Walmart, the world’s largest retailer by sales, has invested in China’s largest e-commerce consumer electronics seller, 360buy.com, in a move that underlines the growing interest of global retailers in China’s rapidly growing online market.
The retailer was one of six investors in a round of funding that raised $500m for 360buy, whose rivals include Taobao, the dominant online marketplace owned by Alibaba.
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Walmart has about 300 stores in China. Its Sam’s Club discount warehouse business launched its own e-commerce business there in November, using a new global platform that it has built over the past two years.
The retailer has taken similar minority stakes with fledgling e-commerce businesses in the US that it has also worked with, including 1-800-Contacts, a contact lens retailer, and Green Dot, the web-based payments and financial company.
Tuesday, December 28, 2010
Walmart invests in China’s 360buy.com
Monday, November 29, 2010
Russia and China: A love affair fueled by oil and gas
Russia and China have enjoyed a close but lopsided economic relationship since the mid-2000s. Beijing sees its giant neighbor to the west rather as little more than a source of energy and other commodities to feed China's rapidly growing economy. The results of recent meetings between senior Russian officials and China's premier Wen Jiabao suggest that the relationship is unlikely to change anytime soon.
Oil, sweet oil
During his November 24 talks with Russian President Dmitry Medvedev, the Chinese premier announced that earlier in the day a total of 13 contracts were signed, worth $8.5 billion in total.
Prime Minister Vladimir Putin, who spoke with his Chinese counterpart ahead of the talks with Medvedev, said that over the year's first eight months, bilateral Russian-Chinese trade had grown by more than 57% on average, with an 83% increase in timber sales, 40% in electricity, and 30% in coal.
According to official statistics in China, exports of Chinese machinery and electronics to Russia grew over this same period by 96.6%. Russia also exports high-tech products into China, but most of them are related to the energy sector.
Energy has been, by far, the most prominent issue on the two countries' bilateral economic agenda in recent years. The most high-profile project is the Eastern Siberia-Pacific Ocean (ESPO) oil pipeline and its offshoot linking Russia's coastal town of Skovorodino and the Chinese border town of Mohe. Fuel prices and Russian gas deliveries to China are also high on the agenda.
Beijing is extremely interested in diversifying its energy imports. At the moment, its fuel needs are met mainly by imports from Gulf countries, such as Iran and Oman. This makes Chinese energy policy heavily dependent on U.S. and EU policies, hence China's heightened interest in the energy wealth of Russia and Kazakhstan.
The first bilateral memorandums on joint projects in the energy sector were signed in 2006, to be implemented over a period of 15 years. These projects will result in two gas pipelines, with a maximum annual capacity of 80 billion cubic meters (supply contracts are to be signed before mid-2011), as well as the already mentioned Skovorodino-Mohe offshoot and a joint venture to build an oil refinery and a gas station in China.
East vs. West on the gas market
Russia, long a purveyor of commodities for developed Western economies, is now playing that same role in the developing East. And the reality is that commodities will likely remain the only real driver of Russia's economic growth for some time to come. With this in mind, the diversification of its exports is becoming a matter of extreme importance.
The future of Western economies looks quite bleak now. Alarming signals are coming from China, too, but overall, its economy is posting high growth rates. Also, Russia could use other potential buyers as an additional bargaining chip in negotiations with its partners. In fact, Russian politicians declare every now and then that the country seeks to totally reorient its natural gas exports away from Europe toward China. This does not seem realistic at this point, as Gazprom is bound by long-term commitments to Western customers.
No longer the big brother
Back in the Soviet era, the Chinese looked up to Russia as a big brother figure, who would introduce them to modern industrial technology. Now, fifty years on, the roles have been reversed, and Russia is looking to China for help in its bid to overcome its technological backwardness. Russia hopes this help will come in the form of Chinese investment in Russia's industrial sector. Investors from the "Middle Country," as China calls itself, are willing to invest in Russia, but they insist on terms that are unlikely to promote any meaningful transfer of high technology.
Last fall, Russia and China adopted a strategic program for bilateral cooperation through the year 2018. This program includes 205 large-scale collaborative projects, and most of these will involve the joint development and production of oil, gas and mineral deposits in Russia, with processing to take place on Chinese soil.
Beijing's logic is simple and clear. Such projects will enable it to solve two problems at once - gaining long-coveted access to the mineral wealth of Russia's Far East and Siberia while also reducing the demographic strain inside China.
Small wonder, then, that Chinese partners always insist on using their own workforce at enterprises and construction sites set up in cooperation with Russia. Many of these projects are now being carried out in Russia's Far East, and locals watching Chinese migrant workers at work are often heard to remark, "They're building great things...for themselves."
The views expressed in this article are the author's and do not necessarily represent those of RIA Novosti.
Press:China May Set 4% CPI Target In 2011; Set Prudent MonPol
BEIJING (MNI) - China is likely to raise its inflation target for 2011 to 4%, the China Business News reported Wednesday, citing an unidentified source.
Moreover, the government will pursue a "prudent" monetary policy, formally moving away from the "appropriately loose" policy adopted in late 2008 in reaction to the global financial crisis, the paper also said.
The inflation target is usually announced at the National People's Congress in every March, when other macroeconomic targets, such as GDP employment. and balance of payments are also released.
"The inflation target for 2011 is under discussion and is likely to be raised, but how much will depend on the consumer price performance in future months," the source told the paper, "4% is very likely to be proposed."
China's consumer price index rose to 4.4% in October, well above the government's 3% inflation target set for this year.
Wednesday, October 27, 2010
China Faces Challenge in Defending Export Limits on Rare-Earth Resources
China may be vulnerable in seeking to defend its restraints on the export of rare earths or other commodities because of conditions it accepted when joining the World Trade Organization in 2001, a former WTO judge said.
While the trade arbiter’s rules let nations tax exports and safeguard natural resources, China signed pledges that it would only tax or limit exports from a list of specific raw materials, said James Bacchus, a lawyer at Greenberg Traurig LLP in Washington. WTO rules prohibit export quotas, he said.
“What makes China vulnerable is the accession agreement it signed” to join the WTO, Bacchus, who was chairman of the WTO’s appellate body, told reporters today at a conference on rare earths in Washington.
China, the source of more than 90 percent of the world’s rare earths used to make disk drives, wind turbines and smart bombs, announced cuts in production in July, prompting calls from Germany, Japan and the U.S. to restore exports.
A separate case the U.S. filed against China on its limits to the export of raw materials used in steel production may set the legal precedent for a complaint on rare earths.
China official sees room for U.S. trade target: FT
HONG KONG (MarketWatch) -- China and the U.S. have the basis for a pact setting specific targets to cut their trade imbalance at next month's Group of 20 nations summit, according to a senior adviser to the Chinese central bank quoted in a Financial Times report Wednesday. "China should not be afraid of numerical targets for reducing its trade surplus," said Li Daokui, a member of the People's Bank of China's monetary policy committee, according to the report. "China is well positioned politically and economically to make this adjustment." Li's comment came after PBOC Deputy Gov. Yi Gang was quoted as saying in media reports earlier this month that China planned to cut its current-account surplus to 4% of its gross domestic product in the next three to five years. In 2009, China's current-account surplus fell to 5.8% of its GDP, down from 9.4% in 2008, as the nation's exports fell and on strong imports.
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