BizChina

Enterprising college students seek slice of Apple-hungry Chinese market

Jack Lee (not his real name) is a gray-market iPad seller in China - or at least he hopes to be.

For now, until Apple kicks off US sales of the much-hyped tablet PC in early April, all he has to sell is the future, promising delivery of the device by taking orders in advance.

The New York-based postgraduate student's business model is simple: buy a 16G WIFI iPad in the US for $499 (3,407 yuan) and informally ship it directly to his online customers back in China, charging them 5,500 yuan for the privilege of having a gray-market one early. Subtract around $30 for shipping and another $45 to cover NY-sales tax, leaving Lee with a cool 1,890 yuan in his pocket.

To date, Apple hasn't said when or even if it plans to release the iPad in China. Apple China spokesperson Tiffany Yang refused to comment on this story.

While the 24-year-old Lee's idea may sound unique, he is actually far from alone in his venture. A review of popular online shopping website, taobao.com, reveals several hundred people are offering to flog Apple's new tablet for prices ranging from 3,500 yuan to 6,200 yuan.

So far, Lee's business is not exactly booming.

Wang Jianzhou, chairman and chief executive officer of China Mobile speaks at the company's 2009 annual results conference in Hong Kong on Thursday.

BEIJING - China Mobile, the world's largest mobile operator, said on Thursday that it plans to reduce capital spending over the next three years as network expansion for third-generation (3G) services nears a close.

The company will reduce capital spending from 123 billion yuan this year to 80.4 billion yuan in 2012, it said in its quarterly report.

China Mobile will also roll out 80 new 3G handsets that support its TD-SCDMA network later this year.

'The convergence across telecommunications, Internet, radio and TV broadcasting networks will form a new market beyond the traditional telecommunications industry," Chairman Wang Jianzhou said in a statement on Thursday.

Poly Beijing Real Estate Limited, a subsidiary of the State-owned conglomerate China Poly Group, was among the latest successful bidders to snap up high-priced residential land in Chaoyang district, grabbing a slice of scarce real estate on Wednesday for 5.04 billion yuan ($738.3 million).

The parcel was the most expensive among seven plots of land that sold on the same day in the Beijing Land Coordination and Reserve Center.

The 280,000-sq-m plot in Dawangjingcun village is next to a parcel bought on Monday by Hong Kong listed Sino-Ocean Land for 4.08 billion yuan. Land in the area now sells for as much as 27,529 yuan per sq m.

China Cosco Group, the world's second largest shipping company, announced on Tuesday plans to raise as much as 3.9 billion yuan, one day after its real estate subsidiary stunned the public by buying land at a record high price in Beijing.

Cosco hopes to sell 390 million new shares of its Shanghai-listed unit Cosco Shipping Co to shareholders by placing three shares for every 10 shares. "The money would mainly be used to build 18 multi-purpose cargo ships and heavy-lift carriers," said the company.

"The plan is a good investment in the shipbuilding industry, which was already sunk by the global financial crisis," said Wu Yunying, an analyst at Changjiang Securities.

But the financing plan has drawn public criticism as Sino-Ocean Land, its Hong Kong-listed real estate subsidiary, on March 15 won the bid on a 169,500 square meter parcel of land located in Beijing's Chaoyang District, for a price of 4.08 billion yuan, or 24,000 yuan per square meter. The company has since been named the capital's new "land king".

Since last year, State-owned companies have been accused of triggering asset bubbles in first-tier cities as they continued to break land price records with abundant capital flow that private players don't have.

Some analysts said the big spending on land and consecutive financing plans may affect its brand image with the public, and regulators may tighten the State-owned company's spending on real estate projects.

However, Wu from Changjiang Securities said: "For Cosco investors, the news could have little impact, as the property sector only accounts for a slice of the group's business."

The real estate business is not a major profit maker for Cosco Group, Zhang Fusheng, vice-president of the group said in an earlier interview with China Daily, without elaborating.

He also denied potential exit from this sector, as the central government suggested State-owned companies consider.

According to Zhang, the group made a profit of 600 million yuan last year, with the shipping business making up 70 percent of total revenue.

Its listed unit, Cosco Shipping Co, on Tuesday reported a 90.64 percent slump in net profit to 136 million yuan, and a 43.46 percent decrease in revenue to 3.9 billion yuan in 2009.

The results were within market estimates, said Yu Jianjun, an analyst at Huatai Securities. He predicted that the company's performance will rebound as the shipping industry gradually recovers this year.

"The new fund-raising plan will help strengthen Cosco Shipping's long-term competitiveness," Yu said.