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China Briefings

Reports on China issued by Samsung Economic Research Institute

China Business Intelligence No. 159

China Business Intelligence No. 159

Samsung Economic Research Institute Beijing Office

May 19, 2010

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I. Economy

China' s mobile payment industry has kicked into growth mode. Former rivals - commercial banks, mobile carriers and online payment services providers- are forging partnerships to take the industry into a new level. In April of this year, China Mobile, the world's largest mobile operator, and Shanghai Pudong Development Bank (SPDB) agreed to offer remote payment services. However, there has been a lack of consistent standards, with major mobile payment players opting for different solutions. Therefore, the Ministry of Industry and Information Technology of the People' s Republic of China has stepped in to hammer out an industry-wide standard for small-sum mobile payment. China' s mobile payment industry is projected to continue its growth for the time being.

II. Industry

In March 2010, Huawei released its 2009 Annual Report on the official website. It is a more detailed report than those of previous years. According to the report, the company maintained growth, excelling its rivals, although the momentum has slowed somewhat. Its financial status and risk management abilities are much improved, recording a higher operating profit percentage than Nokia and Ericsson.

Cost-effective R&D, compared to its rivals, is a key growth driver. Harnessing the advantage of its low labor cost, Huawei focused on improving its R&D team, and increased the share of R&D in the company. As such, Huawei succeeded in establishing itself as a more trustworthy global company which is equipped to control its risk management. However, Huawei still needs to go further by making more effort in strengthening control over its accounts receivable and coordinate its plans and actions.

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