ChinaWatch: Ford Expands

We Mean Business offers the latest installment in our new feature, ChinaWatch, our digest of selected industry and consumer news from the world’s other major economic and military power.

Poised To Surpass U.S.?

“China’s per capita income may be among the 100 poorest nations, but these are still the early years of its opening-up” on the world economic stage, The China Daily reports.

“The fact is that China’s economic modernization is surpassing in decades what developed nations took centuries to achieve,’’ according to the paper.

“The world’s two largest economies, the U.S. and China, currently have GDPs of $15 trillion and $5 trillion, respectively. However, China saves and invests 35 percent of GDP, but Americans consume more than they produce.’’

The China Daily asserts U.S. policymakers are not aligning their country’s interest with China’s economic success, even though major American companies are in China to be profitable.

“Will the U.S. align its success with China’s or are the two countries changing places? The answer depends on many factors, but the Obama Administration’s current policies assure failure. What he needs is a new grand strategy for success. ’’

Stock Fraud Hits $30B

Fraudsters in the Chinese stock markets have proved to be as active as those in India, The Times of India reports.

China’s ministry of public security has revealed that the total sum involved in securities and futures markets crossed $30 billion since 2002.

Investigators have managed to recover just $4.5 billion of the total money stolen. Police have cracked 150 major crimes, including the prominent case of Huang Gangyu, former chairman of the electronic retail chain Gome, now serving a prison sentence of 14 years.

The Beijing No. 2 Intermediate People's Court confiscated $30 million worth of Huang's assets and fined him $90 million for insider trading and illegal business dealings.

The ministry accepts that China's capital market is still in an “early and transition” stage, and various systematic problems might have given way to some illegal activities. The country's stock market begun operating as late as 1990 in the financial hubs of Shanghai and Shenzhen.

The Chinese government recently introduced a slew of measures that include regulating government officials, who have access to insider and non-public information about listed companies, and ensuring confidentiality of sensitive information.

Ford Expanding Dealerships

Ford Motor Co. plans to add 66 dealerships in China before the end of the year, according to a Ford document reviewed by the Wall Street Journal.

The one-fourth expansion of Ford's China sales effort will focus on what are considered the tier-two and tier-three cities in Western and Northern China.

In all, Ford will have added approximately 100 new dealerships in China with its partner, Changan Automobile, by the end of the year.

The total number of Ford dealerships in China will be roughly 340 by year-end, according to the Ford statement reviewed by the WSJ.

The tier-two and tier-three cities in China include Nanning, Shijazhuang, Harbin and Anyang, cities with populations over one million. Car demand isn't the only consumer trend being tapped in the Chinese tier-two and tier-three cities.

It's part of a much larger trend in China, from education to health care and real estate, as the tier-one cities become saturated, according to TheStreet.com.