Profitability and sales are harder to come by in China as U.S. firms face increasing competition from domestic and foreign players, said a U.S. business group survey on Thursday.
An annual survey by the American Chamber of Commerce in Shanghai showed a majority of firms believed that competition had intensified, while the number who said they were profitable in 2012 dropped to 73 percent from 78 percent in 2011.
This reflects the challenge for global firms looking to boost profits in faster-growing economies such as China, and underlines the impact of China’s slowdown in 2012, where GDP grew at its slowest pace in 13 years.
The 420 U.S. firms surveyed identified rising costs, human resources constraints and heightened domestic competition as the main business challenges, said the report.
“We accept these are going to be the rule rather than the exception in the years to come,” said Brenda Foster, president of the chamber at the report’s Shanghai launch on Thursday.
Seventy-one percent of firms said revenue had increased versus last year, down from 80 percent in 2011, while those who reported operating margin growth edged down to 48 percent from 51 percent.
As the Chinese boom years of 10 percent-plus GDP growth recede, international firms are preparing themselves for a ‘new normal’ in China – one less reliant on exports and investment, and more tied to the domestic Chinese market, the survey said.
This meant retail and service sector firms scored higher on the survey’s Shanghai Business Confidence Index, measuring confidence in future business opportunities.
The survey also said many U.S. firms feel China has not done enough to level the playing field for foreign firms, with 54 percent of respondents saying a lack of transparency favored domestic companies, up from 46 percent in 2011.
But despite the challenges of setting up and operating in China, U.S. businesses are still keen to be on the inside of China’s growing domestic market, set to grow 9 percent a year through 2030, according to estimates from consulting firm McKinsey & Co.
The survey data shows that firms making over 10 percent of total global revenue from China rose to 45.5 percent from 41.2 percent, while nearly three-quarters of respondents said they plan to increase investment over 2013, a three-year high.
Intellectual property rights – a topic flagged dramatically by a recent U.S. report linking the Chinese government to international hacking of private information – remained high on the agenda.
Around 70 percent of firms said IPR was “critically important” or “very important” to their business in 2012, up from 68 percent in 2011.
Source: Reuters “US firms in China set for greater competition ahead: survey”
China’s cabinet may soon approve an aircraft engine development program that will require investment of at least 100 billion yuan ($16 billion), state-run Xinhua news agency quoted unidentified industry sources as saying.
China is determined to reduce its dependency on foreign companies like Boeing Co (BA.N), EADS-owned Airbus (EAD.PA), General Electric Co (GE.N) and Rolls Royce Plc (RR.L) for the country’s soaring demand for planes and engines.
So far the domestic aerospace industry has failed to build a reliable, high-performance jet engine to end its dependence on Russian and Western makers for equipping its military and commercial aircraft.
Xinhua on Thursday quoted an unidentified professor at the Beijing University of Aeronautics and Astronautics (BUAA) with knowledge of the project as saying the investment would be used mainly for research on technology, designs and materials related to aircraft engine manufacturing.
The project was going through approval procedures in the State Council and may be approved shortly, the professor was quoted as saying.
Participants in the project include Shenyang Liming Aero-Engine Group Corp, AVIC Xi’an Aero-Engine (Group) Ltd (600893.SS) and research institutes including the BUAA, Xinhua reported.
Aviation Industry Corporation of China (AVIC), the country’s dominant military and commercial aviation contractor, had lobbied the government to back a multi-billion dollar plan to build a high-performance jet engine.
China’s military and aerospace industries have suffered from bans on the sale of military equipment imposed by Western governments after the Tiananmen Square crackdown and foreign engine-makers are reluctant to transfer costly technology.
Some Chinese aviation industry specialists forecast Beijing will eventually spend up to 300 billion yuan ($49 billion) on jet-engine development over the next two decades.
Source: Reiters “China nears approval of $16 billion domestic jet-engine plan: Xinhua”
China’s de facto first lady, famed military singer Peng Liyuan, seems to have gone out of her way to keep a low profile since her husband Xi Jinping was anointed as the Communist Party’s top leader at its 18th National Congress last November.
But as Xi pushes forward a high-profile campaign to rid the Party and military ranks of corruption and waste, Peng found herself in the news again as a model Party member more than ready to answer her husband’s marching orders.
Cai Xiaoxin, a military researcher who has a verified real-name account on China’s social media platform Weibo, wrote on Wednesday that Peng had voluntarily given a flat she owned back to her military unit. According to Cai, the flat was in a military compound in west Beijing, that had been awarded to Peng many years ago.
Free or heavily-subsidised housing is among the most coveted perks Party, government and military officials can receive, especially amid soaring property prices across the country in recent years.
“She sets a good example in answering Chairman Xi’s orders to tighten up military discipline and fight against corrupt practices,” Cai wrote, referring to Xi’s position as the head of the Central Military Commission.
Cai’s post did not give more details about Peng’s generous gesture.
Peng, 51, has been a household name in China since the early 1980s, a soprano well loved for her lusty rendering of Chinese folk songs.
She married Xi in 1987, and is now the president of the People’s Liberation Army Academy of Arts, with a rank equivalent to a major general.
Source: SCMP “China’s first lady gives marching orders to military perk”
A ceremony on delivery of China’s first new type 056 stealth frigate to the navy was held in Shanghai in the morning of February 25. Navy Commander-in-chief Wu Shengli attended and spoke at the ceremony.
According to official mouthpiece People’s Daily’s website people.com.cn, Cui Tieliang, a Chinese analyst serving as executing chief editor of “Modern Warships”, told its reporters in an interview that lots of such frigates will be built to replace China’s outdated Type 053 frigates and optimize China’s navy hardware in near sea defense.
The new type frigate is much better than older types in automation, technology and stealth characteristic, people.com.cn said.
No Chinese media has given details of the ship’s characteristics. Mil.huanqiu.com of Global Daily affiliated to People’s Daily, only says in its report that it has better stealth function and electromagnetic compatibility and has incorporated lots of advanced technology. The size of its crew is only one third of that in an old-typed one.
It says that such frigates will mainly been assigned the tasks of patrolling the sea to safeguard China’s national security and territorial integrity, which obviously means that it will mainly be used to patrol the disputed sea areas. SCMP, however, quotes Agence France Presse’ report from Beijing as saying, “The vessels would mainly be used for escort missions and anti-submarine operations”.
Chinese Navy’s website navy.81.cn publishes six photos of inside views of the new frigate to show off its strength.
Comprehensive post based on the reports of people.com. cn, navy.81.cn, mil.huanqiu.com, SCMP and Agence France Presse
Petition addressed to NPC ahead of annual session calls for adherence to international agreement, which Beijing signed in 1998
More than 120 influential scholars, lawyers and journalists have signed a petition urging the National People’s Congress to ratify an international human rights treaty, as part of the leadership’s pledge to promote constitutional rights and the rule of law.
The petition, addressed to the NPC Standing Committee ahead of the NPC’s annual session beginning next week, calls for the International Covenant on Civil and Political Rights (ICCPR) to be ratified “as soon as possible”.
“There is still a substantial gap between the situation in China with respect to human rights and rule of law and the requirements of international human rights treaties … but now is the best time for our country to ratify the treaty,” the letter said.
Signatories include scholars Qin Hui, Yu Jianrong and He Weifang, liberal Communist Party veterans He Fang and Feng Lanrui, and rights lawyers Pu Zhiqiang and Xu Zhiyong .
They said they feared a society that did not value human rights or individual freedoms would plunge into “hatred and violence, division and hostility” if crises erupted.
The ICCPR is part of the International Bill of Human Rights. China signed the ICCPR in 1998 but has not ratified it.
The covenant commits its parties to respecting civil and political rights, including freedom of speech, religion and assembly and rights to a fair trial.
Professor Li Gongming , a Guangzhou-based commentator who signed the petition, said it was in the spirit of a recent push for rule of law and constitutional government by Communist Party chief Xi Jinping.
“In light of the leadership stressing that the country should be governed under the constitution and with the rule of law, I think ratification is a reasonable step,” Li said.
The petition is part of increasingly bold calls from intellectuals for political openness and government transparency. In December, dozens of scholars and lawyers urged the party’s new leaders to push ahead with political reform. Even more called on officials to disclose their family assets.
The petition said human rights were not just Western imports, but were ideals that the party itself had aspired to since its early days. The Chinese constitution says citizens enjoy freedom of the press, speech, assembly and association, and the right to demonstrate.
Professor Zhang Ming , a political scientist at RenminUniversity and a signatory, said he was sceptical about whether the new leadership would be willing to implement the necessary changes to conform to the treaty’s requirements. “The ‘stability maintenance’ regime has not ended, but then you can’t not call for ratification to happen.”
Xu Youyu, a retired professor at the China Academy of Social Sciences who is also a signatory, said: “It’s a matter of whether those in power genuinely want to safeguard human rights or not. If you want to, then you should ratify as soon as possible.”
Many copies of the open letter posted on mainland websites have been deleted.
Source: SCMP “Petition urges NPC to ratify human rights treaty”
SCMP reports, “A new claim that China is one of the safest countries in the world, based on the number of homicides, has brought the Ministry of Public Security under criticism and ridicule by Chinese who are calling the findings into question.
“The People’s Daily yesterday cited new figures from the ministry as indicating that the number of cases related to murders, assault or robbery have been declining in recent years, and that the annual murder rate was eight people per million, while the closure rate of all murder investigations had reached 94.5 per cent.
“The report added that the rate was lower than in countries considered to have the best social order, including Japan and Switzerland, though specific figures were not given for comparison.
“Tens of thousands of microbloggers from across the country were quick yesterday to rebuke the findings, with many people calling them unbelievable.”
For details, please visit SCMP website at:
Reblog of Amy Li’s blog at SCMP on February 26, 2012
Two Chinese men on an Air France flight recently shocked their fellow passengers by snatching eight bottles of wine from the airline service cart, ignoring objections from other travellers on board.
Wen Fei, a Chinese woman who works in Paris, wrote on weibo, China’s Twitter-like service, about her encounters with the two men who sat near her on flight AF132 from Paris to China’s central Wuhan city on Friday.
Wen said she tried to stop them after they each took at least eight bottles of wine and stowed them in their bags – without asking the flight crew.
“I explained to them it was not OK and interpreted the flight attendents’ explanation in French, but they said it was none of my business, ” Wen told SCMP.com on Tuesday.
The two men, apparently drunk, then shouted at Wen in the Wuhan dialect, she said.
“They asked me to back off if I ever wanted to leave Wuhan in one piece,” said Wen.
The pilot later interfered and asked the men to stop fighting with Wen, she said.
“This kind of behaviour is demeaning for the Chinese travelling abroad,” she said.
Wen also posted a picture she had secretly taken of one of the two men. The photo shows a middle-aged man wearing glasses and well-dressed.
Wen’s post struck a chord with many netizens who said they, too, find the behaviour of some Chinese travellers appalling.
“The Chinese are always loud and jump queues to get on a flight – even when everyone has a seat,” said a netizen.
“They are used to ‘stealing’ from people in China and now they start applying that habit elsewhere,” commented another netizen, implying the two men might be powerful Wuhan officials.
The identities of the two men remain unknown.
Air France didn’t respond to the South China Morning Post’s request for an interview on Tuesday.
In a separate incident in China’s southwestern Yunnan province, a local CPPCC member and businessman, Yan Linkun, was caught on camera throwing a temper tantrum and smashing an airport check-in counter after he missed the deadline for boarding.
Yan has apologised to the airport and was suspended from his work, said reports from Chinese media.
UNCIVILIZED PEOPLE FROM THOUSANDS YEARS OF CIVILIZATION dated January 29, 2012 (https://tiananmenstremendousachievements.wordpress.com/2012/01/29/uncivilized-people-from-thousands-years-of-civilization/)