Going Global!

You have to be there

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The SEMA/APPEX Shows just ended today in Las Vegas. Combined they are the biggest automotive aftermarket shows in the world. According to the cabbies (and taxi drivers know everything that happens in any city), SEMA/APPEX drew bigger crowds this year than the CES (Consumer Electronics Show). The CES has been the biggest trade show in the U.S.  for several years.

 So what does this say about the automotive aftermaket? The booth space at both shows was down 30-50%, and the attendance was down 10-30%, depending on who you talk to. Although this sounds bad, it is dramatically less bad than the CES turnout in February. And at SEMA the aisles were crowded. It seems to me the U.S. buyers that came to SEMA this year and the ever-growing buyers from international markets seeking U.S. products,came  to find and buy new things. They all had confidence the worst was behind us and 2010 would be better than 2009.

Many of my friends in various parts of the U.S. aftermarket told me 2009 was a tough year for them, but they all reported growth. Many of them suggested that drivers are repairing their vehicles instead of replacing them.

But you cannot find the opportunities in today's aftermarket if you are not there! 

RMB YEAH, YEAH, YEAH!

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Early this morning I took at taxi from my office to my doctor's office in Central. The fare was HK$78 (about US $10). Looked in my pocket and to my dismay I had several HK $500 bills, plus two $20 bills. When I presented the $500 bill, the taxi driver responded: "AIYAH!  HO MA FAN" (OH NO: BIG TROUBLE). To that I presented the two $20 bills and he shook his head. Then I looked in my other pocket and found a Chinese $100 RMB bill. I timidly showed it to the driver and he grabbed it and said: "RMD, Yeah, Yeah, Yeah !" He then efficiently gave me HK$22 change, pocketing the 8% exchange advantage.

It struck me how far the RMB has come in the world, and also how integrated Hong Kong has become into China. Five short years ago that taxi driver would have refused the same RMB he so gladly accepted this morning!

Too Much Hot Money Flows to Asia

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It seems much of the economic stimulus and liquidity in the world has found it's way to the BRIC economies, as we can see first hand in Hong Kong. In recent months, according to the South China Morning Post,  billions have flowed into the Hong Kong financial system, doubling the city's monetary base to over US $100 billion. This hot money has driven the local stock market up over 100% and lifted property prices over 30%

In Asia, the local governments are trying to enact various forms of capital controls rather than allowing their currencies to strengthen (thus attracting even more hot money).  Please click on the link for the complete article View this photo

Number of Hong Kong Rich falls 61% after the economic crisis

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The South China Morning Post recently reported that the ranks of Hong Kong's wealthy fell faster than any country on earth at 61 per cent. The biggest drop was among individuals with net worths valued at between US 1 and 5 million dollars.

China dropped 11.8%,  but still has the fourth largest population of wealthy citizens. 

The way China and HK are booming all of a sudden, the wealthy should recover substantially this year. Please click on the link to check out the article: View this photo

Want to Buy a U.S. $46 million apartment in Hong Kong?

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The South China Morning post reported a new record asking price for a hk flat: $46.15 million US! That is over $8,000 per square foot for this 5,636 square foot flat (where they charge you for some of the common areas).  This breaks the old record of $42 million for a house on the Peak. Hong Kong luxury real estate prices are going through the roof. All this 'hot' money is coming from Mainland China.

What makes this story even wilder is this $46 million flat is listed as being on the 66th floor but the building is only 40 stories tall (floor numbers  that HK  people feel are bad or unlucky numbers have been skipped).Click on the link to read the whole story...View this photo

China Sells Over One Million Cars in September!

Wednesday's South China Morning Post reports  that September cars sales in China increased 83.6% on a year on year basis. China is projected to sell 12.6 million vehicles this year, up from 8.8 million in 2008.   China will significantly out pace the U.S. forecast 2009 sales of 11 million units to become the world's biggest new car market .

Government incentives, tax breaks, a fast recovering economy and promotions such as low cost or zero interest loans are driving China's sales. (I always worry a bit about zero interest loans after experiencing the consumer credit led meltdown of the Thai and Korean economies in the late 1990's). Please click on the link for the full article...View this photo

Putting the 'Park' into Parking

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Danny Kwan of our office found an amazing link to the South China Morning Post's website with a great article detailing the efforts of several creative and determined Hong Kong university students to change a public parking space into a public park for a day. The video presentation gives you a feel for the international aspects of Hong Kong, our clever and multilingual university students,strong rule of law, and the generally tolerant and non-confrontational nature of the Hong Kong Police. Check it out: it is really something! Please click on the link to download: Download Menuitem

U.S. University Grads finding jobs in China

 Greetings from Seoul! A friend sent me a fascinating Business Week article about recent grads going to China to find jobs. Please click on the link to see the whole article.Download Young foreigners hunt jobs in China amid crisis - BusinessWeek

Labor Shortages in China

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Friday's Hong Kong Standard newspaper featured on article about the growing labor shortages in China's Pearl River Delta and industrialized east. More workers are needed as factories rush to fill orders for Christmas goods in North America and Europe. Click on the link to view the article:View this photo

IMF: China GDP to grow 9% in 2010

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On Friday the IMF increased it's 2010 forecast for China's GDP. In July it forecast China's economy would grow 8.5% next year. In the latest GDP forecast, China will grow 9% in 2010. Please click on the link to see the entire article from the Hong Kong Standard:View this photo

I predict China will grow more than 9% in 2010.