We have already had revised GDP figures, but they are not alone. The latest revisions relate to the government’s energy intensity targets. “Creative accounting” or not, it is clear that this is a political priority. As a result businesses should watch the associated risks, and align with the policy to benefit from the opportunities.
The stats don’t stop there, as the first half figures were also published last week. China grew 11.1% in the first half, but slowed to 10.3% in the second quarter, as cooling measures kicked in. Inflation also dropped to 2.9% in June – just below the 3% target – but will remain a risky issue.
Overseas Direct Investment (ODI) had another high-profile week, including approval for a Shell-PetroChina bid for Arrow, along with more investment (again minority) in Africa, and US$10 billion in to Argentina’s railways.
Foreign Direct Investment figures were also prominent, with US$12.5 billion recorded in June, 36% up from May. For the first half the total was US$51.4 billion, up 19.6% from the same period last year, and suggesting some optimism (and perhaps a desire to localize for market access and some money seeking RMB appreciation).
Premier Wen Jiabao was quick to leverage the FDI data, and to claim it shows that complaints over China business environment are misplaced: “There is an allegation that China’s investment environment is worsening…”I think it is untrue”. Others, of course may beg to differ. But it should not be a surprise that different businesses in different sectors may face different conditions. As usual in China, there are shades of grey.
Even outspoken GE (see here ) has had some positive news, with a high-tech contract award for supply to Chinese aircraft maker COMAC (via one of their Chinese joint ventures), as well as news that it will help import Chinese high-speed trains to the US.
On the other hand. Google still struggles – though they could have been even worse off than they are – and changes to local (twitter-like) micro blogs have raised new concerns over censorship.
Another common gripe is over protection of intellectual property (IP). But again, it is not all bad news – especially when the China Law Blog tells us that much can be done to avoid problems with “no lawyer required! Be sure to check out the top IP tips from Dan Harris.
Some other companies, operating away from sensitive social networks, and outside the restrictions of indigenous innovation are doing good business. Jing Daily reports that L’Oreal expects China to become its third largest market this year, with over 5% of its global sales, and growth of 17.7%.
The consumer market is an obvious focal point for foreign firms, like L’Oreal, seeking to benefit from China’s growth, as well as its economic rebalancing and promotion of domestic consumption. While we have covered the millionaires, middle classes, workers on these pages before, this time we highlight the demographic shift (as pointed out in a Reuters article on ChinaInfoSeek): “The proportion of people aged 60 and above in China rose at the fastest clip in history last year…and they now represent more than 12 percent of the population”. Yet another challenge for business and government. And more shades of grey…
See the news links, and original tweets here:
1. More re-stated stats (for energy intensity) RT @BeyondBrics: Chinese energy use: a sudden revision in the numbers http://bit.ly/bk7W6L 
2. GDP RT @MalcolmMoore: RT @shanghaidaily: China’s economy expanded by 11.1% year-on-year in the first half of 2010. http://xpo.sh/103 ” (also see: 10.3% in Q2 RT @ChinaRealTime: Economist reactions to China’s 2Q GDP… http://tinyurl.com/2aweqew “Fears of China’s slowdown are overstated Down from 3.1% in May; RT @leonacraig: #China CPI up 2.9% in June http://bit.ly/bzFyva 
3. More (joint) ODI, supply RT @chinaeconreview: Regulators approve Shell and PetroChina for Arrow bid http://dlvr.it/2c5fC (see also: Interesting to note the Shandong Iron & Steel ODI in Sierra Leone (re last tweet) is another one with a minority stake, long-term supply; ODI resources RT @chinaeconreview: Shandong Iron and Steel pays US$1.5 billion for stake in African Minerals project http://dlvr.it/2c7g5 ; Fast track ODI RT @BullishChina: China to invest $10B in Argentina’s railways – AP – msnbc.com http://sns.ly/89j43 )
4. FDI US$51.4bn in H1 RT @chinaeconreview: FDI rises to $12.5b in June http://dlvr.it/2gv5Z (see also: FDI / market access RT @chinahearsay: China defends record on foreign investment http://is.gd/dwsBE )
5. RT @DealZone: GE, Eaton among suppliers for China jet http://link.reuters.com/buc27m (see also: The (GE) plot thickens… RT @newschina: GE to Import Chinese High-Speed Trains to US…talks with China’s [MoR] http://bit.ly/aqhdoU )
6. Facing a draw RT @KaiserKuo: Excellent piece by @pdenlinger Who Won in Google’s Showdown with China…smart, sober view http://ow.ly/2ceIy 
7. RT @CDT: China’s Microblogs Facing New Restrictions: Cara Anna of the Associate Press reports… http://bit.ly/9qGZiJ 
8. RT @BlawgTweets: New @DanHarris: Six Ways To Protect Your China IP. No Lawyer Required. http://bit.ly/dneJrY 
9. China >5%+ global sales; 17.7% growth RT @JingDaily: L’Oreal Expects China To Become Third-Largest Market This Year http://is.gd/dqBv8 (see also: Different perspectives on FDI & business environment RT @BeyondBrics: Thai group thinks big in China http://bit.ly/9gjt7G )
10. 12.5% over 60 RT @InfoseekChina: China’s population aging at fastest clip ever http://bit.ly/cReqsq