Monthly Archives: September 2009

By Michael Komesaroff

Michael Komesaroff is principal of Urandaline Investments , a consultancy specialising in China’s capital intensive industries, and a guest contributor to Dragonbeat blog this week.

China’s metals industry has an unenviable reputation for being technologically backward and highly polluting. In particular, the perception remains that China’s steel industry is dominated by thousands of small, antiquated mills producing low-quality construction steel at a high environmental cost.

Yet, while this description remains true of parts of the industry, it does not hold for the growing number of modern steel mills that operate at efficiencies close to their best international competitors.

By Rosealea Yao and Tom Miller

Rosealea Yao is Dragonomics’ research manager and a guest contributor to Dragonbeat blog this week

Just how expensive are Chinese homes?

The standard measure of housing affordability compares average house prices with average household incomes. In developed country markets, prices are generally considered expensive if they exceed four times average annual household income.

The house-price-to-income ratio in most Chinese cities has been well above eight for years, and reaches an eye-watering 14 in the priciest cities. The cost of housing in China looks scarily high.

Yet China’s housing market continues to roar upwards. Despite the government’s best efforts to cool the property fever in 2007, the market adjustment that followed in 2008 now appears but a blip: house sales in the first half of 2009 matched the frenzied buying of 2007, and prices look set to follow.

By Tom Miller

China is rightly proud of being the home of tea, the world’s most popular drink. Celebratory cups of cha were sipped when China recently regained from India its historical position as the world’s pre-eminent tea producer and consumer after a 100-year hiatus.

But the country’s failure to produce a single internationally recognised tea brand is a source of frustration for cheerleaders of the native Camellia sinensis leaf.

Both at home and abroad, Chinese tea brands struggle to compete with foreign competitors. In China, Unilever’s Lipton brand has a market-leading share three times that of its closest local rival.

“Why is Lipton more powerful than 70,000 Chinese tea companies?” lamented a recent article in a Beijing newspaper.

By Will Freeman and Tom Miller

For years, China’s domestic carmakers have languished in their foreign competitors’ slipstream. Strip out the legion of blue trucks and white minivans that crisscross the hinterland, and Volkswagen, GM, Toyota and Honda are the vehicles of choice on the country’s 3.8m km of highway.

But sales of Chinese brands are accelerating: four out of every 10 cars bought in China in the first half of 2009 were domestic brands, led by BYD, Chery and Geely.

Dragonbeat is no longer updated but it remains open as an archive.

Readers of the Dragonbeat blog can now go to www.ft.com/dragonbeat to read the new Dragonbeat weekly column for insightful commentary and analysis on China.

Full list of the FT’s blogs