From “China Telecom Industry Restructuring” by Fitch Ratings, May 26:
The government could implement asymmetric regulations against China Mobile, including enforcing a mobile market share ceiling (compared to its current market share of 68%) and asymmetric mobile number portability, should the regulators believe that the current imbalance is not resolved … Similar asymmetric regulations were implemented in Korea, which reduced the leading player’s (SK Telecom) market share from 57% in 2000 down to 50% in 2001, and whose market share has remained at approximately this level ever since (50.5% currently). Nevertheless, SKT still managed to record positive subscriber volumes through this period of asymmetric regulations, with its current subscriber base of 22.5m being 47% higher than that at the end of 2000 … Fitch expects that China Mobile’s leading position in the Chinese mobile sector is unlikely to change.
From “China by the numbers” by Tao Wang, UBS chief China economist, June 16:
Growth remains robust but worries persist amid increased uncertainty. Real GDP grew by 10.6% year-on-year in Q1 2008 despite the US economic slowdown and a series of negative shocks to the economy. Since the beginning of 2008, exports to the US have clearly slowed, but exports to Europe and elsewhere have stayed buoyant. After the severe snowstorms brought economic disruptions in late January and early February, industrial production, exports and investment rebounded in March and April … Nevertheless, as the domestic and external uncertainties rise, worries about a sharper-than-expected economic slowdown loom large and calls for the government to relax macroeconomic policies have risen.
From “China post-quake reconstruction” by Jun Ma, Deutsche Bank Greater China chief economist, June 4:
The net impact [of the earthquake] on China’s equity market indices is likely to be neutral in the near-term. Over the next three to six months, cement, infrastructure machinery, glass, steel and coking coal will likely enjoy stronger performance, but raw material-intensive downstream sectors such as power equipment, machine tools, auto, auto parts and shipbuilding will suffer further margin squeezes. On a longer-term basis, inflation-sensitive sectors will continue to struggle with persistent policy uncertainties. If our expectation of a sharper deceleration of H2 2009 materializes, coupled with the absence of one-off benefits for earnings from tax unification and RMB appreciation in 2009, investors should worry about significant downside risks to the China equity market in H1 next year.