China Watch Blog

China Watch Blog picked up local media as reporting that the mobile market in the Asia- Pacific is the fastest-growing in the world, with connections more than double those of any other market.

An Ernst & Young’s telecoms market report released by  showed that Singapore is one of the most developed market, coming in second behind China’s Hong Kong in mobile penetration and fourth in broadband penetration, local newspaper The Straits Times reported.

In December, 2009, The People’s Daily reported that the mobile penetration rate in China had reached 54.3 % in November,  2009, citing figures from the Ministry of Industry and Information Technology (MIIT). The number of mobile users went up by 97.32 million in the first eleven months of this year to 739 million.

The number of fixed-line users, however, dropped by 22.07 million to 318 million with a penetration rate of 24.4%. The drop is caused by the sharp decrease in PHS users, which decreased by 20.6 million to 48.86 million between January and November.

The Singapore market boasts 140.7 % and 168.7 % mobile and broadband penetration respectively, but to remain competitive, telecos need to rethink the way they do business, global deputy telecommunications leader at Ernst & Young Jonathan Dharmapalan said.

China Watch Blog has picked up news that Deutsche Bank was quoted as saying Thursday that China’s economic growth in the next decade is likely to fall to 7% from the current rapid pace .

“Reasons for slowing down the economy in the next 10 years include decreasing export volumes, slowing down in property demand and urbanization,” said Ma Jun, Chief Economist with the Deutsche Bank.

The Chinese government has set the target of 8% GDP growth in order to maintain economic and social stability. The country has maintained rapid economic growth of over 8 % for 10 years, starting with the 8.4 % in 2000. The high was 14 % in 2007, and China reached a surprising 9 % amid the global financial crisis in 2008, according to data from the National Bureau of Statistics.

“In 2015, the large portion of aging people and the population structure change affected by the One-child Policy will be an impediment to economic development,” Life Weekly magazine quoted Chris Sturdy, Asia-Pacific chairman with the Bank of New York Mellon Corporation. “By then, China’s economic growth might drop to 5-6 %.”

But former central bank adviser Fan Gang expressed a different view. “China’s economy is likely to continue growing rapidly over the next 20 to 30 years if the pace of growth stays at 8 % and with 8 million new jobs every year.”

Fan attributed the future high economic growth to high residents’ saving, continued foreign investment, relatively low labour costs, and scientific and technical innovations.

Many like to do crystal ball gazing, and China Watch Blog’s view is that Mainland China huge and fast growing middle class, who are already boosting the economy with their domestic consumer spending, will play a very important role in the future, and don’t forget that there are other Chinese and foreigners living outside China who are likely to immigrate to the Mainland as many area already doing now that will tip the scales.

So we do believe that Fan is right in his forecast.

Foreigners, including Chinese tourists, who visit restaurants and bars in Tokyo’s Roppongi entertainment district should be beware as many are increasingly becoming the targets of credit card fraud in which they are charged for payments they did not make, Japan Today reported.

According to Azabu Police Station which oversees the district, it has received more than 100 consultation requests from foreigners over such scams since last year, mostly involving people from Europe and the United States.

In all the cases, the foreigners were purportedly approached by staff were of African decent, believed to be from Nigeria, and they were handed then a drink on the house and that was the last thing they remember. Although they woke up the next day somewhere in Roppongi the next day, with their credit cards intact, they were shocked when they got their next credit card billing statement.

An Italian man in his 30s who lives in Tokyo said he filed a lawsuit against two credit card firms and a restaurant in Roppongi he had never visited after receiving account statements from the firms last fall notifying him that he spent about 370,000 yen at the restaurant.

According to the man, one possible lead to the fraud might be his visit to a bar in Roppongi with a friend after they were solicited by a man who appeared to be an African on a nearby street several weeks before he received the account statements.

At the bar, he and his friend had several drinks and were asked to pay about 6,000 yen. When he handed a credit card to a foreign employee, it was returned to him a few minutes later with the employee saying the card could not be used. The man then submitted another card, but it was also returned for a similar reason.

He ended up going to an automated teller machine and paid the amount in cash, he said.

The bar was located a few hundred meters from the restaurant’s address written on the account statements, but later disappeared, according to the Italian man.

Inflation in China edged higher in May, exceeding the official target of 3% for the year, amid some initial signs that the world’s major developing economy’s investment has slowed, according to a People’s  Daily report.

The National Bureau of Statistics reported Friday that consumer prices in May rose jumped 3.1% from a year earlier, accelerating from April’s 2.8% rate. To make things worse, producer price index, a major gauge of inflation at the gate of manufacturers, soared a staggering 7.1%.

The rapid industrial product price rises are expected to be transmitted to consumer inflation in a couple of months, analysts say.

Higher inflation in recent months has stoked concerns that Beijing might hike interest rates to cool economy overheating that surged to 11.9 percent in the first three months.

Other data reported by the statistical bureau Friday showed economic activity slowing slightly but still expanding at double-digit annual rates.

Investment in factories and other fixed assets — watched closely by economists as an indicator of future growth — rose 25.9%, but that was down from April’s 26.1% expansion. Growth in industrial output slipped to 16.5%, down from April’s 18.8 %.

New loans issued by Chinese banks also eased off in May, suggesting Beijing’s moves to prevent the world’s third-largest economy overheating were starting to work.

China’s officials said higher food and housing prices in the first 5 months this year were to blame for the increasing inflation pressure, saying the country is facing an amounting task to curb price rises, which are politically sensitive in China.

If China Postal Services is looking for some idea to boost its business, China Watch Blog recommends it to do the same as the Changi Airport Group (CAG) and Singapore Post (SingPost) which launched a two-month Speedpost@Changi trial service yesterday.

The service, located in the transit area of Changi Terminal 1, gives departing passengers the option to post any hand-carried items which may be disallowed on board the aircraft for security restrictions.

The service is the first of its kind in an Asian airport and allows passengers to ’save’ their disallowed hand-carried items – such as perfumes, may be of value and would have been confiscated at pre-flight screening checks and later disposed.

The two-month trial, which will be conducted at the C-Pier in Terminal 1, involves the setting up of dedicated counters and passengers can post their prohibited items to an address in Singapore or overseas.

Items have to fit either of two standard Speedpost envelope sizes and the delivery status can be tracked online. Deliveries within Singapore will be charged a flat fee of S$10 (US$6.85) per package. Charges for overseas delivery charges vary.
China Post can do the same in the Mainland. It will great for passengers as well and we can have a “win-win” situation.

Have you ever been showered with name-cards of massage parlours? Well, yours truly can testify that there is actually such a thing and it happened  this evening before my very eyes.

After attending the Transport Logistic China 2010, which is being held for three days starting from today at the Shanghai New International Expo Centre, in Shanghai,  my friend – a Westerner, his Chinese colleague seated at the back seat of the taxi and I got into the seat next to the taxi driver to head for my western friend’s hotel.

As our taxi was drawing out of the expo centre, it had to slow down at one point out due to the heavy traffic in front of it. Suddenly, a small crowd of people walked to the taxi and they were literally throwing name cards at my western friend through an open window on my side of the taxi.

Yes, you guessed it. The name cards showed photos of scantily clad girls in various sexy poses and had telephone numbers and addresses of various massage parlours in that vicinity.

Yours truly has been several times to  this expo centre to attend various events, but I have never even got one name card till today. Maybe I do not fit their category of massage parlour customers.

Prices of daily necessities including milk powder, tissue paper and tea have risen nationwide in recent months, following previous price hikes in a number of farm products, according to a China Daily report, increasing fears of inflation.

The price of a number of high-end milk powder products increased by up to three times this year, while the price of tea from the spring harvest has risen by 20% year-on-year, media reported, adding that most tissue paper products also risen by 20% year-on-year.

Citing the latest round of price hikes, a number of analysts have warned again of the heightened risks of inflation, though food prices have started to ease due to central government efforts to curb speculation.

Again  this is a relative to which restaurant one patronises. Yours truly’s own observation is that a restaurant he often frequented in Shanghai over the last two years, had a change in management, and changed its way of doing business. Instead of having a set lunch meal comprising a pressured cooked soup, rice with meat and vegetables for 22 yuan,  the restaurant has now gone ala carte. The same meal costs 70 yuan, representing a 218% increase in the price. Of course, not all restaurants are hiking their prices but so much, but nevertheless, signs of such increases is apparent everywhere.

Ha Jiming, chief economist at China International Capital Corp, forecast that the country’s consumer price index (CPI), a major gauge of inflation, will increase by 3.2% in May from a year earlier, Xinhua News Agency reported.

CPI annual growth rate could peak at 4% in June and July, Ha told an investor conference in Beijing recently.

The government also reiterated an inflation target of 3% for the year.

Hooray, it is about time they did this. Word is around that online shopping will no longer be a world of anonymity as the government ushered in new regulations requiring e-retailer applicants to provide personal information, including their real names and address, China Daily reported.

The regulation, issued Tuesday by the State Administration for Industry & Commerce, aims to protect consumer’s rights and provide a safer environment for Internet users.

Those who want to open cyber shops should hand in applications and get approval from e-trading agents, according to the regulation, to be effective on July 1.

Good read. According to:  http://blogs.wsj.com/chinajourna … new-kings-of-bling/

From the WSJ’s Wealth Report blog:

The great spending party of the rich never ends; it just moves from one country to the next.

The latest to pop the champagne corks of conspicuous consumption is China. The government stimulus, rising consumer spending and 6% GDP growth has kept China’s millionaire-making-machine well oiled. It also has fueled a no-holds-barred luxury-buying binge, as the newly rich Chinese seek to show their status.

An article in the Straits Times tells of a young Chinese woman who dispatched 30 Mercedes Benzes to pick up her $580,000 Tibetan mastiff from the airport last month. The canine caravan fueled growing public anger toward what the Chinese call the ‘fu er dai’ or ‘rich second generation’ Little Emperors.

A Goldman Sachs Group report ranks China as the world’s second- largest luxury-goods market, after Japan. China could surpass Japan this year. Japan’s wealthy registered net-worth declines of 16.7% according to this WSJ.com article, while Hong Kong registered a 61% decline.

A survey by New York market research firm Pao Principle found that almost 90% of “well heeled” Chinese surveyed had purchased a designer handbag in the past year.

It said nearly two-thirds of the men surveyed and a third of women also bought a luxury watch in the same period, while another 30% said they had gone home with one of the signature blue boxes of high-end jeweler Tiffany.

Yes, some this is likely hype from the luxury industry (30% of affluent Chinese buying Tiffany?).

But as the sun sets on bling for the U.S., it is clearly rising in China.

Do you think the flashy spending in China will set off public unrest?

China Watch Blog picked up this bit of news that Hong Kong and Bordeaux have signed a supplemental memorandum of understanding on co-operation in wine-related businesses, adding new elements to their 2008 deal.

Permanent Secretary for Commerce & Economic Development (Commerce, Industry & Tourism) Yvonne Choi signed the document with Bordeaux Chamber of Commerce & Industry President Laurent Courbu.

Ms Choi said a new promotion initiative is the pairing of wine with Asian food.

“This enriches our wine culture and capitalises on Hong Kong’s strength as a gourmet centre for the region. We will collaborate with Bordeaux through, for example, chef exchange programmes between our training institutions.”

Noting marketing wine requires sound logistics, Ms Choi said the Bordeaux chamber has been developing measures to help enhance traceability of wines from Bordeaux to distribution points like Hong Kong.

“Bordeaux is carrying out research on technologies that may help with the authentication of wines. We look forward to sharing our experience in this area,” she said.

Another important area for further collaboration is the organisation of the Wine & Dine Festival in the autumns of 2010 and 2011, following the success of the first festival held last year on the West Kowloon waterfront.

“This year’s festival in October looks set to be even larger, more stylish and to make a greater impact than the first. It will be held over four days, one day longer than last year, and followed by a citywide wine and dine month.”

So, logistics professionals don’t forget that there are plenty of opportunities around.