Market Information

Bright Food’s A$1.5 billion ($1.9 billion) tilt at CSR’s sugar business, including New Zealand’s Chelsea Sugar, is a taste of things to come as China looks to acquire assets in the Australasian resources and food sectors, market sources say.

However, finding accessible opportunities is likely to prove more difficult on this side of the Tasman.

Commentators have noted that Shanghai-based Bright Food’s potential offer for CSR’s sugar division shows China’s pursuit of hard assets, previously focused on mining and resource companies, has now spilled into Australia’s wider economy.

The spending spree is backed by China’s Government, which is reported as viewing investment in hard assets as an attractive use for its US$2.3 trillion ($3.1 trillion) in foreign currency reserves, rather than US Government debt securities.

Investment adviser and market commentator Arthur Lim characterises the most recent and visible Chinese investments in New Zealand - whiteware giant Haier’s investment in Fisher & Paykel Appliances and Beijing-based Agria’s investment in PGG Wrightson last year - as opportunistic rather than strategic.

But what is very clear, looking at the CSR investment as well as other investments the Chinese have targeted in Australia, is that they are cash rich.

“They are consciously looking to use that money to secure access to resources as well as positioning themselves in areas where they feel there are benefits for Chinese companies to be able to access expertise and technology.

“That’s where I think in New Zealand the focus will be.”

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The Chinese will be drinking New Zealand-roasted coffee following a deal done by the Kiwi owners of the Esquires coffee house franchise.

Brothers Stuart and Lewis Deeks own the Canadian-developed coffee house franchise for everywhere outside of Europe and North America, and have expanded from New Zealand to the Middle East, Fiji and India.

Now they have sold the master franchise for China to a large investment company in Yunnan province in the country’s south.

Yunnan Metropolitan Construction Investment (YMCI) - part-owned by the Yunnan government and listed on the Shanghai stock exchange - will open 250 Esquires outlets over the next 10 years. The first store opened in the central business district of Beijing a month ago.

Source: NZ Herald

Chinese Rugby-heads have a place to stock up on the latest rugby fashion.  Nestled in one of Beijing’s up and coming fashion districts is Canterbury of New Zealand’s new flagship store.

Offering lifestyle clothing from both the European and Australian ranges plus training and game gear, Canterbury has become a hit with the locals for its authentic preppy look plus the fact that the clothing is built tough and made to last.

Info on Solana below.

http://www.solana.com.cn/english/web/index.asp

Because of its rapid economic growth over the last 30 years, it’s easy to forget that China is a communist country. The Chinese, like everybody else, love money. But the Communist party is clearly in control.
One of the areas controlled with an iron communist fist is China’s media. The main TV station, China Central Television or CCTV, is owned, operated, and controlled by the government. Unlike the U.S., Chinese government officials can’t spout off their own opinion. Instead, they must speak the ‘company line’ of the ruling Communist Party and carefully choose their words.Frankly, I don’t pay too much attention to any government official, Asian or not, when they boast about how wonderful everything is. I do, however, pay very careful attention when they start talking about trouble. You see, glowing words be can true or a complete lie. But whenever the talk turns negative, you can take those warnings to the bank. And the ‘talk’ coming out of China has turned very, very negative. Just last week, five very knowledgeable insiders had some not-so-pretty things to say about the Chinese economy.

Negative Talk #1: Li Yizhong, head of the Ministry of Information and Technology, said this:

“The international financial crisis is having a severe domestic impact.
“We don’t think we’ve bottomed yet.
“Just about every industry has overcapacity.”

Negative Talk #2: China’s economic and social goals are based upon a series of Five Year Plans. The head of that planning body, Zhang Ping, described the economic outlook from his office’s perspective:
“The global crisis has not bottomed out yet. The impact is spreading globally and deepening in China.
“Some domestic economic indicators point to an accelerated slowdown this month.
“Excessive bankruptcies and production cuts will bring massive unemployment, stirring social unrest. Owing to dramatic changes in the international economic and financial environment, the Chinese economy faces growing downside pressure.”

Negative Talk #3: The Minister of Human Resources and Social Security, Yin Weimin, echoed the same warning:

“The current situation is grim, and the impact is still unfolding.”

Negative Talk #4: The biggest cheese of all, Chinese Premier Wen Jiabao, said a mouthful last week, too:

“We must be crystal clear that without a certain pace of economic growth, there will be difficulties with employment, fiscal revenues and social development.
“In this coming period, we will starkly confront the effects of the sustained deepening of the international financial crisis and pressure as global economic growth clearly slows.”

Negative Talk #5: This last comment wasn’t from a Chinese official. It was, however, from someone who should be on top of things since his country is one of the key suppliers of natural resources to China. I’m talking about Glenn Stevens, head of the Australian central bank, who said:
“The most striking real economic fact of the past several months is not continued U.S. economic weakness, but that China’s economy has slowed much more quickly than anyone had forecast.
“There is every chance that the rate of growth of China’s (gross domestic product) is currently noticeably below the 8 per cent pace that is embodied in various forecasts for 2009.”

Those five insiders have good reason to talk cautiously because the Chinese economy, while still growing at a healthy pace, is getting pulled down.

Consider these three pieces of economic news from last week …

Chinese exports fell by 2.2% in November, the first time in seven years …

Imports fell by eight times as much, dropping 17.9% in November, and …

Manufacturing output shrunk by a record amount

Information taken from: Tony Sagami, Money Markets

Picture of Beijing’s urban development: Photo by Joe

China has rewritten both the theory and history of economic development. In just 30 years, it has gone from the brink of economic collapse to the cusp of a newfound prosperity.

The current economic crises is only part of the economic cycle and is sceen as a new phase in China’s economic growth.

“The world is hardly coming to an end. At work are the time-honored forces of the business cycle - driven in this case by the US recession that should inevitably be followed by recovery.”

However painful, cyclical adjustments are also an opportunity. For China, it underscores the imperative of shifting its growth impetus to private consumption.” Stephen Roach, Chairman of Morgan Stanley Asia.

taken from: China to Deal With Global Slowdown

Unicon’s first wine shipment arrived in Beijing last week and the sales team are busy presenting the wines to our retail and Hotel network.

Wineries currently represented by Unicon in Beijing are:

Morton Estate
Astrolabe
Wine Growers of Ara
Paddy Borthwick
Distant Land
Coopers Creek

 www.unicon.co.nz

Hotels in Beijing are slashing prices for next month’s Olympics after the expected windfall of foreign visitors failed to materialise, state media reports today. The statement is a major backtrack after repeated reports throughout the year that Beijing hotels were already fully booked during the Games period.

Beijing Visitor Boom Hasn’t Happened, Tourism Authority Says

from Biz China Update - News, Reports

A CHINESE kiwi fruit company has been ordered to pay a Kiwi company compensation and told not to use its trademark sun emblem.

The Shanghai No. 1 Intermediate People’s Court yesterday ruled the New Zealand Zespri Group Co Ltd, the world’s largest kiwi fruit producer and seller, should get 300,000 yuan (US$43,668) in compensation from Nantong Xishu Fruit Trade Co Ltd and that Xishu must stop using Zespri’s trademark immediately.

Zespri said it began to sell kiwi fruit in Shanghai in 1998 and built up a good reputation for taste and nutrition after a long period of promotion.

But Zespri’s employees discovered last year that Xishu, a Jiangsu Province company, was selling kiwi fruit under the Znishio name and bearing a sun emblem. The Zespri people thought Znishio was too much like its trademark and reported it to the local market watchdog.

Twice last year the Shanghai Industrial and Commercial Administrative Bureau seized a large number of kiwi fruit, packing boxes and labels with the Znishio trademark. Xishu was also using the Znishio trademark on its store signs, its business cards and Website. Its products were being sold in neighboring cities.

Xishu argued its trademark was very different from Zespri and would never confuse consumers. The sun emblem is commonly identified with kiwi fruit and did not belong to Zespri alone.

But the court said Zespri owns the sun or at least the exclusive rights to the Zespri trademark and the sun emblem. The combination of the label, color and characters used by Xishu were identical enough to make most consumers think Xishu’s product was related to Zespri.

via: shanghai daily 

Here’s a good link for businesses thinking of exporting to China. It includes simple steps to assess if you’re ready for the challenges of China as well as information, case studies and support for those wanting to look at the opportunities China offers. Link

Getting goods and people into Beijing from now until the end of the Olympics is going to get more and more difficult as security tightens. I Had the most strengent security checks on my way into Beijing last week, they almost didn’t let me in because they thought I looked different to my passport picture!

We also we have a shipment that has been “held up” due to the extra security checks so expect delays in getting things in and out of Beijing!

Joe

Photo from: NZ Herald.

BEIJING - Guards with machine guns began patrolling the Beijing airport as the city tightens security for the Olympics, news reports said Saturday.

Also this weekend, police will start checking Beijing subway passengers for guns and explosives, the reports said.

The measures reflect the fears of Chinese leaders, who worry the Olympics might be tarnished by security threats. They also hope to stop activists who want to use the August games to air grievances against the communist government.

At the airport, two-member teams of guards with machine guns began work Thursday and will patrol all three terminals through the end of the Olympics, the Xinhua News Agency and newspapers reported. Chinese police usually are unarmed, while some airport guards carry pistols.

“I think they look cool, and you rarely get to see such big guns,” the China Daily newspaper quoted a female traveler at the airport as saying.

On subways, police with dogs will start checking passengers for guns, knives, explosives and flammable, poisonous or radioactive material on Sunday, Xinhua said.

Story via: NZ Herald    Security tightens in Beijing for the Olympics