Archive for November, 2009

An Online Market Flourishes in China (E-commerce Fever Makes Taobao China’s Newest Internet Darling)

The so-called Taobao addicts are helping to pick up the slack in a sluggish economy. “I can’t live without Taobao,” said Zhang Kangni, a graduate student in Shanghai. “First, it’s cheaper. I found a dress at a store in Shanghai. It’s a Hong Kong brand that sells for $175. I found it on Taobao for $33.”

But skeptics ask: Can Taobao actually make a profit and emerge as a true Web powerhouse?

The company is not publicly traded and therefore does not disclose financial information, but listings are free on Taobao and the company makes no money from online transactions. Almost all Taobao’s $200 million in revenue comes from advertising, which the company says covers virtually all its operational costs. (By DAVID BARBOZA, The New York Times, August 9, 2009 )

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November 30, 2009 at 9:18 am

U.S. Power Companies Seek Out Chinese Allies

Duke Chief Executive Jim Rogers said these deals are just the beginning, and that he may solicit Chinese financing for the $25 billion in capital Duke needs to raise in the next five years to build new plants and upgrade other facilities.

As President Barack Obama meets with Chinese officials this week, tamping down carbon-dioxide emissions is on the agenda. The U.S. and China together account for 40% of the world’s output of the gas, the leading culprit in global warming. The two nations’ talks are expected to explore ways they can cooperate to solve common problems, such as making coal a cleaner-burning fuel.

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November 25, 2009 at 8:00 am

In China, Online Advertising Holds Real Promise

HONG KONG — While Internet advertising revenue growth in the U.S. has stalled since the global downturn set in, some hope remains for China’s highly trafficked Web sites.

“For 2010 we’re estimating about 20% growth for online advertising,” says Ben Cavender, a senior analyst at Shanghai-based China Market Research Group. “That’s compared with the U.S., where it’s under 5% a year.”

China’s largest Internet portal, Sina Corp., is optimistic about online advertising–and rightly so. Forecasting advertising growth in 2010, Sina, which Forbes Asia named one of the “Best Under A Billion” companies, posted third-quarter profits Tuesday that beat some analysts’ expectations.(by Hana R. Alberts,Forbes, 11.17.09)

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November 24, 2009 at 8:00 am

Cellphone Entertainment Takes Off in Rural India

MUMBAI—In the furthest reaches of India’s rural heartland, the cellphone is bringing something that television, radio and even newspapers couldn’t deliver: Instant access to music, information, entertainment, news and even worship.

Despite its rapid modernization, many of India’s 750,000 villages remain isolated except for the cellphone reception that now blankets almost the entire country after a decade of rapid expansion by operators. So in villages that don’t receive any FM radio stations, people have begun calling a number that has a recording of Bollywood tunes and listening to it on their headsets.

This primitive cellular “radio” service was used by close to 20 million Indians last year, phone company executives estimate.(By ERIC BELLMAN, The Wall Street Journal, NOVEMBER 22, 2009)

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November 23, 2009 at 8:00 am

MAG Completes First Phase of New China Plant

Erlanger, Kentucky – MAG Industrial Automation Systems will complete the first phase of a new plant in Changchun, China, by the end of November, with production of machine tools and factory automation systems set to begin in February 2010. The new plant, located in the Changchun Economic and Technical Development Zone, is being established in two phases, the first of which covers more than 6,000 m2 of production and offices located on a campus of 13,000 m2.

“This new facility complements our operations in Beijing and Shanghai to offer unique technical knowledge and increased production capacity for faster, better service. Our Chinese footprint will greatly increase Chinese industrial productivity and technological capabilities,” said Daniel D. Janka, President MAG. “With year-over-year GDP growth of nearly nine percent in the third quarter this year, the Chinese market is a bright spot in the global economy, and MAG China has rapidly grown to meet the needs of the aggressive infrastructure build-out going on in that country and the greater Asian market.”( Manufacturing & Technology eJournal | November 12, 2009)

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November 18, 2009 at 8:00 am

Euro-Zone Economy Returns to Expansion

BERLIN — The euro-zone economy returned to modest growth in the third quarter, marking an apparent end to five quarters of recession, but the region’s recovery looks set to be anemic, economists said.

Economic activity in the 16-nation euro-currency zone expanded at an annualized rate of 1.5% in the period from July to September, according to calculations based on data from the European statistics agency Eurostat. Germany, Europe’s biggest economy, led the recovery, expanding at an annualized rate of 2.9%, thanks to strengthening exports and business investment.(By MARCUS WALKER and BRIAN BLACKSTONE, The Wall Street Journal, NOVEMBER 16, 2009)

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November 17, 2009 at 8:00 am

China: A Superpower Stirs

Now, at the dawn of the 21st century, the world is looking to China to assume an unfamiliar role of global leadership. At a time when American prestige is fading, China’s status is rising.

President Barack Obama arrives in China next week seeking help on everything from climate change to North Korea’s nuclear threat. At meetings of the Group of 20 nations, China’s opinions are urgently sought on issues such as banking reform and executive pay. Persuading China to take a lead will be a challenge.

History has done little to prepare this country for the kind of leadership that an anxious international community seems so ready to thrust on it. (By ANDREW BROWNE, The Wall Street Journal,NOVEMBER 13, 2009)

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November 16, 2009 at 11:06 am

The Global Innovation Migration

Research and development is increasingly going global, according to a new report by Duke’s Offshoring Research Network (ORN). More than half of U.S. companies now have corporatewide initiatives to outsource innovation activities, up from 22% in 2005, according to the ORN, which has been tracking the growth of outsourcing since 2004. And of those companies already offshoring development, 60% intend to do so more aggressively.

The days when you could trace development of the majority of the world’s innovative technologies back to U.S. labs are fading fast. Outsourcing of R&D is irreversible. Still, the U.S. retains key advantages and remains well-positioned to continue its technology leadership. But that can happen only if as a nation we recognize the changing role of R&D and refrain from wasting scarce resources trying to recapture a bygone era. Mandating that R&D traditionally performed in the U.S. should stay in America would tie the hands of companies at precisely the time they need flexibility to compete against up-and-coming foreign competitors. (By Vivek Wadhwa, BusinessWeek, November 9, 2009)

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November 13, 2009 at 10:34 am

Japan: The Land of the Rising CDS

Canary in the coal mine? The cost of insuring Japanese government bonds against default has doubled to 0.75 percentage point in the past three months, as markets fret about debt issuance. Credit risk is assuming ever-greater stature in government-bond markets previously blithely assumed to be risk-free.

Japan’s debt problem is becoming urgent. It is grappling with issues other governments such as the U.S. and the U.K. will face, but is much further down the road already.

Its debt-to-gross-domestic-product ratio is set to rise to a staggering 227% in 2010, the International Monetary Fund forecasts, making it particularly exposed to any rise in market interest rates. Japan’s aging population is a crucial concern, driving a change from saving, much of which went into JGBs, to consuming.(By RICHARD BARLEY,The Wall Street Journal, NOVEMBER 11, 2009)

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November 12, 2009 at 11:42 am

Cheap and Trendy Gains as Luxury Fades in Japan

TOKYO—As major luxury brands in Japan delay store openings or quietly slink away from what was once their largest single market, two recent foreign entrants on the other end of the spectrum are aggressively plotting their expansion: Hennes & Mauritz and Forever 21.

Both Forever 21 and H&M are purveyors of “fast fashion”—their shops feature cheap, trendy clothes, with new items hitting the shop floor on a daily basis. In brand-obsessed Japan, the success of both stores underlines a deep shift in consumers’ mentality, as shoppers put value ahead of logos.

Privately owned Forever 21, which entered the market in April with a shop in Harajuku, is aiming to open two to three more stores in Japan over the next nine to 12 months, said Larry Meyer, its chief financial officer.(By MARIKO SANCHANTA,Wall Street Journal, NOVEMBER 10, 2009)

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November 10, 2009 at 10:12 am

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