News » Society » Chinese brands tap Hollywood in quest to go global
News » Society » Chinese brands tap Hollywood in quest to go global |
- Chinese brands tap Hollywood in quest to go global
- Apple’s sales rise, profits rise, shares tank: WTF?
- Smugglers fined just US$340 over ivory
- Abe suggests summit
- Xi vows no compromises over China's sovereignty
- Scientists find out why H1N1 is a bigger problem for Chinese
- Guangdong heralds end of decried labor camps
- China catches its breath as haze envelops nation
- Urgent action in Beijing
- Celebrities urge masks to protect traffic police
- New Tibet chief pushes reform, opening up
- TCM maker sued again over toxic ingredient
- Hygiene at Nestle candy factory under spotlight
- Have You Heard…
- Chinese firm wins A123 despite U.S. tech transfer fears
- Caterpillar Considers ‘All Options’ as Probe Continues
- Sany Tries to Gain Traction in the U.S.
- Japan’s Defense Spending to Increase for First Time in 11 Years
- Chaos at court but no sign of Bo
- Officials denied reports that disgraced politician Bo Xilai's much anticipated trial would open yesterday, amid chaotic scenes at a courthouse packed with journalists in Guiyang, Guizhou province.
| Chinese brands tap Hollywood in quest to go global Posted: 29 Jan 2013 04:02 PM PST Chinese brands tap Hollywood in quest to go global |
| Apple’s sales rise, profits rise, shares tank: WTF? Posted: 29 Jan 2013 08:29 AM PST
So, we have Apple reporting its financial results for the most recent quarter. Profits were up (only very slightly, but they were). Sales were well up. Everything's looking pretty rosy in hte Cupertino garden. At which point the shares drop 10% in minutes. What the hell is going on here? The answer is that stock markets are forward looking. The technical description of the current share price is the current value of all the money the company will ever make off into the infinite future. Or if you want to get really picky, what all the buyers and sellers averaged out think that current value should be. Which means that share prices are not determined by what past profits have been: not at all. They're defined by what people think future profits will be. And these results make people think that Apple isn't going to keep growing as quickly as they thought it would yesterday. They might pull something out of the hat in the future. We might get Apple TV as something more than a toy. There might be a mini-iPhone. Maybe they'll release a special iPhone that will work on China's largest network (none of the current ones do). But until there are signs of something like that rekindling growth then those forward looking markets are going to mark down the share price. It just ain't where you've been it's where you're going. |
| Smugglers fined just US$340 over ivory Posted: 29 Jan 2013 09:24 AM PST FOUR Chinese men who pleaded guilty in a Kenyan court to smuggling thousands of dollars worth of ivory were yesterday fined just US$340 each. In Nairobi, Magistrate Timothy Okello regretted that the defendants' crime "is still considered as a petty offence" and called for Kenyan laws "to be amended to reflect the gravity of such matters." The four men were arrested on Sunday carrying ivory items including chopsticks, necklaces and bracelets, as well as two pieces of raw ivory weighing 9.6 kilograms. The raw ivory alone had an estimated black market value of US$24,000 in Asia, said Patrick Omondi, head of the Kenya Wildlife Service's elephant program. The smugglers, Qu Rongjun, Liu Xuefeng, Gu Guisheng and Wang Chengbang, were stopped in Kenya while in transit from the Democratic Republic of Congo to Guangzhou airport in south China. They said they were unaware it was illegal to carry ivory through Kenya. |
| Posted: 29 Jan 2013 09:24 AM PST A summit is being suggested by Japanese Prime Minister Shinzo Abe to mend relations with China damaged by a territorial dispute, according to Japanese media. The Kyodo news agency quoted Abe as saying there might be "a need to re-establish the relationship, starting with a summit." But the prime minister reiterated that the territorial issue, concerning the Diaoyu Islands, was non-negotiable, Kyodo's report said. Abe's comments on a TV program came after a visit to China by Natsuo Yamaguchi, leader of the New Komeito party which forms the coalition government with Abe's Liberal Democratic Party. On Saturday, Yamaguchi briefed Abe on his visit to China, which the prime minister called "important." |
| Xi vows no compromises over China's sovereignty Posted: 29 Jan 2013 09:23 AM PST CHINA will never compromise on its sovereignty, security or development interests, Party chief Xi Jinping said. Xi told members of the Communist Party's politburo that China would stick to its policy of peaceful development but would never sacrifice its legitimate rights or basic interests. "No foreign country should expect us to make a deal on our core interests and hope we will swallow the bitter pill that will damage our sovereignty, security and development interests," Xi told the 25-member body on Monday. Xi said China will adhere to an "open, cooperative and win-win" development model with due consideration for both domestic and international situations. China will pursue its development by seeking a peaceful international environment while safeguarding and promoting world peace, he said. Xi said the government will ensure the public benefits from China's peaceful development, as well as work to consolidate a material and social basis for furthering its development. Wartime atrocities in the past had made an indelible impression on the Chinese people, leading them to desire and cherish a peaceful and stable life, Xi said. "Turbulence is what the Chinese people are afraid of, stability is what they are after and world peace is what they are looking forward to," Xi said. Xi said that "without peace, China and the world at large cannot develop smoothly; without development, both China and the world as a whole cannot have enduring peace." He added: "Global progress is like a tidal wave: ride with it and prosper, sail against it and you surely will perish." Global prosperity and stability represent an opportunity for China, while China's development represents an opportunity for the world, he said, adding that the success of a peaceful path of development will depend on the utilization of the opportunities that exist for both sides. Through sound interaction between both sides, China will open up a path for advancement, he said, adding that the country will unswervingly adhere to its own path. Xi said China is following a road of peaceful development and other countries should do the same. He also said that only when all countries pursue a path of peaceful development can they jointly develop and enjoy peaceful coexistence. "We should widely and deeply spread our country's strategic thinking of sticking to the road of peaceful development and guide the international community to properly understand and approach China's development," Xi said. "China will never pursue development at the cost of sacrificing other country's interests. We will never benefit ourselves at others' expense or do harm to any neighbor," he said. China will unswervingly pursue peaceful development, push forward joint development, maintain the multilateral trade system and participate in global economic governance, Xi said. This posting includes an audio/video/photo media file: Download Now |
| Scientists find out why H1N1 is a bigger problem for Chinese Posted: 29 Jan 2013 09:23 AM PST BRITISH and Chinese scientists have found a genetic variant which explains why Chinese people may be more vulnerable to the H1N1 virus, commonly known as swine flu. It may also help explain why new strains of flu virus often emerge first in Asia. "Understanding why some people may be worse affected than others is crucial in improving our ability to manage flu epidemics and to prevent people dying from the virus," said Tao Dong at Britain's Oxford University, who led the study. Less than 1 percent of Caucasians are thought to have the gene alteration, which has previously been linked to severe influenza. Yet about 25 percent of Chinese people have it, and it is also common in Japanese and Korean people. The scientists analyzed 83 patients admitted to a Beijing hospital during the 2009-2010 swine flu pandemic. Of those with serious complications such as pneumonia, respiratory or kidney failure, 69 percent had the genetic alteration. Among patients with mild illness, only 25 percent did. "It doesn't mean you should panic if you have this gene variant," said Andrew McMichael, director of the Weatherall Institute of Molecular Medicine at Oxford University. "Most people who have it won't run into any trouble at all." But he said people with the genetic predisposition to severe flu should be treated earlier and more aggressively than others. McMichael estimated people with the variant were five to six times more likely to become severely ill once infected. But the gene alteration doesn't make people more likely to catch the flu, since that depends on other factors. McMichael said the gene variant might give people the same susceptibility to get severely ill from other ailments. But it could also provide them with better immunity once they recover. "The bug in someone who gets severely ill is not any different than the one that infects someone who has mild illness," said Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota. Genetic screening might one day be included in national flu plans. "Further work needs to be done to justify that, but maybe in the future we would be able to say that if you're of a certain ethnicity, you are more at risk and should be prioritized for vaccination or antivirals," said Peter Openshaw, director of the Centre for Respiratory Infection at Imperial College London. "It's possible we could one day do a genetic test before treating someone with flu to see what the best treatment would be." |
| Guangdong heralds end of decried labor camps Posted: 29 Jan 2013 09:22 AM PST SOUTH China's Guangdong Province is planning to end the re-education through labor system within the year, according to the provincial judicial department yesterday. Guangdong was preparing to be the leading and exploratory region to stop the laojiao system, said Yan Zhichan, director of the province's Department of Justice. Public criticism of the re-education through the labor system has been growing. In August, Tang Hui, a woman in central China's Hunan Province, was sentenced to 18 months in a labor camp after protesting and demanding tougher penalties for the seven men convicted of abducting, raping and prostituting her 11-year-old daughter. Tang was released within a week following complaints from people across the country. The national political and legal work conference in early January announced changes to the system, which will be pushed forward this year. |
| China catches its breath as haze envelops nation Posted: 29 Jan 2013 08:40 AM PST Residents across northern China suffered choking pollution yesterday while Beijing was plunged into a toxic twilight for the fourth time this winter. Visibility was reduced to around 200 meters in parts of the capital, where pedestrians wearing masks made their way through a murky haze despite warnings from authorities to stay indoors unless absolutely necessary. In one city office, according to the AFP news agency, up to 20 workers worried that the pollutants could penetrate indoors took extra precautions, wearing protective masks at their desks. Wang Anshun, Beijing's new mayor who took office on Monday, was quoted as saying: "The current environmental problems are worrisome." The Beijing News went as far as to suggest banning or regulating Spring Festival fireworks in the capital. Pollution readings spiked after the city's skyline lit up with explosions last year. The Beijing Environmental Monitoring Center gave the air quality index as 406 yesterday, indicating the capital's air was "severely polluted." The index rates a reading over 150 as "unhealthy" and above 300 as "hazardous." National weather forecasters estimate that rain and snow will hit the nation tonight, and a cold front is expected in the capital tomorrow, bringing strong winds to disperse the fog. Earlier this month, several consecutive days of smoggy weather choked Beijing and other cities in north and east China, with PM2.5 readings far in excess of levels considered safe, Xinhua news agency said. Yesterday's toxic conditions followed an extreme bout of pollution earlier this month, when readings for PM 2.5, particles small enough to deeply penetrate the lungs and cause health problems, peaked at 993 micrograms per cubic meter, almost 40 times the World Health Organization's recommended safe limit. At the height of the smog, many residents rushed to buy face masks and air purifiers, and doctors at two of Beijing's major hospitals said the number of patients with respiratory problems had increased sharply during the period. China Central Television gave the smog's second day huge airplay, showing vehicles having to use full headlights in the middle of the morning to light their way through noxious clouds enveloping huge swathes of northern China as well as other areas. The smog affected a total area of 1.3 million square kilometers across the country, the Ministry of Environmental Protection said yesterday. It said the hardest-hit regions included the cities of Beijing and Tianjin, the provinces of Hebei, Henan, Shandong, Shanxi and Jiangsu, and the cities of Hefei, Wuhan and Chengdu. Beijing, Tianjin, Shijiazhuang and Jinan were "gravely polluted" and air pollution in other cities including Zhengzhou, Wuhan, Xi'an, Hefei, Nanjing, Shenyang and Changchun was rated just one level lower, or "seriously polluted," at 10am yesterday. More than 100 flights were delayed or canceled at Zhengzhou Airport in Henan, said CCTV, adding that the haze would last until tomorrow. In the eastern province of Shandong, almost 2,000 passengers were stranded at Qingdao's main airport after it shut, with 20 flights canceled, after visibility dropped to 100 meters. This posting includes an audio/video/photo media file: Download Now |
| Posted: 29 Jan 2013 08:38 AM PST BEIJING yesterday ordered 30 percent of official vehicles off the road and suspended 103 heavily polluting factories as a murky haze that began to choke the capital on Monday got worse yesterday. Other businesses were encouraged to suspend or cut production by midnight tomorrow, according to an emergency meeting called to tackle the toxic haze. Earlier, the city's environmental protection bureau had announced that Beijing would be adopting a stricter standard for vehicle emissions from this Friday. New cars will be subject to Beijing Standard V, equivalent to that in Europe, in a bid to reduce the density of dangerous PM2.5 particles. |
| Celebrities urge masks to protect traffic police Posted: 29 Jan 2013 08:37 AM PST AFTER days of gray skies in the capital, some of Beijing's better known residents not only began to vent their frustration at the conditions but also expressed concern for people who had to work outdoors. An online campaign was launched, calling for traffic police to be allowed to wear masks. Internet celebrity Sister Lotus was one of the first to highlight the dangers faced by the city's traffic police. Sister Furong, as she is also known, became famous for her blogs about getting into college and finding a boyfriend and for posting risque photographs of herself. She wrote on her microblog: "The outdoor still seems so foggy in the daybreak. We can wear gauze masks to protect our health, but how about the police on duty in the fog? Please provide them with military gauze masks." Her post was forwarded 14,052 times and won many supporters. Jing Yidan, an anchorwoman with China Central Television, said she, too, was worried about the traffic police. "Haze comes again. Many pedestrians wear gauze masks, but traffic police don't," she said. Her post quickly gained the support of other celebrities, including TV personality Yang Lan and real estate tycoon Ren Zhiqiang. Bloggers Pan Shiyi and Xue Manzi, who have a combined 24 million followers on Chinese sites, called for legislation against pollution. In Shanghai, police don't wear masks. "Wearing a mask is not allowed in our dress code," an officer told Shanghai Daily. |
| New Tibet chief pushes reform, opening up Posted: 29 Jan 2013 08:25 AM PST REFORM and opening up are a must for the prosperity of Tibet and its people, according to Losang Jamcan, newly-elected chairman of southwest China's Tibet Autonomous Region. Losang Jamcan was elected chairman of Tibet at the close of the first session of the 10th Tibet Autonomous Regional People's Congress yesterday. His predecessor, Padma Choling, was elected chairman of the standing committee of the current regional legislature. Fourteen others were elected vice chairpersons of the regional government. "Without reform and opening up, today's Tibet would not be there, nor would there be prosperity and development of tomorrow's Tibet," Losang Jamcan told reporters after his election. He said the regional government will deepen reform and opening up for the cause of socialism with Chinese characteristics. "Harmony and stability is an essential guarantee for Tibet's development and prosperity," he said. "We should cherish the harmonious and stable situation in our region in the same way that we cherish our very sight." He called for maintaining vigilance in times of peace as well as taking a firm political stand and acting consistently in resolutely battling against the 14th Dalai Lama clique and unswervingly safeguarding the unification of the motherland and national unity. "All development and progress of Tibet since its peaceful liberation is the result of sticking to the leadership of the Communist Party of China, the socialist system, the regional ethnic autonomy system and the path of development with Chinese characteristics and Tibetan features", said the new chairman. He vowed to improve the living standards of both urban and rural residents and narrow the gap between Tibet and the rest of the country in the public service sector. Over the past five years, the region's gross domestic product has seen an average growth of 12 percent each year to reach 70.1 billion yuan (US$11.15 billion) in 2012. Born in Chagyab, Tibet, in July 1957, Losang Jamcan studied at the Tibet University for Nationalities for five years and worked at the university for another 10 years. Between May 1996 and January 2003, he was mayor of the regional capital of Lhasa and deputy secretary of the CPC Lhasa municipal committee. From January 2003 to January 2013, he served in different posts, including vice chairman of the regional government and deputy secretary of the CPC regional committee. |
| TCM maker sued again over toxic ingredient Posted: 29 Jan 2013 08:25 AM PST TRADITIONAL Chinese medicine maker, the Yunnan Baiyao Group, has been sued by a lawyer in central China's Hunan Province for concealing an alleged toxic ingredient in its signature product from consumers. The lawyer, Luo Qiulin, said that he found the toxic ingredient, radix aconiti agrestis, from the English instruction of the medicine Yunnan Baiyao being sold in the United States, news website Caijing.com.cn reported. The ingredient is a toxic herb also known as gelsemium elegan, or "heartbreak grass", according to the Rules of Toxic Drugs for Medical Use, issued by the State Council. In China, the medicine maker refuses to list any of its ingredients in the Chinese instruction claiming the formula is a "state secret". Luo said the group has violated consumers' right to know the ingredients of the medicine and damaged their "personal dignity", the website said. It is not the first time that Yunnan Baiyao has been taken to court for not revealing its ingredients. In 2009, Zhao Yin, a lawyer in Beijing, sued the group after he took the medicine and suffered allergies. In that case, the lawyer sued the group, also for violating consumer rights, but lost the lawsuit as the court agreed the group's formula is under protection as a state secret. According to the database of the website of China's State Food and Drug Administration, Yunnan Baiyao medicine and capsule are listed under first rank protection from 1995 to 2015. Yunnan Baiyao is natural herbal medicine used for healing wounds and pain relief, according to the group's official website. Doctors said high doses of the toxic herb can cause dizziness, nausea or even death. |
| Hygiene at Nestle candy factory under spotlight Posted: 29 Jan 2013 08:24 AM PST
Some workers didn't have health certificates and some didn't wash their hands, use gloves or wear protective masks, the Qingdao-based City Sun newspaper reported. The newspaper also said that while Nestle announced last March that it had stopped using artificial additives in its food products in the United Kingdom, workers in Tianjin were found using flavoring essence in peppermint candies. The reporter said he took a job at the factory on January 18 with five other people but none of them had a certificate to show they were healthy, a breach of the factory's rules. A worker surnamed Zhang told him that it took about a week for new workers to get certificates, but the factory put them to work straight away. In the factory, hardly any of the workers was seen wearing a mask while making candies or ice-cream, again a breach of factory rules. And although workers are required to wash their hands before handling products, many said they didn't need to if senior officials weren't around. An official at Nestle's Beijing headquarters surnamed Li told Shanghai Daily yesterday officials had been sent to Tianjin to investigate. Nestle will not tolerate any violation of factory rules, Li said. |
| Posted: 29 Jan 2013 08:26 AM PST Have You Heard…   |
| Chinese firm wins A123 despite U.S. tech transfer fears Posted: 29 Jan 2013 08:30 AM PST  Source: Reuters By Tom Hals and Ben Klayman (Reuters) – China's largest auto parts maker won U.S. government approval to buy A123 Systems Inc (AONEQ.PK), a bankrupt maker of electric car batteries that was funded with U.S. government money, a source familiar with the situation said on Tuesday. Some members of Congress and retired military leaders said the sale to Wanxiang would transfer sensitive technology to China and they asked the U.S. committee to block it. A123 filed for bankruptcy in October due to weaker-than-expected demand for hybrid vehicles and technical problems. The company had received a $249 million grant from the U.S. government to promote clean energy, although about half of that money as never used. The company was sold in December at an auction supervised by the U.S. Bankruptcy Court in Delaware. Wanxiang's bid of about $257 million won against U.S. rival Johnson Controls Inc (JCI.N) of Milwaukee. The money raised in the auction will be used to repay the battery maker's debts of about $376 million. Wanxiang tried to blunt criticism of the deal by excluding A123′s defense contracts from its bid at the auction. Those were sold separately to Navitas Systems for $2.25 million. Chinese firms have been pouring cash into overseas investments, and with that money has come concerns around the globe that companies with ties to Beijing may not play by free-market rules. The Committee on Foreign Investment in the United States, or CFIUS, which approved the sale to Wanxiang, recently rejected a bid to build wind farms in Oregon by Ralls Corp, owned by two executives of China's Sany Group SANYG.UL. The committee has also blocked multiple deals by Huawei Technologies Co HWT.UL, a Chinese telecom equipment manufacturer. Wanxiang may have soothed the concerns of CFIUS members with its history of investing in the United States. The company generates about $1 billion in U.S. revenue by supplying parts to General Motors Co (GM.N) and Ford Motor Co (F.N). It has bought or invested in more than 20 U.S. companies, many of them which were in bankruptcy, according to a Congressional report.   |
| Caterpillar Considers ‘All Options’ as Probe Continues Posted: 29 Jan 2013 08:33 AM PST  Source: Bloomberg News By Shruti Date Singh Caterpillar Inc. (CAT), the largest maker of construction and mining equipment, said it's considering "all options" to recover losses from false accounting at a Chinese business that led to a $580 million writedown. "We are not done," Oberhelman said on the company's fourth-quarter earnings conference call with analysts. "We are putting in more effort to finish our investigation." Caterpillar, which revealed the discrepancy on Jan. 18, said yesterday it first became concerned about issues at its Zhengzhou Siwei Mechanical & Electrical Manufacturing Co. unit after a count of physical inventory. That assessment took place in November, a month after Caterpillar completed its purchase of Siwei's parent ERA Mining Machinery Ltd. for HK$6.15 billion ($793 million). The takeover was Peoria, Illinois-based Caterpillar's largest Asian deal and among $10.3 billion of acquisitions announced by Oberhelman since he became CEO in 2010. Caterpillar says it has replaced the management at Siwei, which makes hydraulic roof supports used in underground coal mining. The U.S. company said it doesn't comment on pending or potential litigation. Auditors 'Misled' "When we put our own team in place, the way we operate, we get to the bottom of it," Chief Financial Officer Brad Halverson said in a telephone interview yesterday. Those responsible "purposefully misled their auditors and us." Fourth-quarter net income fell 55 percent to $697 million, or $1.04 a share, from $1.55 billion, or $2.32 a year earlier, Caterpillar said yesterday. Excluding the 87-cent-a-share writedown and a tax benefit, earnings were $1.46, missing the¼$1.70 average of 22 analysts' estimates compiled by Bloomberg. Caterpillar said it doesn't expect the problems at Siwei to have a "significant impact" on 2013 profit and revenue, which it forecast at $7 to $9 a share and $60 billion to $68 billion respectively. The shares rose 2 percent to close at $97.45 in New York yesterday. China is "a very important market now, and as we look to the future, we expect it to become even more significant," Oberhelman said on the call. "While the industries we serve in China are significant, it doesn't mean there aren't challenges." Williams' Response The problem at Siwei is the latest setback for Caterpillar in China, where machine sales have slowed amid excess manufacturing capacity. The country, which is the largest construction-equipment market and biggest coal miner, saw excavator sales fall in December for the 20th consecutive month, according to China Construction Machinery Business Online. China's excavator manufacturing capacity has increased to almost 600,000 a year, compared with a worldwide market of about 300,000, London-based Off-Highway Research said last month. Emory Williams, the chairman of ERA prior to its takeover by Caterpillar, said yesterday he was "shocked and dismayed" by the writedown. "We were especially surprised by this situation as we cooperated very closely with Caterpillar during their extensive due diligence," he said in a statement. Williams said he's had no response after trying to contact Caterpillar senior management last week to request further details and to offer his assistance to the company. Caterpillar declined to comment on Williams' statement, said Jim Dugan, a company spokesman. 'Opaque' Accounting Caterpillar's diligence process for mergers and acquisitions "is rigorous and robust and includes Caterpillar personnel and outside accounting, legal and financial advisors," the company said in its earnings statement. "It is important to understand that Siwei was a publicly traded company with audited financial statements." The Siwei case isn't unusual in a country whose accounting standards are described by Jefferies & Co. analyst Stephen Volkmann as "opaque." Zoomlion Heavy Industry Science & Technology Co., a Chinese machinery manufacturer, is trying to allay investor concerns after Ming Pao Daily reported Jan. 8 it had an unsigned letter questioning the company's sales.   |
| Sany Tries to Gain Traction in the U.S. Posted: 29 Jan 2013 08:41 AM PST  Source: Wall Street Journal By James R. Hagerty anad Colum Murphy PEACHTREE CITY, Ga.—Caterpillar Inc. is struggling in China, as shown by the U.S. company's recent disclosure of a hefty write-down in the value of a Chinese mining-equipment maker it bought last year. But a visit to this Atlanta suburb shows that Chinese construction-equipment companies are finding the U.S. a tricky market too. So far, Sany has little to show for that investment. The company's U.S. market share remains minuscule. Only a few hundred Sany excavators have been sold in the American market so far, company officials say. On a recent morning here, a few workers were puttering around on the gleaming concrete floor in the warehouse; the 18 bright red upholstered chairs lined up neatly in the three-story atrium were empty. Even so, Sany officials say they aim to turn their company into the world's biggest maker of construction equipment, eclipsing the current leader, Caterpillar, and No. 2, Komatsu Ltd. of Japan. Caterpillar and Komatsu declined to comment on Sany's ambition. Sany is No. 6 on the latest ranking of the world's biggest makers of construction equipment compiled by KHL Group, a publisher of construction magazines. Sany executives say they are scouting for acquisitions and joint ventures to gain a broader product line, more sales and rental outlets. The company's U.S.-based executives acknowledge they don't yet need all of the capacity created here; its 60,000 square feet of office space equates to 700 square feet for each of the 85 or so employees here. But having such an impressive building shows potential customers "that we will be here for the long term," Jack Tang, president of Sany's U.S. arm, said in an interview. The feeling of surplus space is similar at a new Sany plant, in Lingang, about 40 miles southeast of Shanghai. The $818 million plant has 5.9 million square feet of manufacturing space—equivalent to about 32 Wal-Mart stores. At the center of the plant is a rest area where black marble pools, bordered with fake coconut trees, reflect the glass ceiling. Sany officials said the plant can build 20,000 excavators annually but recently has been working at half that rate. Patience isn't a notable part of Sany culture. Sany's annual sales are about 80 billion yuan ($12.86 billion), far below the $65.88 billion Caterpillar reported for 2012. But Sany's chairman, Liang Wengen, said in November he expects the company to reach about $47 billion within 10 years. Sany also has established sales and marketing operations in Europe, Latin America, India and other places. Sany is among the leaders in the Chinese market for certain construction equipment—including excavators, cranes and concrete pumps—but still "has to learn how to be a global company," said Tim Frank, chairman of Sany's U.S. business, who previously worked for other construction-equipment makers, including Volvo AB and Caterpillar. Sany's goal of becoming No. 1 globally may sound grandiose, but its leaders are "starting with the expectation that we can do it," said Mr. Frank. The toughest challenge is establishing networks of dealers in the U.S., Europe and other parts of the world, as Caterpillar and Komatsu did long ago. Dealers with strong local reputations and expertise generally are already working on an exclusive basis for the best-known brands. In the U.S., Sany has signed up 12 dealers for excavators, mostly in the Northeast, and sold a negligible number of earth-moving machines. Five excavator makers—Caterpillar, Komatsu, Volvo, Deere & Co. and Fiat Industrial SpA's CNH Global unit—account for more than 85% of U.S. sales, estimates industry consultant Frank Manfredi. Other strong rivals, including Hyundai Heavy Industries Co. and Doosan Corp.of South Korea, are scrapping for the rest. One way for Sany to gain more exposure in the U.S. would be to buy all or part of an equipment-rental company, industry executives say. Sany's Mr. Frank said it would be expensive to acquire a large, well-run rental operation. Still, he said, "the large rental channel is something I am exploring, along with other potential acquisitions and partnerships." Last year, Sany acquired Putzmeister Holding GmbH, a German maker of concrete pumps, for about $500 million. Equipment buyers often are wary of little-known brands like Sany because they lack an established secondhand market, which makes resale value unpredictable. Sany aims to deliver quality at an attractive price, Mr. Frank said, adding: "Over time, customers get that." Brad Hutchinson, owner of Company Wrench, a Carroll, Ohio-based dealer for demolition equipment, has bought about a dozen Sany excavators for his rental fleet and also offers excavators for sale. So far, he said, "we think the quality is very good." He was reassured that Sany excavators use many industry standard components, such as Cummins Inc. engines. Sany machines cost about 10% to 20% less than the top U.S. brands, Mr. Hutchinson said. Sany's Mr. Frank said that estimate was "certainly in the range." Company Wrench sells excavators for prices ranging from about $50,000 to $700,000 each, depending largely on size, power and features. As for the resale value, that isn't always an issue for demolition contractors, Mr. Hutchinson said: "The guys that buy our machines, they're going to own them till [the machines are] dead." In its home market of China, Sany faces tough competition from a host of Chinese rivals as well as such foreign giants as Caterpillar and Komatsu. "The best way to beat the Chinese outside of China is to compete and win with them inside of China," Ed Rapp, a group president at Caterpillar, said in a recent interview. An immense glut of unsold equipment has accumulated in China over the past two years with the sudden cooling of the country's once-roaring construction market. Off-Highway Research Ltd., a London-based data and consulting firm, estimates that 80,000 excavators, including repossessed machines less than a year old, are sitting in inventories—enough to fill about nine months of demand at the current sales pace. Sany officials say the Chinese market is starting to recover. Meanwhile, the new factory in Lingang proclaims Sany's ambitions, both economic and aesthetic. "The most beautiful garden-like digital factory in the world," reads one wall sign. "The most advanced excavator assembly line in the world" reads another.   |
| Japan’s Defense Spending to Increase for First Time in 11 Years Posted: 29 Jan 2013 08:45 AM PST  Source: Bloomberg News By Isabel Reynolds | Photo: AFP Japan is set to increase its defense budget for the first time in 11 years and boost Coast Guard spending as it copes with rising tensions with China over islands claimed by both countries. Abe took office last month vowing to beef up Japan's ability to monitor and protect the uninhabited East China Sea islands called Diaoyu in China and Senkaku in Japan. His plans are limited by a shortage of funds as Japan struggles to service record debt, as well as a decades-old informal military spending limit of 1 percent of gross domestic product. "They should spend more, but it's significant that they've managed to stop the shrinkage," said Ikuo Kayahara, a former general and a visiting professor at Takushoku University in Tokyo. "The events around the Senkakus made the Japanese realize they might not be safe." The Coast Guard has taken the lead in efforts to warn off Chinese government vessels that have entered Japan-administered waters 24 times since the dispute over the island chain heated up. The new budget calls for setting up a 400-strong specialized team with 14 patrol vessels to defend remote islands. Defense outlays will total 4.8 trillion yen according to Finance Ministry figures that include some expenses for relocating American troops and aid to residents of Okinawa, where 75 percent of the U.S. bases in Japan are located. China-Japan Tensions Tensions between China and Japan showed signs of easing last week after Chinese Communist Party Secretary General Xi Jinping met with the head of Abe's junior coalition partner in Beijing. New Komeito Party leader Natsuo Yamaguchi handed over a personal letter from Abe and told reporters Xi said he would consider a summit. The dispute between Asia's two largest economies reignited after the Japanese government bought three of the islands from a private owner in September. The move set off riots in China, damaging the $340 billion bilateral trade relationship. Chinese ships have not entered what Japan regards as its territorial waters since Jan. 21, according to the Coast Guard. Japan's defense spending in 2011 was the world's sixth largest at $59.3 billion, according to the Stockholm International Peace Research Institute. China was second behind the U.S. at $143 billion, spending 2 percent of GDP, compared with Japan's 1 percent. Military outlays account for about 5 percent of Japan's budget, while almost a quarter goes to servicing the world's largest debt and almost 30 percent goes to social security spending, according to Finance Ministry data.   |
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