China State Construction Engineering Corp. Signs $1.7 Billion Agreement With Tishman And Casino Builder Revel Entertainment To Complete Atlantic City Casino
Forbes.com reports today that one of the big investment trends of the last decade — western (primarily American) investors pumping money into places like Macau to develop sprawling casinos — has been turned on its head, as China State Construction Engineering Corp. (CSCEC), China’s biggest property company, has just signed a $1.7 billion deal with Tishman and Revel to complete a new casino in Atlantic City by July 2011. This investment may be unusual, but it is both a welcome injection of cash into a delayed project as well as a possible sign of more Chinese-American cooperative deals and construction projects to come. These construction agreements are extremely common in China — as we reported yesterday — but to date have been largely nonexistent in America.
CSCEC has been on a bit of a roll lately, having benefitted greatly from China’s massive stimulus spending, and will provide the much-needed funding that this project needs to finally get moving again — construction had been halted in the wake of the global financial crisis. As Forbes.com notes, CSCEC
reported a net profit of 2.35 billion yuan ($344 million) for the first half of 2009 on 111.3 billion yuan ($16.3 billion) in revenue.
Number of Travelers Increasing More Rapidly In China And Other Emerging Economies; Carriers Taking Localized Approaches To Woo Passengers
The number of Chinese air travelers has grown exponentially in the last 10 years. Graphic © Brand Channel
Although the air travel industry has reported grim figures over the last year — with Asia-Pacific airlines taking the biggest hit overall — industry insiders report continued growth in the Chinese market, particularly from business travelers. To reach this lucrative group, airlines have taken unique approaches to branding and service in the Mainland, with carriers like Finnair and Emirates, along with domestic carriers, reaching out to Chinese travelers through culturally-relevant approaches.
Brand Channel recently posted a feature that looked into what successful airlines are doing correctly in the Chinese market (and the reasons why others are failing to make a connection with Chinese consumers). As the article points out, outreach can range from simple changes like ensuring crewmembers can speak Mandarin, English, and regional dialects to more dedicated personal services that Chinese consumers may find more important than their non-Chinese counterparts. With more Chinese passengers flying domestically as well as overseas, this type of article is essential reading for airlines — or any other companies — which are looking for proven techniques for attracting Chinese customers.
Posted in Business, China, Culture, Luxury
Tagged airlines, asia, Business, carriers, China, emirates, finnair, travel
Multinationals Hope Domestic Consumption, Inland Movement Will Counterbalance Drop In Exports
The world's target market
CNN reports today on the hopes of many western investors and CEOs for the rise of the Chinese consumer to help lift up the sluggish global economy. With slowly-increasing consumption rates in a country still highly populated by savers rather than spenders, redoubled efforts by western and Japanese companies to retain and expand their customer base shows that they understand that the Chinese market — with its vast potential but cut-throat competition — is critical for their global strategy.
Posted in Automobile, Business, China, Culture, Economics, Economy, Fashion, Investment, Luxury
Tagged Apple, Audi, branding, Business, China, china market, computers, consumer, founder, geely, JNBY, louis vuitton, marketing, panamera, porsche, shanghai, shanghai auto show, strategy
Rising Trade And Cultural Exchanges Between Two Countries Leading China-West Partnerships
Ambassador Raby has been a contemporary Chinese art buff since the 1980s. Could Raby and Rudd lead the way to better Sino-Australian ties?
There have been several stories in the last few days about the relationship between Australia and China, two countries which have economically benefitted in alternating cycles through increased trade and commerce over the last 20 or so years. While Australia has a Mandarin-speaking PM who has shown a muted interest in deepening Sino-Australian ties, recent articles have indicated that the China stigma continues to play a role in business deals and politics.
Posted in Business, China, Chinese Art, Culture, Economics, Economy, Investment, Museums
Tagged Art, australia, Business, BYD, China, chinalco, contemporary art, dealmaking, foreign investment, Investment, paul rudd, rio, SOEs, warren buffett
American Luxury Brand Bullish On Chinese Consumer Demand For Luxury Goods
FT has a brief story today on comments made by Lew Frankfort, Chief Executive of Coach, about the potential for competition between foreign and home-grown luxury brands in the growing Chinese market:
Lew Frankfort said the worldwide economic slowdown was set to raise further China’s importance to the luxury goods sector, not just as a manufacturing centre but, more significantly, as a growing consumer market.
While Coach announced in January that it would halve its rate of expansion in North America, reducing the number of annual store openings there from 40 to 20, Mr Frankfort said he was likely to accelerate development plans in China.
Speaking at the end of a visit to China, he said: “I am leaving this trip with a view that our numbers might be conservative . . . We see sophisticated [Chinese] consumers shopping and international brands thriving.”
Coach estimates that China will represent 10 per cent of the $25bn global luxury handbag and accessories market by 2010. The US group currently has 17 shops in mainland China, in addition to eight stores in Hong Kong and two in Macao.
Posted in Business, China, Culture, Luxury
Tagged Business, China, chinese market, coach, competition, Luxury, mainland china, marketing
Chinese Automakers Hope to Leapfrog the Competition
Tianjin-Qingyuan: One of China's Hybrid/Electric Auto Frontrunners
Following up my last post on luxury SUVs, I noticed a rash of stories today about the opposite end of the automotive spectrum — the electric car. There has been a lot of chatter about Chinese electric cars in recent months, mainly brought on by Warren Buffett’s $232 million investment in BYD last October. Since then, there has been more talk on both sides of the Pacific Ocean about increasing production of electric and hybrid vehicles, not only for the environmental benefits they bring, but also to corner a lucrative new global market. As China’s automotive market is still relatively young, competition will be fierce between new Chinese automakers like Shenzhen-based BYD and Tianjin-based Tianjin-Qingyuan and the more established Japanese powerhouses and North American giants (if they manage to get their act together in time). No matter what, manufacturing electric and hybrid vehicles is big business, even if you just count the Chinese domestic market. And the Chinese government is making it clear that they think the country can become the world’s electric vehicle manufacturing epicenter and eclipse production from other traditional auto capitals. As the New York Times writes,
Posted in Automobile, Business, China
Tagged auto, Automobile, Business, BYD, car, China, electric car, environment, tata
Is the Company’s “Long March” Nearing its End?
It looks like the Chinese telecom giant Huawei might make its oft-delayed entrance to the US market, after what Forbes calls the company’s “Long March”:
For years, the Chinese networking and telecom vendor’s attempt to expand its U.S. presence has been held back in part by security worries stemming from its murky association with the Chinese government. But now, the Shenzhen-based company is said to have won a major U.S. deal: a contract to build the network infrastructure for a cellphone service that Cox Communications plans to launch later this year. Huawei is also a contender to build Clearwire’s 4G network.
I’m keeping a close eye on this story, since making big deals in the US is never an easy task for Chinese multinationals — also, Recent chatter from Britain indicates that British authorities have serious concerns about allowing Huawei to install telecom infrastructure. As the Times points out,
A confidential document circulating in Whitehall says that while BT has taken steps to reduce the risk of attacks by hackers or organised crime, “we believe that the mitigating measures are not effective against deliberate attack by China”.
A Whitehall report is understood to warn that, although there is at present a “low” risk of China exploiting its capability, “the impact would be very high”.
So who knows? The US contracts might be a financial windfall for Huawei. Or, as was the case in their attempted 3Com deal and Haier’s abortive Maytag deal, security and/or protectionist concerns might threaten to scupper the whole deal. With the British report coinciding with Huawei’s American overtures, it could, quite possbly, go either way.