FDI in China Drops to New Low; Anti-Trust Actions Blamed

fdichinaLos Angeles, CA – China attracted $71.1 billion in foreign direct investment from January to July, down 0.4 percent on the same period in 2013, with FDI in the country reaching $7.8 billion in July alone, the first decline in overseas capital inflow in 17 months.

The slashing of spending in China’s manufacturing sector by companies from the US, Japan and the European Union is being blamed, primarily, on an increase in Beijing’s recent crackdown on foreign companies alleged to be engaging in “anti-competitive” business practices.

Over the past year, China has taken action against a number of ‘big ticket’ foreign companies, accusing them of breaking the country’s anti-trust regulations, which many feel are opaque and in violation of World Trade Organization rules.

Most recently luxury car brand Mercedes-Benz has been accused of manipulating prices for after-sales services in the country, while Beijing has imposed fines on milk powder companies including Mead Johnson Nutrition Co and Danone SA, alleging breach of its anti-monopoly laws.

China has also launched a probe into US-based Microsoft and chip maker Qualcomm over anti-trust claims, while several pharmaceutical companies including GlaxoSmithKline are facing probe in the country over alleged corruption and price fixing.

The probes have raised concerns among foreign investors that the country is targeting foreign firms operating there in an effort to, as one source out it, “flex its muscles.”

According to the Ministry of Commerce in Beijing, though, the anti-trust investigations aren’t responsible for the drop in FDI. Instead, the agency said, the “volatility of FDI” is a natural reaction to the country’s “efforts to balance the economic structure.”

The monthly decline “is not sufficient enough to reflect the general trend. It must not be linked to the anti-monopoly probes into some foreign invested companies or be associated with other baseless speculations,” said Commerce Ministry spokesman Shen Danyang.

“All market players should operate their business according to the law,” he added. “They should be punished according to the law and be subject to appropriate legal penalties if they violate the law.”

Beijing, he said, “expects foreign investment to keep a steady growth in the coming years and total FDI in 2014 to remain at a similar level with last year.”


2024 Mobile Commerce Sales Expected to Soar to $59 Billion

m commerceChicago, IL – Many US merchants that place mobile at the core of their e-commerce strategy are reaping big rewards with “m-commerce” sales of $59 billion in 2014, up 74 percent from $34 billion in 2013, according to the Internet Retailer’s latest 2015 Mobile 500 report.

Mobile sales, the report said, will account for 23 percent of total 2014 online sales of the US merchants analyzed in the report.

By contrast, e-retail sales in the US grew 15.7 percent in Q2 2014, according to the US Commerce Department. With their combined $30.8 billion in 2014 mobile sales, No. 1-ranked Amazon.com and No 2.-ranked Apple Inc. command a 37 percent share of total Mobile 500 “m-commerce” sales, the report found.

“But since the mobile commerce market is far from mature, there’s still plenty of room for growth and new players, both domestically and internationally,” it said.

The 134 overseas retailers studied in the 2015 Mobile 500 are expected to reach $25 billion in “m-commerce” sales in 2014, up an impressive 96 percent from $13 billion in 2013.

The report estimates that the world’s 500 largest mobile commerce businesses combined will increase their mobile sales by 80 percent in 2014 to more than $84 billion.

“The quantum leap in mobile sales growth worldwide is prompting many retailers to prioritize their tech spending and match consumers’ online shopping behavior, which leans toward mobile shopping on apps as opposed to shopping on a mobile web site,” the report said.

“Mobile commerce is like a hurricane rearranging the coastline of e-retailing,” said Internet Retailer publisher Jack Love in Chicago. “For e-retailers trying to ride the wave rather than being swamped by it, the 2015 Mobile 500 is a survival guide to e-commerce in the mobile age.”


New Offshore Incorporations Increase in 2013

offshore (1)Los Angeles, CA – New company registrations increased in most offshore jurisdictions in the second half of 2013, according to Appleby, one of the world’s largest providers of offshore legal, fiduciary and administration services.

In total, there were 44,615 new offshore company incorporations in the second half of 2013, and the total number of active companies rose to 671,000, according to the firm’s latest On the Register report.

The report provides insight and data on company incorporations in offshore financial centers and is focused primarily on the second half of 2013.

“As the global economy follows a path to recovery, offshore company registration data reveals that levels of new company registrations are up in most jurisdictions during the second half of 2013, with increases of between 5 percent and 10 percent,” said Farah Ballands, partner and global head of Fiduciary & Administration Services at London, UK-based Appleby.

Overall, the report found, the combined total of new offshore incorporations in the second half of 2013 “represents a slow-down compared to the preceding six months,” attributing much of the pull-back to a decline in incorporations in the British Virgin Islands (BVI) – which is the offshore jurisdiction that attracts the most company registrations.

Though it maintained a two-fold lead over its nearest comparator, the Seychelles, the number of new companies joining the BVI register shrank by 17 percent when compared to the first half of the year.

The story of company incorporations, the report said, “is largely positive with the Cayman Islands being the only other offshore jurisdiction to report a decrease in new registrations in the second half of 2013 when compared to the first half of the year.”

However, the report attributed the decrease to a seasonal decline in company registrations and, when looking at 2013 as a whole, Cayman experienced a healthy 5 percent growth.

During the second half of 2013, the Crown Dependency jurisdictions of the Isle of Man and Guernsey revealed the largest increases in new companies joining the registers at 10 percent and 9 percent, respectively, over the previous half.  The number of new companies added to the register in Mauritius, meanwhile, was up 8 percent on the previous period.

The largest year-on-year increase was seen in the Seychelles (29 percent), followed by Bermuda (16 percent), which saw a recent high in new incorporations – more than 1,000 annually for the first time since 2008.

Data for the report was collected from reported figures produced by the national registries of Bermuda, the Cayman Islands, Guernsey, Hong Kong, the Isle of Man, and the UK.

In addition, data available from Jersey Finance, the Central Bank of Seychelles and the Financial Services Commissions of Mauritius and the British Virgin Islands, Seychelles International Business Authority, The US Census Bureau, The State of Delaware, The Federal State Statistics Service in Russia and the State Administration of Industry and Commerce of China was also analyzed.


US Exports to ‘Sub-Saharan’ Africa Surge to $1.7 Billion

impact_report_2014_hpfWashington, DC – Over the past ten months, the US Export-Import Bank (EXIM) has reportedly authorized a record $1.7 billion in financing to support exports of American-made products to sub-Saharan Africa.

This record-setting surge “has not only empowered U.S. small businesses to sell their products in global markets, but has also supported more than 10,000 American jobs which contribute to strengthening the U.S. economy,” the trade bank said.

The announcement was made as EXIM President and CEO Fred Hochberg participated in the US-Africa Leaders Summit that recently convened in Washington, DC.

EXIM also said it will pledge $3 billion in financing to support US exports to sub-Saharan Africa over the next two fiscal years and that it had recently signed a memorandum of understanding (MOU) with Angola “to strengthen collaboration on the financing of American-made exports” to the central African nation.

Two-thirds of the population of Sub-Saharan Africa lacks electricity and earlier this month, the bank approved a loan guarantee for $17 million to support long-term financing by the West African Development Bank (BOAD) for the Azito Power project in Cote D’Ivoire.

Financing for steam turbines used in the Azito Power project will support 40 manufacturing and engineering jobs in Schenectady, New York, and Bangor, Maine, said EXIM. The project is part of a long-term strategy to strengthen the region’s power capacity and, in turn, help to position economies there for growth, it added.

Three Louisiana small businesses benefit from EXIM’s $43 million financing of a liftboat destined for Nigeria.

The “Bellator” liftboat is a self-propelled vessel, 150-foot long by 118-foot wide, that lifts and suspends equipment and personnel up to the level of an offshore drilling platform.  About 300 employees of C.S. Liftboats, Inc., of Abbeville, Louisiana, together with Gulf Island Fabrications of Houma, Louisiana, will construct the high-tech vessel.

The Nigerian buyer also contracted for prefabricated liftboat-mounted modules for housing workers; these are built by Fiberglass Unlimited Inc. of Raceland, Louisiana.  This is Nigeria’s first purchase of a new, US-made liftboat system.

According to the bank, Pennsylvania employees of GE Transportation “will benefit from the bank-supported export of GE’s locomotives with Pennsylvania-made engines and components to Transnet in South Africa.”  In its recent transaction, EXIM authorized a $563.5 million loan guarantee to support financing for the sale of 293 locomotives being manufactured by GE Transportation.

EXIM “is firmly committed to equipping US exporters to realize the vast economic opportunities emerging throughout sub-Saharan Africa, which is home to seven out of 10 of the world’s fastest-growing markets,” said EXIM’s Hochberg. “Each transaction the Bank supports creates jobs for local US businesses and strengthens our relationship with a region that has a strong prospect for long-term economic growth.”


Tips On Stemming the Flood Of Counterfeit Goods

genuine-fake-turkey-8Los Angeles, CA – Despite significant government efforts, China remains the world’s primary source of counterfeit goods, constituting 84 percent of shipment seizures in the US in 2012.

Experts, in fact, predict that the online trade of counterfeit goods in China will surpass the physical trade of such goods in the next two to three years.

The problem seems too vast and overwhelming to surmount, however, says Bob Youill, senior managing director in the Global Risk and Investigations practice of New York-based FTI Consulting, “doing so will never be easy, but it can be done” if companies take the appropriate steps.

In an article published this week in the FTI Journal, Youill, an acknowledged authority on product piracy, makes several suggestions on what US-based exporters, importers, retailers and manufacturers can do to stop the production, distribution and sale of counterfeit goods.

First, he says, declare your intellectual property. An effective anti-counterfeiting strategy for China, he says, “begins with begins with registering the relevant intellectual property rights in China, as Beijing doesn’t automatically recognize IP rights registered overseas.”

That done, writes Youill, “quantify the risk to your brand with in-house counsel working directly with key stakeholders to review the company’s markets inside and outside China and organize those markets into those that must be protected and those that are less important to focus on.”

Next, it needs to be understood that the primary responsibility for managing counterfeiting will rest mostly with in-house counsel and will involve representatives from different corporate functions, including a PR lead, external consultants, and internal stakeholders. To achieve that goal, “build your anti-counterfeit team.”

When considering tackling organized counterfeiting operations, a “best course of action” should be strategized that carefully analyzes various tactics that could include ‘street sweeps,’ Customs watches, administrative action, and civil or criminal proceedings.

Lastly, says Youill, “There are a number of risks to manage when dealing with Chinese authorities, such as controlling sensitive corporate information, fulfilling government requests for documents, overseeing internal reporting and complying with reporting rules. So, learn how to work with them.”



‘Electric Highway’ Planned at Ports of Los Angeles, Long Beach

1Los Angeles, CA – Next summer, Southern California’s South Coast Air Quality Management District (AQMD) will begin a pilot ‘e-Highway’ system near the ports of Los Angeles and Long Beach.

The first of its kind in the US, the $13.5 million highway project to be built starting in early 2015 will consist of a two-way, 1-mile overhead electric catenary system along a major thoroughfare that runs between both mega-ports.

A catenary system consists of overhead wires that vehicles pass under to receive electrical charges using a pantograph, a contraption mounted on the roof of the vehicle to collect the electrical charges. They are most commonly used by trolleys and streetcars.

The e-Highway concept applies the catenary system to trucks, allowing them to collect electrical power with a pantograph that unfolds from the roof of a truck. After passing under the catenary system, trucks can switch to diesel, compressed natural gas, battery or another on-board energy source.

Up to four demonstration trucks — both battery-electric and hybrid types — will reportedly be used. Trucks on the ‘e-Highway’ will be able to travel at speeds up to 60 mph.

Germany-based global engineering company Siemens will build the catenary system as well as the “current collectors,” which would allow trucks at any speed to link and unlink from the ‘e-Highway.’

According to the AQMD, the ports of Los Angeles and Long Beach “are an optimal location for this kind of system because of the high concentration of diesel-powered trucks traveling relatively short distances between the ports and intermodal transfer facilities or distribution warehouses.

AQMD officials hope the demonstration “will lead to a reduction of fossil fuel and toxic air emissions, as well as save on transportation costs.”


Boxed Imports Expected to Reach All-Time High

shopper-w-bagsWashington, DC – Import volume at major US container ports is expected to hit an all-time record in August as retailers concerned about the lack of a West Coast longshoremen’s contract rush to bring holiday season merchandise into the country, according to the latest monthly Global Port Tracker report.

“The negotiations appear to be going well but each week that goes by makes the situation more critical as the holiday season approaches,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said.

Retailers, he said, “are making sure they are stocked up so shoppers won’t be affected regardless of what happens at the ports.”

Import volume at the ports covered by the Global Port Tracker report, just released by the National Retail Federation (NRF) and business consultancy Hackett Associates, is expected to total 1.54 million containers this month.

That’s the highest monthly volume since NRF began tracking import volume in 2000, topping a previous record of 1.53 million set in July and unusually high numbers seen this spring as retailers began importing merchandise early in anticipation of this summer’s contract talks.

The contract between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) expired on July 1 with dockworkers pledging to remain on the job as both sides continue to negotiate a new agreement.

Both sides report that the on-going contract negotiations have been “productive” with the NRF urging both sides to avoid any disruptions that could affect the flow of seasonal back-to-school or holiday merchandise.

US ports followed by the report handled 1.48 million TEUs (Twenty-foot Equivalent Units) in June, the latest month for which after-the-fact numbers are available. That was down 0.38 percent from May but up 9.1 percent from June 2013. One TEU is one 20-foot cargo container or its equivalent.

July was estimated at 1.53 million TEU, up 5.8 percent from the same month last year, and August is forecast at 1.54 million TEU, up 3.6 percent from last year. September is forecast at 1.48 million TEU, up 2.8 percent from last year; October also at 1.48 million TEU, up 3.3 percent; November at 1.37 million TEU, up 2 percent; and December at 1.34 million TEU, up 2.1 percent.

Those numbers would bring 2014 to a total of 17.1 million TEU, an increase of 5.2 percent over 2013’s 16.2 million. Imports in 2012 totaled 15.8 million. The first half of the 2014 totaled 8.3 million TEU, up 6.9 percent over last year.

The import numbers come as NRF is forecasting 3.6 percent sales growth in 2014. Cargo volume does not correlate directly with sales but is a barometer of retailers’ expectations.

Hackett Associates CEO Ben Hackett said the increases in volume reflect both improvements in the economy and retailers importing merchandise early because of the contract negotiations.

“US GDP has increased in 11 out of the last 12 quarters, confirming that we are in a sustained period of expansion,” Hackett said. “A significant portion of the strong upswing in imports has been due to the labor negotiations, with importers moving up shipments just in case.”

The Global Port Tracker covers container activity at the ports of Los Angeles, Long Beach, Oakland, Seattle and Tacoma on the US West Coast; New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades and Miami on the US East Coast, and Houston on the US Gulf Coast.


Egyptian Government Plans New, Improved Suez Canal

suezcanalLos Angeles, CA – The Egyptian government has reportedly launched a new project to construct a “new” Suez Canal that will run for 45 miles parallel to the existing waterway.

According to the Head of the Suez Canal Authority,  Mohab Mamish, the new canal “will reduce passing ships’ waiting time from 11 hours to as little as three hours” as they move from Port Said on the Mediterranean to the Red Sea terminus of Port Tawfiq.

The existing canal is too narrow for two-way passage, so transiting ships are moved in convoys or use bypasses.

The original, sea-level canal extends for 102 miles and has been the major route for shipping moving between Europe, India and the Far East since it was completed in 1869 after ten years of work. In 24 hours, the canal can handle as many as 76 ships.

The Suez Canal, a major chess piece in international geopolitics for all of its 145 year existence, earns Egypt about $5 billion annually, important for a country that has suffered a reduction in tourism and foreign investment over the last three years because of Egypt’s continuing political tensions.

The new canal is expected to increase annual revenues to $13.5 billion by 2023, said Mamish. The total estimated cost of drilling the new channel would be about $4 billion and should be completed in five years, he said.

Egypt, said Mamish, will eschew using foreign companies to build the planned canal and instead use its own firms, a move expected to create several thousand, much-need jobs.

At the same time, Cairo has said a consortium including the Egyptian Army will develop an international industrial and logistics hub in Suez to attract more shipping and logistics business to the country.


Hola y Mucho Gusto, America! This Montejo’s for You!

montejoLos Angeles, CA – Anheuser-Busch is importing its first Mexican lager to the US in a concerted campaign to tap the fast-growing Hispanic market.

Anheuser-Busch said that starting next month it will sell Montejo lager in bars, restaurants and grocery stores in California, Texas, Arizona, and New Mexico.

Nearly 55 percent of all imported lagers in the US are imported from Mexico, including such brands as Corona, Modelo, Tecate and Dos Equis, according to market researcher Euromonitor International.

The Mexican import market in $2012 was valued at $1.8 billion with South of the Border brands currently commanding a 60 percent share of the US imported beer market.

“There’s obviously a growing consumer demand and preference for Mexican beers in the US,” Ryan Garcia, Anheuser-Busch’s vice president of regional marketing, said in a press interview.

That’s due to both demographics, but also to price as Mexican beers tend to be cheaper because import costs are lower, said Euromonitor.

With origins in Mexicos’s Merida, Yucatan, Montejo is brewed at Cerveceria Modelo S. de R.L. de C.V. in Oaxaca, Mexico.

Its export to the US market will be the first time the brand is available outside of Mexico. According to InBev, current plans don’t call for Montejo to be made available beyond the southwestern US, where most current sales of Mexican imports occur.

Anheuser-Busch, a subsidiary of Belgium-based Anheuser-Busch InBev, the world’s largest beer maker, will launch Montejo in California, New Mexico, Arizona and Texas with an integrated advertising and marketing campaign that includes Hispanic targeted radio, digital, print, experiential and outdoor advertising.

Consumers in Los Angeles, Houston and San Antonio residents will also catch a glimpse of one of Mexico City’s classic VW Beetle “vocho” taxicabs delivering Montejo samples to various local events and festivals.


Wendy’s: ‘Aye’ to Canada, ‘Nyet’ to Russia

wendysDublin, OH – Fast food giant Wendy’s has announced a major overhaul of its international operations with almost simultaneous moves to increase its Canadian footprint and reduce its presence in Russia.

On the Canadian front, Wendy’s currently operates 367 restaurants across the country, 230 of which are franchises. By early next year, the company said, the remaining stores that are company owned will also be franchise operations.

According to sources, the company is betting on Canadian franchisors having a better understanding of the Canadian fast food market with the goal of opening at least 100 additional franchises in Canada over the next six years.

Wendy’s is the third-largest burger chain in Canada, behind global mega-giant McDonald’s and A&W. The company has a joint real estate venture with Canadian donut king Tim Hortons called ‘TimWen’, that has Wendy’s leasing 42 facilities across the country for Wendy’s/Tim Hortons combo restaurants.

At the same time it announced its expansion in Canada, Wendy’s said it will close the eight burger restaurants it’s opened in Russia since 2010.

Wendy’s, which had originally planned to open 180 locations in Russia, has cited disagreements with its local partner, Wenrus, for the decision.

The Russian franchiser, the Ohio-based company said, “has not expressed interest in growing Wendy’s business in Russia, nor have they shown the resources to successfully operate the existing restaurants on a long-term basis.”

Currently, Wendy’s operates more than 6,500 Wendy’s restaurants in the US and 27 countries including Singapore, Azerbaijan, Georgia, Costa Rica, the Bahamas, Singapore, Guatemala, Japan, Argentina, Venezuela, the United Arab Emirates, the Dominican Republic, New Zealand, Malaysia, and the Philippines.