US companies in China are taking a cautious view of the new Chinese leadership, hoping a key Chinese Communist Party (CCP) meeting in November will clear up the outlook for economic reform.
Representatives of the American Chamber of Commerce in China (AmCham Shanghai), visiting Washington last week, said that Chinese President Xi Jinping (習近平) had indicated plans to further open up the economy.
However, it was unclear whether he had all the control levers at his command less than a year after taking power, they said.
Xi, who became head of the CCP last November, has shown he will take “a more pro-market approach than his predecessor [Hu Jintao (胡錦濤)],” Kenneth Jarrett, president of AmCham Shanghai, said.
However, businesses were waiting to see what comes out of a key meeting of the CCP leadership in November.
The meeting — known as the third plenum — traditionally is used to unveil political and economic reforms.
The plenum could be an “opening salvo” on Chinese reforms, Jarrett said.
The AmCham Shanghai delegation was in the US capital for their annual “doorknock” talks with top officials in US President Barack Obama’s administration, lawmakers and members of leading think tanks, pushing for a stronger US-China economic and trade relationship.
Jarrett said that China has only provided “sketchy” details on the planned free-trade zone (FTZ) in Shanghai announced early this month.
The FTZ could be a “pilot project” for financial and economic reforms, he said.
Timothy Stratford, a member of the delegation, said the Shanghai FTZ could be used to test a lowering of barriers to US investment in China.
The relaunch of US-China negotiations on a Bilateral Investment Treaty (BIT) in July was an encouraging sign, the executives said.
The chamber estimates that a successful conclusion of the BIT could open more than 100 Chinese industries to US investment.
The benefit would be shared, fostering badly needed US job growth as the economy recovers from the Great Recession.
China already is the fastest-growing source of foreign direct investment into the US, up an annual average rate of 71 percent from 2008 to last year, according to the US government.
The BIT could even pave the way for China to join the US-led initiative to create an Asia-Pacific free-trade area, the business leaders said.
China’s new leadership appeared to have made a remarkable U-turn on the Trans-Pacific Partnership (TPP), said Stratford, a managing partner of law firm Covington and Burling and a former assistant US trade representative.
Just four months ago, Chinese officials called the US-led TPP initiative “insidious containment,” he said.
“Now we’re hearing far more positive words,” he said.
AmCham Shanghai chairman Robert Theleen said that China’s income surge of more than 20 percent a year was more important than the country’s GDP growth, which has slowed modestly from a blistering pace a few years ago.
The robust Chinese income growth “is tied more and more to urbanization,” said Theleen, chairman and chief executive of ChinaVest, a Shanghai-based merchant bank he founded in 1982.
There are 170 cities with populations of 100 million or more, he said.
US businesses are pursuing “in-China, for-China” strategies, he said, producing locally and plowing back yuan investment into the world’s second-largest economy.
US businesses’ top concern is the increasing cost of doing business in China, according to AmCham Shanghai’s annual survey of members, which include 1,800 corporations and 4,000 individuals.
Chinese government corruption is the No. 2 concern, followed by worries about intellectual property rights.
Peter Sykes, president of Asia Pacific for Dow Chemical, said his company employs more than 500 scientists and researchers in China, the firm’s second-largest international market.
The creation of intellectual property there “balances the ledger,” he said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”