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01 November 2012

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Macro View

Gentle rebound

The Big Call

China’s investment engines churn again

Grassroots evidence in seven provinces shows that China’s fixed asset investment engines are starting to rev up. 

Consumer China

Cafés and bakeries – realising the potential

Domestic and multinational café and bakery chains are scrambling to tap into the vast potential of the Chinese market, but increased competition means that some are finding the going tougher than expected

Starbucks – winning the popularity contest

Its large store count, rapid expansion and concerted efforts to build up customer loyalty have enabled Starbucks to become the most popular café and bakery chain in China, according to our survey data.

Gourmet Master – aggressive expansion boosting sales

The Taiwanese bakery and coffee chain’s strong competitive advantages mean that its inland expansion efforts should prove successful despite slowing same-store sales in its core Shanghai market.

Holiland – no IPO plans for bakery market leader

Holiland’s strength in lower-tier markets has enabled it to build up strong popularity and sizeable revenues, but despite rumoured investor interest, it is not seeking an IPO or external investment in the near future.

Christine – disappointing post-IPO results, gloomy outlook

The Hong Kong-listed bakery chain reported disappointing 1H12 results and looks set to continue to struggle due to intensifying competition in its core Shanghai market.

Breadtalk – high-end popularity driving growth

The Singaporean chain is hoping that its high-end positioning and broad geographic scope can drive continued growth in China’s increasingly crowded bakery market.

Costa Coffee – playing catch-up in China

Whitbread is planning rapid expansion of its Costa Coffee chain in China, but its popularity continues to lag well behind market leaders Starbucks and McCafe, according to our survey data.

McCafé – a double advantage for McDonald’s

The roll-out of McCafé outlets within existing McDonald’s stores in China is helping the fast-food giant to expand its product portfolio while also tapping into growing demand for coffee.

Financial China

Infrastructure funding stays in the shadows

Trust funding remains a vital source of financing for some Chinese infrastructure projects, suggesting that this sector has not benefited from the country’s looser monetary environment.

Selected financial charts

A selection of key financial data over the past fortnight

Capital Intensive China

Real estate funding chill abates

Real estate developers’ access to funding is improving, with the domestic banking sector and Hong Kong bond market providing easier and cheaper financing.

Forbidden City

Focus on reform

On the eve of the 18th Party Congress, a broad consensus is forming at policy advisor level for accelerated reforms.

Best of Chinese Commentators

US-China ties under the spotlight

As Barack Obama and Mitt Romney stake out their claims to be the next American president, the country’s relationship with China has come under the spotlight. How the new administration will handle business disputes, ranging from intellectual property rights, currency and exports, has been central in the run-up to the elections. But China is also gearing up for a leadership transition, with the 18th Party Congress scheduled to start on November 8. This has also raised questions as to how China’s new leaders will deal with a shifting geo-political environment.

Consumer spending takes over as driver of GDP growth

Consumer spending in China was the biggest contributor to growth in economic output in the first three quarters of this year. Domestic consumption accounted for 55% of China’s GDP growth during the first nine months of the year, surpassing that of investment, which took only 50.5%. Net exports of goods and services subtracted 5.5% from growth. Revised 2011 GDP figures from China’s National Bureau of Statistics (NBS) suggest that, contrary to the initial data release, consumption also took the largest share of GDP growth in 2011. According to the latest data published by NBS, consumption accounted for 55.5% of GDP growth last year. Investment took just 48.8% of total growth. This data has led many commentators to rethink the importance of domestic consumption to China’s economy.  


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