The China Sourcing Blog
An information platform for the procurement and trade industries in China
The China Analyst - October 2012
China's hand-picked next
generation of leaders will be tasked with solving deep-rooted problems formed
during China's 30 years of socio-economic development. A growing (and
increasingly visible) disconnect between top wage earners and the working
class, frustrated factory owners, and a rapidly-ageing population are just some
of the key issues facing modern China.
Beijing needs to rebalance
its economy away from excessive reliance on investment towards a more domestic
consumption driven growth model. Beijing will only be able to accomplish this
feat through targeted market-oriented reforms such as deepening reforms in the
land, labour and financial markets. In the meantime, the vested interests of China's
powerful SOEs, who have long enjoyed preferential government policies in an
effort to breed global champions, will remain a major hurdle in pushing
China is still on track to
become the world's largest economy sometime during the new leadership's 10-year
The China Compass - August 2012
The China Compass - August 2012, published by The Beijing Axis, combines basic country data of China, as well as other major world economies, with more detailed analysis of a wide range of macroeconomic and social data; presents a comprehensive picture of the ever-changing and evolving Chinese landscape; contains up-to-date statistics, topical themes and insights; and is presented in a reader-friendly format as a useful desk reference for executives with a China agenda.
Click here to download the August 2012 edition
Since our last edition, the developed world has been unable to escape from a self-induced sovereign debt crisis, which has fuelled speculation as to whether China's economy is headed for a 'soft' or 'hard' landing. While China's GDP growth has subsequently slowed to 9.2% in 2011 and 7.8% year-on-year in the first half of 2012, fears of 'hard' landing seem overblown. Even growth of 7.6% in the second quarter fits with our core view that China's annual growth rate for ...
Juxtaposition: China in the Fortune 500 vs. the Beijing Subway System
Here's a little mental leap. In the last few years Beijing's subway has expanded substantially, especially after a building blitz before the 2008 Olympics. At the time, Chinese companies have entered the Fortune 500 in increasing numbers. What if you would literally put these two completely disparate phenomena together?
The result is this infographic. It illustrates the progression of Chinese companies in the Fortune 500 from 1994 (when the first Chinese company joined the list) with a visual reference to the expansion of the Beijing subway system from 1971. All but two of Beijing’s current 15 lines were opened in the last decade; in the same period, 47 of the current total of 58 mainland Chinese companies joined the Fortune 500.
The circles around each company portrays visually the expansion in revenue of the companies at time of joining the Fortune 500 vs. currently. Note the subway map is not exhaustive of Beijing’s current subway system of 15 lines.
Click for a closer view....
The China Analyst - April 2012
This is the new edition of The China Analyst
- April 2012. In this edition we ask you to prepare for a more competitive China. We ask you to change your perspective on China.
How competitive is China really? It has changed a lot in the last three decades, yet now it is aiming to transition to innovation-driven competitiveness. If you apply a little imagination and envision where current trends are heading, you might be induced to change your opinion on China. This process has started happening in a number of industries, such as heavy and construction equipment, where Chinese companies have begun to shake up the competitive landscape, especially in emerging economies. Yet in various other industries as well a number of Chinese companies are approaching the 'technological frontier.' It is a process that is occurring in gradual steps, as Chinese companies adapt, improve and innovate, but it is a process that all companies in the world should be aware of and prepare for.
In other ...
China's Shipbuilding Industry: Tough at the Top
The shipbuilding industry has been the scene for a major uptick in Chinese export market share in the period 2007-10.
The OECD countries that China captured market share from were in this case Japan and South Korea. These two, in their turn, were responsible for capturing the market from Europe as early as the 1970s, but it was only in 2010 that South Korea was surpassed by China as the world's leading shipbuilder. The chart above illustrates how rapidly this occurred in the period 2007-10.
According to the global shipping services provider Clarksons
, in 2011 China accounted for around 41% of the global shipbuilding share in dead weight tonnes, while South Korea had 33%, Japan 20%, and Europe only 2%. China's ascent in the industry was complicated, however, by the global financial crisis. With sluggish demand for new ships and rising costs for labour and steel, the volume of new orders in 2011 fell 52%
, according to the China Association of the National Shipbuilding Industry (CANSI)...
China and India: Comparing Export Growth
Its always tempting to compare economic aspects of China and India, as we have done before
. Exports is one area that is commonly compared; the chart below summarises briefly China and India's performance over the last decade. There are some striking observations.
Firstly, the scale indicates that India's exports are dwarfed by China's, yet both Chinese and Indian exports have increased substantially in the last decade. China's advance in exports was mainly situated in the Machinery and Electrical Equipment category, in which it has gained market share all over the world (i.e. in Australia
, as we have outlined before) and which reflect the strategic evolving of its economy from the 1990s
India, however, have not focused on equipment as China has, but instead the bulge has occurred in the 'Other' category. The bulk of this 'Other' category includes Manufactured Goods, of which Engineering Goods in 2010 constituted about 65%. Petroleum Oil Products (or POL products) constituted a sig...
The Rise of China's Second Tier, Part I: Henan/Zhengzhou
This is the first in a new series of posts looking at certain trade and industrial 'hotspots' in China.
If you look at trade statistics for Chinese provinces in 2011, it is clear that something is happening in Henan, an emerging central province, and particularly in its provincial capital of Zhengzhou, one of China's 20 fastest growing cities
. Zhengzhou is what some might call a typical second-tier Chinese city (Bentley
and Louis Vuitton
have just set up shop there). Provincial Value Added of Industry growth was a solid 19.6% in the first eleven months of 2011, yet what sets the province apart is the huge jump in foreign trade
achieved in 2011. In August 2011, Xinhua
picked up on Henan's trade bounty when it reported that Henan had registered total foreign trade of USD 11.7 billion for H1 2011 (this is perhaps an underestimate), with the European Union serving as the main trade partner. The province's main exports were silver, aluminium, vegetables, porcelain, and fur, while main imp...
EVENTS: China Procurement Roundtable (Johannesburg)
China Procurement Roundtable: Assessing China as a Supply Chain Partner for the African Mining, Industrial and Retail Sectors
Venue: Radisson Blu Hotel Sandton (close to Hilton)
Cnr Rivonia & Daisy, Sandton, Johannesburg, South Africa
Date: 16 February 2012, 07:00 - 09:00
Organiser: The Beijing Axis
Tel: +27 (0) 11 201 2453
From resource extraction and investments to consumer products and services, China’s presence in Africa and its role in the continent’s development can be
observed in various facets of the economy. With China’s continued role as a key supply chain partner in the mining, industrial and retail sectors, supply chain
managers of companies engaging with or planning to engage with China need to understand the realities and inherent complexities of dealing with the country
and, specifi cally, the individual suppliers. The lure of eff ectively dealing with capacity constraints and minimising costs are strong incentives for reaching out to
Textile and Apparel Sourcing: The Rise of South East Asia
Global textile and apparel sourcing is currently in a state of change. In China, the textile industry is not a major focus for industrial development, and lower value added manufacturing is progressively moving into South East Asian countries. For this reason, textile and apparel sourcing has to become more diversified. Yet this does not mean that China is no longer one of the leading players in this field, but emerging countries in South East Asia are increasingly challenging China's dominance.
China still has a lot going for it. It has well-established supply chains, as well as good infrastructure and expertise in making apparel and textile products; no single emerging country in South East Asia can yet hope to match China in all of these capabilities. Hence China will likely remain the leading textile and apparel sourcing country in the region over the near to medium-term. But the basic point here is that sourcing can (and should) now utilise the increased number of sourcing opti...
Happy Holidays from The China Sourcing Blog
To all our readers who are taking some time off after a long year, we wish you a pleasant and relaxing time, hope we'll catch you again soon.