China Business Guide 中 国 商 务 指 南 2009 (The Light Industry)


Figure5-62 Costs and expenses of daily chemicals manufacturing industry 2004-2008



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Figure5-62 Costs and expenses of daily chemicals manufacturing industry 2004-2008

Item

Jan.-Nov. 2008

2007

2006

2005

2004

Sales costs (100million RMB)

1228

1156

956

856

727

Year-on-year growth (%)

19.9

20.9

11.7

17.7

19.6

Management expenses (100million RMB)

110.9

115.3

96.4

88.2

79.6

Year-on-year growth (%)

18.7

19.6

9.3

10.8

22.8

Financial expenses (100million RMB)

6.4

7.7

7.2

5.8

8.5

Year-on-year growth (%)

-9.5

6.0

25.6

-31.8

14.0

Source: China National Light Industry Council

The asset growth rate of daily chemicals manufacturing industry peaked at 18.8% in 2004. It dropped to 8.4% in 2005. It was 15.5% in 2007 and 12.4% in the first 11 months of 2008. The asset-liability rate was 53.9% in 2004, 50.4% in 2005, and 47.8% in the first 11 months of 2008. The profit growth rate saw great changes from 2004 to 2008. It reached 29.3% in 2004 and dropped to 12.8% in 2005 and 1.6% in 2006. It grew rapidly to 32.2% in 2007 and stood at 25.3% in the first 11 months of 2008.



Figure 5-63 Profit growth of daily chemicals manufacturing industry 2004-2008 Unit: %

Item

Jan.-Nov. 2008

2007

2006

2005

2004

Asset growth rate

12.4

15.5

10.4

8.4

18.8

Asset-liability

47.8

49.0

49.1

50.4

53.9

Profit growth rate

25.3

32.2

1.6

12.8

29.3

Growth rate of total industrial output value

17.9

21.0

10.2

9.8

24.1

Annual employee growth rate

8.5

7.3

1.6

4.4

6.5

Source: China National Light Industry Council

The soap output was 655,000 tons in 2004, down by 2.9% on a year-on-year basis and 716,000 tons in 2005, up by 2.6% on a year-on-year basis. The output growth in 2006 went up to 4.0% on a year-on-year basis. It encountered a drop for 2 consecutive years from 2007 to 2008. It stood at 748,000 tons in 2008, down by 1.2% on a year-on-year basis. The synthetic detergent output growth saw a rise from 2004 to 2007. Its output was 334,000 tons in 2006, up by 12.4% on a year-on-year basis, at the fastest speed in recent 5 years. It was 5.98 million tons in 2008, down by 3.2% on a year-on-year basis. The synthetic washing-powder output was 273,000 tons in 2004, up by 9.2% on a year-on-year basis, 294,000 tons in 2005, up by 10.1% on a year-on-year basis and 387,000 tons in 2007, up by 9.8% on a year-on-year basis. It dropped by 6.7% on a year-on-year basis in 2008. The essence output growth rate peaked at 31.9% in 2006, the highest in recent 5 years. It suddenly dropped to 5.4% in 2007. It stood at 240,000 tons in 2008, up by 1.0% on a year-on-year basis. On the whole, the output growth of a majority of daily chemicals declined at different levels. The synthetic washing-powder output encountered an especially remarkable drop.



Figure5-64 Output of major products of daily chemicals manufacturing industry 2004-2008

Item

Soap

Year-on

-year


increase or decrease

Synthetic detergent

Year-on

-year


increase or decrease

Synthetic washing

-powder


Year-on

-year


increase

or decrease



Essence

Year-on

-year


increase

or decrease



(10,000 tons)

(%)

(10,000 tons)

(%)

(10,000 tons)

(%)

(10,000 tons)

(%)

2008

74.8

-1.2

597.9

-3.2

33.5

-6.7

2.4

1.0

2007

75.3

-0.8

631.6

11.7

38.7

9.8

2.0

-5.4

2006

72.0

4.0

546.1

12.4

33.4

8.1

2.0

31.9

2005

71.6

2.6

494.4

14.1

29.4

10.1

1.1

14.8

2004

65.5

-2.9

436.4

11.5

27.3

9.2

0.8

8.3

5.14 Output of other light industry products

Figure 5-63 shows the total industrial output value and year-on-year growth of other light industry sectors such as salt mining, battery manufacturing, lighting fixture manufacturing, daily chemicals manufacturing, printing ink and animal glue manufacturing, sewing machine manufacturing, weighing apparatus manufacturing, light industry facilities manufacturing and glasses manufacturing.



Figure5-65 Output and growth of other light industry sectors 2004-2008 Unit: RMB 10,000, %

Sectors

2008

2007

2006

2005

2004

(at constant prices in 1990)



Salt mining

Output

2497782

2177398

1867651

1477947

1244965

Growth

26.1

21.0

24.3

42.5

46.26

Battery manufacturing

Output

24688739

17198110

12210497

9138794

6352300

Growth

40.8

45.7

29.9

24.4

43.9

Lighting fixture manufacturing

Output

18997626

15803127

11770120

9693156

7159905

Growth

20.3

31.3

21.5

23.8

25.3

Daily chemicals manufacturing

Output

23955415

18290526

15306839

13796369

12354802

Growth

17.9

20.0

11.7

11.0

27.5

Printing ink and animal glue manufacturing

Output

2641029

2268021

1765518

1449458

1011907

Growth

20.6

27.2

25.1

26.2

13.4

Sewing machine manufacturing

Output

2260625

2779894

2267773

1890770

1458923

Growth

-24.6

16.5

17.5

23.6

21.6

Weighing apparatus manufacturing

Output

907540

630231

635113

525805

487255

Growth

38.8

29.9

17.5

14.4

22.6

Light industry facilities manufacturing

Output

11468655

9419146

7324188

5794542

4470017

Growth

24.7

28.2

26.1

19.2

24.8

Glasses manufacturing

Output

2157941

1535961

1233007

1088959

775594

Growth

16.9

18.8

16.3

16.79

14.5

Source: China National Light Industry Council

Chapter 6 External Cooperation of China's Light Industry

China has been successfully attracted foreign direct investment. Attributed to its favorable investment environment, low wages and rapid growth of domestic market in recent years, China has attracted 6.5% foreign direct investment of the world and 25% of the developing countries in the past decade.

China's foreign direct investment is not evenly distributed in every province. The coastal provinces received 90% of the total foreign direct investment. Although, the government policies advocate investing in the west, the western provinces only received less than 2%. Most of the foreign direct investment is concentrated in the industry, which attracted 60% in 1990s. In 2004, 75% of foreign direct investment flowed into industry, of which, 71% on manufacturing. Service industry attracted 20%, most of which concentrated in real estate development. Banks and public facilities are major sectors to attract foreign direct investment in other countries, but they have very limited performance in China. Foreign direct investment in agriculture is almost negligible.



In 2008, China approved 27,514 foreign investment projects, down by 27.35% on a year-on-year basis, much lower than the previous year. The actual inflow of foreign investment reached 95.25 billion yuan, up by 21.59% on a year-on-year basis. It shows not only the reduction of foreign investment project caused by financial crisis, but also the transfer from quantity to quality in applying foreign investment and China's more rationality in approving foreign investment projects. In December, China approved 2,562 foreign-funded enterprises, down by 25.78% on a year-on-year basis. The actual inflow of foreign investment stood at US$ 5.98 billion, down by 5.73% on a year-on-year basis. Over the same period, the number of U.S.-funded enterprises dropped by 32.55% on a year-on-year basis, with a 12.54% increase in realized investment. The number of enterprises funded by the original 15 European Union countries dropped by 22.65% on a year-on-year basis, with a 30.12% increase in realized investment. China's utilization of foreign investment involves mainly in foreign direct investment and wholly foreign-owned enterprises and few in Sino-foreign joint ventures and cooperative enterprises.

Figure6-1 China's utilization of foreign fund 2008 Unit: US$ 100 million

Way of utilization of foreign fund

Approved projects in 2008

Realized foreign fund in 2008

Projects

2008

2007

Year-on-year growth

2008

2007

Year-on-year growth

Total

27514

37871

-27.35

952.53

783.39

21.59

Foreign direct investment

27514

37871

-27.35

923.95

747.68

23.58

Sino-foreign joint ventures

4612

7649

-39.70

173.18

155.96

11.04

Sino-foreign cooperative enterprises

468

641

-26.99

19.03

14.16

34.40

Wholly foreign owned enterprises

22396

29543

-24.19

723.15

572.64

26.28

foreign-funded joint stocks

38

38

0

8.59

4.92

74.71

Foreign indirect investment

0

0




28.58

35.72

-19.98

Foreign shares

0

0




0.77

4.02

-80.85

International lease

0

0




1.44

1.80

-20.00

Compensatory trade

0

0




0.52

0.18

192.25

Processing and assembling

0

0




25.85

29.72

-13.02

Source: Ministry of Commerce of the People's Republic of China Department of Foreign Investment Administration

In 2008, China attracted actual foreign direct investment of US$ 92.4 billion, up by 23.58% on a year-on-year basis. Among that, 10 Asian countries investment accounted for 59.97%, up by 4.62 percentage points than 2007. Hong Kong invested US$ 41.036 billion, accounting for 44.41%, up by 48.13% on a year-on-year basis. Japan invested US$ 3.65 billion, accounting for 3.95%, up by 1.76% on a year-on-year basis. EU major countries investment accounted for 5.41%, up by 30.12% on a year-on-year basis. North America invested US$ 3.488 billion, accounting for 3.77%, up by 15.76% on a year-on-year basis. Among that, U.S. invested US$ 2.944 billion, accounting for 3.19%, up by 12.54% on a year-on-year basis.



Figure6-2 Analysis on countries/regions of foreign direct investment 2008 Unit: US$ 10,000

Countries/regions

2008

2007

Growth

rate


Proportion in 2008

Proportion

in 2007


Proportion growth

Total

9239544

7476789

23.58

 

 

 

10 Asian countries/regions

5540994

4138335

33.89

59.97

55.35

4.62

Hang Kong

4103640

2770342

48.13

44.41

37.05

7.36

Indonesia

16725

13441

24.43

0.18

0.18

 

Japan

365235

358922

1.76

3.95

4.8

-0.85

Macao

581616

63700

-8.7

0.63

0.85

-0.22

Malaysia

24696

39725

-37.83

0.27

0.53

-0.26

Philippines

12687

19532

-35.05

0.14

0.26

-0.12

Singapore

443529

318457

39.27

4.8

4.26

0.54

Korea

313532

367831

-14.76

3.39

4.92

-1.53

Thailand

12921

8948

44.4

0.14

0.12

0.02

Taiwan Province

189868

177437

7.01

2.05

2.37

-0.32

EU major countries

499451

383838

30.12

5.41

5.13

0.28

Belgium

5586

9584

-41.72

0.06

0.13

-0.07

Denmark

29376

12514

134.75

0.32

0.17

0.15

Britain

91401

83094

10

0.99

1.11

-0.12

Germany

90049

73397

22.69

0.97

0.98

-0.01

France

58775

45601

28.89

0.64

0.61

0.03

Ireland

19829

6103

224.91

0.21

0.08

0.13

Italy

49326

34792

41.77

0.53

0.47

0.06

Luxembourg

13283

8246

61.08

0.14

0.11

0.03

Holland

86216

61666

39.81

0.93

0.82

0.11

Greece

1309

235

457.02

0.01

 

0.01

Portugal

829

823

0.73

0.01

0.01

 

Spain

20890

21324

-2.04

0.23

0.29

-0.06

Austria

13255

8234

60.98

0.14

0.11

0.03

Finland

5410

5589

-3.2

0.06

0.07

-0.01

Sweden

13917

12636

10.14

0.15

0.17

-0.02

North America

348762

301281

15.76

3.77

4.03

-0.26

Canada

54328

39658

36.99

0.59

0.53

0.06

United States

294434

261623

12.54

3.19

3.5

-0.31

Some free-trade ports

2314227

2262560

2.28

25.05

30.26

-5.21

Mauritius

149371

133250

12.1

1.62

1.78

-0.16

Cayman Islands

314497

257078

22.34

3.4

3.44

-0.04

Britain Virgin Islands

1595384

1655244

-3.62

17.27

22.14

-4.87

Samoa

254975

216988

17.51

2.76

2.9

-0.14

Others

536110

390775

37.19

5.8

5.23

0.57

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