Linxco's blog

SHANGHAI BRIEFING
July 2006

News this month

Less for your money

Shanghai is now the world’s 20th most expensive city, according to a report published in June. The annual survey by Mercer, a consulting firm, measures expatriates' living costs in 144 cities by comparing the prices of over 200 items, including housing, transport, food, clothing, household goods and entertainment. This year the title of the world's most expensive city passed from Tokyo to Moscow, where there has been a property boom. Shanghai rose ten places on Mercer's list, up from 30th in 2005, though Beijing remains more expensive, in 14th place. A big reason for the rise in living costs in China's major cities is the yuan’s appreciation against the dollar.

Meanwhile in Mercer’s related quality-of-living survey—which weighs safety, stability and pollution, among other factors—Shanghai did not even break into the top 50. Zurich came first, ahead of Geneva.

For background see: Exercising its pricing power, June 22nd 2006

Coal seller

On June 23rd China’s second-largest coal producer, Datong Coal, became the first company in over a year to list on the Shanghai stock exchange. It was quite a debut: Datong’s stock soared 63% on the first day of trading, with investor interest stoked by China’s demand for coal. The country is the world’s second-largest consumer of energy after America, and coal supplies 70% of its energy needs.

The mainland’s stockmarkets in Shanghai and Shenzhen had been closed to new listings since May 2005, to allow time for shares previously owned by the state to be made tradable. Now that they have reopened, Datong’s listing is expected to be the first of many. The Bank of China, for example, will list on July 5th in Shanghai and is expected to raise $2.5 billion. The sale of its A shares (which remain off limits to most foreign investors) will be the largest listing in the 16-year history of the mainland markets. Other large Chinese corporations considering mainland listings are rumoured to include the country’s largest oil producer, PetroChina, and its biggest mobile-phone company, China Mobile.

For background see: Mercury rising, May 4th 2006

Also in the Shanghai guide Stylish The Hilton, Shanghai's first foreign-owned hotel, remains popular with Western and Japanese business travellers... Read more

Put to the sword

Wives have long devised ways to make their husbands do their bidding. But a technique recently used by a 25-year-old woman in Shanghai proved counter-productive: on June 19th Tang Xiaowan was charged with killing her husband after he refused to cook her dinner. According to police, Mrs Tang regularly forced her spouse of three years, Li Weidong, to do household chores at sword-point. On the day of Mr Li's death, Mrs Tang allegedly asked him to cook her dinner, and when he refused, claiming he would be late for work, she threatened him with the sword. Mrs Tang then supposedly slipped and stabbed her husband, puncturing his liver. Mr Li died later in hospital from blood loss.

A prosecutor with the Minhang District Prosecutors' Office reportedly said, “It is really rare that a family tragedy is caused by a high-maintenance wife”.

Bigfoot returns

Yao Ming, a basketball superstar, came home to Shanghai on June 21st to rest ahead of August’s World Championships in Japan. To the delight of fans, he looks set to play. The 7ft-6-inch (2.29 metres) tall Shanghainese, who plays for the Houston Rockets in America, broke his left foot in April and was not expected to play in the World Championships.

But Mr Yao's recovery has been faster than expected, and in mid-June he gave himself a 50-50 chance of making a full recovery before the championships. Now his doctor believes he will be healed by the start of August. The Chinese national team's coach, Jonas Kaslauskas, is hoping that Mr Yao will play in a warm-up match against America on August 10th. The team has set itself a formidable target of making the quarter-finals; it will be hard-pressed to do so without Mr Yao.

Doctor Love

China’s first government-certified training centre for matchmakers opened its doors in Shanghai on June 30th. Classes will range from the sociology of marriage to the administrative skills needed to run a company, with role-playing used to nurture matchmakers’ sensitivity to their clients' needs. Now all 94 matchmaking companies in Shanghai must ensure that at least four of their employees are certified. The courses, which last between 20 days and two months, are not cheap, with prices ranging from 1,700 yuan to 3,500 yuan ($212 to $438). China is expected to introduce national regulations for matchmaking companies within the year.

Posted by Kevin at 9:00 PM | Permalink | Comments  

Posted by Kevin at 8:57 AM | Permalink | Comments  

Outward bound
Jun 22nd 2006 | HONG KONG
From The Economist print edition


CHINA'S citizens do not only export goods; increasingly they export themselves. The concept of tourism—going abroad for pleasure rather than for business—is less than a decade old in China. Yet since the Chinese government sanctioned overseas leisure trips in 1997, tourism has grown hugely. Last year more than 31m Chinese travelled outside mainland China and the World Tourism Organisation expects this number to grow to 50m by 2010 and 100m by 2020. Across the world, hotels, shops, restaurants and travel agents are salivating at the prospect.

Which way to Galeries Lafayette?Although there is money to be made, profits will be harder to come by than the headline numbers suggest. For a start, of those 31m, some 21m only made it as far as Hong Kong and Macau. Half of the rest were “border tourists”, on day trips to Russia, Vietnam or Laos to trade or gamble in casinos, which are illegal in China. Only 5m-6m Chinese could be called international tourists and most chose Asian destinations such as Thailand and Malaysia. Just 1m visited Europe and only a handful made it to America and Canada, which still restrict Chinese visitors.

Nor are the Chinese likely to resemble the free-spending Japanese visitors who lifted global tourism revenues in the 1980s. Most first-time travellers from the mainland are deeply frugal. Typically, a Chinese tour group will choose the cheapest hotel—even if it is 50km (30 miles) outside a city—travel by bus and eat only Chinese food, says Wolfgang Georg Arlt, a professor of tourism at Stralsund University in Germany and author of a new book on China's outbound tourism. They visit only the most famous attractions and even these often get only a cursory glance.

Those who return for a second or third visit will often spend more. But return visitors will be a minority for a long time to come—and so posh hotels, resorts and restaurants will have to wait for their Chinese windfall. At a recent conference organised by the European Tour Operators' Association, hotel owners complained that the Chinese were pushing down room prices.

Hard beds and cold noodles

Chinese tourists are willing to put up with hard beds and cold noodles for a reason: they are champion shoppers who prefer to concentrate their spending on luxury branded goods, which are cheaper than back home and guaranteed not to be fakes. In 2005 they spent more on shopping, per day and per trip, than travellers from Europe, Japan or America.

The biggest winners of the Chinese tourist boom are therefore likely to be international retailers and luxury-goods manufacturers. In Germany the second most visited place by Chinese tourists after Berlin is Metzingen, a small town in the Black Forest unknown to most Germans, but home to a giant Hugo Boss discount store—since joined by another 20-odd factory outlets for designer labels. Big, diversified luxury-goods groups—including LVMH, Richemont and Swatch—which are present in duty-free outlets and big cities worldwide and have established brands in China itself, should also do well. Antoine Colonna, an analyst at Merrill Lynch in Paris, reckons that the Chinese account for around 11% of the €97 billion ($121 billion) annual revenues of the luxury-goods industry today and that this will rise to 24% by 2009, surpassing the Americans, Japanese and Europeans.

Those that do best, though, understand that Chinese shoppers can be tough customers, says Mr Arlt. “Compared with the Japanese, Chinese mainland tourists coming to Europe for the first time are ruder, louder and more demanding,” he says, citing a tendency to smoke under “no smoking” signs, haggle over prices and rip off packaging at the checkout to be sure that everything is in the box. “All that makes sense in China, but European salespeople think it is very rude,” says Mr Arlt.

A growing number of organisations are, however, more than happy to cater to the Chinese. Galeries Lafayette, a famous department store in Paris, celebrated China's “Year of the Dog” this February with decorations of red and gold pooches, New Year messages in Chinese wishing happiness, prosperity and longevity together with greeters fluent in Mandarin, a Sichuan restaurant and deep discounts on its designer goods. Small wonder, then, that the Chinese spend more in the shop than any other group of foreign visitors do.

Accor, a French hotel group, has adapted 56 hotels (the bulk are its mid-range Mercure and Novotel hotels) in Europe for Chinese tourists, offering noodles for breakfast, Chinese TV channels and Mandarin-speaking staff. Rosita Yiu, who oversees the effort, says Accor will open another 50 this year and perhaps 50 more next year.

Tourist authorities are also trying harder. Switzerland's has a website with local attractions explained in Mandarin. Berlin's city tourist authority has opened its own German-themed shops, partly aimed at the Chinese, and selling, among other things, cuckoo clocks and Swiss army knives—considered German by some in China.

Tactics like these will pay off as more Chinese travel. Mr Arlt estimates that by 2020 there will be 30m “genuine” international tourists from China. They will demand more sophisticated service and new experiences, and will also be increasingly willing to pay for them. Accor's Ms Yiu says that Chinese tourists making return trips to Europe want to stay in nicer, four- and five-star hotels. The western tourism industry will need to adapt quickly and intelligently to the demands of Chinese visitors—but the prize is huge for those who can manage it.

Posted by Kevin at 7:27 PM | Permalink | Comments  

Google's chinese name, guge. How can I express it in English? I translated it to "paddy as song", a awful translation with no meaning.

But I found a good one, much better than my alwful one. Gu means cereal or grain and also valley, and ge meas a song. Together, guge means "harvest song" or "song of the valley". As most of chinese people, I have no special feeling about this name. A very common name, isn't cool at all.

Technorati Tags: guge, google

Posted by Kevin at 9:18 AM | Permalink | Comments  

Posted by Kevin at 8:31 AM | Permalink | Comments  

Posted by Kevin at 7:54 AM | Permalink | Comments