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Coca Cola may be recognized around the world, but China has another product ready to battle for supremacy as a favourite beverage. Bottled, chilled herbal tea has become popular in China as a healthy alternative to sugar-laden sodas. The tea drinks are said to reduce "nei huo," or internal body heat, and are better at quenching thirst. Zhang Junxiu, director of the Guangdong Provincial Food and Drug Industry Association says overall production of bottled tea in China surpassed Coca Cola last year.
Now, beverage company Hutchison Whampoa Guangzhou Baiyunshan Chinese Medicine Co. has teamed up with a South African firm in a US$20-million deal to build a bottling plant in South Africa. It hopes to compete head to head with soft drink giants such as Coke and Pepsi. Another Guangdong tea bottler company is planning to set up plants in Brazil. Even gaming company The9 Ltd. has turned to a Chinese maker of beverages, Master Kong, to help promote its latest game. Its last promotional campaign for World of Warcraft was with Coke.
Process of accepting Chinese firms
Electronics and handset maker ZTE is already a significant player overseas and estimates 50% of its revenue came from overseas operations in 2006, up from 34% in 2005. In 2007 overseas revenue could be higher than Chinese revenue. "Our main trend is toward globalization, and China is only one part of that," said Lin Zao Ming, president of the company. "For consumers and governments in developed countries, there is a process of accepting Chinese firms," he said. "Those markets need to better understand we are there to serve consumers and we don't present a threat."
Doing business in China: Selected headlines
- China exported 340,000 motor vehicles valued at US$3.2 billion in 2006, up from 173,000 units in 2005. The average price of a Chinese vehicle was $9,400, 33% lower than Korea with average price of $12,200 per unit. The China unit of Honda exported 24,600 Jazz compact cars to Europe last year and plans to export 42,000 this year. It recently began selling MDX SUVs, built in Canada, in China. China exported 38,000 vehicles to Russia in 2006 and a total of US$460 million in automotive products.
- China is offering rebates of up to US$4,600 annually to foreign companies that hire disabled workers. China has more than 83 million people considered disabled with 22.7 million of them unemployed.
- Five foreign banks have received approval to trade on the Shanghai Gold Exchange. They are HSBC, Standard Chartered, Bank of Nova Scotia, UBS and Société Générale of France.
- Google Inc. of the U.S. has won preliminary approval for a content-provider licence in China. Competitor Baidu.com accounted for 57% of Internet search engine revenue in the first quarter in China, while Google held only 19%. Google plans to open an R&D centre and work with Sina Corp. on search services and advertising. Earlier this year, it bought a stake in Xunlei Network Technology Co.
- GlaxoSmithKline has launched its new research centre in Shanghai. It will conduct research related to multiple sclerosis, Parkinson's disease and Alzheimer's. GSK had 17 clinical studies in China in 2006. ValiRx of the U.K. plans to offers its oncology products in China in a deal with U.S. based Bridgetech Holdings.
- Power is now generated on both sides of the river in China's US$22.5-billion Three Gorges Project. The 14 turbines on the left bank of the Gorges began operating in September 2005 and there will be 12 turbines on the right bank. The project will produce 85 billion KW/hours of electricity annually when it is completed in 2008.
These articles and selected headlines are just some of the stories contained in the current issue.
Read the
complete July 2007 edition of Express China News for more news and information on doing business in China
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Express China News is a quarterly newsletter on current economic, business and regulatory developments in China.
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Express China News, July 2007
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