world growth

world growth

Sunday, March 25, 2012

China plans to import more corn this year, as reserves are running low

China is going to spending a lot of dollars to import grain to combat food inflation, which hurts low income residents.
China's corn production in 2011/12 could be as much as 14 percent lower than current official estimates, according to Capital Economics.

As a result, China's imports are likely to be much higher than current USDA forecasts, which would squeeze global corn supplies further and put upward pressure on prices, says Capital Economics.

Despite reducing global end stocks by as much as 4 million tons since the beginning of 2012, many analysts consider the USDA's latest global corn production estimate to be optimistic. China's actual production is likely to be between 168-185 million tons, which is 5 to 15 percent lower than the USDA's current forecast of 191 million tons.

Corn inventory levels in China's state reserves are quite low, which is around 10 to 12 million tons, notes Capital Economics.

Though the USDA estimates that Chinese government will import 4 million tons of corn in 2011/12, twice the amount it imported a year earlier, yet many analysts believe that actual imports could be even higher, around 8 million tons. This in turn would create additional pressure on global supplies, causing prices to strengthen further.

China sold around 55 million tons of corn from 2009-11. China is reported to have purchased in total approximately 47 million tons in 2009 and 2011.

Capital Economics estimates the current inventory level at China's state reserves to be between 13.8 million to 22.8 million tons, which is still higher than the latest industry estimates.

Even if China's total corn imports increase to 9.5 million tons in 2011/12, the global stock-to-use ratio would decrease marginally, from 13 percent to 12 percents points out Capital Economics.

Capital Economics forecasts that prices will fall to 585 cents per bushel from current levels of around 650 cents by the end of 2012. That's still a very high price by historical standard.

Saturday, March 17, 2012

China is the largest market for smartphone in 2012

China to Ship Majority of World’s Smartphones in 2012

Chinese smartphone makers such as Huawei and ZTE should do well this year.
China is poised to become the world’s leader in smartphone shipments in 2012, according to recent research from IDC. With its sheer size, China nudged the US out of the lead by a hair, but is expected to continue to widen the gap as more of the developing country’s users sign on to the smartphone revolution.

The research firm predicted China will reach 20.7 percent of the world’s smartphone market this year, just ahead of the US’s 20.6 percent. While previous research had shown China taking the lead but then falling behind, IDC maintains this latest trend will only continue to snowball. By 2016, China is expected to leverage 20.2 percent of the global smartphone market, while the US will garner 15.3 percent.

“(China’s) smartphone shipments are expected to take a slim lead over the U.S. in 2012 before the gap widens in the coming years,” said Wong Tech Zhung, senior market analyst with IDC’s Asia/Pacific Client Devices team, in a statement. “There will be no turning back this leadership changeover.”

Meanwhile, India and Brazil are expected to be among the top 5 hottest smartphone markets by 2016, with India growing from its current position at seventh to become the third largest market, followed by Brazil, which currently ranks tenth.

The trends are clearly showing developing countries connecting to the Internet via the palm of your hand. The sheer size of these populations combined with a thirst for smarter technology creates a perfect storm of demand that will be close to rivaling the US.

“Demand for smartphones will also grow as urban and enterprise users mature in their handset preferences and usage,” says G. Rajeev, senior market analyst for mobile devices with IDC India. “Consumers are growing accustomed to higher data usage and using handsets for entertainment and other content, instead of just as a communication device.”

Yet costs will continue to be a challenge to these developing markets. The report notes that numerous industry heads at this year’s Mobile Conference in Barcelona stressed the need for affordable smartphones as low as $50 US to propel saturation. In Brazil, smartphones have dropped to below $300 with optional prepaid data plans, propelling the market with room to grow.

“Users in emerging markets seek more than simple voice telephony, and smartphones offer the ideal platform for mobile entertainment, social networking, and business usage as seen in developed markets,” said Ramon Llamas, senior research analyst with IDC.

Sunday, March 11, 2012

China posts biggest trade deficit yet

Clearly, China is aiming for a soft landing, probably a 6 percent to 7 percent growth for this decade, as compared to double digit growth in the previous decade.

China has posted a trade deficit of $31.5 billion in February 2012, the biggest in at least a decade as imports increased faster than exports.

Exports expanded by 18.4 per cent year on year to $114.4 billion in February, recovering from the retreat of 0.5 per cent in January, while imports surged by 39.6 per cent to $145.9 billion, rebounding from a slump of 15 per cent in January.

Taking seasonal factors into consideration, export and import growth in February should be 4 percent and 9.4 percent respectively, the General Administration of Customs said in a report Saturday.

The results were welcomed by many economists after China Friday reported a slowdown in other key economic data, including industrial production, fixed-asset investment and retail sales in the first two months, the Shanghai Daily reported.

"Trade performed better than expected and thus eased pressure for the government to release growth-supportive policies," said Xue Jun, an analyst at CITIC Securities Co.

"If exports can continue such growth momentum, it may delay cuts in the reserve requirement ratio," said Xue.

Li Maoyu, an analyst at Changjiang Securities Co, said such a big trade deficit may also slow the appreciation of the yuan.

"It's not rare for China to report a trade deficit in February but it's very uncommon for the country to register such a large trade deficit," the daily quoted Li as saying.

"It will weaken claims by some other countries that the value of the yuan gives Chinese export firms an unfair advantage," he added.

China may "appropriately" widen the yuan's trading band to better reflect market supply and demand, said Zhou Xiaochuan, governor of the People's Bank of China, the country's central bank, during the annual session of the National People's Congress this month.

In the first two months of 2012, China's trade expanded by 7.3 percent from a year earlier to $533 billion with a deficit of $4.2 billion.

Trade with the European Union improved by an annualized growth of 4.7 percent between January and February, and deals with the US increased by 9.2 percent. Both were negative in January, the Customs data showed.

China's trade with emerging markets improved as shipments to Russia surged by 31.9 percent in the first two months.

Saturday, March 3, 2012

China is the first country to have 1 billion mobile phone users

China is still the largest market for mobile phones.

China has become the first country in the globe to have more than 1 billion mobile phone subscribers, according to government statistics. It has reached 951.6 million October last year with additional 39 million users per quarter. Based on that and recent growth rates, the total number of users has surpassed a billion sometime during this month. We can say it’s around 74 percent of its total population — 1.35 billion people — owns a mobile phone.

One of the first customers who queued up to purchase a new smartphone iPhone 4S show his new phone at an Apple Store Friday Jan. 13, 2012 in Shanghai, China. Mobile subscribers in China have breached the 1 billion mark, although the country is still said to have room to grow, in terms of mobile broadband speeds and penetration.

China Has the World’s Top Mobile Phone Population

The figures underscore the soaring rate of mobile phone adoption in the country. In March three years ago, the country had 670 million mobile phone users. During the same period in 2010, that number reached 776 million. China Mobile, the country’s largest telecommunications company, has the biggest market share with 67.3 percent, followed by China Unicom with 20.1 percent and China Telecom, the smallest of the three operators, have 12.6 percent share.

A point to note is that China Mobile has been listed in the Dow Jones Sustainability Index (DJSI) marked them as the first company from China to be included in the list. In 2004, International Telecommunications Union (ITU) ranked China Mobile first among the top ten mobile operators by proportionate subscribers.

India Catching Up

While China maintains itself as the country with the most mobile phone users, India is catching up, with the growth rate of telecommunication sector continued to enjoy an impressive growth. The wireless subscription base has recorded an increase of 227.27 million, thus makes it a total base of 893.84 million connections according to a recent report from the Telecom Regulatory Authority of India. The overall teledensity registered an increase from 52.74 at the end of March 2010 to 70.89 at the end of March 2011.

China’s 3G networks, which launched three years ago, added around 15 million new subscribers over the first two months of 2012. This puts them on track to surpass its 2011 3G network growth rate, which made around 135 million subscribers in the nation by now. Many analysts and parties have concluded that China’s smartphone sales have driven the force in the increase of 3G subscribers in the country.

And at the end of last year, China had 440 million users who used mobile devices to go online, an increase from 305 million a year before, as stated by China Internet Network Information Center.

Still Plenty of Room for Growth?

The countries with the most phones per person tend to be small, with lots of borders or numerous foreign workers and visitors, as stated by Susan Teltscher, an analyst at the ITU. If there is a question which country has the most cell phones per person? United Arab Emirates (UAE) with two for each citizen is the answer. Second place goes to Montenegro. Why? Because the visitors tend to buy local phones to use during their stay either for vacation or business trip. With the UAE as a benchmark, mobile phone market in China surely appear to have plenty of room to grow.