China Economy Forum

[shuttler]

It is just insane!
Samsung who?
Apple who?

 

[BoQ77]

Shame on who? Domestic Chinese cars?

nothing to surprise, Japan export their cars for several years to USA ...

 

[Edison Chen]

nothing to surprise, Japan export their cars for several years to USA ...

Wrong, it's for several decades. They have factories in USA.

 

[cirr]

China’s Xiaomi Plans to Give the World iPhone Cool at Half the Price

By Bloomberg on 10:20 am Apr 09, 2014




Pedestrians use smartphones by the side of a road in Tokyo, on Wednesday, April 2, 2014. Xiaomi, a Chinese mobile-phone maker, is making inroads across Asia by selling smartphones at affordable prices. (Bloomberg Photo/Tomohiro Ohsumi)


As China’s Xiaomi Corporation began selling smartphones in Singapore this year, each batch sold out in just a few minutes. So when the company asked people on Facebook to spread the word that more phones would be available soon, one fan was having none of it.

“Spread the word so that my friend can compete with me to buy the phone in under 8 minutes?” wrote Zen Yeo, a 31-year-old documentary film director. “You must be kidding me.”

Such is the fervor for Xiaomi. Though the Beijing-based company is little known beyond Asia, it has become one of China’s top competitors in four years. Xiaomi’s appeal: It offers the technology and style of Apple or Samsung Electronics at less than half the cost.

Now founder Lei Jun, 44, is taking his formula abroad. He’s beginning in markets with Chinese populations like Singapore and has hired Google’s Hugo Barra to lead the effort. Lei’s goal is to boost sales fivefold to 100 million phones in 2015.

“We’re moving as fast as we can,” Barra said. “We’re working around the clock with our supplier and manufacturing partners to meet demand.”

Xiaomi reflects a shift in China’s economy, with technology companies gaining prominence to match state-owned enterprises in sectors like oil and coal. The country’s standouts include Internet portal Tencent Holdings, computer maker Lenovo Group and Alibaba Group Holding, the e-commerce company headed for a multibillion-dollar initial public offering.

Make people ‘scream’

Xiaomi is an example of a Chinese company succeeding through innovation and creativity, precisely the characteristics they’re supposed to have in short supply. The company’s phones run on Android, the operating system available free from Google and used by Samsung, among others. Lei makes his phones stand out through sleek design, software that anyone can customize and prices rivals won’t touch. He’s said that, more than revenue or profit, he wants to create products that make people “scream.”

Though the Singapore launch has been strong, the question for Lei is how well Xiaomi will translate in other new markets. Beyond China, his brand lacks the profile of BlackBerry and Nokia, never mind Apple or Samsung. The task is doubly complicated because Xiaomi’s secret to keeping prices low is that it doesn’t advertise and sells directly over the Web.

“If nobody knows about you, certainly they are not going to buy online,” said Jeongwen Chiang, chairman of the marketing department at China Europe International Business School in Shanghai. “There will be some difficulty to overcome.”

Market riptides

Lei founded two companies before he was 30, selling one to Amazon.com for $75 million and leading another, Kingsoft, to its initial public offering. He remains chairman of the Beijing-based developer of business and gaming software.

In Xiaomi, which means millet in Chinese, he has built a successful company even as the riptides of the mobile-phone market have battered former leaders such as Nokia, BlackBerry and Motorola Mobility. Xiaomi’s valuation hit $10 billion with a fundraising round in August, or double the value of Waterloo, Ontario-based BlackBerry now.

“They did the right thing at the right time,” said Sandy Shen, an analyst with Gartner. “Xiaomi addresses a segment that has been underserved by major brands, which craves the coolness of the latest technology at affordable prices.”

In expanding abroad, Lei is beginning in Southeast Asia, where the Chinese diaspora gives him a head start in name recognition. Xiaomi will begin selling phones in Malaysia in a few weeks, with Indonesia, Thailand and the Philippines following shortly, Barra said. The company is actively looking at India, Brazil and Mexico, too.

Production challenge

Xiaomi will continue to focus on Web sales as it expands abroad, though it may try new approaches in certain spots.

“We will continue to follow our model of online sales and mobile operator distribution while allowing ourselves to experiment with other channels where it makes sense to do so,” Barra said. “We are constantly trying new things at Xiaomi.”

Brydan Foo, a 23-year-old Singaporean student, tried for months to import a Xiaomi phone without any luck. When the company’s Redmi phone went on sale in February for S$169 ($135), he scrambled to buy one before it sold out.

“From last year, I started to notice this Xiaomi,” Foo said. “The main thing that got my attention was the price. There have been a lot of similar products in terms of quality and design at easily three times the price.”

One challenge is expanding production to meet demand. Like most other major mobile-phone makers these days, Xiaomi doesn’t make its own devices and relies on contract manufacturers, such as FIH Mobile and Inventec, to build them.

‘Thunderous army’

Xiaomi has to persuade suppliers of its prospects so they’ll invest in plants and machinery — and rapidly, given its growth. Xiaomi has boosted supply commitments 31-fold since November 2011 to 3.2 million devices a month as of December.

“We will continue to improve manufacturing capacity as we expand into more countries,” said Bin Lin, Xiaomi’s president and co-founder. Lei declined to discuss overseas expansion plans.

Xiaomi’s rise has been aided by Lei’s track record as one of China’s most active entrepreneurs for more than two decades. Lei, whose name can be translated as “Thunderous Army,” is one of the most popular figures on Chinese social media, with more than 8 million followers of his Sina Weibo microblogging page.

He isn’t as well-known beyond China as fellow technology pioneers, such as Alibaba’s Jack Ma and Baidu’s Robin Li. Unlike them, Xiaomi’s chief executive doesn’t speak English.

Lei has said he learned computer programming on the Apple II model in high school and considers its designer, Steve Wozniak, to be an early inspiration.

Joyo.com sale

After completing coursework at Wuhan University in two years, Lei helped found software maker Kingsoft in 1992. He served as chief executive from 1998 through 2007, during which time he oversaw the company’s expansion from office application software into Internet security and online games.

While running Kingsoft, Lei helped establish other Internet companies, including co-founding Joyo.com in 2000. Lei built Joyo.com into China’s largest online retailer of books, music and videos. Amazon bought the company in 2004 and it became the core of the Seattle-based company’s China operations.

That track record has made it easier for Lei to line up backers for Xiaomi, said Richard Liu, managing director of Morningside Venture Capital. Morningside is the earliest and single-largest external investor in Xiaomi, Liu said, without supplying the value of the investment or size of the stake.

“Lei is very capable so, no matter what he wants to do, he has a high chance to be successful,” said Liu, who has known Lei since 2003. “He’s a world-class entrepreneur with vision, leadership and ambition to really build up a global company.”

Xiaomi fundraising

Xiaomi initially raised $131 million from backers including Singapore’s Temasek Holdings, Qiming Venture Partners, Qualcomm Ventures, IDG Capital and Morningside. Its fundraising valuation in August puts it close to the almost $12 billion market value of Lenovo Group, the Beijing-based computer and smartphone maker that’s been around since 1984.

“Xiaomi is going to be a huge company,” said Hans Tung, one of its earliest investors and a board member from 2010 to 2013. “They don’t have any immediate plans for developed markets like the US. Instead, they are trying to be big in Southeast Asia, India and Latin America.”

Xiaomi’s rise is all the more dramatic because it comes as hardware companies everywhere have struggled. Personal-computer makers like Dell have floundered as PCs became commoditized, and mobile-phone makers have gone through a brutal shakeout. Even Samsung, the world’s largest smartphone maker, has posted two straight declines in quarterly profit.

China’s rise

China has been a fortuitous base. The wireless market has exploded to become the largest in the world, with 1.25 billion users now compared with 647.7 million in March 2009.

That’s bolstered the fortunes of Chinese phonemakers, from Xiaomi and Lenovo to Huawei Technologies and Coolpad Group. Huawei and Lenovo were among the top five smartphone vendors worldwide last year, shipping a combined 94.3 million units, according to researcher International Data Corporation. Global shipments surpassed 1 billion units for the first time.

Xiaomi captured 7 percent of the China market in the fourth quarter, ranking just ahead of Apple, according to researcher Canalys. Lenovo, Coolpad and Huawei also sold more than Apple, often with devices costing as little as $100.

Social media

Xiaomi has distinguished itself through its approach to social media and marketing over the Internet. Lei pushed the strategy early on, and his status as a tech industry celebrity helped him draw attention. In addition to his personal followers, the company’s Weibo microblogging account is tracked by more than 8.5 million followers.

The company caters to these hardcore fans, who support the brand by word of mouth and make up for the lack of advertising. Xiaomi’s website lets customers give input on product plans through the company’s blog and interact through discussion groups. To celebrate the company’s fourth anniversary this month, Lei declared a “Fan Festival” online shopping event with discounts and coupons. Lei autographed invoices for some buyers.

Apple is getting more aggressive on Xiaomi’s home turf. It just cut a deal to sell phones through China Mobile, the world’s largest carrier, after only being available on two smaller operators. China Mobile will expand iPhone sales to more than 300 cities by year’s end from 16 in January, chief executive Tim Cook said on a Jan. 27 conference call.

Xiaomi vs. Apple

In China and beyond, Apple may struggle with customers looking at specs, rather than brands. Compared with the iPhone 5c, for example, Xiaomi’s Mi3 has a larger, sharper screen; a camera with higher-density pixels; and speedy quadcore processors from Nvidia or Qualcomm. The Mi3 sells for 1,999 yuan without a contract, compared with 4,488 yuan for the Apple device.

“From the standpoint of processor, screen size and camera, it is superior to the iPhone,” said Jessica Kwee, a Singapore-based analyst with Canalys. Carolyn Wu, a Beijing-based Apple spokeswoman, declined to comment on competition with Xiaomi.

Lei and Xiaomi have been described as China’s answer to Jobs and Apple because of the obvious similarities. Both companies make smartphones and their physical designs are similar — rectangles with rounded edges and touch screens. Lei also favors jeans and black shirts, like the Apple co-founder.

Not Apple

Still, the tactics and strategies are very different. While Apple engineers are famous for secretly concocting new products at the Cupertino, California, headquarters and then presenting them as gifts from the heavens, Xiaomi solicits customer input and incorporates their thoughts. The Chinese company also lets people modify their phones’ software and swap out batteries or SIM cards. Apple doesn’t even let customers touch the iPhone’s battery — and got sued because of it.

Pricing is a reflection of deeper differences. Apple positions its phones at the top of the market — premium products that people should pay up for. Lei has said that Xiaomi is more like Amazon than Apple in that respect. It sells products as close to cost as it can — making money on content and services.

The question is whether that approach will work overseas, in markets with lots of cheap phones and where Xiaomi hasn’t built up brand-name appeal. It likely will become more difficult as the company moves beyond countries like Taiwan and Singapore where Chinese speakers are familiar with the upstart.

“In a mobile-phone landscape, Xiaomi’s rise to prominence is not an everyday occurrence,” said Melissa Chau, senior research manager for client devices at IDC Asia/Pacific in Singapore. “Whether they can rise to the next big milestone of becoming a global player is their next big challenge.”

Bloomberg

China’s Xiaomi Plans to Give the World iPhone Cool at Half the Price - The Jakarta Globe

 

[cirr]

Hunan reactor ready to resume construction
Last Updated: 2014-04-08
China Daily

The Taohuajiang Nuclear Power Plant in Hunan province is likely to become the first nuclear
power plant project that will be built in China's inland areas. Liu Gang / For China Daily

Taohuajiang would be 1st inland nuclear plant in China. A nuclear power plant in central China's Hunan province is set to resume construction, Xinhua News Agency reported on Saturday. The Taohuajiang power station likely will become the first nuclear project to be built in an inland area after Beijing suspended the approval of new nuclear power projects due to the Fukushima nuclear power plant disaster in Japan in 2011. Two other inland projects - the Pengze nuclear power plant in Jiangxi and the Dafan plant in Hubei - are still under suspension. The report said the plant is ready for construction, the preliminary engineering and necessary documents having been completed. But China National Nuclear Corp, the parent company of the project, said on its website that some advocacy work is still being carried out in Hunan and that the documents required for the project are currently being prepared.

Zhang Yongxiang, an expert in geology and mini ng for CNNC's Hunan subsidiary, said the province is short of energy and relies largely on resources from other provinces. Nuclear power generation, he said, can help meet the demand for energy. "Inland nuclear power plants provide a good way to ease the reliance on coal consumption," he said. "Apparently, the present capacity of nuclear plants in coastal regions cannot support the local economy and the scale of development planned for the country's energy consumption."

In 2012, China's State Council issued a notice, saying that China would approve a small number of nuclear projects along its coast if still needed by 2015 but would not construct any nuclear projects in inland regions. But as China's worsening air pollution continues to exact a significant economic toll, the country is pressing ahead with more nuclear projects, as noted in Premier Li Keqiang's government work report, which stressed the need to combat air pollution. He Zuoxiu, a leading theoretical physicist and among the scientists who designed China's first hydrogen bomb, had previously expressed concern over the plan to develop nuclear power stations in inland regions. He said even though plants in inland and coastal areas have the same safety standards, there needs to be a stricter requirement on pollutant discharges and radioactive effluents with low radiation.

Wang Yumin, deputy director of the National Energy Administration, said earlier last month that inland projects, which have been listed in the next five-year plan, will start after the nuclear plant projects are completed along the coast. Local citizens oppose such projects, he said, but utilizing third-generation technology can avoid Fukushima-like catastrophes. Wang said it takes time for the public to dispel doubts and that public information campaigns need to be undertaken.

By the end of 2013, China had a total of 17 nuclear power plants in operation, with a total installed capacity of 14.83 million kilowatts. The nation is building a further 31 reactors, accounting for about 40 percent of the world's nuclear power plants in current construction, according to the National Energy Administration.

Location of initial inland nuclear power plants

 

[Fukuoka]

BBC News - Chinese exports and imports fall sharply in March

 

[Fukuoka]

BBC News - Chinese exports and imports fall sharply in March

 

[cnleio]

Never always 10% or 8% increase, 7% or 6% is normal.

One percent of 100 trillion == still lots of money.

 

[Viet]

that is not a good sign. I am very concerned. seems China economic miracle is coming to the end.

soon millions of Chinese will lose their jobs and houses. CCP should brace for protests among their unhappy citizens. revolts may emerge in Chinese cities. hope that won´t be a Chinese spring.

good for the neighbors of China. the bullying may stop

but we will see whether thousands of Chinese refugees come again and knock on Vietnam door as they did after the collapse of the Ming dynasty. I have to tell that hostile Chinese posters against Vietnam here are not qualified for asylum

 

[cnleio]

that is not a good sign. I am very concerned. seems China economic miracle is coming to the end.

soon millions of Chinese will lose their jobs and houses. CCP should brace for protests among their unhappy citizens. revolts may emerge in Chinese cities. hope that won´t be a Chinese spring.

good for the neighbors of China. the bullying may stop

but we will see whether thousands of Chinese refugees come again and knock on Vietnam door as they did after the collapse of the Ming dynasty. I have to tell that hostile Chinese posters against Vietnam here are not qualified for asylum

Is that Vietnam version "The Collapse of China" or “Threat from China” theory ???

 

[atatwolf]

The writing is on the wall

that is not a good sign. I am very concerned. seems China economic miracle is coming to the end.

soon millions of Chinese will lose their jobs and houses. CCP should brace for protests among their unhappy citizens. revolts may emerge in Chinese cities. hope that won´t be a Chinese spring.

good for the neighbors of China. the bullying may stop

but we will see whether thousands of Chinese refugees come again and knock on Vietnam door as they did after the collapse of the Ming dynasty. I have to tell that hostile Chinese posters against Vietnam here are not qualified for asylum

No, like Chinese members say all the time, they will focus on their national economy because their citizens have buying power

 

[Sourya Kharb]

Sad news for China
But India Export rise 3.8 percent

 

[Viet]

Is that Vietnam version "The Collapse of China" or “Threat from China” theory ???

the first one, the coming collapse of China. Vietnam export outperforms China.

 

[cnleio]

the first one, the coming collapse of China. Vietnam export outperforms China.

But the export growth 15% of 10billion vs 5% of 10trillion is completely different. Most West developed nations they only 1%-2% growth, Does it mean Vietnam export stronger than them ?

 

[armchairPrivate]

Good News!!
That means China's economy is switching gear. It's one notch down, more torque, less speed.