Swiss Banking Aid for Zhejiang’s Private Enterprises

The Swiss banking industry plans to establish branches in Zhejiang, the eastern province known as the new haunt of Chinese billionaires. Mirabaud & Cie is one of Switzerland’s three largest private banks, and according to Guo Ming, its chief economist for Asia, the Swiss banking industry is to help 300 private enterprises in Zhejiang get listings on overseas stock markets. Zhejiang’s banking regulatory bureau expects Mirabaud & Cie to establish a branch in Hangzhou. This wouldn’t be the first time a foreign bank has explored the Zhejiang market. After the Hangzhou branch of the East Asia Bank opened business last September, foreign outlets, such as HSBC, Hang Seng Bank, Mitsubishi Bank of Japan and the DBS Bank of Singapore, applied to establish representative offices in the provincial capital Hangzhou, and various commercial banks in Zhejiang are actively seeking cooperation with foreign banks.

Zhejiang Has Most Billionaires

Ding Lei, head of Netease and the richest man in China.

Macroeconomic controls started in China last year seem to have had little impact on its growing number of wealthy private entrepreneurs. The 400 people that made the country’s most recent rich-list are worth a total of RMB 600 billion, equivalent to 6 percent of China’s GDP. Zhejiang, home to 63 billionaires, has leapfrogged Guangdong to become the province where most Chinese magnates reside. The threshold for inclusion in the top 100 has jumped from RMB 1.2 billion last year to RMB 1.7 billion this year, and the number of tycoons whose wealth surpasses RMB 10 billion has shot up from one to five. Those setting the pace in terms of rapid wealth accumulation include Ding Lei of Netease, Huang Guangyu of Gome and Li Yanhong of Baidu. Ding Lei has more than doubled his wealth from RMB 5 billion in 2004 to RMB 10.2 billion in 2005.

High Growth in the Advertising Industry

The Chinese mainland’s advertising industry is booming. In the first half of 2005, spending on advertising reached RMB 143.4 billion, an increase of 20 percent over the same period in 2004. Nearly 80 percent was spent on TV commercials, those for men’s consumer goods having increased sharply, although ads for medicines outnumber all others, followed by cosmetics and toiletries. Meanwhile, ads for tourism have seen the fastest growth, those for hotels and amusement parks having jumped by 30 percent over the previous year. In certain high-end magazines and television channels in Guangdong, ads for traveling cases are a new growth point. More and more overseas travel agencies are beginning to place advertisements in China’s fashion magazines.

The Iraqi procurement group is a bright star at the Shanghai Transnational Procurement Fair.

Chinese Merchants Eager to Enter Iraqi Market

The 2005 Transnational Procurement Fair was recently held in Shanghai. The fair, which attracted 110 firms, including world-renowned retailers and businesses, was the largest of its kind in China. The procurement group for the reconstruction of Iraq was one of the fair’s bright stars. It placed orders worth US $1 billion for building materials, power products, highway and bridge equipment, petroleum and natural gas equipment, foodstuffs, drinks and related equipment. The head of Iraq’s Chamber of Commerce says that this was the first time the country’s procurement group had sought goods in China. He expressed his satisfaction at being able to make purchases directly from China.

China Needs 2,500 Planes in the Coming 20 Years

A recent report released by the China Aviation Industry Corporation I states that the country’s civil aviation industry would need to acquire 2,541 planes over the next two decades. China’s aviation passenger volume is expected to see annual growth of 8.4 percent to 890.2 billion passengers/km in 2024, and its freight volume to achieve annual growth of 11 percent to 57.9 billion tons/km in the same period of time. Last year, China’s total aviation volume, passenger volume and freight volume ranked third in the world.

China will be the world’s second largest advertising market within three years.

Lenovo to Add Two Regional Headquarters

The Lenovo Group announced that it has reorganized Lenovo China and Lenovo International to form a new global framework. The new setup took effect last October, six months ahead of schedule. After reorganization, Lenovo will set up five global organizations, including a global products group, a global supply chain, a global sales system, a global research and development system, and the group headquarters. What’s more, the number of Lenovo’s regional headquarters will increase from three to five when its India Regional headquarters is added on January 1, 2006. Yang Yuanqing, chairman of the Lenovo Group, said that through reorganization Lenovo aims to become an internationalized company in the real sense.

Haier Electrical Appliance Suffers Huge Losses in the First Half of 2005

Haier Electrical Appliance Company announced that in the first half of 2005 it suffered losses of HK $397 million, compared to a profit of HK $44.98 million in the same period last year. As a listed company under Haier Group in the Hong Kong stock market, Haier Electrical Appliance Company specializes in the manufacture and marketing of mobile phones and other telecommunication products, and the Chinese mainland is its main market. According to its 2004 annual report, 92 percent of Haier Electrical Appliance Co. revenue was earned in the Chinese mainland. Many of China’s mainstream handset enterprises, including TCL, Bird, Amoi, Konka, Eastcom and Kejian, also reported losses in their half-year report, as domestic phone manufacturers struggle to compete with their overseas counterparts.

Maritime Satellite Broadband Products Enter China

The new-model maritime satellite communication – BGAN – has attracted numerous users.

Denmark’s Thrane & Thrane recently joined hands with a Beijing company to launch a new-generation maritime satellite broadband product called BGAN (Broadband Global Area Network). BGAN perfectly integrates broadband, multi-services and mobile communications, allowing global communications anywhere, anytime on earth. China has been using maritime satellite communications for more than 20 years, but in the past, communication was restricted to the telephone. Video images, photos and e-mails can now be transmitted worldwide, and used to exchange meteorological, positioning and navigation information. In 2003 China had 10,000 maritime satellite users, generating annual revenue of RMB 35 million. Thrane & Thrane is optimistic about market prospects in China.