Honeywell International Inc, the world's biggest maker of aircraft electronics, is relocating its eight top Asia-Pacific executives to Shanghai from Singapore, moving them closer to clients and factories in what's expected to be the world's biggest buyer of aircraft in the next 10 years.
"We decided that China is more important as the center of gravity for this region," said Francis Yuen, chairman and president of Honey-well China.
Like Siemens AG, Alcatel SA and Eastman Kodak Co, Honeywell wants its regional headquarters closer to factories where average wages are a tenth of that in Singapore and to markets where demand is spurred by 8 percent annual economic growth.
"Shanghai is the hot place right now amid the boom that's being experienced in China," said David Cohen, an economist with MMS International in Singapore.
Honeywell's relocation "certainly is not going to be the last one," he said.
About 80 multinational companies, or a third of those with headquarters in China, had regional head offices in Shanghai as of September, according to the Web site of the city's Foreign Investment Service Center.
Living and doing business in China isn't without drawbacks, including inadequate legal protections, a muzzled media, local Communist Party interference, corruption among corporate and government officials and capricious public policies.
Advanced Micro Devices Inc, the world's second-biggest maker of personal computer processors, and Siemens, Germany's largest electronics company, moved head offices to Shanghai from Hong Kong last year. Sora Enso Oyj, the world's biggest paper maker by capacity, and Fuji Xerox Co also have uprooted from Singapore.
For Honeywell, setting up a head office in Shanghai brings it closer to Shanghai Airlines Co and China Eastern Airlines Co, among the country's fastest-expanding carriers.
Chinese carriers are likely to expand their fleets with between 1,600 and 1,900 planes worth US$144 billion by 2020, according to forecasts by both Airbus SAS and Boeing Co.
Honeywell's aerospace division has four ventures in Xiamen, Shanghai, Shenzhen and Nanjing, employing more than 270 people.
Honeywell, which has US$500 million invested in China, said mainland sales last year accounted for US$575 million of US$2 billion in Asia-Pacific revenue and will top US$1 billion by 2005.
The company said its new head-quarters will be in the Zhangjiang industrial park in the Pudong district. The complex will include an US$18 million research and development center that can accommodate up to 1,000 engineers.
"We are constantly exploring opportunities to migrate manufacturing operations to those regions that are competitive," Yuen told reporters in Shanghai. "The new site will allow us to tap the vast pool of customers, suppliers, employees and partners in China."
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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