China's market is not so lucrative
It is hardly news that 2003 and 2004 have been good years for business in China. The refrain about the country supplying one quarter of the world's economic growth has become a contemporary cliché. But just how good has life been for individual companies? Not that great, according to the latest profitability review by the China Economic Quarterly (CEQ), which runs counter to the received wisdom about the abundant and lucrative opportunities for foreign companies in China.
The survey is based on income reported by affiliates of US companies in mainland China, plus a proportion of earnings reported by holding companies in Hong Kong and Singapore that is reckoned to derive from mainland business activity. These numbers are compared and cross-checked with less reliable Chinese data for earnings from all foreign manufacturers and polls conducted by organisations such as the American Chamber of Commerce.
The latest survey shows that the earnings of US affiliates have rocketed. As recently as 1997, the best evidence was that US companies in China were returning an aggregate profit of zero. In 1999, equity-based earnings (those derived from shareholdings in local affiliates) rose to $755m. By 2003, they had more than tripled to $2.4bn. Latest filings suggest they will be at least as good this year. The CEQ's estimate for total China earnings, which includes the affiliates' profits and earnings booked through Hong Kong and Singapore, shows income rising from $1.9bn in 1999 to $4.4bn in 2003. When all other sources of profit are added royalty and licensing fees and income from private services spanning consultancy to education last year's total mounts to $8.2bn.
Eight billion dollars is no small amount of money. It makes China sound like the global profit lode it is so often reported to be.
But in 2003, US companies made $7.1bn in Australia, a market of only 19m. They earned $8.9bn in Taiwan and South Korea, emerging economies with a combined population of 70m. And in Mexico an important destination for US foreign direct investment that is considered by many people to be something of an investment dud compared with China US companies earned $14.3bn last year.
The fact is that foreign earnings from the Chinese economy have increased quickly, but from a low base. Indeed, many foreign businesses in China are still struggling to make money at all. We know this from surveys such as the one conducted annually by the American Chamber of Commerce. Even in 2003 when the economic environment was extraordinarily favourable most respondents were unable to achieve a profit margin above their global average.
In fact, a large proportion of foreign enterprise earnings ends up in the hands of a tiny number of companies that enjoy “lucky breaks” in China's heavily regulated operating environment. The biggest winner used to be mobile telecommunications, a 1990s business that ran up against no vested interests in China and contributed as much as half of US companies' mainland-reported earnings as recently as 2001. But, from 2002, domestic companies, bankrolled by the state, moved into the mobile handset business and their cut-throat pricing destroyed profits for everybody.
More recently, a consumer loan boom financed by state-run banks underwrote an explosion in car sales. This is now fizzling out but Volkswagen, the market leader, still earned $1.2bn in China in 2003.
Among American companies, just five accounted for one third of equity profits reported by mainland affiliates in 2003. Three of these were carmakers, among which General Motors was much the most important, booking $437m in earnings. The other two were fast-food giants Yum Brands owner of KFC and McDonald's.
Fast food and beverage companies have been the most consistent foreign earners in the domestic economy. They face no competition from state interests and, as services, are much less prone to the intellectual property abuses that see other products ripped off.
Yum Brands, which has 1,200 restaurants in China, and McDonald's are estimated to have earned about $200m last year and the US car companies in excess of $500m equivalent to about one-third of mainland equity income of $2.4bn. What these figures underline is that China's domestic market is not that interesting.
True, vendors of hard and soft commodities based outside China have enjoyed windfall profits. Their earnings are not included in the data. But, to take one example, even though Chinese demand has boosted metals prices, the biggest beneficiary, BHP Billiton, the mining group, is only drawing 10 per cent of its earnings from the country.
One day, the Chinese market may indeed become what it is cracked up to be. But for now the country's significance for companies can be found elsewhere in the fact that China is the biggest cog in the machine of global manufacturing for export. An economy in oversupply, a financial system that lavishes loans on manufacturers who will not repay them, a cowed and industrious workforce and a host of state incentives to export at all costs provide the world with some of the cheapest manufactures it has ever known. The people who make the real money from such an economy such as Wal-Mart, the US retailer, which will spend about $15bn on goods processed in China this year are the ones who buy from it rather than the ones who invest in it.
中国的钱没那么好赚
2003和2004年中国业务年景不错，这几乎不是新闻。人们反复称中国贡献了全球经济增长的四分之一，这种说法已成为当代的老生常谈。但对个别公司来说，日子到底有多好呢？据《中国经济季刊》(China Economic Quarterly)最新的盈利能力评论，情况并不那么美妙，这与人们普遍接受的观点相反。人们普遍认为，外国公司在中国有着大量有利可图的机会。
这项调查基于美国公司在华分支机构所报告的收入，以及一部分香港和新加坡控股公司报告的、估计来自大陆业务活动的盈利。这些数据与全部在华外国制造商所提供的、不太可靠的中国盈利数据，以及美国商会等机构的民意调查结果进行了比较和交叉检查。
最新调查显示，美国在华分支机构的盈利已飞速上升。就在1997年，最好的证据还是，美国在华公司的合计利润已恢复为零。1999年，基于股本的盈利（来自本地分支机构持股的盈利）上升至7.55亿美元。到2003年，美国公司的总利润增至三倍多，达24亿美元。最新提交的文件显示，今年的数据至少会和去年一样好。《中国经济季刊》对外国企业在华盈利总额的估计表明，收入从1999年的19亿美元升至2003年的44亿美元，数字中包括了分支机构的利润以及香港和新加坡公司登记的盈利。把所有其它来源的利润（专利费、授权费，以及从咨询到教育业所有私人服务公司的收入）加进去，去年这笔盈利总额达82亿美元。
80亿美元可不是个小数目。它使中国听上去就像个全球利润矿脉，媒体就经常这样报道中国。
但在2003年，美国公司在澳大利亚赚了71亿美元，这是个仅有1900万人口的市场。它们在台湾和韩国共赚了89亿美元，这两个新兴经济体共有7000万人口。而去年美国公司在墨西哥赚了143亿美元。墨西哥是美国一个重要的直接投资目的地，而在许多人看来，与中国相比，墨西哥是个没有价值的投资场所。
事实上，外国公司从中国经济中获得的盈利已迅速增长，但这是从一个很低的基数开始的。其实，许多在华外资企业赚钱根本就有困难。我们从一些调查中了解到这一点，比如美国商会一年一度的调查。即使在2003年，当经济环境格外有利时，大多数接受调查的公司还是表示，它们在中国的利润率还是无法超过自己的全球平均水平。
实际上，外资企业很大一部分盈利只集中在少数企业手中，这些企业享受着中国严格监管运营环境下的“好运气”。过去最大的赢家是移动电信，90年代，这些业务在中国不与任何既得利益形成冲突，而且到2001年，该业务还在美国公司报告的大陆盈利中占了多达一半。但从2002年开始，在政府的资助下，中国国内公司进入手机业务领域，而它们具有高度竞争力的定价措施破坏了所有厂商的利润。
近期，国有银行资金支持的消费贷款热潮造成了汽车销售的火爆行情。现在这波行情开始逐渐退去，但汽车市场上的领先企业“大众”(Volkswagen)2003年仍在中国赚了12亿美元。
在美国公司中，仅五家公司就占到2003年美国在华分支机构所报股本盈利的三分之一。三家是汽车制造商，其中通用汽车(General Motors)最厉害，盈利达4.37亿美元。其余两家是快餐巨头：肯德基(KFC)的拥有者“百胜餐饮”(Yum Brands)和麦当劳(McDonald’s)。
在中国国内市场上，外国快餐和饮料公司一直是最稳定的外国赢利企业。中国国有企业对它们不构成竞争，而作为服务性企业，它们不太容易受到知识产权侵权的打击，而其它产品常遭到剽窃。
百胜餐饮在中国有1200家餐馆，估计它和麦当劳去年在中国赚了约2亿美元，而美国汽车公司在华利润超过5亿美元，相当于24亿美元大陆股本收益的近三分之一。这些数字突出表明，中国国内市场并非那么有意思。
的确，总部不在中国的有形与无形商品经销商一直在大发横财。而它们的盈利没有包括在上述数据中。但是，举例来说，即便中国的需求提高了金属价格，最大的受益者矿业集团“必和必拓”(BHP Billiton)也仅有十分之一的盈利来自中国。
将来某一天，中国市场也许真会成为人们吹捧的样子。但就目前来说，中国对于外国公司的重要性在其它方面，因为事实上，中国是全球制造业出口机器上的最大齿轮。一个供应过剩的经济体、一个把贷款浪费在不会偿还的制造商身上的金融系统、一群顺从而勤劳的劳动力，以及许多不惜一切代价刺激出口的国内措施，这都为世界提供了一些前所未有的最廉价制造产品。在中国这样的经济体中，真正赚钱的是那些从这里买东西、而非投资的外国公司，如美国零售商沃尔玛(Wal-Mart)今年将支出约150亿美元，在中国采购加工后的商品
