Welcome to the November 2008 edition of China Pulse, the U.S. Foreign Commercial Service Newsletter for China ("USFCS"). The USFCS offers you the resources you need to grow your business in China. By partnering with USFCS, the U.S. Embassy's contacts and expertise are put to work for your business. Knowledgeable Commercial Service specialists and American Trading Center ("ATC") representatives can help you contact and set up appointments with Chinese organizations in 19 cities in China. With access to a broad cross-section of contacts including potential agents and distributors, major end-users and key government officials, you will be sure to meet the right people at the right levels to expand your business. Our customer service team can help you identify top regional markets and opportunities to export your product to China. Click here.
November 04-09, Guangzhou, Airshow China 2008
November 12-14, Beijing, The 5th Int'l Exhibition on Electrical Engineering, Electrical Equipment and Contractors' Supplies
November 11-12, Guangzhou, Franchising China 2008
November 20-23, Shanghai, China International Travel Mart 2008
November 25-28, Shanghai, Bauma China
China’s National Development and Reform Commission (NDRC) has released the 2009 tariff rate quotas (TRQs) for agricultural imports. According to The Volumes, Application Procedures and Allocation Principles for 2009 Grain and Cotton Tariff Rate Quotas dated September 26 but posted on NDRC’s website yesterday, the 2009 TRQs for wheat total 9.636 mn tons with 90% reserved for state trading; corn - 7.2 mn tons with 60% for state trading; rice - 5.32 mn tons with 50% for state trading; and cotton - 894,000 tons with 33% for state trading. Local authorities are required to report to NDRC on local applications by November 30 and the quotas will be allocated to end users by January 1, 2009.
(Full text in Chinese: http://www.ndrc.gov.cn/zcfb/zcfbgg/2008gonggao/t20081013_240075.htm) (NDRC)
The General Customs Administration has released a set of rules for conducting chemical tests on imported and exported goods. Under the rules, customs may conduct chemical tests if the authorities cannot determine the property, components, content, structure, quality and specifications of goods. Owners are allowed to challenge the results and ask for a re-testing. The new rules will replace a set of similar rules issued in 1993 and will take effect on December 1. (Full text in Chinese: http://www.gov.cn/flfg/2008-10/16/content_1122283.htm)
China’s Trade Surplus Declines by 2.6 Percent
According to China’s General Administration of Customs trade surplus for the first nine months of the year declined by 2.6 percent to US$180.9 billion compared to last year’s figure.
In September, import restrictions made to accommodate the Beijing Olympics and Para olympics boosted trade surplus by 23.1 percent to US$29.3 billion, a monthly all-time high. Exports increased by 21.5 percent to US$136.4 billion. Import growth in September slowed to 21.3 percent from August’s 23.1 percent and July’s 33.7 percent.
The European Union maintained its position as China’s top trading partner with bilateral trade increasing by 25.9 percent to US$322.5 billion. Following the EU, the United States was at second place with trade worth US$251.5 billion, although growth decreased by 1.8 percent.
The first nine months saw China’s trade value rise by 25.2 percent to US$1.9 trillion. “The trade activities have been shrinking due to weaker demand when the major economies are struggling in the financial crisis. They import less and import lower-priced products,” Li Maoyu, an analyst at Changjiang Securities Co., told Shanghai Daily.
Li added, But it was a different story for China’s slower import growth in August and September as hosting the Olympics led to factories halting their production temporarily and thus reducing their need to import raw materials.
To learn about other upcoming events, click here.
» NEW MARKET RESEARCH AVAILABLE!
China: Green Building
It is probably news to no-one that China’s construction industry is one of the world’s largest. Since 1999,
China’s construction industry has grown at an average annual rate of 20%. The World Bank estimates that by 2015 half the world’s building construction will take place in China. McKinsey Global Institute
estimates that in the next twenty years China will build nearly 40 billion square meters of floor space,
tantamount to between 20,000 and 50,000 new skyscrapers. Accompanying such growth, China will account for 20% of global energy consumption well within the next decade. As such, all major stakeholders, including private and public constituents, are increasingly realizing the need for environmentally aligned and energy-saving building strategy.
China’s green building industry consists of architectural design, construction strategy, and lifetime
operation that attempt to keep accord with established sustainability principles and standards. This report
briefly discusses relevant market issues pertaining to the export potential of green building products to China and with surveying the underlying materials and technologies being implemented in China green building initiatives.
The bottom line is that green building, though often associated with higher initials costs, ultimately
increases market competitiveness and will receive further investment. With China’s green building
emerging as an upscale market with potential for much broader application, American companies should consider export-or expansion-of their green building products to China.
For the full report please go to http://buyusainfo.net/docs/x_3903816.pdf
China: Specialty Software Industry
China’s software industry, with sales revenue of over U.S. $85.5 billion (all figures of this research in U.S. $ unless otherwise stated) in 2007, is a large sector still undergoing rapid growth. Software, in particular specialty software, remains the foundation for progress in the country’s information technology, advanced manufacturing, and modern service industries. Chinese government agencies and large local enterprises remain focused on improving their efficiency through using new IT software products and solutions. With the strong support of government incentive regulations and programs, China’s specialty software industry has made noticeable gains in the development of such areas as database software, Chinese-language office applications, and information security software. Compared with other developed countries, China’s software and IT service remains an emergent sector and is expected to grow approximately 30 percent annually over the next five years. At the present, China’s local software industry still lacks core technologies, high-end software development talent, and consistent high quality software products. Key opportunities for U.S. companies in the specialty software market are in such industries as the financial, education and training, telecommunications, and security sectors. U.S. firms looking to export into the Chinese market should focus on finding appropriate partners to provide local support. At the same time, U.S. software companies should be aware of China’s registration and certification requirements for software products. As a large and growing sector, China’s software market offers strong prospects for American software companies.
For the full report please go to http://buyusainfo.net/docs/x_9967366.pdf
Hong Kong - Green Buildings (Building Energy Efficiency)
Interest in green building technologies in Hong Kong has greatly increased in the last 2 years. Soaring fuel prices, increased public awareness and a growing focus by related departments of the Hong Kong government have led to greater interest among developers to utilize energy saving technologies – both in new construction projects as well as retro-fits of existing properties.
Hong Kong has several voluntary energy efficiency and related certification programs, and new mandatory building efficiency codes will likely be rolled out in late 2008.
As more construction projects seek to improve sustainability and energy efficiency, U.S. suppliers of energy efficiency technologies and services will find many new opportunities. Hong Kong is a significant retro-fit market due to the large inventory of existing commercial and residential properties; a number of large-scale new developments are also on the docket for the next few years. Furthermore, many Hong Kong developers and construction companies are active in China and other Asian markets. Establishing a foothold in Hong Kong can open up new doors in the region.
For the full report, please contact Mr. James Mayfield at james.mayfield@mail.doc.gov.
Price Strategy: Targeting “Good Enough” Market |
|
China’s myriad markets have long been divided into two main categories premium and low-cost. Many foreign companies aimed very high when first launching their businesses here, making premium products mainly for export, while local Chinese companies focused on selling to the low-end market of inexpensive, lower-quality goods. But that is changing. Many foreign companies no longer use China just as a manufacturing base for export and are trying to sell their products in the highly competitive domestic market. Many such companies
are adjusting their product pricing and quality strategies and instead are opting for a “good enough” approach selling reliable, good-enough products at low-enough prices to compete in the domestic market. This “medium” or middle-range market is growing much faster than the premium market or even the low-end market due to the rapid expansion of China’s new middle class. It accounts for more than half of the market for some types of consumer electronics.
Many multinationals have found that a top premium strategy does not work well in China because the upper end market is relatively small and is crowded with international competitors. Highly priced products just cannot compete. Take the example of one of our clients in the machine tool industry. The major foreign machine tool maker set up a plant in China in 2002 and invested substantial sums to establish five sales companies to handle different regional sales. But its aggressive efforts did not pay off because sales growth was not strong despite
China’s status as the third-largest market in the world. Meanwhile, many leading MNC competitors (Japanese, Europeans and Americans) also joined the fray. The high-end segment of the market was jam-packed with leading global machine tool makers despite its lack of size and growth. This posed a dilemma as many MNCs are reluctant to abandon the premium market for fear of damaging their brand names.
While MNCs dominated the premium market, local Chinese and Taiwanese machine tool makers occupied the low and medium-end market. With InterChina’s support, our client identified emerging demand in the “good enough” market _ customers demanding better quality and reliability than those offered by Taiwanese and Chinese competitors. These “good- enough” machine tools were about 10% to 20% cheaper than the top premium machine tools but 10% to 20% more expensive than low-end products.
InterChina’s client was able to jump ahead of its competitors by timely adjustment of its market strategy, engineering, sales, supply chain and products, which were well-received by the market. Customers were able to buy previously unaffordable quality on better terms than imported machines (RMB payment, short delivery times). The company’s sales of locally produced machines tripled to EUR 25 million in three years.
If you are interested to get the report, please go to www.InterChinaConsulting.com
AmCham-China in Action |
 |
EVENTS:
Upcoming Events
AmCham-China's Ninth Annual Appreciation Dinner
Celebrating the 30th anniversary of China’s reform and opening
6 PM – 9 PM, Friday, December 5, 2008
China World Hotel
Brand America: How Can the US Position Itself to Re-engage Global Communities?
Join AmCham-China for a breakfast meeting with Jack Leslie, chairman of Weber Shandwick, one of the world's leading public relations agencies. A veteran communications strategist, he has been an architect of some of the most visible communications campaigns for a range of prominent corporations over the last two decades.
7:30-10 AM, November 14, 2008
Kerry Center Hotel
About AmCham-China
The American Chamber of Commerce in the People's Republic of China (AmCham-China) is a non-profit organization which represents US companies and individuals doing business in China. AmCham's membership comprises nearly 2,700 individuals from over 1,100 companies. It has more than 40 industry- and issue-specific forums and committees, offers unique services such as the Business Visa Program, holds a wide range of networking and informational events, and meets with US and Chinese officials to discuss challenges and opportunities facing US firms doing business in China.
The Chamber's mission is to help American companies succeed in China through advocacy, information, networking and business support services. Find out how your firm can benefit from a membership with AmCham-China.
Why choose the Foreign Commercial Service?
FCS offers you the access you need to grow your business in China at an affordable rate. By partnering with FCS, the U.S. Embassy's contacts and expertise are put to work for your business. Knowledgeable Commercial Service specialists and American Trading Center (ATC) representatives can help you contact and set up appointments with Chinese organizations across China. With access to a broad cross-section of contacts including potential agents and distributors, major end-users and key government officials, you will be sure to meet the right people at the right levels to expand your business.
Symbol indicates a non-U.S. Government site
Privacy Policy | USA.gov | Contact Us | 1-800-USA-TRADE
Disclaimer | Download Adobe Acrobat
Export.gov Login/Edit
