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After a brief slowdown earlier this year, Thailand’s automotive industry is back near top speed, resuming progress toward the goal of becoming the world’s 10th biggest automaker. Rising steadily by one notch in 2009 and by another in 2010, Thailand currently ranks as the 12th largest auto manufacturing country. Share this Article

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Thailand’s auto industry to reach top 10 by 2015

For 2009 as a whole, nonetheless, real GDP fell 2.3 percent despite a pick-up in consumption in the fourth quarter, external demand will be the main contributor to growth in the near term.
Government consumption will likely contract due to the phase-out of consumption measures of the first fiscal stimulus package. Investment is expected to recover, as capacity utilization rises and deferred maintenance, machine replacements and limited expansion of existing plants take place. In addition, there are indications that construction investment, long subdued, may be picking up.

In any case, Thailand’s strong rally in 2009 should still be considered in context.
The 2009 market rally reflects the perception that valuations are about long-term potential, and that political crises in Thailand rarely have a dramatic impact on the fundamentals of the economy. If we look at the EV/EBITDA multiples of the oil and gas sector, for example, valuations are still low compared to regional peers : this is partly a reflection of regulatory risks and political instability in Thailand.

Mark another milestone for China’s ever-rising economic profile: UBS emerging-markets economist Jonathan Anderson has declared China’s property industry “the single most important sector in the entire global economy.”

In a research note Wednesday, Mr. Anderson, a longtime China watcher, says that “real-estate and housing construction pervade the entire [China] growth model. They are the most important determinant of commodity demand, a very big marginal driver of China’s external surpluses, and indeed a crucial key to real understanding of household balance sheets, saving and investment behavior and the debate around Chinese rebalancing.” In other words, he says, “from a macroeconomic perspective if you don’t understand Chinese property, you probably don’t understand China.”

Many global investors won’t find the declaration all that surprising, having seen shares in many companies buffeted over the past year by Beijing’s efforts to wrestle with soaring house prices while trying to avoid undercutting the construction industry. But it is remarkable sign of the times nevertheless. As Mr. Anderson notes, “until very recently” the proper response to the question of which sector is most important “would almost certainly have been U.S. financials and/or U.S. housing.”

The numbers tell much of the story. China is the world’s largest consumer of steel, and Mr. Anderson notes that real estate directly accounts for 40% of Chinese steel usage. Add home appliances and automobiles—which he notes tend to directly follow new housing purchases in China–the share is more than 50%. Similar logic applies to other products like cement, iron ore, coal, and construction equipment.

Property construction—75% of which in China is housing–accounted for more than 13% of China’s gross domestic product last year, UBS estimates—more than double the average of 6% in the 1990s. Mr. Anderson says that explains why investment overall accounts for such a large share of China’s economy—an estimated 47% to 48% of GDP last year, which “is an absolute record for any economy of significant size in the post-war era, and almost single-handedly explains China’s explosive real growth over the same period.”

So is China’s property sector a bubble? And how long can the boom continue? Mr. Anderson temporarily punts on those all-important questions, saying colleague Wang Tao, UBS’s China economist, will weigh in next week.

–Jason Dean

The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978.

China continues to lose arable land because of erosion and economic development.

The country’s per capita income was at $6,567 (IMF, 98th) in 2009.

The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978.

Its mineral resources are probably among the richest in the world but are only partially developed.

A report by UBS in 2009 concluded that China has experienced total factor productivity growth of 4 per cent per year since 1990, one of the fastest improvements in world economic history.

The market-oriented reforms China has implemented over the past two decades have unleashed individual initiative and entrepreneurship, whilst retaining state domination of the economy.

Both forums will start on Tuesday.

In this period the average annual growth rate stood at more than 50 percent.

China is expected to have 200 million cars on the road by 2020, increasing pressure on energy security and the environment, government officials said yesterday.

Although China is still a developing country with a relatively low per capita income, it has experienced tremendous economic growth since the late 1970s.

Even with these improvements, agriculture accounts for only 20% of the nation’s gross national product.

China is the world’s largest producer of rice and wheat and a major producer of sweet potatoes, sorghum, millet, barley, peanuts, corn, soybeans, and potatoes.

China ranks first in world production of red meat (including beef, veal, mutton, lamb, and pork).

Oil fields discovered in the 1960s and after made China a net exporter, and by the early 1990s, China was the world’s fifth-ranked oil producer.

China’s leading export minerals are tungsten, antimony, tin, magnesium, molybdenum, mercury, manganese, barite, and salt.

China’s exploitation of its high-sulfur coal resources has resulted in massive pollution.

After the 1960s, the emphasis was on regional self-sufficiency, and many factories sprang up in rural areas.

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Chinese Property: The Most Important Sector in the World

Japan’s automobile production fell 6. 3 percent in January from a year earlier, marking the fourth consecutive month of decline, the Japan Automobile Manufacturing Association (JAMA) said in a report on Monday.

Automobile production in January totaled 706,107 units, down from the 753,734 units total production logged in the same month a year earlier, JAMA said.

January’s decline follows a 5.1 percent fall the previous month and a 6.7 percent contraction logged in November, the industry body said.

Manufacturing of passenger cars fell 7.2 percent to 609,598 units, while truck production dipped 2.1 percent to 87,830 units to mark the second straight month of decrease. The production of buses however, increased 17.2 percent to 8,679 units, marking the fourth straight month of increase, JAMA said.

The association also noted that domestic sales of automobiles in Japan dropped 16.7 percent year-on-year in January to 305,500 units sold.

JAMA highlighted that the domestic sales figures were in stark contrast to figures showing that auto exports increased in the recording period by 7.3 percent in comparison with the same month of the previous year.

&$&$Source:Xinhua&$&$

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Japan’s auto output falls 6.3% on year in Jan.

After keeping its currency tightly linked to the US dollar for years, China in July 2005 revalued its currency by 2 % against the US dollar and moved to an exchange rate system that references a basket of currencies.

In 2009, the global economic downturn reduced foreign demand for Chinese exports for the first time in many years.

China has emphasized raising personal income and consumption and introducing new management systems to help increase productivity.

The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978.

China is the world’s largest producer of rice and is among the principal sources of wheat, corn (maize), tobacco, soybeans, peanuts (groundnuts), and cotton.

A report by UBS in 2009 concluded that China has experienced total factor productivity growth of 4 per cent per year since 1990, one of the fastest improvements in world economic history.

Over the years, large subsidies were built into the price structure, and these subsidies grew substantially in the late 1970s and 1980s.

On top of this, foreign direct investment (FDI) this year was set to “surpass $100 billion”, compared to $90 billion last year, ministry officials predicted.

“The growth rate (for ODI) in the next few years will be much higher than previous years,” Shen said, without elaborating.

China is expected to have 200 million cars on the road by 2020, increasing pressure on energy security and the environment, government officials said yesterday.

China’s challenge in the early 21st century will be to balance its highly centralized political system with an increasingly decentralized economic system.

Despite initial gains in farmers’ incomes in the early 1980s, taxes and fees have increasingly made farming an unprofitable occupation, and because the state owns all land farmers have at times been easily evicted when croplands are sought by developers.

In terms of cash crops, China ranks first in cotton and tobacco and is an important producer of oilseeds, silk, tea, ramie, jute, hemp, sugarcane, and sugar beets.

Horses, donkeys, and mules are work animals in the north, while oxen and water buffalo are used for plowing chiefly in the south.

There are also extensive iron-ore deposits; the largest mines are at Anshan and Benxi, in Liaoning province.

Alumina is found in many parts of the country; China is one of world’s largest producers of aluminum.

Coal is the single most important energy source in China; coal-fired thermal electric generators provide over 70% of the country’s electric power.

Before 1945, heavy industry was concentrated in the northeast (Manchuria), but important centers were subsequently established in other parts of the country, notably in Shanghai and Wuhan.

Author: Hinrich Voss and L. Jeremy Clegg, Leeds University

Since China embarked on its ambitious opening and reform process, its commercial relationship with the European Union has flourished. Although bilateral trade growth has been an important part of this, European multinational enterprises (MNEs) have been swift to target China for foreign direct investment (FDI). With the path blazed by large MNEs, increasingly smaller firms are following in the footsteps of the European majors such as the carmaker Volkswagen, or the chemical firm BASF, to use FDI to get a foothold in the Chinese market.

Now the roles are shifting as Chinese investors descend on Europe. Reportedly, Chinese firms have been willing to acquire any ailing European firm, and are lining up to make major new large-scale investments. These perceptions are fuelled by acquisitions like Nanjing Automobile Corporation’s and Shanghai Automobile Industry Corporation’s acquisition of UK-based MG Rover in 2004–5, by Geely of Swedish-based Volvo in 2010, or of business units belonging to Thomson and Alcatel by TCL in 2004–5.

These developments have caused two types of reactions. European governments and regional institutions have started to court Chinese companies and quarrel about who has been most successful in doing so.

In some countries investment attraction has been nationally orchestrated to more effectively increase Chinese FDI, as in the case of the United Kingdom, with its government-run UK Trade & Investment network within China reaching out to Chinese firms. This network has been supported within the UK by regional investment promotion agencies. Other European countries have followed suit, by establishing their own networks within China. Cautionary voices have argued that, if the enterprise sector in the EU is bought out by China, the EU will risk losing its domestically-owned industrial capabilities and technological leadership. This has led to a call to monitor and screen investments into the EU, in particular from China and other emerging markets, for their fit with European objectives.

Both stances — positive and apprehensive — toward Chinese FDI need to be put into perspective, and understood in terms of the motives of the Chinese investors themselves. Broadly speaking, there are two types of Chinese investor. Large state-owned firms with favourable access to government capital seek to diversify their portfolios of real assets, and thereby the wealth portfolio of the Chinese state, through the acquisition of western assets. In contrast, investors originating in the vibrant Chinese domestic private sector are seeking profitable investment opportunities to upgrade their industrial capabilities and to grow their business. For these firms the purchase of strategic assets is made on the basis of fit with their corporate industrial strategy. However, for private firms, the opportunities offered by Chinese domestic market growth reduce the pull of markets abroad, which are growing at a slower pace. This certainly applies to EU market growth, with the exception of the high growth (but generally small) economies of the twelve countries joining in 2004 and 2007.

The implications of this Chinese investment behaviour are visible across the EU. The EU-27 has collectively played only a very minor part in China’s outward investment strategy. Less than 3 per cent of China’s global investment stock was located in the EU in 2009. However, discounting the entrepôt and investment hub Luxembourg, of this investment the 12 newly acceded countries attracted over 10 per cent of the EU’s total. This is a greater proportion than their share of EU GDP, and suggests that Chinese investment decisions are driven primarily by growth.

If we were to characterise the spatial distribution of Chinese FDI within the EU, it might be said to mirror that of South Korean investment, rather than Japanese, which favours the larger economies. However, Chinese investment in the EU is still at a level where a clear pattern is yet to be established; over the last decade there is little evidence of a continuous and focused investment strategy in particular countries.

While the EU has been of limited importance in China’s outward investment strategy, Chinese investment has equally kept a low profile within the EU. The numbers of Chinese affiliates are low across the Union, and Eurostat figures show that their contribution to employment is minor — it should be noted that individual member states can report significantly higher values for selected FDI data than Eurostat does.

Can we expect Chinese investments in the EU to grow? Chinese investments in Hungary, Poland and Romania have recently picked up. These transition economies have been especially attractive to Chinese firms, largely because they offer growth and are coupled with deep privatisation and liberalisation (Hungary), a large market (Poland) and a favourable business environment in the eyes of Chinese investors (Romania). The recent increase in Chinese investments in Central and Eastern European countries may also reflect a change in Chinese investment strategies towards targeting lower production cost sites within the EU, as a means of expanding market shares across the EU via export.

Another development that could lead to an increase of Chinese investment over the coming years is the Treaty of Lisbon. Following this Treaty, as with Trade, one commissioner represents the EU in the sphere of FDI and is responsible for investment liberalisation. Now the authority for FDI policy resides at the EU level, it can have a single, united voice when dealing with China. This should make it easier for the EU as a whole to articulate its policy towards China, and to bring some coherence to the bewildering range of diverse institutional systems within the EU that are faced by the much sought after Chinese investor.

Hinrich Voss is Roberts Fellow at the Centre for International Business at Leeds University Business School.

L. Jeremy Clegg is Jean Monnet Professor of European Integration and International Business Management at Leeds University Business School.

1. Europe needs to screen Chinese investment
2. Traps for Chinese investment overseas
3. Chinese investment in Australian resources

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Understanding the Chinese-EU investment relationship

According to U. S. car manufacturer Ford, the future of the automobile industry may have been reflected in the new Ford Focus Electric, the company’s first fuel-free, rechargeable passenger car. Continue Reading

China’s domestic vehicle production and sales volume from January to October 2010 reached 14.62 million and 14.68 million units respectively, 832,800 and more than 1 million units over the figures for all of 2009, according to the latest statistics released by the China Association of Automobile Manufacturers (CAAM) on Nov. 9.

CAAM’s statistics show that the production and sales volume of domestic vehicles for the first 10 months of this year rose 34.5 percent and 34.8 percent from the same period of last year. The production and sales volume of passenger vehicles reached 11.08 million and 11.10 million units, respectively, up 36.3 percent and 35.5 percent from a year earlier. The production and sales volume of commercial vehicles reached 3.55 million and 3.58 million units, respectively, up 29.2 percent and 32.4 percent compared to the first 10 months of last year.

From January to October this year, China’s top 10 auto makers listed in descending order by sales are Shanghai Automotive Industry Corporation, Dongfeng Motor Corporation, FAW Group Corporation, Chang’an Automobile Company, Beijing Automobile Works Company, Guangzhou Automobile Group Company, Chery Automobile Company, BYD Company, Brilliance China Automotive Holdings and Anhui Jianghuai Automobile Company. The combined sales volume of the 10 companies amounted to nearly 12.8 million units, accounting for 87 percent of the total auto sales in China in the first 10 months of this year.

CAAM predicted that the full-year production and sales volume of domestic vehicles will both exceed 17 million units in 2010, and China will remain the largest automobile producer and largest auto market in the world.

&$&$By People’s Daily Online&$&$

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China’s production and sales volume of domestic vehicles increased greatly from last year

Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2009 stood as the second-largest economy in the world after the US, although in per capita terms the country is still lower middle-income.

Deterioration in the environment – notably air pollution, soil erosion, and the steady fall of the water table, especially in the north – is another long-term problem.

China is also the second largest trading nation in the world and the largest exporter and second largest importer of goods.
The PRC government’s decision to permit China to be used by multinational corporations as an export platform has made the country a major competitor to other Asian export-led economies, such as South Korea, Singapore, and Malaysia.

Available energy is insufficient to run at fully installed industrial capacity, and the transport system is inadequate to move sufficient quantities of such critical items as coal.

The two sectors have differed in many respects.

China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.

China’s increasing integration with the international economy and its growing efforts to use market forces to govern the domestic allocation of goods have exacerbated this problem.

Globally, foreign investment decreased by almost 40 percent last year amid the financial downturn and is expected to show only marginal growth this year.

But “this is just a beginning.

China is expected to have 200 million cars on the road by 2020, increasing pressure on energy security and the environment, government officials said yesterday.

China’s challenge in the early 21st century will be to balance its highly centralized political system with an increasingly decentralized economic system.

Even with these improvements, agriculture accounts for only 20% of the nation’s gross national product.

Except for the oasis farming in Xinjiang and Qinghai, some irrigated areas in Inner Mongolia and Gansu, and sheltered valleys in Tibet, agricultural production is restricted to the east.

China ranks first in world production of red meat (including beef, veal, mutton, lamb, and pork).

Offshore exploration has become important to meeting domestic needs; massive deposits off the coasts are believed to exceed all the world’s known oil reserves.

China’s leading export minerals are tungsten, antimony, tin, magnesium, molybdenum, mercury, manganese, barite, and salt.

In the 1990s a program of share-holding and greater market orientation went into effect; however, state enterprises continue to dominate many key industries in China’s socialist market economy.

Shanghai and Guangzhou are the traditionally great textile centers, but many new mills have been built, concentrated mostly in the cotton-growing provinces of N China and along the Chang (Yangtze) River.

China has worked out a plan to prop up consolidation of companies in some important fields, including automobile, rare earth and machineries, the government said. Continue Reading

Red-shirt protesters, at least 100,000 strong, occupied Rajdamnoen Avenue Saturday and more kept flowing into the capital from all over the Kingdom Saturday night.

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Rajdamnoen a sea of red as protesters set up camp
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