The Blog:

China’s New Bullet Train 10/29/2010

Traveling in China just got quicker. A new high speed rail opened for business this week, connecting Shanghai to Hangzhou. October 26  marked the first official trip by the train, recording speeds above 245 miles per hour. The new bullet train which set speed records during the previous trials runs allows citizens to travel the 200 km distance (almost 125 miles) in 45 minutes; twice as fast as the old train’s speed.

Video courtesy of Wall Street Journal and Reuters.

Wall Street Journal Article

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Apple Opens China Online Store 10/28/2010

Apple Store in ChinaOn Tuesday, October 26, Apple launched its first online store in China.The new online store is offering the traditional Apple products such as iPads, iPhones and MacBooks. Many of the additional services such as free shipping, gift wrapping and engraving are also now available to the Chinese consumer.

The online store is also offering the WiFi compatible version of the iPhone 4 for sale, that up until now was only available without WiFi capability in China.

In other efforts to expand sales in China, Apple is plans to open 25 retail outlets by the end of 2011 in addition to its two Shanghai locations.

View the Full article
Apple.com/cn

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China Map 10/27/2010

China Map

After many years of doing research on China, and finding a lack of quality maps out there, 1ChinaBlog and Understand-China.com decided to put together our own collection of maps. This map is of all of the Provinces in China (gray areas), the Autonomous Regions (yellow), Municipalities (green), and Special Administrative Regions (Red). For a larger map, please click here: China Map

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Harman expands China Operations by $100 Million 10/27/2010

Harman Expands in ChinaThe global audio and entertainment product manufacturer based in Stamford, Connecticut announced their plans to expand their China manufacturing and research capabilities by $100 Million USD this Monday. The new operation is set to be built in Dandong in the Liaoning Province in Northern China. They currently have operations in Shanghai, Suzhou and Shenzhen. Harman will be able to take advantage of some of the investment incentives provided to foreign investors by the city of Dandong.

Harman provides automotive electronics and audio systems for global automotive brands such as Audi, BMW, Chrysler, FIAT, Ferrari, General Motors and many more. Harman’s plan to expand in China seems like a logical step; last year China surpassed the U.S. as the leading automotive market in the world. Harman already has over 120 employees in China and has set a $1 Billion China sales objective to work towards.

Harman has seen reason to continue China expansion after the success of their participation as a sponsor and supplier to the Shanghai World Expo this year and record results at the 2008 Beijing Olympics as well.

Bloomberg Newsweek’s full article
Harman’s website & Picture Source

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Outsourcing Creates American Jobs Too 10/27/2010

outsourcing globeAn article published on October 12 in the Wall Street Journal reports on the recent whirlwind of events surrounding outsourcing policy development in America. Author William Cohen believes that for every job America outsources, nearly two jobs are created on our own turf; jobs that are pay more and require a higher skill-set, like engineers, scientists and managers. Cohen references studies that have found that when a company expands overseas, they have a higher need to expand management at the American parent company to support their expansion.

The study, published by an economist out of Dartmouth’s Tuck School of Business studied the hiring practices of 2,500 U.S. based multinational companies. He found that when U.S. companies hired lower-cost labor at their foreign subsidiary companies, the U.S. parent companies expanded their teams as well. Meaning that the 2.6 million outsourced jobs helped to create 5.5 million jobs here. And, the jobs created here were often that of management level, created to help support the overseas efforts. Sounds like good news for both countries.

To read the full article please visit:

Wall Street Journal
(sometimes it only gives you a summary, searching the name of the article “Obama and the Politics of Outsourcing” will also work)

Picture Source

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China Energy: An Investment in the Future 10/26/2010

Looking to invest in China? Market analysts say renewable energy is where to plant your dollars….and watch them grow.

As you all know, China has a whole lot of people, 1.33 Billion to be exact (I could be more exact and say 1,338,612,968 as an estimate for July 2010) but let’s not be picky. These people all use and consume energy on a daily basis. China has, in fact, recently become the world’s biggest energy consumer as of July 2010, as reported by the International Energy Agency. China however, consumes about five times less energy per capita than the United States.

None the less, if China (and the U.S. for that matter) continue at such a pace, it will only lead to more of an energy crisis than there already is. Hence, the need for renewable, clean and green energy sources is growing. In efforts to fuel this need China has set a goal to have 15% of its energy use be non-fossil-energy by 2020; wind and solar are predicted to be the largest part of this surge.

According to Marketwatch, in 2002 China consumed 2.2 billion tones of oil “equivalent” or 19.5% of the world’s total energy consumption. Investment in clean energy in China however was $34.6 billion in 2009 (up almost 150% from 2005). China’s wind power market alone has been estimated to be worth 1.5 trillion RMB (or roughly 225 Billion USD) by the year 2020. (source: Energy Research Institute of the National Development and Reform Commission.)

Investing in clean energy could see high returns, both for your pocket book and the sustainability of our earth.

Some useful resources:

http://newsfeed.time.com/2010/07/20/worlds-new-biggest-energy-hog-china/

https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

http://www.chinadaily.com.cn/m/liaoning/2010-10/05/content_11381375.htm

http://www.marketwatch.com/story/chinas-green-stocks-poised-to-steal-limelight-2010-10-07?reflink=MW_news_stmp

Picture source

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China Raises Gas Prices 10/25/2010

Bloomberg Business Week Reports: Today China has increased gas prices by 3 percent. According to the National Development and Reform Commission, the ceiling for gas prices will increase by 230 yuan or $34.50 USD per metric ton. Diesel prices will also go up by 220 yuan.

The increase is said to be in part to help China reach its energy goals (cut energy consumption per unit of gross domestic product 20% by 2020.) It is also a way to help slow down China’s economy and focus on its green energy efforts.

The price hike is also reported to affect inflation, although it is predicted that the overall affect on prices will not be much. Picture Source

Bloomberg’s Full article

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Guangzhou and Guangdong: What is the difference? 10/21/2010

Guangzhou and Guangdong: What is the difference?

In today’s post I will demystify the difference between two similar-looking words, with two very different meanings. Guangdong (pronounced Gwong-dong) is Southern China’s economic center and one of the wealthiest provinces in China.  Guangzhou (pronounced Gwong-jhoe) is the largest city in the Guangdong province and has been China’s leading international commercial port for over 2,000 years. Guangzhou is the political, economic and cultural center of the province. (See map below)

Guangdong Guangzhou
Type Province City
Location Southeastern China Coast Guangdong Province
Population 95.44 Million USD (2008) 7.6072 Million (2006)
GDP 572.12 Billion USD(2009) 133.5 Billion USD (2009)
FDI 19.2 Billion USD (2009) 11.244 Billion USD (2009)


How did Guangzhou become so strong?

Guangzhou, also called Canton or Kwangchow, is one of the biggest economic zones in China (3rd to be exact), thanks to its proximity to the extremely successful regions of Hong Kong, Macau and its premier access to the Pearl River Delta. The success of these regions began spilling over into Guangdong when labor rates began to increase with the cost of living in Hong Kong. Guangdong’s labor wages are about half of the average monthly wage in Hong Kong.

Guangzhou has grown quickly by offering investment incentives that have helped to attract over 170 of the world’s top 500 multinational companies. The foreign enterprises contributed 11.244 Billion (USD) in foreign capital in 2009; which is over half of the entire province’s FDI. Guangzhou is now the main manufacturing core of the Pearl River Delta region.

Building strength over time, Guangzhou earned 133.5 Billion (USD) GDP in 2009. That is nearly 25% of the entire province’s gross domestic product! With this accomplishment, Guangzhou became the first city in Mainland China to have a per capita GDP of over 10,000 USD.

There is so much going on there!

Guangzhou is also home to the China Import and Export Fair (aka the Canton Fair) which takes place every October and April. The Canton Fair is by far China’s largest and oldest trade fair that been running for over 50 years. Each fair now stretches over three days in order to fit in all of the participants and exhibitors.

Some impressive stats about the Canton Fair:

>200,000 Buyers
>200 countries in attendance
>23,000 Exhibitors
>55,000 Booths
>200 Football Fields in Area (>1.1 Million Sq. Meters)

Some helpful resources I found:

Guangdong Manufacturing & Investment Guide

Guangzhou Government Resource

Invest Guangzhou

Canton Fair Resource

Another China Resource

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When is the Chinese New Year in 2011? 10/11/2010

Based on the lunar calendar, the New Year is always the first day of the first lunar month (this coming year it is on February 3, 2011) and lasts two full weeks ending on the fifteenth day with the full moon. Most people get at least one week off of work to spend time eating lavish meals and welcoming the new year; which means factories are usually closed during the first week of the new year (from February 3-10). The Chinese New Year celebration is actually the single largest annual migration of human beings, when China’s nearly 150 million migrant workers return home from the big cities to see their families. Be sure to take this into consideration when setting up production schedules and shipments as the New Year will have an impact on your factories. In addition, if you happen to be traveling in China during this time, you will find extremely crowded airports, train stations and hotels.

Seeing as how I was already doing the research, I decided to include a little history on the background of the holiday and where you should go to celebrate just in case you do happen to find yourself in China that week.

While Americans celebrate winter with turkey, sleigh bells and mistletoe, the Chinese celebrate their most important holiday with dumplings, fireworks, lanterns and parades. The New Year, also called Spring Festival, is arguably China’s biggest, most important celebration that has been celebrated for centuries and is deeply rooted in myth, legends and traditions.

The main focus of the celebration? Family and prosperity. A few days prior to the first day of the New Year, it is customary to clean and prepare for the celebrations, in efforts to “sweep away” the bad luck of the previous year and make room for the New Year’s good luck.

New Year’s Eve in China is full of parties with family and friends, firecrackers and lots of food. It is customary to serve dumplings to symbolize the coming of wealth and a new year replacing the old. Children are often given gifts of money and fireworks are often set off all over the cities.

Over the next two weeks, people spend time visiting families and catching up with relatives. Spring Festival ends on a high note on the fifteenth day, with the Lantern Festival, or Yuanxiao. Lanterns are typically made by children who march through the streets beneath the full moon. Lantern shows, games and dancing take place all over China, but a few of the most notable celebration spots are in Hong Kong, Beijing ,and Shanghai, where the “lanterns” look more like huge, brightly lit floats.

Chinese New Year in Hong Kong

If you are going to be in China, Hong Kong has a spectacular parade and fireworks show on the second day of the Lunar New Year. Starting at around 8pm in Victoria Harbor, the streets are lit up with colorful costumes, music, performers and floats. Following the parade is a magnificent fireworks show that continues into the night throughout the cities.

Chinese New Year in Beijing

Beijing’s impressive Lantern Festival is held every year in Longtan Park. As China’s capital, Beijing has extensive experience with putting on world-class Lantern Festivals, including the many performances for the Olympics Games in 2008, so you are in for a good show.

Chinese New Year in Shanghai

If you are going to be near Shanghai, head out to the Yuyuan Garden for a festive atmosphere with traditional sticky rice balls (the round shape represents wholeness and unity) and lanterns of all shapes and sizes.

You don’t have to travel to China to celebrate though; Chinatowns all over the world have celebrations as well. Here is a list of Chinatowns all over the world.

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China Energy: Goals for 2010 10/8/2010

"China Energy" Goals for 2010According to the China Daily Newspaper, China has made great strides to meet the energy consumption goals the Central Government has set for 2010. The mission is to cut energy use per unit of GDP by 20 percent by the end of 2010. The Minister of Industry and Information Technology of China, Li Yizhong said on Friday that they are on track to hit the mark in efforts to become a more green country.

This goal could affect where your company chooses to invest or start a business. Provinces heavy in highly consumptive and pollutant industries like steel, iron and cement production are being affected more than other regions. Areas with more of a balanced landscape of industries are having an easier time reducing overall energy consumption.

Some of the struggling provinces have received orders to shut down certain factories after the government ordered for more than 2,000 closures of inefficient, highly polluting factories nationwide in August.  According to Bloomberg, some specifically challenged cities have faced blackouts affecting businesses, homes, traffic signals and hospitals as the local governments strain to meet the proposed energy goals. The Central Government has been halting these outages as quickly as possible to encourage regions to meet the goal the right way.

China has also reduced its energy consumption and helped improve environmental conditions through the closure of some small thermal power plants and other energy-hogging projects and by slowing the growth of additional highly consumptive and pollutant projects.

Resources:

Guardian: China Electricity Blackouts

China Daily: China Energy Consumption Down

Bloomberg: Energy Intensity Targets

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