Nation gets top ranking in survey of world’s emerging economies

BEIJING – China ranks No 1 among 27 emerging economies due to its huge consumer market and rapid economic growth, according to the Emerging Markets Opportunity Index released by US accounting firm Grant Thornton.

The index takes account of key factors such as the size of the economy, wealth, involvement in world trade, growth potential and levels of human development.

China scores 454 points, double the India’s score (222 points) in second place and almost triple that of Russia (163 points) in third place.

“China leads the way thanks to the country’s huge consumer market, an increasingly open economy and extremely rapid trade growth, which offer a myriad of business opportunities for potential investors,” said Xia Zhidong, partner and vice-chairman of Grant Thornton China.

According to figures from the United Nations Conference on Trade and Development, China attracts the most foreign investment among the BRIC (Brazil, Russia, India and China) countries.

Last year, the inward foreign direct investment (FDI) flow to China was $95 billion, followed by Russia at $39 billion and with India and Brazil posting $35 billion and $26 billion respectively.

“In the future, more opportunities will lie in improved infrastructure, enhanced human capital, investments in R&D and the increasing middle-class base,” Xia said.

However, a lack of skilled labor, increasing labor costs and the low per capita gross domestic product (GDP) pose major challenges to foreign investment in China.

According to Grant Thornton China, 23 percent of Chinese enterprises said they faced a shortage of skilled labor, higher than the global average of 21 percent.

In the top five places of the index, BRIC countries take four positions.

India, although a long way behind, boasts a huge consumer market and a booming services industry, which accounts for around 55 percent of GDP, compared to 40 percent in the Chinese mainland.

Russia, in third place, has a much smaller consumer base than either China or India, but it boasts a per capita GDP which is more than double that of China, and more than five times as high as India. In addition, its high-level per capita consumption is close to the levels of the major cities of Europe’s advanced economies.

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BEIJING – Revenue in China’s software industry rose by 29.1 percent year on year to 604.8 billion yuan ($89.34 billion) in the first half of 2010, the Ministry of Industry and Information Technology (MIIT) said Monday.

The speed of the growth was 6.4 percentage points higher than the same period last year, said a statement on the MIIT website.

Further, export volume of software grew by 22.7 percent to $10.33 billion in the first six months, but the speed of the growth was 6.4 percentage points lower than the average level of the industry, the statement said.

Furthermore, outsourcing services provided by the country’s software industry rose by 38.8 percent to $1.23 billion, though the growth speed was 25.7 percentage points lower than the previous year.

However, experts note that the development of China’s software industry remains unbalanced. The eastern regions finished 529.3 billion yuan of software business revenue, about 87.5 percent of the country’s total business volume.

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BEIJING – Sichuan New Hope Agribusiness Co Ltd, the listed arm of China’s largest animal-feed producer, New Hope Group, announced its share trading has been suspended for undisclosed reasons that may cause the company’s share price to fluctuate irregularly.

Industry experts said the reason behind the suspension may be that an unlisted subsidiary of the group – Shandong Liuhe Co Ltd – has plans in the works to inject capital into Sichuan New Hope. The Shenzhen-listed company declined to comment and did not signal when trading will resume.

Shandong Liuhe is China’s largest poultry product processor and Shandong’s top feed enterprise with more than 200 subsidiaries engaged in feed, animal husbandry and meatpacking.

“Combining the listed and unlisted assets is the inevitable choice for Liu Yonghao, president of New Hope Group, who wants to develop his company into a world-class agriculture enterprise,” said Sun Guodong, an industry analyst at Qilu Securities.

According to Qilu Securities, meat sales of four unlisted units of Sichuan New Hope were eight times that of Sichuan New Hope last year. Meanwhile, their total sales revenue was 6.6 times the listed company.

Qilu Securities’ Sun said that Shandong Liuhe is more likely to make the investment, because of its good asset quality and capacity for profitability.

According to Qilu Securities, the combined sales revenue of Liuhe was 40 billion yuan last year. While, that for Sichuan New Hope Agribusiness was 6.8 billion yuan, 6.4 percent lower than a year earlier.

New Hope Group acquired a 45 percent stake in Shandong Liuhe in 2005. According to Du Juan, head of the office of New Hope Group, Shandong Liuhe saw a 100 percent increase in its business every year since it joined New Hope.

Zhang Xu, an analyst at Shanxi Securities, said: “New Hope Group has always been discussing asset combinations which will be beneficial to the whole group.”

Qilu Securities estimated a 32 percent increase in New Hope’s sales, which is expected to hit 9 billion yuan in 2010.

By Friday, the share price of Sichuan New Hope Agribusiness on the Shenzhen exchange was 8.56 yuan, 64 percent lower than its highest price of 24 yuan per share in 2008.

Industry expert said it’s a suitable time for Liuhe to make an investment because of the low share price.

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