BizChina

China's domestic auto market could reach sales of more than 17 million vehicles this year and 19 million next year, said a senior General Motors Co. executive, outpacing home-market sales for several Western auto brands.

Daimler AG Chief Executive Dieter Zetsche on Friday separately said he expects Chinese consumers to become the biggest buyers of Mercedes Benz cars in the next three to five years. Volkswagen AG's Audi unit expects its sales in China to surpass German sales next year.

With China's booming economy raising personal income, the country's auto market will likely continue to offer a "tremendous upside potential," said Kevin Wale, GM's head of operations in China. He predicted China is likely to hold on to its newly acquired status as the world's largest auto market for the foreseeable future.

The sales forecasts that Mr. Wale offered Thursday in Shanghai are up sharply from the 13.7 million vehicles that auto makers sold in China last year as the country's auto market grew about 50% to surpass the U.S. as the world's biggest.

Baidu, the Chinese Web search provider, posted strong earnings in its latest quarter, doubling net income in only 12 months as it continued to add online marketing customers.

Baidu, the leading search engine in the Chinese language, increased revenues by 76.4% from a year ago to $337.2 million. Essentially all of the increase comes from an extended online marketing customer base, which grew to 272,000, up 25.9% from Q3 2009, and 7.1% on a sequential basis.

After years of having to going through an awkward offshore detour to invest in Chinese startups, now venture capitalists are going direct.

They’re transforming companies they previously invested with the traditional system — so-called wholly owned foreign enterprises typically set up in the Cayman Islands — to a joint venture in China. It’s done through a share swap. I first heard about this at a recent Silicon Dragon event in the Valley.

At the event, legendary investor Dick Kramlich of venture firm New Enterprise Associates showed he’s in the vanguard. His firm is transitioning a Hangzhou-based portfolio company, microfinance service UPG, from a wholly-owned foreign entity to a Chinese firm.
This step will let NEA invest in the company directly. Then, when it comes time to exit the company through an initial public offering, NEA and the investment bankers can take UPG public on a local exchange in China.

China Mobile Ltd. said Wednesday its net profit for the January-September period rose 3.9% on growth in its third-generation mobile-services business, even as competition intensified.

The world's largest mobile carrier by subscribers reported net profit for the nine months ended Sept. 30 was 87.25 billion yuan ($13.13 billion), up from 83.94 billion yuan a year earlier.

That marked a slowdown from China Mobile's net profit growth for the first half, when net profit rose 4.2% from a year earlier to 57.64 billion yuan, underlining pressures on the company's bottom line including heavy spending on handset subsidies to promote its 3G services.

China Mobile and its two major rivals, China Unicom (Hong Kong) Ltd. and China Telecom Corp., are competing for subscribers to their 3G services, whose faster data speeds and pricier service plans could boost the companies' average revenue per user—a key gauge to determine long-term growth for telecommunications operators.