Hybridev.com.

One condition that a carmaker must meet before it succeeds globally is a dominant position in its domestic market.

“History has shown that all car manufacturers who were successful in the export market (did so) after they had a strong position in their home market,” said Klaus Paur, director at TNS’ North Asia automotive division.

Singapore Business Times – 28 April 2010

Nearly 150 years after American railroads imported thousands of Chinese labourers to build raillines across the West, China is poised once again to play a role in American rail construction.  But this time it would be an entirely different role, supplying the technology and engineers to build high-speed rail lines.

The Chinse government has signed cooperation agreements with California and General electric (GE) to help build such lines.  The agreements, both of which are preliminary, show China’s desire to become a big exporter and licensor of bullet trains travelling 215 miles an hour, an environmentally friendly technology in which China has raced past the United States in the past few years.

“We are the most advanced in many fields, and we are willing to share with the United States,” Zheng Jian, the chief planner and director of high-speed rail at China’s railway ministry said.

the Singapore Business Times Wed 28 April

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Regards Peter

Sorry no new articles for a while, but three days into a very heavy cold and feeling grotty.  Will try and upload some more early next week.

Had a great Christmas, but first New Year’s Eve in a long long time not celebrated with a cup of good cheer.

Peter