DANWEI - The Beijing municipal government has announced initiatives to install charge points for electric cars around the city and to promote electric vehicles for public transport and rental. At the same time, there has been a significant increase in negative media stories about foreign car brands, especially high-end brands. Coming shortly after a clampdown on military use of luxury autos and noises from the government about forcing officials to switch to domestic auto brands, we believe 2013 will be a challenging year for foreign players in China.
China faces a huge funding gap in pushing forward an urbanisation programme that may cost over Rmb50tn by 2020, Zheng Zhijie, president of the China Development Bank (CDB), the country’s top policy lender, has said. Mr Zheng, writing in a central bank journal, also suggested a thorough reform of China’s project financing methods so as to reduce financial risks. We think the proposed reforms represent a key strand in the Xi Jinping leadership’s vision of a “new-type” of urbanisation (Update Alert, May 16).
Home sales appear to have stabilised, suggesting that some buyers are returning to the market. The recovery may be derailed, however, by the continued strength in home prices, which could lead to further tightening measures being introduced.
Recent sluggish performance by mainland- and Hong Kong-listed department store operators is an indication that the era of strong-double-digit sales growth may be a thing of the past.
A wide range of retail and leisure services under one roof has enabled the aggressively expanding chain to emerge as the most popular shopping destination among Chinese consumers, according to our survey.
China’s fourth largest department store operator reported its weakest revenue growth for a decade last year, but its strong presence in inland cities leaves it well positioned to tap into growing demand in these less-competitive markets.
A successful rebranding programme has enabled New World to outperform its department store rivals in terms of sales growth, but its stores remain less productive, while the competitive threat posed by shopping malls remains significant.
China’s largest department store operator has struggled to adapt to shifting market dynamics and is losing popularity as a result, according to our survey.
Several factors combined suggest a positive outlook for China’s wheat imports in coming years.
Capital Intensive China
Chinese real estate developers are increasing their involvement in overseas markets.
New labourers take the stage
As China shifts to a growth pattern driven more by domestic spending, today’s 220m Chinese migrant workers are emerging as one of tomorrow’s most important consumer groups. We estimate that the total consumption of China’s 220m migrant workers reached Rmb4.2tn ($680bn) in 2012, 1.5 times the amount of household consumption expenditure in Indonesia in the same year.
The Bottom Line
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