The rise of China's Communism 3.0
http://www.iht.com/articles/2008/07/30/business/factory.php
By David Barboza
July 30, 2008
SHENZHEN, China: Few people have heard of the BYD Corp. - BYD for Build Your Dream - but this little-known company has grown into the world's second-largest battery producer in less than a decade of existence. Now it plans to make a great leap forward by producing its own cars.
"We'd like to make a green energy car, a plug-in," said Paul Lin, a BYD marketing executive. "We think we can do that."
Even in go-go China, such lofty aspirations may sound far-fetched. But BYD has built a 150,000-square-meter, or 1.4 million-square-foot, auto assembly plant in this city next to Hong Kong, hired a team of Italian-trained car designers and plans to build a green hybrid by the end of the year.
Welcome to Communism 3.0. No longer content to be the home of low-skilled, low-cost, low-margin manufacturing for toys, pens, clothes and other good, Chinese companies are trying to move up the value chain, hoping to eventually challenge the world's biggest corporations for business, customers, power and recognition.
The Chinese government is backing the drive with a two-pronged approach: using incentives to encourage companies to innovate, but also moving to discourage low-end manufacturers from operating in southeastern China, reversing one of the key engines of this country's spectacular economic rise.
By introducing tougher labor and environmental standards and ending tax breaks for thousands of factories here, the government has sent a powerful signal about its desire to have Chinese companies move up the value chain, and also helped fuel an exodus of factories from an area long considered the world's shop floor.
President Hu Jintao hinted at the Olympic-sized Chinese ambitions during a meeting of the country's scientific elite last June at the Chinese Academy of Sciences, where he called on scientists to challenge other countries in high technology.
"We are ready for a fight to control the scientific high ground and earn a seat on the world's high technology board," Hu said. "We will make some serious efforts to strengthen our nation's competence."
Government policies now favor high-tech economic zones, research and development centers and companies that promise higher salaries and more skills. A computer chip facility being built by Intel in the northern city of Dalian is welcomed; a textile mill churning out $1 pairs of socks is not.
"When a country is in its early stages of development, as China was 20 years ago, having an export processing center is good for growth," said Andy Rothman, a China analyst at the investment bank CLSA. "But there's a point when that's no longer appropriate. Now, China's saying, 'We don't want to be the world's sweatshop for junk any more."'
Chinese firms are expanding into (or buying companies that work in) software, biotechnology, automobiles, medical devices and supercomputers. Earlier this year, a government-backed corporation even rolled out its first commercial passenger jet, a move Beijing hopes will allow it to some day compete with Boeing and Airbus.
In some ways, the government is only riding the currents that come with strong economic development. For instance, many manufacturers in southeast China, the country's biggest export zone, are moving to the interior, where land and labor costs are cheaper, or expanding operations to lower-cost countries, like India, Vietnam or Bangladesh.
World-class brands that have grown dependent on outsourcing labor-intensive production to China are now searching for alternatives. Even the huge retailer Wal-Mart Stores, which moved its global procurement center to Shenzhen in 2002, is going to be forced to map out new sourcing channels to fill its 5,000 stores worldwide.
For millions of consumers around the world, experts say the policy shift could also mean higher prices for a broad array of goods from pens and hammers to dolls and running shoes.
"Basically the cost of things China produces for Home Depot and Wal-Mart are going up," said Dong Tao, an economist at Credit Suisse. "But there is another side. In some areas that China's going to grab, like telecom equipment, they'll push prices lower."
Economists say the economic development of China is following in the footsteps of Japan and South Korea, which successfully shifted from low-skilled manufacturing to high technology, services and the creation of global brands.
There are still numerous obstacles here, including weak enforcement of intellectual property rights and a culture of copying or stealing technology from foreign companies or venture partners. But experts point to positives like a rising aggressive entrepreneurial class, legions of newly minted science and engineering graduates and a fiercely competitive domestic marketplace.
Peter Williamson, a professor of management at Cambridge University, challenges the notion that China doesn't have technological know-how.
"They are some of the biggest in launching satellites," said Williamson, co-author of "Dragons at Your Door: How Chinese Cost Innovation is Disrupting Global Competition." "They have a lot of technology locked up in the military, and now the government is reducing budgets and pressing agencies to privatize. So suddenly, a lot of technology people thought didn't exist has come out from behind the curtain."
This is what China is betting on.
At BYD, executives are ramping up research and development spending, studying global marketing strategies. Founded in 1995 by a scientist who studied metallurgy, the company has made lithium batteries, cellphones, camera equipment, auto parts and other components for Nokia, Motorola and Sony, among others, giving it experience in producing high quality goods.
"The technology for a car is not that sophisticated," Lin said. "It's big but a lot of low technology."
Five years ago, BYD purchased a state-owned automaker to help make the transition.
Another company hoping to make the leap is Hasee Computer, a fast-growing computer maker also based in Shenzhen, in an area that is also home to Huawei, the giant Chinese telecom equipment maker.
Founded six years ago, Hasee is already selling 100,000 laptops a month and is the No.2 Chinese computer maker behind Lenovo, with revenues forecast to reach $800 million this year.
Hasee executives say the company is spending heavily on research and development and that by focusing on innovative computers and laptops that now sell for just $370, it is on track to become the world's biggest computer maker within a decade.
"Our strategy in China is to always focus on innovation," said Zhang Xianyong, a Hasee vice president and sales manager for greater China. "We're now in the domestic market, but we'll spare no effort to grab overseas expansion."
Analysts say there are dozens of other little known semiconductor, software and telecom equipment makers that could emerge as global companies over the next two decades.
The government is pressing companies to move up the value chain for economic, but also political reasons, analysts say. Promoting innovation and brand-name companies is likely to bolster the economy and create better jobs.
The Hong Kong Small Business Association projects that by the end of the year 20,000 factories in southern China will have closed or left China.
In April, Credit Suisse forecast that one-third of all export-oriented manufacturers could close within three years. A study released in March by the American Chamber of Commerce in Shanghai and Booz & Company, the consulting firm, said foreign investors were growing bearish on China and that rising costs were driving some U.S. manufacturers out of the country.
For many Chinese economists, that's just fine.
"The low end industries used to make a great contribution to Guangdong" Province, said Liang Guiquan, an economist at the Guangdong Academy of Social Sciences, a government research institute in southeast China. "But an enterprise is like a creation. They must get used to changes in the environment. If the environment changes, they must die out."
Full Version: The Rise Of China's Communism 3.0
I can't believe this is happening. I am so glad it's finally coming true. No more listening to other races accusing China of cheap chinese goods. Well, I'd like to see when China will catch up with South Koreans and Japanese in manufacturing good LCD tvs.
Lets just hope the sweat shop goes to India...... LOL... j/k.
Thank you marchpole for the delightful news.
Lets just hope the sweat shop goes to India...... LOL... j/k.
Thank you marchpole for the delightful news.
QUOTE(rott @ Jul 31 2008, 02:58 PM) 
I can't believe this is happening. I am so glad it's finally coming true. No more listening to other races accusing China of cheap chinese goods. Well, I'd like to see when China will catch up with South Koreans and Japanese in manufacturing good LCD tvs.
Lets just hope the sweat shop goes to India...... LOL... j/k.
Thank you marchpole for the delightful news.
Lets just hope the sweat shop goes to India...... LOL... j/k.
Thank you marchpole for the delightful news.
LCD tvs market is now so packed, if China really wants to penetrate a market, Chinese companies must target for a specific niche with new technology.
People need to stop calling this communism. This is market capitalism at its finest, transitioning from a manufacturing based to design/service based economy. It's an important step moving towards from a developing to a more advanced developed country. I'm guessing in about 20 years China will be up there with the big boys in terms of personal income.
More incentives should be given to scientific researchers and engineers instead of to real-estate developers and corrupted government officials as their collaborators. Chinese media had the impression that the people hate the rich, which has become excuses by the dirty rich, now this theory is toppled by an instance. A media published a photo showing Mr. Yuan Longping, the father of hybrid rice, shopping for a luxury car. The article said, The Yuan's already has 7-8 cars, now, he is looking for a new race car. What is unexpected by the media is that people are almost unanimously supportive of Mr. Yuan. The general opinion is Mr. Yuan deserves every luxury the country can offer because his contribution to China food production. Some people say, without Yuan Longping, many Chinese might go to bed with empty stomachs, it's ok if he buys planes or yachts. He got his money through his hard working and devotion to science.
Chinese people don't hate the rich who gained their wealth like Mr. Yuan Longping, they hate the rich who got rich with dirty hands. If China wants to upgrade its economic sectors, the distributions of wealth should be tilted to people who make real contributions to the country and people. Politically they are powerless, but they are the backbone of China's future.
As to sweat shops going India, they have to upgrade their infrastructure and human resources to absorb them, let's see how long the way it will take them.
Chinese people don't hate the rich who gained their wealth like Mr. Yuan Longping, they hate the rich who got rich with dirty hands. If China wants to upgrade its economic sectors, the distributions of wealth should be tilted to people who make real contributions to the country and people. Politically they are powerless, but they are the backbone of China's future.
As to sweat shops going India, they have to upgrade their infrastructure and human resources to absorb them, let's see how long the way it will take them.
Hey please don't mention the word India, whatever happens to them that's their business. we should just focus on China. Talking about those people won't help China.
As far as I know, China already put in a lot of money for nanotechnology (and doing ok, i can post their research here if you wish), renewable energy technology. Chinese government now agrees to give incentives to Chinese automakers with the development of fuel cell, hybrid technology and as the results of it, electric cars engine that will be running during the Olympics are mostly developed by Chinese universities, and SAIC and Chery, (VW cars with purely Chinese developed electric engines by Tongji University). Government also said that they firmly supports the country's own 3G standard TD-SCDMA just like they support the space programs and it is said that a few Chinese companies like Datang are engaged in the next generation of mobile telecommunication technology 4G (I don't know if Huawei and ZTE will join) . Within 7 years, their aim is to build China's space industry into a world class level to compete with other big countries in that sector. Besides that China's own home grown supercomputers companies like Dawning Information Industry that recently just succesfully developed China's supercomputer (230 teraflops) that 20 times more powerful than the current one in China and Dawning is currently developing supercomputer with petaflop performance operate by China developed Godson chip (or Loongson) which is due to be unveiled in 2010 and the big passenger jets program...etc...
But on the other hand, I need to point out that the current issues facing Chinese hi tech companies are bad management, lack of skilled staff, R&D in the wrong areas. There are still many technology areas that China is still weak in like semiconductors, OLEDs, medical equipments (well apart from HIFU)......
and not to forget the corruption within the officials level. if China really wants to develop a hi tech economy, the first she needs to do is to completely stamp out corruption, IPR
China at the moment i'd say is at the very infant stage of a hi tech economy, alot more need to be done, the educational system need a good reshuffle, the best university in China at the moment is the Tongji University with quite alot of R&D (like the one I mentioned above and the high speed train technology, and China's own maglev technology) and good education methods but unfortunately not all universities in China are like Tongji University, and you can see where the lack of skilled workers problem come from.
About building global hi-tech brands for China, well only a few I can see hopes in such as Lenovo (well doing reasonably well with a lot of activities lately), Huawei (expanding very fast, revenues expected to top $24 billions with $12 billions already achieved in H1 this year), ZTE (another breed like Huawei but take different path, first manufacture low end handset, now they are slowly penetrating into a mid-high end segment and won praises from many analyst for their recent moves , but still quite a long way off), Haier (well I am still a bit sceptic about this company, it's like they are playing an on-off game, they are specialised in household appliances but also make LCD tvs, plasma tvs, phones like Haier black pearl and mirror phone Haier Sterling , laptops, portable music players like Haier's Ibiza Rhapsody and present in many countries but I heard that their aftersale services suck, although they are trying to correct it but analysts say they are not doing enough about it given the amount of revenues they earn every year, and recently I have not seen them come out with new technology, well except for some "green" air conditioners and "green" fridges that uses cold carbon dioxide instead of traditional refridgerant air and the detergent-free washing machine Haier H2O that was debuted in France and comming to the UK later this year, sometimes I do think this company is really hopeless), Chery, well as people here may know this is an 11 year-old company but already produces 400 000 cars a year and expanding rapidly in many developing countries including Russia but that's nothing to hype about, they are still somehow stuck in the doldrums of quality problem, although they say they are working intensively on that problem and promised that their lineups for 2009 will be of better quality and that's why they recently stopped releasing new models to focus on quality problems (but we shall wait and see if they keep up with their words), and plus Chery was involved in a lawsuit by GM over a design piracy that is definitely not good for a company's image , and it seems they have learn a lesson and went to the Italian design house like Bertone and Pininfarina (Alfa Romeo and Ferrari) to have their cars designed by them, they have successfully developed their own engines but I heard quite a number of complaints about their aftersale service (like Haier) and some mechanical problems (both minor and major) with their cars and not to mention the poor crash test rating by Euro-Ncap.
As you can see, China still has many hurdles to overcome if she really wants to erase the image of a low skilled, low wage labour and cheap goods based economy and transform into a hi-tech, service based economy. And I mean a lot of works to do, more skilled workers, Intellectual property issue (the law is there but it is lax and not enforced), top management level needs more attention and training, tackle corruption, privatise those state owned companies those that are already too big and too filthy rich and the quality problems as well, I have to admit that many Chinese companies out there are ready to sacrifice quality to boost up profits, I hope the recent scandals really teach them a lesson in their face.
But hey we should not forget the less developed inland region of the West of China, the manufacturing bases are moving there too leaving the PRD and Yangtze river regions so another question here is "the title factory of the world will really go away soon ?"
if you see any flaws in my post, please help me correct it, and if you have any other different ideas, views in regards to my points please do share with us.
Thank you for reading.
As far as I know, China already put in a lot of money for nanotechnology (and doing ok, i can post their research here if you wish), renewable energy technology. Chinese government now agrees to give incentives to Chinese automakers with the development of fuel cell, hybrid technology and as the results of it, electric cars engine that will be running during the Olympics are mostly developed by Chinese universities, and SAIC and Chery, (VW cars with purely Chinese developed electric engines by Tongji University). Government also said that they firmly supports the country's own 3G standard TD-SCDMA just like they support the space programs and it is said that a few Chinese companies like Datang are engaged in the next generation of mobile telecommunication technology 4G (I don't know if Huawei and ZTE will join) . Within 7 years, their aim is to build China's space industry into a world class level to compete with other big countries in that sector. Besides that China's own home grown supercomputers companies like Dawning Information Industry that recently just succesfully developed China's supercomputer (230 teraflops) that 20 times more powerful than the current one in China and Dawning is currently developing supercomputer with petaflop performance operate by China developed Godson chip (or Loongson) which is due to be unveiled in 2010 and the big passenger jets program...etc...
But on the other hand, I need to point out that the current issues facing Chinese hi tech companies are bad management, lack of skilled staff, R&D in the wrong areas. There are still many technology areas that China is still weak in like semiconductors, OLEDs, medical equipments (well apart from HIFU)......
and not to forget the corruption within the officials level. if China really wants to develop a hi tech economy, the first she needs to do is to completely stamp out corruption, IPR
China at the moment i'd say is at the very infant stage of a hi tech economy, alot more need to be done, the educational system need a good reshuffle, the best university in China at the moment is the Tongji University with quite alot of R&D (like the one I mentioned above and the high speed train technology, and China's own maglev technology) and good education methods but unfortunately not all universities in China are like Tongji University, and you can see where the lack of skilled workers problem come from.
About building global hi-tech brands for China, well only a few I can see hopes in such as Lenovo (well doing reasonably well with a lot of activities lately), Huawei (expanding very fast, revenues expected to top $24 billions with $12 billions already achieved in H1 this year), ZTE (another breed like Huawei but take different path, first manufacture low end handset, now they are slowly penetrating into a mid-high end segment and won praises from many analyst for their recent moves , but still quite a long way off), Haier (well I am still a bit sceptic about this company, it's like they are playing an on-off game, they are specialised in household appliances but also make LCD tvs, plasma tvs, phones like Haier black pearl and mirror phone Haier Sterling , laptops, portable music players like Haier's Ibiza Rhapsody and present in many countries but I heard that their aftersale services suck, although they are trying to correct it but analysts say they are not doing enough about it given the amount of revenues they earn every year, and recently I have not seen them come out with new technology, well except for some "green" air conditioners and "green" fridges that uses cold carbon dioxide instead of traditional refridgerant air and the detergent-free washing machine Haier H2O that was debuted in France and comming to the UK later this year, sometimes I do think this company is really hopeless), Chery, well as people here may know this is an 11 year-old company but already produces 400 000 cars a year and expanding rapidly in many developing countries including Russia but that's nothing to hype about, they are still somehow stuck in the doldrums of quality problem, although they say they are working intensively on that problem and promised that their lineups for 2009 will be of better quality and that's why they recently stopped releasing new models to focus on quality problems (but we shall wait and see if they keep up with their words), and plus Chery was involved in a lawsuit by GM over a design piracy that is definitely not good for a company's image , and it seems they have learn a lesson and went to the Italian design house like Bertone and Pininfarina (Alfa Romeo and Ferrari) to have their cars designed by them, they have successfully developed their own engines but I heard quite a number of complaints about their aftersale service (like Haier) and some mechanical problems (both minor and major) with their cars and not to mention the poor crash test rating by Euro-Ncap.
As you can see, China still has many hurdles to overcome if she really wants to erase the image of a low skilled, low wage labour and cheap goods based economy and transform into a hi-tech, service based economy. And I mean a lot of works to do, more skilled workers, Intellectual property issue (the law is there but it is lax and not enforced), top management level needs more attention and training, tackle corruption, privatise those state owned companies those that are already too big and too filthy rich and the quality problems as well, I have to admit that many Chinese companies out there are ready to sacrifice quality to boost up profits, I hope the recent scandals really teach them a lesson in their face.
But hey we should not forget the less developed inland region of the West of China, the manufacturing bases are moving there too leaving the PRD and Yangtze river regions so another question here is "the title factory of the world will really go away soon ?"
if you see any flaws in my post, please help me correct it, and if you have any other different ideas, views in regards to my points please do share with us.
Thank you for reading.
It is truly magnificent for China as a nation.
however I have a policy for all successful nations. Since my nation will probably never use it, as success is something we are allergic too, you might as well know.
I have a concept of staple industries, industries which are the bare minimum required to run a nation.
- Agriculture
- Energy
- Defence
- Construction
- software/hardware/electrical
- Transport (planes cars trucks ships, trains)
- Textiles
- Banking
If you have these industries within your own country, from top to end, and you can produce all the products you need from these without any external help, you cannot go wrong. After that you can afford to get rid of all excess manufacturing if you should want, but always keep these industries alive to meet national demand.
however I have a policy for all successful nations. Since my nation will probably never use it, as success is something we are allergic too, you might as well know.
I have a concept of staple industries, industries which are the bare minimum required to run a nation.
- Agriculture
- Energy
- Defence
- Construction
- software/hardware/electrical
- Transport (planes cars trucks ships, trains)
- Textiles
- Banking
If you have these industries within your own country, from top to end, and you can produce all the products you need from these without any external help, you cannot go wrong. After that you can afford to get rid of all excess manufacturing if you should want, but always keep these industries alive to meet national demand.
I also see this as an opportunity for Pakistan. China is getting rid of the labour market, we should be bidding for those contracts looking to move out, so that we can get some of the market.
However that will never happen, we are currently plagued with incompetent corrupt leaders. By the time the laedership changes the world will have changed.
However that will never happen, we are currently plagued with incompetent corrupt leaders. By the time the laedership changes the world will have changed.
QUOTE(platinum786 @ Aug 1 2008, 08:43 AM)
It is truly magnificent for China as a nation.
however I have a policy for all successful nations. Since my nation will probably never use it, as success is something we are allergic too, you might as well know.
I have a concept of staple industries, industries which are the bare minimum required to run a nation.
- Agriculture
- Energy
- Defence
- Construction
- software/hardware/electrical
- Transport (planes cars trucks ships, trains)
- Textiles
- Banking
If you have these industries within your own country, from top to end, and you can produce all the products you need from these without any external help, you cannot go wrong. After that you can afford to get rid of all excess manufacturing if you should want, but always keep these industries alive to meet national demand.
however I have a policy for all successful nations. Since my nation will probably never use it, as success is something we are allergic too, you might as well know.
I have a concept of staple industries, industries which are the bare minimum required to run a nation.
- Agriculture
- Energy
- Defence
- Construction
- software/hardware/electrical
- Transport (planes cars trucks ships, trains)
- Textiles
- Banking
If you have these industries within your own country, from top to end, and you can produce all the products you need from these without any external help, you cannot go wrong. After that you can afford to get rid of all excess manufacturing if you should want, but always keep these industries alive to meet national demand.
Thank you for your concerns about China. You're right about those sectors and self-sufficience.
I believe China is well aware of this, that's why China is trying to manufacture everything she can on her own, passenger jets and even tunnel digging shields that were only manufactured by Germany, Japan and the USA. The government emphasized on high speed trains and they went on to buy the tech from Japan and Germany and now they got the tech to build it domestically and doing more research on it to recently got it to higher speed.
My best wishes to Pakistan, don't forget that China in the late 80s and early 90s was just a mess too, if it was not for a pragmatic president that cleared up the government then China would not go on like this.
I still see hope for every country.
Judging at the above posts, China still got a long way to go. Infact, let's not take Japan, let's just take South Korea. They have two good reputed companies like Samsung and LG in the white goods sector. As for the cars, I can see just one which has made it's mark and that's Hyundai. Other than that.... the rest of their companies are not worth talking about. What China should do is in the white goods section they should have 4 to 5 companies which can compete with Samsung and LG. I don't see Haier or TCL competing much. I agree with Harrypotter on the Haier sales and service part.
These days in China, I can hardly see Haier as a top brand. Lenovo is still at the top but they aren't concentrating on white goods. Still focusing much on Laptops and Mobiles. I can't say China has a good white goods manufacturer which can compete with Samsung and LG in terms of quality and service after sales.
In cars section, Chery could gain some ground if it focuses more on quality and service after sales. Crashing and failing in the Euro-Ncap test is a big blow to Chery. But Hopefully they would get it right and pick up their pieces.
China, still have many hurdles. But once crossed.... The Dragon Has Awakened.
P.S: And Stop the copying of other countries designs.
These days in China, I can hardly see Haier as a top brand. Lenovo is still at the top but they aren't concentrating on white goods. Still focusing much on Laptops and Mobiles. I can't say China has a good white goods manufacturer which can compete with Samsung and LG in terms of quality and service after sales.
In cars section, Chery could gain some ground if it focuses more on quality and service after sales. Crashing and failing in the Euro-Ncap test is a big blow to Chery. But Hopefully they would get it right and pick up their pieces.
China, still have many hurdles. But once crossed.... The Dragon Has Awakened.
P.S: And Stop the copying of other countries designs.
QUOTE(rott @ Aug 1 2008, 03:04 PM)
Judging at the above posts, China still got a long way to go. Infact, let's not take Japan, let's just take South Korea. They have two good reputed companies like Samsung and LG in the white goods sector. As for the cars, I can see just one which has made it's mark and that's Hyundai. Other than that.... the rest of their companies are not worth talking about. What China should do is in the white goods section they should have 4 to 5 companies which can compete with Samsung and LG. I don't see Haier or TCL competing much. I agree with Harrypotter on the Haier sales and service part.
These days in China, I can hardly see Haier as a top brand. Lenovo is still at the top but they aren't concentrating on white goods. Still focusing much on Laptops and Mobiles. I can't say China has a good white goods manufacturer which can compete with Samsung and LG in terms of quality and service after sales.
In cars section, Chery could gain some ground if it focuses more on quality and service after sales. Crashing and failing in the Euro-Ncap test is a big blow to Chery. But Hopefully they would get it right and pick up their pieces.
China, still have many hurdles. But once crossed.... The Dragon Has Awakened.
P.S: And Stop the copying of other countries designs.
These days in China, I can hardly see Haier as a top brand. Lenovo is still at the top but they aren't concentrating on white goods. Still focusing much on Laptops and Mobiles. I can't say China has a good white goods manufacturer which can compete with Samsung and LG in terms of quality and service after sales.
In cars section, Chery could gain some ground if it focuses more on quality and service after sales. Crashing and failing in the Euro-Ncap test is a big blow to Chery. But Hopefully they would get it right and pick up their pieces.
China, still have many hurdles. But once crossed.... The Dragon Has Awakened.
P.S: And Stop the copying of other countries designs.
Although China, Korea and Japan seem to follow the same pattern of industrialisation, low end manufacturing then slowly upgrade to hi-tech, service based one (for China, we 're still waiting to see). But in the case of the Japanese and the Korean, their home market was heavily protected and endorsed by the government and that allow home grown companies to dominate the countries for decades. In the case of Japan, Sony and Toyota ruled for decades. And for South Korea, I read from the history of Samsung that the company was heavily financed and backed by the government and heavy tariffs were slapped on foreign electronic imports and that allow Samsung to morph into a giant that later on helped it in the global arena. In the 90s, when the Korean government realized that they will soon enter the industrialized country category and that means they will have to play fair and allow foreign companies to come in Korea, and that's when company like Samsung started its internationalization because of heavy competition at its own home turf and the only way to survive was to go abroad. The company grow quickly abroad around 1995-1998 (well if someone here can exactly remember when Samsung was actually first hit your eyes).
LG which is formerly known as Goldstar quickly adopted its compatriot's strategy to escape the Walmart shelves and went through a metamorphosis.
But now it is the age of globalization, we are no longer in the 20th century where people can just practice protectionism and shut off its market to foreign imports like Korea, and have heavy subsidies from the government. Whether China likes it or not, she still has to open her market for foreign brands. So the problem here is Chinese companies already are facing threats at home, do they still even have the mind for overseas expansion ?
Well some Chinese companies like Lenovo opted the overseas expansion, and the result is they started losing their home market share to HP and Dell, but to compensate that they also start gaining some overseas market share, and its earning has tripled in the last Q4 of 2007 and the total revenue of 2007 was $16 billions. And about Chery there are some mixed results about that company, although their overseas sales show very strong positive sign but at the same time, they manage to stay in the top 5 seller in the Chinese market, and in June they even beat GM to stay in the second place but in some months, they even went all the way down to 9th place behind Hyundai, but for the overall performance of the H1 this year, Chery was only behind VW and GM. But if Chery is not careful and keep up the laid back attitude in term of quality and aftersale service then its reign won't last long in China
But some Chinese companies like Hisense LCD tvs maker, chose to stay in China to fight for market share against Samsung and Sony, Hisense has been China's top LCD tvs seller for many years but recently got ousted by Samsung and Sony this year, and the fight is still on. I heard that hisense is quite active in South Africa and doing rather ok there but I don't know how true this is since I am not living there.
TCL is only engaged in phones and TVs so I don't see how they can compete with LG and Samsung in the white goods sector.
Haier, I can hardly get hold of info about them lately, I don't even know what they are up to recently (ah I know they are busy with the Olympics sponsorship), they keep saying they want to expand overseas but I hardly see any efforts from them. And to your surprise, Haier is even present in South Korea but guess what, people who buy Haier products complain about their aftersale service all the times.
Local designers drive Chinese IC market growth
Wednesday, 30 July 2008
EL SEGUNDO, CA – Although China’s semiconductor purchasing boom is cooling down, the nation’s demand for locally designed chips is heating up, with domestic consumption expected to rise by more than 60% from 2007 to 2012, according to iSuppli Corp.
By 2012, $42.1 billion worth of Chinese-designed semiconductors will be purchased for use in electronic equipment made in the nation, up 63.4% from 2007, says the research firm.
“The growth of China's semiconductor consumption has slowed since 2005,” said Kevin Wang, senior manager for China Research at iSuppli. “The main reason is that foreign electronic equipment makers have decelerated the pace of their manufacturing outsourcing to China. This is having a negative impact on China’s electronic equipment manufacturing and semiconductor industries. China’s semiconductor industry now is undergoing a transformation, with an increased focus on designing chips for electronic products that are popular in the nation.”
China- and Hong Kong-based electronics OEMs and contract manufacturers are driving the demand for these locally designed chips. However, foreign ODMs that develop and manufacture goods for Chinese OEMs also are contributing to the growth, says iSuppli.
“In the electronics industry, China often is seen simply as a low-cost manufacturing region,” Wang said. “However, the rise of the semiconductor design business in China shows the nation’s high-tech future increasingly will reside in capitalizing on local brainpower to produce innovative products that appeal to the domestic audience.”
Mobile handsets were the largest application for Chinese-designed semiconductors in 2007, consuming $4.4 billion worth of chips for the year. PMP/MP3 players were the second-largest application, buying $2.2 billion worth of semiconductors.
Mobile handsets will remain the largest application through 2012, when the area will consume $9.8 billion worth of domestically designed chips. Notebook PCs by 2012 will become the second-largest area for domestically designed semiconductors, with $3.4 billion worth of consumption for the year, says the firm.
The fastest-growing segment for domestically designed semiconductors during the next few years will be mobile communications infrastructure equipment, which will experience a 24.9% CAGR from 2007 to 2012. Next will be LCD-TVs, which will achieve a 21.8% CAGR during the same period, according to iSuppli.
Chinese manufacturers that concentrate on other consumer electronics products, such as digital set-top boxes and white-good appliances, also will increase their spending on domestically designed chips during the coming years. Other expanding application areas will include car infotainment products and security systems such as surveillance devices, smoke detectors and door security systems.
The boom in locally designed semiconductor usage in China comes at a time of deceleration for the nation’s overall chip consumption. China's consumption of all kinds of semiconductors is expected to expand to $81 billion in 2008, up 7% year-over-year, iSuppli predicts. Consumption is expected to grow at a 7.7% CAGR from 2007 to 2012. In contrast, China’s overall semiconductor consumption grew at a CAGR of 27.7% from 2001 to 2006.
This year is a difficult one for Chinese electronic equipment producers, especially smaller manufacturers, says iSuppli. China’s central government has adopted a tight monetary policy to avoid overheating the economy, even while it reduced export tax rebates. Furthermore, the increasing value of the Chinese yuan is placing great pressure on domestic companies producing low-end electronic equipment. Furthermore, operating and labor costs are still rising, along with prices for food, gasoline and electricity. Higher inflation, a weakened equity market and the devastating earthquake in Sichuan province negatively affected domestic market demand for electronic equipment in the first half of 2008.
iSuppli anticipates the market will be in a readjustment period for the remainder of 2008 and 2009. Small companies without strong R&D capabilities will exit the market. At the same time, many leading Chinese OEMs, such as Huawei and ZTE, will grow larger by aggressively targeting international markets. Meanwhile, Chinese independent design houses are expected to acquire more international clients.
http://circuitsassembly.com/cms/cms/content/view/6940/95/
http://www.eetimes.com/news/latest/showArt...cleID=209900679
Wednesday, 30 July 2008
EL SEGUNDO, CA – Although China’s semiconductor purchasing boom is cooling down, the nation’s demand for locally designed chips is heating up, with domestic consumption expected to rise by more than 60% from 2007 to 2012, according to iSuppli Corp.
By 2012, $42.1 billion worth of Chinese-designed semiconductors will be purchased for use in electronic equipment made in the nation, up 63.4% from 2007, says the research firm.
“The growth of China's semiconductor consumption has slowed since 2005,” said Kevin Wang, senior manager for China Research at iSuppli. “The main reason is that foreign electronic equipment makers have decelerated the pace of their manufacturing outsourcing to China. This is having a negative impact on China’s electronic equipment manufacturing and semiconductor industries. China’s semiconductor industry now is undergoing a transformation, with an increased focus on designing chips for electronic products that are popular in the nation.”
China- and Hong Kong-based electronics OEMs and contract manufacturers are driving the demand for these locally designed chips. However, foreign ODMs that develop and manufacture goods for Chinese OEMs also are contributing to the growth, says iSuppli.
“In the electronics industry, China often is seen simply as a low-cost manufacturing region,” Wang said. “However, the rise of the semiconductor design business in China shows the nation’s high-tech future increasingly will reside in capitalizing on local brainpower to produce innovative products that appeal to the domestic audience.”
Mobile handsets were the largest application for Chinese-designed semiconductors in 2007, consuming $4.4 billion worth of chips for the year. PMP/MP3 players were the second-largest application, buying $2.2 billion worth of semiconductors.
Mobile handsets will remain the largest application through 2012, when the area will consume $9.8 billion worth of domestically designed chips. Notebook PCs by 2012 will become the second-largest area for domestically designed semiconductors, with $3.4 billion worth of consumption for the year, says the firm.
The fastest-growing segment for domestically designed semiconductors during the next few years will be mobile communications infrastructure equipment, which will experience a 24.9% CAGR from 2007 to 2012. Next will be LCD-TVs, which will achieve a 21.8% CAGR during the same period, according to iSuppli.
Chinese manufacturers that concentrate on other consumer electronics products, such as digital set-top boxes and white-good appliances, also will increase their spending on domestically designed chips during the coming years. Other expanding application areas will include car infotainment products and security systems such as surveillance devices, smoke detectors and door security systems.
The boom in locally designed semiconductor usage in China comes at a time of deceleration for the nation’s overall chip consumption. China's consumption of all kinds of semiconductors is expected to expand to $81 billion in 2008, up 7% year-over-year, iSuppli predicts. Consumption is expected to grow at a 7.7% CAGR from 2007 to 2012. In contrast, China’s overall semiconductor consumption grew at a CAGR of 27.7% from 2001 to 2006.
This year is a difficult one for Chinese electronic equipment producers, especially smaller manufacturers, says iSuppli. China’s central government has adopted a tight monetary policy to avoid overheating the economy, even while it reduced export tax rebates. Furthermore, the increasing value of the Chinese yuan is placing great pressure on domestic companies producing low-end electronic equipment. Furthermore, operating and labor costs are still rising, along with prices for food, gasoline and electricity. Higher inflation, a weakened equity market and the devastating earthquake in Sichuan province negatively affected domestic market demand for electronic equipment in the first half of 2008.
iSuppli anticipates the market will be in a readjustment period for the remainder of 2008 and 2009. Small companies without strong R&D capabilities will exit the market. At the same time, many leading Chinese OEMs, such as Huawei and ZTE, will grow larger by aggressively targeting international markets. Meanwhile, Chinese independent design houses are expected to acquire more international clients.
http://circuitsassembly.com/cms/cms/content/view/6940/95/
http://www.eetimes.com/news/latest/showArt...cleID=209900679
I hope Pakistan capitalizes on this situation. With China moving onto more technologically advanced fields, the least we can do is absorb the industries it is leaving behind. We have everything it takes to absorb those industries (in potential of course). We have the manpower, we have the coal/hydro potential (thus the electricity needed), we have the location (in between all these major potential markets), all we need is someone to help clean out the country of its corruption and help it going in the right direction. Can you imagine having Pakistan in the same position China is right now, 20 years down the road?!
I'm a bit too optimistic..
I'm a bit too optimistic..
You can imagine? This is the identical place ?? this is China !!
你能想象吗? 这是同一个地方?? 这是中国 !!
你能想象吗? 这是同一个地方?? 这是中国 !!
Chinese firms need to improve work on home turf
2008-08-04
With nearly two decades of experience in providing consulting services for multinational companies, Ruggero Jenna believes Chinese companies need to concentrate on planning and improving their services, creative product designs, and plan their strategic priorities before they go abroad.
The managing director of Value Partners China supervises and coordinates consulting services for a string of major Chinese companies engaged in the telecommunications, automobile, consumer goods and textile and apparels industries.
Globalization
When some domestic companies ask for suggestions on how to realize globalization, Jenna says they'd better improve their work on their home turf before looking overseas.
"Not just for going abroad, but also for increasing their competitive capability comprehensively, they'd better improve their performance at home in things like organization, customer service, and then think over their overall strategy - what markets to invest in," says the consultancy veteran from Italy.
The quality of customer service, for example - from telecommunications to the banking industry - that Chinese companies give to their clients, in general, "is still not what it should be", he notes.
Chinese companies are facing increasing competition from both international brands and local players, so they need to protect themselves first, he says.
Chinese consumers are also becoming increasingly demanding and sophisticated and if Chinese companies can meet their needs, they can be more competitive on the international market, says Jenna.
"If they want to win against the competitors at home and abroad, improving customer services is the key topic that we know about and what Chinese companies have to do now," Jenna says.
He points out that another key goal for Chinese companies is quality product design. In China's early developing stage when growth was focused on fast expansion and low value products to reach scale, the game was easy.
But now China has stepped into another stage, which requires more value added services and products. Domestic companies should quickly respond to the transition, he says.
Jenna cites China's car manufacturers as an example. Cars designed by Chinese producers, even joint ventures, are not at the same level as those in the most sophisticated markets. That fact limits the potential of companies such as Chery and Geely to fully expand in the international market.
"If Chinese companies, including car makers, want to go globally successfully, they need to have creative products or services, which have superior characteristics and their own personalities," says Jenna.
Concerning globalization, it's a case-to-case issue, with no magic bullet for all companies, especially when it comes to establishing priorities
"If you are a telecommunication company, your priority is at home now where there is a restructuring of the industry, people's needs are increasing and there is a lot of competition among various operators. So you have to win that first and then go abroad," he advises, adding that it makes more immediate sense for automakers to think about global marketing.
With an international network of 15 offices in 40 nations and regions and more than 3,000 professionals, including 55 partners, Value Partners has successfully backed a series of Chinese companies to establish their overseas foothold.
Huawei is one. When China's top telecom equipment maker goes abroad, it has to compete with local peers on bidding.
Value Partners helped Huawei respond to the local standards, adopt their offers and meet the needs of other overseas telecommunication corporations.
"We help them understand the local market, tailor their proposals and prove to the local operators that Huawei is better than other international companies," says Jenna.
Value Partners has been doing that for Huawei in many countries in the Middle East, Central America and Europe, including Italy.
Jenna says Huawei has very advanced technologies and strong R&D department and is very aggressive on the market, but it doesn't use many consultants.
"They are very protective company, they don't tell others too much about themselves, but they are happy with our work, as we really bring results faster than others and our cooperation is flexible," says Jenna.
Competitive edge
Entering China in 2005, Value Partners has set up three offices in Beijing, Shanghai and Hong Kong with around 30 consultants. Its Chinese business, to date, contributes around 5 percent to its global revenue.
This year's growth rate for Value Partners China is estimated to be 50 percent, and the trend is expected to continue for several years.
"We are quite small so far, but my goal is that within four to five years, we will have 90 to 100 professionals and make up 15 percent of Value Partners' global business," says Jenna.
At the moment, the Italian-headquartered firm's client portfolio is more composed of multinational companies but Jenna says the company is working for a 50-50 balance.
Sources from the China Consulting Industry Association say there were about 30,000 consulting institutions, both domestic and foreign, registered in China by the end of last year.
They are engaged in diversified industries such as IT, corporate management, public relations, human resources, and marketing and the number of firms has been rising at a double digital growth annually.
"We don't look too much at the competition, we are more about having a clear direction of what we want to do and working well for our clients," says Jenna. He says that the consulting market in China is growing at probably 20 to 30 percent annually now and will do so for the next five years at least, so there is room for more.
And he says Value Partners' real challenge is to distinguish itself from competitors.
Last year, Value Partners helped Eurizon Financial Group S.P.A., the top financial group in Italy and third largest in Europe, acquire a 19.9 percent stake in Beijing-based Union Life Insurance Co Ltd for 800 million euros and to buy a 49 percent stake in Shenzhen Penghua Fund Management Co Ltd, one of China's top 10 fund managers.
It did strategy design and investment consultancy for Eurizon, which helps Eurizon's investment grow more than 100 percent so far and establish it as a significant presence in China's financial industry.
The case of Pirelli, an Italy-based large tire manufacturer, demonstrates Value Partners' technique of aiding multinational companies entering China.
When Pirelli came to China in 2005, it decided to find a local partner and the consulting firm helped it invest in Lutong company in Shandong province, which initially manufactured only truck tires.
"Most of the work we have done is improving the performance of the joint venture, because Lutong was mainly around Shandong, not around China, and the products' quality is relatively poor and Lutong is a relatively poor brand," recalls Jenna.
Then Value Partner designed the strategy to improve the distribution, selected the best distributors in every province, improved market share, and introduced better quality products with the Pirelli brand. It resulted in a 100 percent sales increase in the first six months after the distribution restructuring.
Jenna says Value Partners' internal communications is another plus. "The connections between different offices in order to have the best resources available is our strong point," Jenna stresses.
http://www.chinadaily.com.cn/bizchina/2008...ent_6901865.htm
2008-08-04
With nearly two decades of experience in providing consulting services for multinational companies, Ruggero Jenna believes Chinese companies need to concentrate on planning and improving their services, creative product designs, and plan their strategic priorities before they go abroad.
The managing director of Value Partners China supervises and coordinates consulting services for a string of major Chinese companies engaged in the telecommunications, automobile, consumer goods and textile and apparels industries.
Globalization
When some domestic companies ask for suggestions on how to realize globalization, Jenna says they'd better improve their work on their home turf before looking overseas.
"Not just for going abroad, but also for increasing their competitive capability comprehensively, they'd better improve their performance at home in things like organization, customer service, and then think over their overall strategy - what markets to invest in," says the consultancy veteran from Italy.
The quality of customer service, for example - from telecommunications to the banking industry - that Chinese companies give to their clients, in general, "is still not what it should be", he notes.
Chinese companies are facing increasing competition from both international brands and local players, so they need to protect themselves first, he says.
Chinese consumers are also becoming increasingly demanding and sophisticated and if Chinese companies can meet their needs, they can be more competitive on the international market, says Jenna.
"If they want to win against the competitors at home and abroad, improving customer services is the key topic that we know about and what Chinese companies have to do now," Jenna says.
He points out that another key goal for Chinese companies is quality product design. In China's early developing stage when growth was focused on fast expansion and low value products to reach scale, the game was easy.
But now China has stepped into another stage, which requires more value added services and products. Domestic companies should quickly respond to the transition, he says.
Jenna cites China's car manufacturers as an example. Cars designed by Chinese producers, even joint ventures, are not at the same level as those in the most sophisticated markets. That fact limits the potential of companies such as Chery and Geely to fully expand in the international market.
"If Chinese companies, including car makers, want to go globally successfully, they need to have creative products or services, which have superior characteristics and their own personalities," says Jenna.
Concerning globalization, it's a case-to-case issue, with no magic bullet for all companies, especially when it comes to establishing priorities
"If you are a telecommunication company, your priority is at home now where there is a restructuring of the industry, people's needs are increasing and there is a lot of competition among various operators. So you have to win that first and then go abroad," he advises, adding that it makes more immediate sense for automakers to think about global marketing.
With an international network of 15 offices in 40 nations and regions and more than 3,000 professionals, including 55 partners, Value Partners has successfully backed a series of Chinese companies to establish their overseas foothold.
Huawei is one. When China's top telecom equipment maker goes abroad, it has to compete with local peers on bidding.
Value Partners helped Huawei respond to the local standards, adopt their offers and meet the needs of other overseas telecommunication corporations.
"We help them understand the local market, tailor their proposals and prove to the local operators that Huawei is better than other international companies," says Jenna.
Value Partners has been doing that for Huawei in many countries in the Middle East, Central America and Europe, including Italy.
Jenna says Huawei has very advanced technologies and strong R&D department and is very aggressive on the market, but it doesn't use many consultants.
"They are very protective company, they don't tell others too much about themselves, but they are happy with our work, as we really bring results faster than others and our cooperation is flexible," says Jenna.
Competitive edge
Entering China in 2005, Value Partners has set up three offices in Beijing, Shanghai and Hong Kong with around 30 consultants. Its Chinese business, to date, contributes around 5 percent to its global revenue.
This year's growth rate for Value Partners China is estimated to be 50 percent, and the trend is expected to continue for several years.
"We are quite small so far, but my goal is that within four to five years, we will have 90 to 100 professionals and make up 15 percent of Value Partners' global business," says Jenna.
At the moment, the Italian-headquartered firm's client portfolio is more composed of multinational companies but Jenna says the company is working for a 50-50 balance.
Sources from the China Consulting Industry Association say there were about 30,000 consulting institutions, both domestic and foreign, registered in China by the end of last year.
They are engaged in diversified industries such as IT, corporate management, public relations, human resources, and marketing and the number of firms has been rising at a double digital growth annually.
"We don't look too much at the competition, we are more about having a clear direction of what we want to do and working well for our clients," says Jenna. He says that the consulting market in China is growing at probably 20 to 30 percent annually now and will do so for the next five years at least, so there is room for more.
And he says Value Partners' real challenge is to distinguish itself from competitors.
Last year, Value Partners helped Eurizon Financial Group S.P.A., the top financial group in Italy and third largest in Europe, acquire a 19.9 percent stake in Beijing-based Union Life Insurance Co Ltd for 800 million euros and to buy a 49 percent stake in Shenzhen Penghua Fund Management Co Ltd, one of China's top 10 fund managers.
It did strategy design and investment consultancy for Eurizon, which helps Eurizon's investment grow more than 100 percent so far and establish it as a significant presence in China's financial industry.
The case of Pirelli, an Italy-based large tire manufacturer, demonstrates Value Partners' technique of aiding multinational companies entering China.
When Pirelli came to China in 2005, it decided to find a local partner and the consulting firm helped it invest in Lutong company in Shandong province, which initially manufactured only truck tires.
"Most of the work we have done is improving the performance of the joint venture, because Lutong was mainly around Shandong, not around China, and the products' quality is relatively poor and Lutong is a relatively poor brand," recalls Jenna.
Then Value Partner designed the strategy to improve the distribution, selected the best distributors in every province, improved market share, and introduced better quality products with the Pirelli brand. It resulted in a 100 percent sales increase in the first six months after the distribution restructuring.
Jenna says Value Partners' internal communications is another plus. "The connections between different offices in order to have the best resources available is our strong point," Jenna stresses.
http://www.chinadaily.com.cn/bizchina/2008...ent_6901865.htm
QUOTE(Leaf @ Aug 3 2008, 08:48 PM)
You can imagine? This is the identical place ?? this is China !!
你能想象吗? 这是同一个地方?? 这是中国 !!
你能想象吗? 这是同一个地方?? 这是中国 !!
This is Chongqing, right ?
Shenzhen zen: Fishing village turned boomtown
2008-08-04
If the grandeur that is New York - or Hong Kong - wasn't built in a day, how about within 50 years?
No matter what the answer, South China's glittering Shenzhen in Guangdong province is already beginning to realize that grand ambition only three decades after its humble origin as an obscure fishing village.
It has become China's richest city ranked by per capita GDP and within another decade, it plans to become as modern and competitive as Singapore, Hong Kong and Seoul. And by 2030, after being integrated with its neighbor Hong Kong, Shenzhen could be contending with world big boys such as New York, London and Tokyo.
Shenzhen's growth and ambition comes at a time when China, the world's biggest transitional economy, is celebrating its 30th anniversary of opening its doors to the outside world.
It also comes after the provincial Party chief Wang Yang required the municipal leadership to reconsider Shenzhen's development vision by changing their outdated mindset.
"Shenzhen needs to orientate itself in the global spectrum," says Wang.
Despite the new high- minded goals the gap between Shenzhen current reality and the global aspirations remains wide despite city's economic miracles. Shenzhen's per capita GDP, surpassed $10,000 in 2007, just about one third of Singapore's, which ranks 21st worldwide. And it accounted for one fourth of New York, the sixth richest state in the US, with a per capita GDP of $40,272.
First steps first. In its efforts to increase Shenzhen's economy, the municipal government has repeatedly urged using all means possible to enlarge and reinforce its cooperation with Hong Kong and to enhance Shenzhen's declining institutional superiority over other growing mainland metropolises.
Hong Kong has also responded swiftly. Among a string of recent actions, the special administrative region conducted a feasibility study on the construction of the railway linking Shenzhen's and Hong Kong's airports. This blueprint, if approved by the central government, would allow Shenzhen passengers to spend just 12 minutes traveling to Hong Kong international airport aboard a cross-border railway by 2011.
In its quest to achieve a free flow of people, goods and capital between Shenzhen and Hong Kong, Shenzhen has also unrolled plans for a slew of transportation infrastructure projects, including airport facilities, ports, railways, roads and border checkpoints to improve traffic.
In addition to playing an important role in China's further reforms, Li Luoli, deputy president of the Beijing-based China Institute of Economic System Reform Research said the city should be more aggressive in developing its regional cooperation with Hong Kong and nearby Macao.
"To make the blueprint into reality, Shenzhen should be as brave, bold and innovative as it was years ago," Li tells China Business Weekly recently. "We lack that spirit now."
In the beginning
Shenzhen occupies what was once Bao'an county, before the reform and opening-up of the late 1970s. The county had a population of barely 30,000 people, many of who made a living fishing with per capita GDP of less than $100.
For years, China has applied the "crossing-river-by-feeling-the-stones" principle for its market-oriented reform.
Where was the first stone in the late 1970s and earlier 1980s when the mainland was still dominated by rigid planned economy?
In May 1980, late Chinese leader Deng Xiaoping designated four cities as "special economic zones" - the first testing grounds for the reform. Shenzhen was one of the first special economic zones (SEZs) because of its geographical proximity to Hong Kong, which could offer market-economy expertise and capital from its free port and other parts of the world.
And another important reason was that the human flow between Hong Kong and Guangdong province's Pearl River Delta happened frequently and secretly before the establishment of Shenzhen as an SEZ.
"This facilitated the first batch of Hong Kong investors to start their businesses in Shenzhen," says think-tank expert Li Luoli.
Not only Shenzhen, the entire Pearl River Delta took the lead in the reform and sought to follow the words of Deng Xiaoping, who said "to get rich is glorious".
Between 1980 and 1985, Shenzhen pioneered reforms in capital raising, pricing, finance and investment and wages and employment systems.
On July 8, 1985, the Bao'an County United Investment Corp issued the mainland's first shares of stock since 1949. That same year, the mainland's first foreign-exchange redistribution center was established in Shenzhen.
The preferential policies granted to Shenzhen by the central government eventually translated into institutional advantages over other localities on the mainland and, in turn, into resource advantages.
Eager to tap Shenzhen's low costs especially for labor and land, foreign companies rushed into the SEZ, led by factory owners from nearby Hong Kong.
But the SEZ's small space - it occupies a mere 396 sq km - later arrested its further development.
In 1992 the 14th National Congress of the Communist Party of China made it clear that the goal of China's economic reform was to build a socialist market economy.
Now that the reform has taken hold the institutional advantages enjoyed by the Shenzhen Special Economic Zone faded a bit. In response, Shenzhen started looking beyond the narrow SEZ and at the city's entire 1,952.8 sq km of land.
The result was a decades-long boom, with Shenzhen's economy expanding at an average rate of 28 percent a year from 1980 to 2004 driven largely by exports. Its exports totaled $168.2 billion last year, leading the country as it has for 15 consecutive years. Today the city is home to some of China's most important electronics manufacturers, such as telecom-equipment firm Huawei Technologies and mobile phone maker ZTE.
The rapid development of Shenzhen has also allowed Guangdong to become the richest province in China. Guangdong still leads its peers in economic output, accounting for about 12 percent of national GDP. The province's population, including migrants, is near 100 million.
Shenzhen can attribute much of its success to migrant workers. Today, it has 2.1 million "official" residents and almost 8 million "unofficial" ones, who are not granted local household registrations or "hokou".
Luckily, since August 1, the city has adopted a "residential permit" system for migrants. Replacing "temprary residential system," the new policy allows the administration to better manage the population by collecting full information on non-permanent residents and provide more employment, social security and educational services for their children.
Qin Hui, a professor with Tsinghua University, points out that while migrant workers have left their rural homes to work in big cities and have spent their "prime" literally building urban growth, they are still not legally entitled to settle permanently in the cities and enjoy the same privileges as those with hokou.
Reinventing Shenzhen
These days, Shenzhen is trying to reinvent itself as a high-tech economic powerhouse with an advanced services sector and more diversified ownership.
This is the progression that Japanese companies went through in the 1950s-70s. It' s also progression that Korean companies went through in the '70s and '80s.
Shenzhen began with garments and footwear, and then moved into consumer electronics. Now it's communications equipment, telecoms switches and routers, and automobiles. The municipal government's painstaking efforts to upgrade its industrial structure have also paid off. The service industry now accounts for 49 percent of the economy, following the manufacturing industry at 50.9 percent. Agriculture has narrowed to 0.1 percent.
But Shenzhen has been faced with many barriers such as shortages of land, power and water, population growth and a worsening environment. And it has also been challenged by global factors including the US subprime mortgage crisis and US dollar depreciation, falling global market demand, the rising prices of oil, grain and raw materials, and global inflation.
"Shenzhen is at an important strategic turning point," the city government said recently. "We should waste no time to turn Shenzhen into an innovative city."
Two major factors are helping make it possible for Shenzhen push for a change in the manufacturing landscape. A new highway network to the coast is making it possible to move factories inland, where officials are eager for the investment. Second, most of the low-wage laborers who fill the Pearl River Delta's factories are migrants from rural areas inland. These workers are mobile, quickly moving on if the basic jobs they do disappear.
Now, Shenzhen and the rest of Guangdong province look at Hunan and Sichuan as a much more cooperative hinterland.
If Shenzhen can leap from assembling basic products with low-pay, unskilled labor to nurturing lavishly paid talent, it could blaze a trail for the rest of China.
Confronted with resource and energy constraints, the entire Chinese economy is being faced with the transitional pains Shenzhen must tackle today. Shenzhen is "continuously trying to set an example for the rest of the country," says the expert Li Luoli.
Strategically Li is right: Shenzhen is on the way to realizing its Seoul, Hong Kong or Tokyo dream while China is transforming itself.
http://www.chinadaily.com.cn/home/2008-08/...t_6901116_2.htm
2008-08-04
If the grandeur that is New York - or Hong Kong - wasn't built in a day, how about within 50 years?
No matter what the answer, South China's glittering Shenzhen in Guangdong province is already beginning to realize that grand ambition only three decades after its humble origin as an obscure fishing village.
It has become China's richest city ranked by per capita GDP and within another decade, it plans to become as modern and competitive as Singapore, Hong Kong and Seoul. And by 2030, after being integrated with its neighbor Hong Kong, Shenzhen could be contending with world big boys such as New York, London and Tokyo.
Shenzhen's growth and ambition comes at a time when China, the world's biggest transitional economy, is celebrating its 30th anniversary of opening its doors to the outside world.
It also comes after the provincial Party chief Wang Yang required the municipal leadership to reconsider Shenzhen's development vision by changing their outdated mindset.
"Shenzhen needs to orientate itself in the global spectrum," says Wang.
Despite the new high- minded goals the gap between Shenzhen current reality and the global aspirations remains wide despite city's economic miracles. Shenzhen's per capita GDP, surpassed $10,000 in 2007, just about one third of Singapore's, which ranks 21st worldwide. And it accounted for one fourth of New York, the sixth richest state in the US, with a per capita GDP of $40,272.
First steps first. In its efforts to increase Shenzhen's economy, the municipal government has repeatedly urged using all means possible to enlarge and reinforce its cooperation with Hong Kong and to enhance Shenzhen's declining institutional superiority over other growing mainland metropolises.
Hong Kong has also responded swiftly. Among a string of recent actions, the special administrative region conducted a feasibility study on the construction of the railway linking Shenzhen's and Hong Kong's airports. This blueprint, if approved by the central government, would allow Shenzhen passengers to spend just 12 minutes traveling to Hong Kong international airport aboard a cross-border railway by 2011.
In its quest to achieve a free flow of people, goods and capital between Shenzhen and Hong Kong, Shenzhen has also unrolled plans for a slew of transportation infrastructure projects, including airport facilities, ports, railways, roads and border checkpoints to improve traffic.
In addition to playing an important role in China's further reforms, Li Luoli, deputy president of the Beijing-based China Institute of Economic System Reform Research said the city should be more aggressive in developing its regional cooperation with Hong Kong and nearby Macao.
"To make the blueprint into reality, Shenzhen should be as brave, bold and innovative as it was years ago," Li tells China Business Weekly recently. "We lack that spirit now."
In the beginning
Shenzhen occupies what was once Bao'an county, before the reform and opening-up of the late 1970s. The county had a population of barely 30,000 people, many of who made a living fishing with per capita GDP of less than $100.
For years, China has applied the "crossing-river-by-feeling-the-stones" principle for its market-oriented reform.
Where was the first stone in the late 1970s and earlier 1980s when the mainland was still dominated by rigid planned economy?
In May 1980, late Chinese leader Deng Xiaoping designated four cities as "special economic zones" - the first testing grounds for the reform. Shenzhen was one of the first special economic zones (SEZs) because of its geographical proximity to Hong Kong, which could offer market-economy expertise and capital from its free port and other parts of the world.
And another important reason was that the human flow between Hong Kong and Guangdong province's Pearl River Delta happened frequently and secretly before the establishment of Shenzhen as an SEZ.
"This facilitated the first batch of Hong Kong investors to start their businesses in Shenzhen," says think-tank expert Li Luoli.
Not only Shenzhen, the entire Pearl River Delta took the lead in the reform and sought to follow the words of Deng Xiaoping, who said "to get rich is glorious".
Between 1980 and 1985, Shenzhen pioneered reforms in capital raising, pricing, finance and investment and wages and employment systems.
On July 8, 1985, the Bao'an County United Investment Corp issued the mainland's first shares of stock since 1949. That same year, the mainland's first foreign-exchange redistribution center was established in Shenzhen.
The preferential policies granted to Shenzhen by the central government eventually translated into institutional advantages over other localities on the mainland and, in turn, into resource advantages.
Eager to tap Shenzhen's low costs especially for labor and land, foreign companies rushed into the SEZ, led by factory owners from nearby Hong Kong.
But the SEZ's small space - it occupies a mere 396 sq km - later arrested its further development.
In 1992 the 14th National Congress of the Communist Party of China made it clear that the goal of China's economic reform was to build a socialist market economy.
Now that the reform has taken hold the institutional advantages enjoyed by the Shenzhen Special Economic Zone faded a bit. In response, Shenzhen started looking beyond the narrow SEZ and at the city's entire 1,952.8 sq km of land.
The result was a decades-long boom, with Shenzhen's economy expanding at an average rate of 28 percent a year from 1980 to 2004 driven largely by exports. Its exports totaled $168.2 billion last year, leading the country as it has for 15 consecutive years. Today the city is home to some of China's most important electronics manufacturers, such as telecom-equipment firm Huawei Technologies and mobile phone maker ZTE.
The rapid development of Shenzhen has also allowed Guangdong to become the richest province in China. Guangdong still leads its peers in economic output, accounting for about 12 percent of national GDP. The province's population, including migrants, is near 100 million.
Shenzhen can attribute much of its success to migrant workers. Today, it has 2.1 million "official" residents and almost 8 million "unofficial" ones, who are not granted local household registrations or "hokou".
Luckily, since August 1, the city has adopted a "residential permit" system for migrants. Replacing "temprary residential system," the new policy allows the administration to better manage the population by collecting full information on non-permanent residents and provide more employment, social security and educational services for their children.
Qin Hui, a professor with Tsinghua University, points out that while migrant workers have left their rural homes to work in big cities and have spent their "prime" literally building urban growth, they are still not legally entitled to settle permanently in the cities and enjoy the same privileges as those with hokou.
Reinventing Shenzhen
These days, Shenzhen is trying to reinvent itself as a high-tech economic powerhouse with an advanced services sector and more diversified ownership.
This is the progression that Japanese companies went through in the 1950s-70s. It' s also progression that Korean companies went through in the '70s and '80s.
Shenzhen began with garments and footwear, and then moved into consumer electronics. Now it's communications equipment, telecoms switches and routers, and automobiles. The municipal government's painstaking efforts to upgrade its industrial structure have also paid off. The service industry now accounts for 49 percent of the economy, following the manufacturing industry at 50.9 percent. Agriculture has narrowed to 0.1 percent.
But Shenzhen has been faced with many barriers such as shortages of land, power and water, population growth and a worsening environment. And it has also been challenged by global factors including the US subprime mortgage crisis and US dollar depreciation, falling global market demand, the rising prices of oil, grain and raw materials, and global inflation.
"Shenzhen is at an important strategic turning point," the city government said recently. "We should waste no time to turn Shenzhen into an innovative city."
Two major factors are helping make it possible for Shenzhen push for a change in the manufacturing landscape. A new highway network to the coast is making it possible to move factories inland, where officials are eager for the investment. Second, most of the low-wage laborers who fill the Pearl River Delta's factories are migrants from rural areas inland. These workers are mobile, quickly moving on if the basic jobs they do disappear.
Now, Shenzhen and the rest of Guangdong province look at Hunan and Sichuan as a much more cooperative hinterland.
If Shenzhen can leap from assembling basic products with low-pay, unskilled labor to nurturing lavishly paid talent, it could blaze a trail for the rest of China.
Confronted with resource and energy constraints, the entire Chinese economy is being faced with the transitional pains Shenzhen must tackle today. Shenzhen is "continuously trying to set an example for the rest of the country," says the expert Li Luoli.
Strategically Li is right: Shenzhen is on the way to realizing its Seoul, Hong Kong or Tokyo dream while China is transforming itself.
http://www.chinadaily.com.cn/home/2008-08/...t_6901116_2.htm
Rott.
I just found this about Haier
Well in the end of the day, they don't really look at useless to me, at least those Haier fools are doing something.
Introduction to Haier U-Home
U—Ubiquitous, Means Being Anywhere
Haier U-Home, a new idea promoted by Haier Group in this age of information technology, is a system where the Haier U-Home system as carrier. It uses a wireless network to achieve interconnection between the 3C products (COMPUTER, CONSUMER ELECTRONICS, COMMUNICATION) to create an intelligent household system to share digital media information.
Haier U-Home not only provides products but also offers the solution for fashionable living. Your family can enjoy the comforts and convenience of accessing the Internet anytime and anywhere using the Haier U-home intelligent system.
Outline of Haier U-home System
Topologic Map of Haier U-Home System
Video and Audio Entertainment Services
Not only would you be able to view programs offered by the TV station, but also be able to watch programs from service providers over the Internet.
Control your Home Appliances
You can control your home appliances not only by remote control, but also by your mobile phone anytime and anywhere all over the world
Maintenance Services for Home Appliances
Not only can you call the service center, you can also have on-site service for repair, maintainance, and upgrades through the service network
I just found this about Haier
Well in the end of the day, they don't really look at useless to me, at least those Haier fools are doing something.
Introduction to Haier U-Home
U—Ubiquitous, Means Being Anywhere
Haier U-Home, a new idea promoted by Haier Group in this age of information technology, is a system where the Haier U-Home system as carrier. It uses a wireless network to achieve interconnection between the 3C products (COMPUTER, CONSUMER ELECTRONICS, COMMUNICATION) to create an intelligent household system to share digital media information.
Haier U-Home not only provides products but also offers the solution for fashionable living. Your family can enjoy the comforts and convenience of accessing the Internet anytime and anywhere using the Haier U-home intelligent system.
Outline of Haier U-home System
Topologic Map of Haier U-Home System
Video and Audio Entertainment Services
Not only would you be able to view programs offered by the TV station, but also be able to watch programs from service providers over the Internet.
Control your Home Appliances
You can control your home appliances not only by remote control, but also by your mobile phone anytime and anywhere all over the world
Maintenance Services for Home Appliances
Not only can you call the service center, you can also have on-site service for repair, maintainance, and upgrades through the service network
Medical Treatment Service
If any irregular signals are detected, emergency medical care can be called
Home Security Service
Security monitoring network of your entire home
Incorporating its own technology in the home network and using the communications of the Internet, wireless mobile devices such as PDA, mobile communication networks, cable television networks and fixed-line telephone network, “Haier U-Home” Intelligent Home Appliance System features remote access capability and interoperability among home appliances.
Home Appliances Control System
Environment Detection System
Media Entertainment System
Video Door Phone System
There are more but this is just too long
http://www.stcinc.net/appliances-uhome-sys-02.html
So to sum up everything in short, just watch this video
http://www.youtube.com/watch?v=HT700IwxCmM
Haier Experience centre (where this will be demonstrated) at Chaoyang Park, Beijing for the Olympics
If any irregular signals are detected, emergency medical care can be called
Home Security Service
Security monitoring network of your entire home
Incorporating its own technology in the home network and using the communications of the Internet, wireless mobile devices such as PDA, mobile communication networks, cable television networks and fixed-line telephone network, “Haier U-Home” Intelligent Home Appliance System features remote access capability and interoperability among home appliances.
Home Appliances Control System
Environment Detection System
Media Entertainment System
Video Door Phone System
There are more but this is just too long
http://www.stcinc.net/appliances-uhome-sys-02.html
So to sum up everything in short, just watch this video
http://www.youtube.com/watch?v=HT700IwxCmM
Haier Experience centre (where this will be demonstrated) at Chaoyang Park, Beijing for the Olympics
This is a "lo-fi" version of our main content. To view the full version with more information, formatting and images, please click here.