China will eclipse North America in terms of LCD TV shipments by 2011, with substantial growth from consumers of all levels -- tier-1 cities (population greater than 1 million), tier-2 cities and rural regions.

The China's TV Market Report, recently released by Santa Clara, Calif.-based DisplaySearch, also predicts that flat panel TV (including LCD and plasma) shipments in China will rise from 31 million in 2009 to 59 million in 2014, a compound annual growth rate of 14 percent. Meantime, the share of flat panel TVs in China's TV market will grow from 72 percent in 2009 to around 100 percent in 2014, when CRTs will effectively disappear.

The report analyzes the trends by regional market segments, screen sizes, technology and specific TV features. It also covers the status of TV manufacturing and exports.

Whether the government subsidy incentives for rural consumers bring new opportunities is of particular interest, the company said.

In China, color TV shipments grew rapidly in the mid-1990s, and because the average lifetime of a color (CRT) TV is eight to 10 years, there is an opportunity for the industry to replace these old TVs - nearly 450 million of them - in the next five to 10 years.

China has been ramping up LCD TV production capacity since last year, said a Nikkei BP report. Industry insiders are concerned that an overcapacity will emerge in 2012, when a large amount of domestic and foreign invested capacity comes on stream in China.

There was a slight undersupply of LCD panels from spring 2009 to mid-2010. With the overcapacity looming large, Chinese products will pose a threat to Japanese and South Korean brands, the Nikkei report said.
Chinese domestic brands currently claim 80 percent market share in China.

"Long time, little progress" is probably the best description for the current status of DuPont's largest titanium dioxide investment outside of U.S. borders. Industry rumor has it that the $1 billion project may not see the day of approval.

Back in 2005, DuPont signed a memorandum of intent with the local government in Dongying, Shandong province, hoping to establish a 200,000-metric-ton-per-year facility there and start production in 2010.

"It was a very attractive opportunity for Dongying at the time," commented the Economic Observer News. The deal was going to create 600 jobs and 500 million yuan ($73.8 million) of tax revenue - about one eighth of the total revenue of the Dongying government.

Dongying was quick to reserve 20 square kilometers of land for the project.

In November 2007, the project received an approval from China's State Administration of Environmental Protection (now Ministry of Environmental Protection) and entered the evaluation phase of the Ministry of Land and Resources.

An industry veteran, however, now tells the media that the Ministry of Land and Resources would need an OK from Dongying local government to process such applications.

Coincidentally, the Dongying government went through a personnel change in early 2008, and the new mayor brought into the office a different set of values and policies that highly emphasized eco-friendliness.

DuPont China's government relations manager, Xun Jun, was quoted by the Economic Observer News as saying that DuPont's repeated inquiries to Dongying officials received no response.

Like many places in China, Dongying city has changed a lot in five years. Its 2009 fiscal revenue topped 8 billion yuan. More importantly, the local economy is transforming from petrochemical-dependent to include more sustainable industries especially renewable energy.

Dongying has attracted wind power, solar, and geothermal energy firms from both domestic and abroad, including Datang, Huaneng, Saertex, and Nordex, just to name a few.

At the Yellow River Delta trade talk last month, Dongying secured more than 80 billion yuan of investment from petrochemical, automotive and wind power industries. "Compared to the current volume of investment inflow, DuPont's investment is not as much as it sounded five years," the Economic Observer News commented.

Chinese news media have reported various versions of the investment amount, anywhere from 1 billion yuan to 4.7 billion yuan, but DuPont said the total investment is expected to exceed $1 billion (6.8 billion yuan), according to a position statement on its Web site.

DuPont is the world's largest manufacturer of titanium dioxide, a white pigment widely used in the coatings, plastics and paper industries.

The main concern raised by the Chinese side seemed to center on the environmental impact of the project, especially the waste disposal. The proposed site will employ the chloride technology, which DuPont says has always been preferred by the Chinese government over the sulfate process.

"A feature of the new plant at Dongying will be the use of underground injection (UI) technology to dispose of liquid wastes. DuPont Titanium Technologies has safely and successfully used underground injection wells, also known as deepwells, for nearly 50 years. Injection disposal is a safe and environmentally protective technology. Liquid wastes produced during the titanium dioxide production process are injected deep underground and dispersed into natural geological formations. Typically, over time, the wastes are rendered non-hazardous through naturally occurring chemical processes," DuPont said in the position statement.

The simple fact that the Ministry of Environmental Protection in Beijing has approved the project should have dismissed the questioning and disbelief on the environmental front from the Chinese TiO2 industry, media and public, as far as I'm concerned.

The reports that have quoted Chinese TiO2 makers saying the market is oversupplied are less than accurate, as China continues to import significant amount of high-end TiO2.

DuPont said what it needs now is a business license, in order to get the project started.

The company has so far invested 500 million yuan on the early-stage preparation for the project, which is still up in the air, and it maintains a three-person office in Dongying, the Economic Observer News reported.

Massive storms and flooding in south China are causing damage to all aspects of the society, including manufacturing.

Plastics packaging firms in Tongcheng, Anhui province, for example, said although the floods have subsided in that region, machinery and raw materials in the factories have been severely damaged. They estimated combined loss of 120 million yuan ($17.7 million) for the 60 small plastics companies in the Shuanggang township, according to local media.

Some regions remain on flood alert, as the Yangtze River, China's longest, rises to dangerously high water levels. Millions of residents have been affected, with the death toll in the hundreds and growing.

Warren Buffet once said, "The great personal fortunes in this country weren't built on a portfolio of fifty companies. They were built by someone who identified one wonderful business." But it hardly applies in China, especially as the real state boom creates wealth in an unmatched speed.

Haitian Group, owned by the Zhang family in Ningbo, Zhejiang province, has been very successful with its "one wonderful business" - machinery, including plastic injection molding machines and other industrial equipment.

This year, Haitian established a real estate subsidiary with 125 million yuan ($18.4 million) of registered capital, according to the National Business Daily.

It's not uncommon for Chinese companies that have healthy cash flow from other businesses to dive into real estate. In Zhejiang province, the most entrepreneurial region in China, six of the top 100 privately owned companies have their core business in real estate. But more than 60 others also participate in real estate development beyond their core businesses.

Between 1998 and 2005, the average profit margin of the real estate industry was just 2 percentage points higher than that of the manufacturing sector. However, the gap quickly widened since 2006, and the gross margin of real estate topped 30 percent.

Meantime, manufacturing profitability goes in the other direction, as cost hikes, exchange rate changes, distressed export market, and growing competition further squeeze manufacturers.

Driving the capitalist economy is the search for profits, and it holds true for China.

BASF AG chairman Jurgen Hambrecht, along with other German executives, reiterated concerns and criticism about Chinese policies that they believe put foreign companies at a disadvantage in a meeting with Premier Wen Jiabao.

According to the Wall Street Journal, Hambrecht complained about rules that foreign firms say compel them to transfer valuable intellectual property in order to gain access to the world's largest market.

"That does not exactly correspond to our views of a partnership," said Hambrecht, according to a German reporter present at the meeting.

The meeting took place last Saturday in Xi'an, and included German and Chinese executives as well as Wen and visiting German Chancellor Angela Merkel.

Wen rebutted and said the allegation is untrue.

German executives also raised concerns about Beijing's efforts to limit the export of rare earth minerals, which are used in electric car batteries and other high-tech products. China has the world's largest reserves of some of those elements. Wen promised to remain open on the export issue.

Hambrecht was chairman of the Asia Pacific Committee of German Business until this month.

Among all Chinese stocks listed in the U.S., the one with the highest return on assets ratio in the past 12 months is a plastics recycling company.

According to financial information firm China Analyst, Guanwei Recycling Corp. (NASDAQ:GPRC) features a ROA of 70.36 percent for the last 12 months. Its asset turnover ratio (revenue divided by assets) was 3.26 for the same period.

Guanwei has also shown the highest return on equity among U.S.-listed Chinese stock, according to China Analyst.

Earlier this month, Guanwei announced a sales contract with Sunshine Handels & Consulting GmbH, a German recycling company, for the purchase of 25,000 tons of LDPE waste through June 2011.

The Fuqing-based company reported a sharp increase in net income in its first quarter ended March 31, 2010, which rose 73.4 percent year-over-year to $2,204,604, thanks to growth of high margin business and lower raw material costs.

Reported net sales in the first quarter, however, suffered a 58 percent decline, because the company increase raw material inventory and stopped the resale of other manufacturers' products.

The company noted in its first quarter filing that, in addition to the recovery in selling prices for recycled LDPE, production volume of polyethylene in China increased 19 percent year-over-year to 2.84 million tons in the first quarter.

We wrote about Guanwei last December in this story.

I was told by my colleagues that the Plastics News China Blog and my name were mentioned in the China Tracker section of forbes.com, in a blog post on why Chinese companies fail in the U.S.

It was two and half years ago when I wrote a post here to comment on an insightful list of the top 10 reasons for such failures, put together by China Law Blog author, Seattle-based international lawyer Dan Harris.

Harris did a new post, Why Chinese Companies Fail in the U.S., Part II, in response to my comments.

Recently, Harris realized that the reasons we discussed in 2008 still hold true. "Chinese companies are still failing in the United States at what I see as an alarming rate -- and the reasons I see for that have not changed a bit," he said in the Forbes.com post.

That's exactly why he reposted the list, along with my comments, and his response to my comments, in this new piece.

The growth of wealth doesn't necessarily change one's mindset, at least not immediately.