By Hu Yuanyuan (China Daily) – BEIJING – China’s property market has seen soaring investment from foreign institutional investors, driven by strong expectations of renminbi appreciation this year.

According to international real estate advisor CB Richard Ellis, the value of en bloc property transactions in 15 Chinese cities has hit 49.9 billion yuan ($7.36 billion) in the first-half of this year, among which 19.4 billion yuan came from foreign institutional investors, 10.2 billion yuan from Hong Kong, Taiwan and Macao, and the remaining 20.3 billion yuan from mainland investors.

Total investments in the first six months of this year were almost five-fold of those from the same period of last year.

“Affected by the financial crisis, foreign investors were inactive last year and domestic investors dominated the market. But due to better liquidity and expectations of renminbi appreciation, the situation is just the opposite this year,” said Danny Ma, senior director of CB Richard Ellis Research China.

Industry experts say the renminbi will probably appreciated 3 percent this year.

LaSalle Investment Management, a US-based real estate fund, for instance, has been actively seeking opportunities in China, particularly in second-tier cities. Though the fund raised $2 billion last year, it made no investments at all in 2009. But top management said that they will definitely reach a deal in China this year.

“We are now in talks with several projects in the commercial and industrial sectors,” Eric Au, China director of LaSalle told China Daily on Thursday.

For Matt Brailsford, Deputy Managing Director of Savills Beijing, their foreign clients have shown much stronger interest in investing in China’s properties, mainly in the office and retail sector.

“But there is no big increase of new faces in market, most of them remain those from Hong Kong and the United States,” said Brailsford. – read more at ChinaDaily.com…

By Wang Xiaotian (China Daily) – LEIPZIG, Germany – DHL Express, the express arm of Deutsche Post DHL, will continue to expand in China, but in a careful and cautious way, according to Charlie Dobbie, executive vice-president for network operations.

Dobbie told China Daily that DHL Express will continue to build on its partnership with State-owned logistics company Sinotrans Group and channel more investment into the service sector in China.

DHL entered China by setting up a 50-50 joint venture with Sinotrans in 1986. The DHL-Sinotrans joint venture acquired Shanghai Quanyi Express Co Ltd in 2008 to further develop its domestic network.

“The move into the domestic arena was a logical step given the size and future of the market. We have a strong local partnership, and that model has given us the confidence to succeed in China,” said Dobbie.

DHL Express will focus on the quality of service and work on growing its existing business, before considering more domestic acquisitions. – read more at ChinaDaily.com…

ChinaRetailNews.com – American clothing retailer Gap Inc. has unveiled details of its entry into China with plans to open Gap stores in Beijing and Shanghai in late 2010, and simultaneously bring an online shopping experience to all Chinese consumers.

The first four Gap stores will feature a full range of Gap adult, GapKids and babyGap product, including all styles of the brand’s stylish and fashionable 1969 Premium Jeans. This announcement marks the start of a long-term, multi-channel consumer market entry strategy for Gap Inc. that involves more stores in major regions, including Hong Kong, in the coming year.

In Shanghai, a 1,796 square meter Gap flagship will be located on the premier Nanjing West Road, occupying two floors in the Venture Tech building. It will be followed by another 1,140 square meter flagship located on Mid Huaihai Road, one of Shanghai’s top high streets. In Beijing, a 1,165 square meter flagship store will span two floors in the APM building on Wanfujing Street; another 1,800 square meter store will be opened in Chaobei Joy City, a large scale regional shopping center.

As part of its multi-channel entry strategy, Gap Inc. has partnered with Shanghai Yi Shang Network Information Company. The online shopping site will give consumers throughout the country the opportunity to shop for Gap products whenever and wherever they want. – read more at ChinaRetailNews.com

(Xinhua) – HONG KONG – Air China, China’s leading carrier listed in Hong Kong, said late Friday that it would pay $1.398 billion to buy 20 Boeing 737-800 planes.

In a statement filed to the Hong Kong stock exchange, the carrier said the cost would be “payable by cash in installments” and it would “take delivery of the Boeing Aircraft in stages from 2013 to 2015.”

“The aircraft price is subject to price escalation by applying a formula. Boeing Company has granted to the Company (Air China) significant price concessions with regard to the Boeing Aircraft,” said the statement.

The transaction will be funded through cash generated from Air China’s business operations, commercial bank loans and other financing instruments of Air China, said the statement.

The Beijing-based airlines said the transaction would expand its fleet capacity with an increase of around 5 percent based on available tonne kilometers of Air China by the end of 2009.

In particular, the deal would reinforce Air China’s market share in the Chinese domestic market, and would also increase frequency of flights for a number of domestic and neighboring international routes, it added. – read more at ChinaDaily.com…

(Xinhua) – SHENYANG: Representatives of US fast-food chain KFC in northeast China’s Shenyang city Thursday signed the company’s first collective labor contract on the Chinese mainland, agreeing to raise workers’ wages and meeting the demands of a local trade union.

According to the agreement, the company’s roughly 2,000 employees will enjoy a minimum monthly wage of 900 yuan ($131.7) – up from the company’s previous offer of 700 yuan per month – and an annual five percent pay raise.

An executive with Yum! Brands Inc in Shenyang said on the condition of anonymity the agreement is the company’s first collective labor contract on the Chinese mainland.

He admitted the company had been under pressure after media reports of the negotiations with the local trade union.

Yum! Brands Inc in Shenyang manages 57 KFC outlets and 11 Pizza Hut restaurants. The company is known by locals as KFC Shenyang.

The company said in a statement earlier this month most of its employees in Shenyang already have monthly wages of over 900 yuan, and so the signing of the contract “would not necessarily mean workers’ pay would immediately rise.” – read more at ChinaDaily.com…

The JW Marriott hotel, Beijing

By Jing Jin (China Daily) – SHANGHAI – Marriott International Inc, the largest US hotel chain, plans to double its hotels in China in the next five years, taking advantage of an expected jump in domestic tourism as the world’s third-largest economy expands.

China is expected to be the world’s single largest source of international tourism and will become the biggest travel destination over the next 10 years, JW Marriott Jr, chairman and chief executive officer of Marriott, said in a statement released at a media briefing in Shanghai.

“It’s growing very quickly,” Arne Sorenson, Marriott president and chief operating officer, said at the briefing at the World Expo in Shanghai. “By the end of this year, revenue in same store hotels is expected to grow over 20 percent in China.”

Marriott, based in Bethesda, Maryland, expects to have up to 90 hotels in China by 2015, up from 46, the company said.

China is Marriott’s largest market outside North America, with sales from the nation of 1.4 billion people accounting for less than 10 percent of revenue.

China’s economy grew 11.9 percent in the first quarter from a year earlier, the fastest pace in almost three years.

More than 4 million visitors, an average of 200,000 a day, have entered Shanghai’s $44 billion World Expo park since its May 1 opening.

Hotel and tourism stocks are likely to extend gains this year as a jump in visitors during the World Expo may increase earnings by 20 percent, Guotai Junan Securities Co said last month.

Home Inns & Hotels Management Inc, China’s second-biggest budget hotel operator, said in March that the World Expo will boost room rates by as much as 20 percent, and it’s adding 38 percent more hotels nationwide. …read more at ChinaDaily.com…

Boeing's new 787 will be a big seller in China

CHICAGO (Xinhua): China will continue to be both major market and partner to the United States, supporting thousands of US jobs and contributing significantly to the US balance of trade, said CEO of a Fortune 100 company in Chicago on Wednesday.

James McNerney Jr, chairman, president and CEO of the Boeing company, made the statement at a luncheon organized by The Chicago Council On Global Affairs as part of its Corporate Program: Focus on China.

McNerney started his speech by commending Secretary of State Hilary Clinton and Treasury Secretary Tim Geithner for the progress their teams made this week at the Sino-US Strategic and Economic Dialogue in Beijing.

“It is vitally important that US leaders are engaged in supporting US trade relationships. Expanded engagement in international markets, combined with the recovery of our financial service markets, is critical to accelerating our overall economic recovery,” he said.

In 1972, then President Richard Nixon landed in Beijing aboard Air Force One – a Boeing 707 – marking the first visit of a US president to China. Boeing has been one of the few American companies present in China since diplomatic and economic channels were reopened.

“That Boeing 707 is truly the game-changing airplane of its time. China ordered ten Boeing 707 jetliners soon after the visit, setting in motion a tremendously productive relationship between a company (Boeing) and a country (China) – a relationship that continues today and in many ways has become symbolic of the four decades of cooperation between our two nations,” McNerney said.

When talking about the significant changes in China, McNerney said, “One of the most important changes in China that I have witnessed – the rapid growth in personal incomes. A growing middle class in China is dramatically reshaping the country’ s domestic economy and has global economic impact too.”

Regarding Boeing’s growing business with China, the CEO exclaimed, “China has bought more than any country in the world (except the US). It has a total of 1,560 airplanes (almost 53 percent of them are Boeing airplanes), and the average age of these planes is just six and a half years – meaning that China also has one of the youngest fleets in the region.”

Commenting on the relationship between China and the United States, he noted, “I believe the US and China are already interdependent and growing more so every day. In fact, our interdependence with China is key to the US achieving President Obama’ s goal of doubling America’s exports over the next five years – an increase projected to support two million American jobs at a time when we really need them.”

“I expect that the US-China relationship will always be complex, but that global interdependence in business will help keep both nations motivated to work out their differences constructively,” he added. – read more at ChinaDaily.com…

ZTE Corporation, based in Shenzhen, is currently the eighth-ranked handset maker in the world, according to the Gartner Group.

By Zhu Shenshen (Shanghai Daily) – THREE Chinese firms, two in the mainland and one from Hong Kong, have been listed in the world’s top 10 handset makers, thanks to the growing market demand in Asia, a United States-based research firm said today.

By the end of the first quarter, Shenzhen-based ZTE Corp ranked No. 8, followed by Hong Kong-based G-Five with the No. 9 position, which ranked in the top 10 for the first time. Shenzhen-based firm Huawei Technologies ranked No. 10, according to Gartner Inc, a US-based IT research firm.

The combined market shares of the top five mobile handset manufacturers, including Nokia, Samsung, LG, RIM (Research in Motion) and Sony Ericsson, dropped from 73.3 percent in the first quarter of 2009 to 70.7 percent in the same period this year, according to Gartner.

ZTE, which expects mobile phone revenue to grow 35 percent annually in 2010, grabbed a 1.7 percent share of the global market, up 0.4 percent from last year.

China’s mobile subscriber base will reach 840 million units by 2010 and more than 1 billion in 2012, according to Informa, a Switzerland-based research firm. — read more at ShanghaiDaily.com…

By Donny Kwok (Shanghai Daily) – MCDONALD’S Corp, the world’s biggest fast-food chain operator, is looking for new franchise partners in China, expanding a six-year-old trial program in its fastest growing market, a spokeswoman said yesterday.

McDonald’s relies heavily on franchises in more mature markets such as the United States, but has almost exclusively opened self-operated stores in China since entering the market two decades ago.

The company launched a pilot franchise program in China, but has so far limited it to three franchisees running six restaurants.

It moved to expand the process in April, posting information on its China Website inviting new franchise applicants as it accelerates a plan to double its China network to more than 2,000 outlets by 2013.

McDonald’s had asked interested parties to prepare at least 2 million yuan (US$293,000) to cover equipment purchases, joining fee and other expenses, a spokeswoman said. She added that the company would initially experiment with new franchisees in Jiangsu Province near Shanghai. – read more at ShanghaiDaily.com…

Starbucks VIA Ready Brew instant coffee is offered at a Starbucks coffee shop in Chicago, Illinois. Starbucks instant coffee is already available in the United States, Canada, the United Kingdom and Japan. (Scott Olson/For China Daily)

By YU TIANYU (China Daily) – BEIJING: Global coffee chain Starbucks Corp is planning to launch instant coffee products in China, a region it believes will be its largest market outside North America, surpassing Japan.

Wang Jinlong, chairman of Starbucks in China, told China Daily that the company is presently working on market surveys and customer preferences for such products.

Starbucks Chief Executive Officer Howard Schultz said the company expects to sell more than $1 billion of its instant coffee, called Via Coffee Essence, worldwide after it started offering the powdered mix in Japan, the world’s biggest market for instant coffee since early this month.

The product is already available in the United States, Canada and the United Kingdom.

“During the last five decades, there have been very few new products, but great progress has been made in the world’s instant coffee market,” Wang said.

“Starbucks has taken over 20 years to revolutionize its offerings and we are offering high-quality instant coffee that customers can enjoy anytime and anywhere,” he added.

Instant coffee accounts for just 2 to 3 percent of coffee consumption in the US, he said. But, the company is convinced of the huge potential in China and expects to launch the products soon.

According to market research firm Euromonitor International, coffee sales in China could reach $3.6 billion by 2011 from $2.4 billion in 2006.

Instant coffee currently makes up the biggest chunk of China’s coffee industry with Nestle’s Nescaf and Kraft’s Maxwell House the major players in the market.

Starbucks operates more than 16,000 outlets in over 50 countries. Since entering the mainland in 1999, it has 376 outlets in 26 cities, mainly in coastal regions.

Wang said the company would focus more on inland cities in the future.

The company expects second- and third-tier cities to become significant markets after its expansion.

It has opened 14 outlets in Chengdu and 10 outlets in Chongqing.

Meanwhile, the company will look to further expand its presence in first-tier cities like Beijing, Shanghai and Shenzhen. — read more at ChinaDaily.com…