Journalist China

Business news from China By Doug Young.
Doug Young, journalist, has lived and worked in China for 20 years, much of that as a journalist, writing about publicly listed Chinese companies.

He is based in Shanghai where, in addition to his role as editor of Young’s China Business Blog, he teaches financial journalism at Fudan University, one of China’s top journalism programs.
He contributes regularly to a wide range of publications in both China and the west, including Forbes, CNN, Seeking Alpha and Reuters, as well as Asia-based publications including the South China Morning Post, Global Times, Shanghai Daily and Shanghai Observer

Cleanup Resumes, Facebook Sniffs Out China Investors 在美上市的中国企业将继续面临“大清洗”

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The new year is bringing many questions about the future of US listings for China stocks, but one thing remains quite clear: the cleanup of the sector triggered by a series of accounting scandals last year will continue into 2012, as evidenced by the latest activity. In one of the latest signs of the ongoing cleanup, China CGame (Nasdaq: CCGM) has been notified of its pending de-listing from the Nasdaq due to its failure to hold its annual meeting on time. (Chinese article) The company’s stock  currently trades at just 17 cents per share, meaning it also is well below the $1 level necessary for a Nasdaq listing. In related news, embattled Focus Media (Nasdaq: FMCN), which previously came under attack from short sellers, has come under renewed attack from Muddy Waters, which this time is questioning the company’s purchase of a ginseng plantation. (English article) Focus tried to explain the acquisition by saying it was designed to acquire assets related to its core outdoor advertising business, but that didn’t convince investors, with Focus shares losing 5.4 percent on Friday. Perhaps this transaction is really related to Focus’ core business, as the company says; but the purchase looks a bit similar to one by online game company Giant Interactive (NYSE: GA) in the completely unrelated insurance space last year (previous post), and is symptomatic of the way that many US-listed Chinese companies are run like personal fiefdoms of their founders, who use their companies to play all kinds of investment and financial games. Expect to see more such delistings and short-seller attacks this year as the cleanup continues, though I would expect most activity to end by the middle of the year. In separate unrelated Internet news, Goldman Sachs has apparently begun shopping shares of Facebook to wealthy Chinese investors via a unit of financial services group Ping An in the run-up to Facebook’s highly anticipated IPO. (Chinese article) This kind of activity certainly isn’t that unusual, as Goldman is clearly trying to start creating buzz before the offering. What’s more interesting is that it’s seeking investors in China, providing the latest indication that Facebook still aims to enter the China market and could even make a move here soon to create more buzz for its offering expected in the next few months. Stay tuned.

Bottom line: The latest delisting and short-seller attack against US-listed Chinese firms indicate the cleanup of such companies on US markets will continue through at least the middle of this year.

Related postings 相关文章:

◙ Short Sellers Target China in Year End Assault 做空抛盘年底将矛头对准在美上市中国企业

◙ Rumor Mongers Seize on Crisis With Sina Attack

◙ Despite China Rebuff, Facebook Going Back for More Facebook明知山有虎，偏向虎山行

Lenovo Starts Year With New Europe Chief, TV Tie-Up 联想新年新气象：聘用新高管并推互联网电视

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Lenovo (HKEx: 992), the Chinese PC maker that wants to do a lot more than sell computers, is starting off the new year with a couple of positive developments, hiring a sharp new executive to head its important European operations and also launching an interesting new web TV initiative. In the former move, the company has formally hired Gianfranco Lanci, formerly CEO of Taiwan’s Acer (Taipei: 2353) to head its Europe operations under a new reorganization of its global regions. (Chinese article) In fact, this development isn’t huge, as Lenovo actually hired Lanci as a consultant last September (previous post), so clearly they have been happy with his performance since then. I’m a fan of Lanci, who was a major force behind Acer’s rise a few years ago by correctly predicting the importance of mobile computing and stressing development of laptop computers. Of course, Acer has fallen on harder times since then due to lack of focus and innovation, and Lanci left the company last year as a result of differing opinions with other top managers. It’s unclear if Lanci can do the same for Lenovo as he did for Acer, but Lenovo clearly does need some strong leadership in Europe, following its purchase of German PC maker Medion last year and as it tries to boost its presence in developed markets in Europe and North America. (previous post) Meantime, the company has also formed a tie-up with BesTV, the digital TV arm of Shanghai Media Group (SMG), China’s second biggest media group and the main TV operator in the lucrative Shanghai market. Under the tie-up Lenovo is providing set-top boxes that will allow BesTV viewers to surf the web on their televisions. (Chinese article) Like Acer, Lenovo sometimes seems to lack focus in the current digital world, often chasing the latest popular product like smartphones or gaming consoles rather than trying to innovate with its own new bets on hot new product areas. So in that light, this Internet TV initiative certainly seems refreshing as the kind of move one would expect from a leader rather than a follower. I also like the choice of SMG as its partner, as SMG is clearly one of China’s top media groups and could potentially become a leader in China’s nascent digital TV market. All that said, these 2 new moves by Lenovo, with a smart new European head and interesting Internet TV initiative, auger a promising start for 2012.

Bottom line: Lenovo’s hiring of an experienced European head and  a new Internet TV tie-up both look like promising developments as it heads into the new year.

Related postings 相关文章:

◙ Lenovo Considers Japan Production 联想向日本转移制造业务为明智公关手段

◙ Liu Steps Down at Lenovo — Again 柳传志再度卸任联想董事会主席

◙ Lenovo Parent Goes Down to the Farm 联想控股“务农” 瓶装水里淘金

Regulator Eyes Online Video in Ad Crackdown 广电总局或限制视频网站广告

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Chinese regulators seem to have discovered a sudden fondness for the Internet, first saddling many social networking sites with cumbersome “real name” rules and now potentially setting their sights on the fast-rising video-sharing sector. I doubt these 2 initiatives are related, but they both do reflect a worrisome surge in China’s classic heavy-handed approach to fast-rising new industries, which often ends up stunting their development or even killing them outright. In this latest news, Chinese media are reporting that an official at SARFT, the agency that regulates TV, has hinted that tough new requirements limiting the amount of ads that TV stations can show during their programs may also soon be extended to video sharing sites. (English article) The new requirements would come just months after many of China’s leading video sites, including Youku (NYSE: YOKU), Sohu (Nasdaq: SOHU) and Tudou (Nasdaq: TUDO) have signed a series of landmark agreements to offer legally licensed content as they wean themselves from the pirated material that has historically been a mainstay on such sites. (previous post) Thus the new requirements, if they come, would almost look like punishment for this positive development, when instead encouragement should be offered. This new requirement would follow the higher-profile move in December when Beijing issued new rules requiring all social networking sites (SNS) to register users using only their real names. (previous post) That rule dealt a blow to Sina (Nasdaq: SINA), whose wildly popular Weibo microblogging service looks set to become the biggest victim of that new policy. Frankly speaking, I’m not even really sure how dependent the online video sites are on advertising for their revenue, as some of the movies and TV shows offered under these new licensing agreements are on a pay-per-view basis that would see users paying to watch content. But regardless of the current situation, advertising is clearly a potential revenue source as these companies work toward sustained profitability, and any move by regulators to put sharp new limits on this activity could seriously hamper the industry’s development.

Bottom line: Potential new rules limiting ads for online video sites could seriously hamper the industry’s development, hurting their chances for sustained long-term profitability.

Related postings 相关文章:

◙ Tudou, Youku: China’s New Piracy Police　　土豆和优酷：中国打击盗版的民间警察

◙ Jishi the Latest in Low-Key Media Listing Parade 吉视传媒加入中国媒体低调上市大军

◙ Tudou Surprises With Profit, Licensing Deal 土豆网意外扭亏为盈视频分享市场的好兆头

Web Security: Qihoo Sputters, NetQin Surges

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Amid all the recent talk about security due to high-profile breaches at some big-name web firms, 2 of the nation’s top Web security software makers, high-flyer Qihoo 360 (NYSE: QIHU) and laggard NetQin (NYSE: NQ), are seeing some sharp reversals of fortune as investors take a second look at these stocks. We’ll start with Qihoo, clearly the larger and more aggressive of the 2, which has started the new year by announcing a plan to buy back up to $50 million in company shares. (company announcement; Chinese article) The timing of the plan is interesting, as the markets have been relatively quiet in recent weeks compared with the summer and fall when many other US-listed Chinese firms announced similar buy-backs. But a quick look at Qihoo shares reveals its stock is down around 30 percent from its mid-November high, which roughly corresponds to when a small research house named Citron came out with a report saying Qihoo’s user figures were grossly exaggerating and that its stock, then trading in the $20 range, should be valued closer to $5 per share. (previous post) Qihoo denied the claims, prompting Citron to issue another similar report weeks later. Investors seemed to shrug off the initial report, but the recent fall in its price to below $15, which seems to have prompted the buyback, clearly has the company worried that people may finally be waking up to the reality that Qihoo does indeed seem to be prone to exaggeration based on past actions, though obviously I can’t comment on the accuracy of Citron’s claims. Stay tuned for more downward pressure on its shares this year. Meantime, NetQin, a smaller security software firm whose shares have languished since their IPO last May, got a nice boost on Wall Street after announcing a deal to provide software to Motorola Mobility. (company announcement) Its shares rose 16 percent after the news came out, and indeed such a deal shows the company may still have some potential even after reports emerged last year of conflicts with China’s 3 big telcos. Even so, the company’s shares, which now trade at around $6.20, are still down by about half from their IPO level of $11.50, so they still  have a ways to go.

Bottom line: Qihoo shares will come under pressure this year as doubts remain about its credibility, while rival NetQin could get a lift following a new agreement with Motorola.

Related postings 相关文章:

◙ Qihoo, Vancl Fend Off New Attacks 奇虎、凡客和人人承受压力

◙ Netqin Fizzles on Debut, Could Still Have Potential 网秦首秀表现不佳但可能仍具潜力

◙ Report Takes Wind Out of Inflated Qihoo 奇虎遭遇Citron釜底抽薪

China Telcos In New Drives at Home, Abroad 中国三大电信运营商海内外发力

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China’s 3 telcos are all in the news in this first week of the new year, with China Unicom (HKEx: 762; NYSE: CHU) making a long-awaited iPhone announcement, while an intriguing newly announced chip could give a big boost to China Mobile‘s (HKEx: 941; NYSE: CHL) 3G service. Last but not least, China Telecom (HKEx: 728; NYSE: CHA) has announced an interesting move abroad, with potentially more to come. Let’s start with Unicom, which after months of delay, will finally start selling Apple’s (Nasdaq: AAPL) newest iPhone 4S on January 13. (English article; Chinese article) This news comes as other media are reporting that Unicom will also soon launch 8 new low-cost smartphones (English article), after the company blamed a shortage of such models last year for its disappointing progress in the 3G space. These latest Unicom developments look like a step in the right direction after a disappointing year in 2011, but I still have big doubts about the company’s ability to execute due to ongoing management turmoil that led it to squander a golden opportunity for growth in 2011. (previous post). Meantime, chip developer Spreadtrum (Nasdaq: SPRD) has announced an interesting new low-cost chip designed specifically for China Mobile, which can handle the company’s homegrown 3G standard, TD-SCDMA, along with its 2G EDGE standard and also wi-fi, which the company is strongly developing. (company announcement; Chinese article) If this chip is good, which looks like a strong possibility, we could soon see a strong new field of low-cost products coming out that could be very attractive for China Mobile customers, helping it to regain some of its lost momentum this year as a new generation of leaders put their mark on the company. (previous post) Finally there’s China Telecom, which will start offering a mobile service under its own name in Britain with plans to expand to France and Germany. (English article) The move will make China Telecom China’s first telco to become a mobile virtual network operator (MVNO), as it looks to cater to the growing number of Chinese living overseas. I applaud China Telecom for its effort to look for new business opportunities abroad, though the VMNO model has been notoriously difficult and only a few companies have really succeeded in the space, such as Britain’s own Virgin Group. That said, I would give this initiative only a 20-30 percent chance for success, but would expect to see China Telecom trying more similar innovative overseas initiatives in the next 2 years.

Bottom line: New products from China Unicom and China Mobile could breath new life into their 3G business this year, while an overseas move by China Telecom is likely to fail.

Related postings 相关文章:

◙ China Telecoms Faces Power Struggle, Half-Baked 4G 中国电信行业遭遇政府监管权利斗争

◙ Unicom, China Telecom in iPhone 4S 中国电信有望领先推出iPhone 4S Race

◙ China Mobile 3G: Where Are the Subscribers? 中国移动3G：订户在哪里？

PetroChina Explores Insurance 中石油试水保险业

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Much of the world is watching China’s hunt for global resource M&A, which looks set to accelerate in 2012, but a completely different piece of news caught my eye this morning from leading oil producer PetroChina (HKEx: 857; Shanghai: 601857; NYSE: PTR), which has just announced a new venture in the completely unrelated insurance sector. (company announcement) PetroChina made headlines earlier this week with the announcement that it was buying out its partner in a Canadian oil sands project, the latest in a recent string of global acquisitions for the company and its rivals as China looks to feed its hungry economy and make itself more energy self-sufficient. (English article) But the insurance announcement seems to have gone relatively unnoticed by many major media, even though it looks rather large to me with registered capital of nearly $1 billion. Perhaps people are unimpressed by the fact that PetroChina’s partner in the venture is its state-run parent, which will hold a controlling 51 percent stake, meaning this is really just a nominal joint venture since both partners are part of the same company. It’s also a bit disappointing to see that while the venture will sell insurance in many popular areas, such as health and property, one area that’s not on the list is the most lucrative life insurance sector, meaning industry leaders China Life (HKEx: 2628; Shanghai: 601628; NYSE: LFC), Ping An (HKEx: 2318; Shanghai: 601318) and New China Life (HKEx: 1336) may not need to worry about new competition anytime soon. While this move looks a bit strange on the surface, I find it quite intriguing and perhaps even intelligent as PetroChina looks for ways to diversify beyond its core oil exploration business, which is famously subject to huge price swings globally and strict price controls at home by Beijing. I suspect that formation of this joint venture is just the first step, and that we may soon see PetroChina try to bring in a more experienced partner from the financial services sector to help it run the venture by the end of this year. If it does take that route, the right combination of PetroChina’s deep pockets and a savvy financial services partner could make this new endeavor a serious competitor in the insurance space in the next 2-3 years.

Bottom line: PetroChina’s move into insurance looks like a smart diversification play if the company can find a good partner from the financial services sector to develop the business.

Related postings 相关文章:

◙ Ping An Returns to Market With Second Big Fund Request 中国平安拟发大规模可转债

◙ 2012: The Year of China Resource M&A? 2012：中国企业的资源并购年？

◙ AIG’s Greenberg Returns to China With Dazhong Tie-Up AIG前执行长格林伯格借投资大众保险重返中国

China Banks: More Trouble Signs

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Just a week after a leading Chinese newspaper predicted a new wave of capital raising by China’s banks this year, the latest trouble sign is emerging for the overstretched sector with news that Beijing will delay implementing tougher new capital requirements. The China Daily is citing a Bank of China (HKEx: 3988; Shanghai: 601398) official saying the banking regulator will postpone tougher new requirements, which were supposed to take effect on January 1, to the second half of the year instead. The news comes as signs mount that balance sheets at China’s banks are coming under growing pressure as the real estate market shows early signs of a major correction and the stock market fell 20 percent in 2011, both of which point to a big rise in souring loans this year. Last week, ICBC (HKEx: 1398; Shanghai: 601398) launched a nearly $8 billion subordinated bond offering to raise its capital adequacy ratio in anticipation of the new requirement, looking to the debt market to boost its capital. (English article) That came after the China Securities Journal wrote last week that many lenders, including Agricultural Bank of China (HKEx: 1288; Shanghai: 601288), one of China’s top 4 state lenders, and Bank of Communications (HKEx: 3328; Shanghai: 601328), a top regional lender, will need to replenish their capital this year, following a lending binge in 2009 and 2010 under orders from Beijing to boost the economy during the global downturn. (previous post) This new recapitalization will come only 2 years after a similar exercise that saw banks raise more than $100 billion collectively, again prompted by their overzealous lending during the global downturn. China Merchants Bank (HKEx: 3968; Shanghai: 600036), another major regional lender, kicked off the drive in the middle of last year with a plan to raise $5.4 billion. The contagion this time has shown signs of spreading to the insurance sector, with Ping An (HKEx: 2318; Shanghai: 601318), China’s second largest insurer, also announcing a plan in December to raise more than $4 billion. No matter how you look at it, 2012 will be a challenging year for Chinese banks and perhaps even tougher for their investors.

Bottom line: The delay of new tougher capital requirements is the latest sign of trouble among China’s banks, which will soon launch a major new capital raising drive.

Related postings 相关文章:

◙ 2012: Capital Raising II Year For China Banks

◙ Ping An Returns to Market With Second Big Fund Request 中国平安拟发大规模可转债

◙ Message to Beijing: Privatize the Big 4 Banks 对中国政府说：将四大银行退市吧

LDK’s German Buy: Two Losers Combine 赛维LDK收购Sunways将使前者境况雪上加霜

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LDK Solar (NYSE: LDK), the weakest of China’s struggling solar panel makers, is starting off the new year with plans to buy another battered German competitor, a move that looks OK in theory for this sector in need of consolidation but one that will ultimately bring LDK even more headaches than it already has. LDK has offered to buy Sunways AG (Frankfurt: SWW) for 24 million euros, according to a media report, a relatively modest sum for a company of LDK’s scale. (English article) (company announcement) The rationale for this deal is relatively straightforward: Sunways will offer LDK new technology to boost the efficiency of its solar cells, making its products more competitive. The German company will also offer LDK manufacturing facilities outside its home China base, an important diversification move as both the US and Europe consider levying anti-dumping tariffs against solar cells manufactured in China. The main problem is that Sunways is losing money, and is unlikely to see its position improve anytime soon as the industry suffers through its worst-ever downturn. LDK, meantime, is hardly in a position to provide the German company with much financial help, having itself sunk deeply into the red last year as it struggles under a heavy debt load. Asian companies have traditionally had a difficult time with European acquisitions, as labor laws in those countries tend to be very tough and unions also provide a big challenge to inexperienced Asian firms. I see lots of conflict ahead for LDK ahead if this merger proceeds, making the company’s already troubled situation even worse and setting the stage for a difficult year in 2012.

Bottom line: LDK’s planned purchase of a German solar panel maker will create more problems for the already shaky company.

Related postings 相关文章:

◙ Solar Matures With Foxconn Entry

◙ Beijing Boosts Solar In Latest Mixed Signal　中国扩张太阳能行业发展 解决与美争端立场混乱

◙ China Rescues LDK With New Financing 中国拯救赛维LDK举动与未提供不公补贴说法相左

 

New Year Brings New Starts for China Lodging, Grace-Hua Hong Merger 汉庭换将,华虹NEC和宏力半导体合并

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It’s the new year, and that means a time of new beginnings for 2 big names, one in the hotel space where China Lodging Group (Nasdaq: HTHT) is starting 2012 with a new CEO, and the other in semiconductors where the long-awaited merger of Hua Hong NEC and Grace Semiconductor may finally happen. Let’s start with the China Lodging, whose CEO will leave after just 2 years on the job and be replaced by executive Chairman Ji Qi. (company announcement) Based on the announcement, Ji will take on the additional CEO role as China Lodging, owner of the Huating brand, embarks on an interesting multi-brand strategy targeting travelers with different quality levels of hotel, similar to what most of the major western brands already do. This strategy may work well for the western brands, but I’m a doubtful that young Chinese operators like China Lodging, 7 Days (NYSE: SVN) and Home Inns (Nasdaq: HMIN), which have all been quite successful with budget hotels, have the necessary expertise to operate at the higher-end of the market, where they will have to compete with the big international chains like Marriott (NYSE: MAR). In the chip space, Hua Hong NEC and Grace Semiconductor, which have talked about a merger for years, have announced that they have finally reached such a merger agreement. (English article) Reports say the new company will have about $600 million in annual revenue, not small but still a fraction of leading Chinese chipmaker SMIC (HKEx: 981; NYSE: SMI), whose annual figure stands at about $1.6 billion. The report says the merged company is quite profitable, with $100 million in annual profit, which I find difficult to believe considering the industry’s current downcycle. I suspect that if the figure is really true, the 2 companies are using accounting tricks to hide their real situation. I see problems ahead for the company as it struggles to integrate after the merger, and if and when it ever goes public, which is probably the ultimate goal, I wouldn’t be surprised to learn that Hua Hong NEC-Grace isn’t quite as profitable as it wants people to believe.

Bottom line: China Lodging Group will have trouble executing its new multi-brand strategy, while Hua Hong NEC and Grace Semi will also face a rough time in their new merger.

Related postings 相关文章:

◙ China Lodging: Rebound Ahead 中国经济型酒店业绩回升在望

◙ Hotels: Expo Hangover Set to Linger into 2012

◙ Chip Merger Near, More Consolidation Ahead? 华虹NEC和宏力半导体合并预示未来或有更多整合

China Mobile: Improvement Ahead Under New Leaders 新领导有望助中国移动复苏

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On this final workday of 2011, I’ll start with a look at one of China’s longest-running retirements, namely the departure of long-serving Chairman Wang Jianzhou from the helm of China Mobile (HKEx: 941; NYSE: CHL), which finally may have happened, in what can only be described as a happy ending to a yet another uninspired year from the nation’s top mobile carrier. I say “may have happened”, as Wang’s final departure isn’t entirely clear just yet. Media are saying the latest copy of a recent document now lists Li Yue, president of Hong Kong-listed China Mobile, as chairman of the company’s state-run parent, a position formerly held by Wang. (Chinese article) Wang’s departure has been rumored for more than a year now, dating back as early as 2010 after Li was first named as president of the Hong Kong-listed China Mobile. Since then, Li and another executive, Xi Guohua, have taken a growing number of top titles at the listed company and its state-run parent, leaving just the chairmanship at both for Wang. (previous post) I suspect we may even see an official announcement from the Hong Kong stock exchange very soon saying Wang has finally been replaced as chairman of the publicly listed China Mobile as well. China Mobile has been a slow-moving disaster in 2011, as the company lost steady market share to rivals China Unicom (HKEx: 762; NYSE: CHU) and especially an aggressive China Telecom (HKEx: 728; NYSE: CHA) in the important 3G space. Wang’s uninspired leadership was at least partly to blame for the company’s anemic profit growth and loss of market share, and I’ve said numerous times that he should step down to make way for a new generation of more aggressive leaders with new ideas. Now that Wang’s departure has finally come, look for China Mobile to step up its 3G campaign significantly next year, which it has already shown early signs of doing by working more closely with handset makers to develop models for its network using a homegrown technology called TD-SCDMA. It’s obviously too early to say if Wang’s departure will breathe major new life into China Mobile in the year ahead; but it’s really hard to imagine how things can get any worse, and I’m cautiously optimistic that 2012 will see some exciting fresh initiatives from this sleeping giant.

Bottom line: 2012 will be an exciting year for China Mobile following the long-awaited retirement of its long-serving chairman, with younger new leadership making a reinvigorated drive in 3G.

Related postings 相关文章:

◙ China Mobile 3G: Where Are the Subscribers? 中国移动3G：订户在哪里？

◙ China Mobile’s TD 3G Fading Fast 中国移动3G网络前景黯淡

◙ China Mobile: Poor 3G Approach Yields Weak Results 中移动3G策略不当 拖累公司三季度业绩

China Slams the Brakes on Automakers 中国为汽车行业踩刹车

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A slightly ominous memo from the National Development Reform Commission (NDRC), China’s state planner, indicates Beijing plans to slam the brakes on approvals for major new auto-making investments, a much needed development for the overheated industry that could end up driving many smaller players out of business. The memo, detailed in a media report (English article), says China will strive for “healthy development” of the auto industry, with a focus on nurturing new industries — words that point to a sharp slowdown in approvals for major new projects except perhaps in the new energy arena. That should come as welcome news for an industry that has seen billions of dollars in new investment announced over the last 2 years, mostly by joint ventures between big foreign automakers and their Chinese partners. (previous post) After seeing turbo-charged growth in 2009 and 2010 due largely to economic incentives from Beijing, China auto sales have slowed to almost a halt this year as most of those incentives expired and the government turned its focus from stimulating the economy to cooling it down instead. Chinese vehicle grew just 2.6 percent in the first 11 months of this year, a major slowdown from the 32 percent growth rate last year and even higher growth in 2009, as China overtook the US to become the world’s biggest car market. Major new investment plans announced by the likes of Volkswagen’s (Frankfurt: VOWG) Audi, Ford (NYSE: F) and BMW (Frankfurt: BMW) for their China joint ventures were all undoubtedly planned during the boom times of 2009 and 2010, and the market is likely to become seriously oversupplied as they start to produce over the next 2 years, putting pressure on everyone, especially small- to mid-sized domestic manufacturers without major overseas partners. Such domestic companies, like BYD (HKEx: 1211; Shenzhen: 002594), Geely (HKEx: 165) and Chery, are already showing signs of stress with sales growth well behind that of their better-connected rivals, and that trend could accelerate as the new capacity comes on stream. In terms of new investment, look for a trickle of new energy auto initiatives to be announced and approved in 2012, most of them largely insignificant. In the meantime, watch for growth of the mainstream auto market to stay in the low single digits next year, with many smaller players slipping into the red — perhaps permanently.

Bottom line: Smaller automakers without big foreign partners are likely to slip into the red next year as growth slows, with Beijing unlikely to approve any major new investments.

Related postings 相关文章:

◙ China Autos Set for Long Slowdown

◙ Chery, Luxury Cars Hit New Speed Bumps

◙ Foreign Spending Spree Augers Woes for China Car Makers 外国车企大举投资中国 本土车企倍感压力