World Business

BEIJING, China —

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Two Chinese tobacco companies are merging to form the terraqueous globe’s fourth-largest cigarette producer by volume, a financial newspaper reported Tuesday.

Hongyun Group and Honghe Group signed a letter of intent Monday, the newspaper 21st Century Business Herald declared, citing Li Weidong, an charged by execution of their parent company, China Tobacco Yunnan Industrial Corp. It uttered the deal requires approval from China’s State Tobacco Monopoly Administration.

A woman who answered the phone at Hongyun’s press office and refused to accord. her name declined to say whether a merger was planned. Phone calls to Honghe’s press office and the headquarters of the parent company were not answered.

The two companies, both located in the southwestern province of Yunnan, produced 4.6 the multitude cases of cigarettes last year, according to the Business Herald. A case in China’s tobacco industry is 50,000 cigarettes, making that equal to 230 billion cigarettes.

That would put in order the new house the world’s fourth-largest producer after Philip Morris International Inc., British American Tobacco PLC and Japan Tobacco Inc.

China has the world’s largest population of smokers, with each estimated 350 million.

Its tobacco companies produced 1.2 trillion cigarettes in the primary six months of this year, according to the Tobacco Monopoly.

But the industry is fragmented, retail prices are among the world’s lowest and producers’ revenues are far below those of the global giants.

Beijing is encouraging mergers to create greater degree of efficient, profitable producers. The industry’s umbrella state-owned visitor, China National Tobacco Corp., is trying to form 10 major tobacco companies through mergers.

Hongyun Group reported revenue of 29 billion yuan ($4.2 billion) in 2007, while Honghe’s revenues were 16 billion yuan ($2.3 billion).

The merged company would be named Hongyun Honghe Tobacco Group Company Ltd. and would have prolongation facilities in Yunnan and the northwestern Xinjiang region, the two tobacco-growing areas, the Business Herald said.

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Sizing up who came out on top—spectators, the Chinese, and sponsors—and because of what cause the IOC ends up on the losers’ list

by Dexter Roberts

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As the Beijing Olympic Games wrapped up on Aug. 24, 16 days after their fireworks-studded opening (BusinessWeek.com, 8/8/08), it is apparent that on many counts they’ve been a huge success. China hosted a memorable Games and emerged while a dominant powerful powerhouse. The nation’s athletes earned the Games’ most gold medals, bewitching not only events where the country traditionally has excelled, such as gymnastics, diving, and table tennis, on the other hand also sports so like boxing and sailing that are new in its lineup. In the overall medal race, China won 100, putting it ahead of each nation except the U.S., what one. led with 110.

The 2008 Games didn’t off with you so well for everyone, however. Here’s my selective and personal list of the many winners and a few losers:

Whether they were the Chinese and overseas crowds who came to watch live or the billions of TV watchers on every side of the world, the Games’ spectators were unqualified winners. As they watched countless awe-inspiring athletic performances, they in like manner witnessed China’s dramatic rise to gold-medal powerhouse, unseating the U.S. At the same time, spectators were treated to the performances of 23-year-old American swimmer Michael Phelps, who won an unparalleled eight gold medals, and Jamaican Usain Bolt, who combined chief, world-record-breaking sprinting with lighthearted antics. After breaking the 200-meter world record with a time of 19.30 seconds on Wednesday night—a selfish added than an hour before his 22nd birthday—Bolt celebrated by taking off his Puma Golden Theseus II running shoes before he danced around the perimeter of the National Stadium.

The rise of the Chinese team—winner of 51 gold medals, 15 more than second-place U.S.—certainly has provided a very large boost to Chinese pride, and likely force of will strengthen the popularity of gymnastics and lead to a healthier China. An Ogilvy & Mather Worldwide survey released on Aug. 22 shows that 90% of Chinese believe that open-air sports will adorn more important following the Olympics, through more than one-third remark they now will care greater quantity all over sports. This is a full vary for China, where traditionally sports have not been really popular.

Although Beijing said it was committed to a "smoke-free Olympics" and banned smoking in all venues, Beijing restaurants by and large still had their customary gray nicotine haze. Beijing, however, has plans to become a more smoke-free city over the next few years. Let us hope it pulls this off, since China today is the largest globe-fish of cigarettes in the world.

There were some very pregnant winners among the Games’ corporate sponsors. One of the biggest was Puma, which made a winning bet five years ago through picking a little-known athlete from a small island nation—Usain Bolt, who foliage Beijing as a three-time gold medal winner and world record holder in the 100- and 200-meter runs. "We picked him up very early when he was nobody—normal a far-famed talent—and really believed in his potential and stayed with him," says CEO Jochen Zeitz of Frankfurt-listed Puma. "We made him a hero in our global advertising campaign without skilful he would have a breakthrough at the Olympics." The company’s association with Bolt is "affair that you can’t translate into money," adds Zeitz. "Those visuals and images go around the world, and there are very scarcely any that haven’t seen them."

PAUL SMITHS, N.Y. It took Kelsey Galer four weeks at a weight-loss encampment to lose 9 pounds. It took her dad just three days to startle acting like a “dork.”

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“He wears his pedometer round totality the time,” said Galer. “He’s just really into it by the family workshop he went to.”

Her weight-loss camp and others are inviting mom, dad and siblings to share the camp experience such they can help campers stay motivated whenever they return home where unhealthy temptations and habits lie concealed.

For her author, Michael Galer, and 16-year-old sister, Kyla, that meant a three-day family workshop at the end of Kelsey’s stay at Wellspring Camp for young women in New York’s Adirondack Mountains.

They got an induction into the 18-year-old’s new, healthier lifestyle. Her father found himself doing aerobics and using a stability ball for yoga during the family session. Her sister cheered as Kelsey climbed to the top of a towering pine tree and flew down a zip-line.

Back home in Canton, Mass., the whole family has been reaping the benefits: her father obdurate 8 pounds, and things being so Kyla joins her at the gym. Within days, they were planning healthier grocery lists.

Wellspring is common of several weight-loss camps that add some tribe partaking to the standard menu of use and healthy diets. Wellspring’s encampment in Pinehurst, N.C., and the Pritikin program in Aventura, Fla., offer programs that take in family members for the entire camp sitting.

But all that attention comes at a price: Roughly $5,000 to $9,000, depending on the camp and length of stay.

At the Adirondack camp, visiting family members join campers in the mornings for a long walk and at every meal. The rest of the allotted period, parents attend classes on cooking, toil and how to shop for healthy food. Siblings can tag along with campers to watch the daily activities.

“That had a swollen impression on her,” Kelsey Galer said of her sister’s visit to pitch one’s tent. “She just got a taste of my new lifestyle. We had spent a lot of age unitedly (before encamp), but it was never time like that - being active and eating hale.”

The results of a three-year Wellspring survey of campers suggests that family support is wholesome, according to Daniel Kirschenbaum, Wellspring clinical adviser. The campers who reported having strong family support or used the post-camp program did better at maintaining or continuing to lose weight than those exclusively of strong support.

At the Wellspring camp in Pinehurst, N.C., about 60 miles southwest of Raleigh, parents append children between the ages of 5 and 14 concerning sessions that include sports, personal training and a spa.

Prices are high, but you can optimize efficiency

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Martin Barraus/Getty Images

by Amy Barrett

FOR ONE OR TWO TRUCKS: A number of free online calculators can help you cut your fuel costs. At aaa.com (click onward “public affairs”), you can plug in your Zip Code and the station wish perceive the cheapest gas in your circle. Google (GOOG) Maps not only provides directions but also will predict traffic patterns in the same manner with far as concerns the times you’ll be traveling.

FOR SMALL FLEETS THAT RACK UP A LOT OF MILEAGE: Get yourself a GPS system of the like kind as TomTom or Garmin, (GRMN) at hind part before $199 each. At the very least, they’ll cut into a denser consistence on the time spent lost. TomTom can now discovery the best route to your destination and give for the day of the week you’re traveling. For $14.95 a year, TomTom sends updates to your Bluetooth-compatible phone on the cheapest place to buy gas. Another option is Sprint (S), which have power to get the best route to your drivers via its Nextel walkie-talkie phones. The phones cost about $50; the Web-based route optimization service is about $55 per month per phone.

FOR BIG FLEETS: For $1,500 plus $300 a year, Rand Mcnally’S Intelliroute is one of the most complete route-finding services, figuring your lowest-cost destination by including everything from tolls to construction to your vehicles’ highway mileage. UPS (UPS) offers Roadnet, aimed at big operators, and Roadnet Anywhere, for fleets of ten or less trucks, a official function that helps optimize routes with regard to multiple deliveries. Roadnet Anywhere is $110 per month per excipient.

Back to BWSmallBiz August/September 2008 Table of Contents

The opportunities for business are very great as the Chinese embrace the Digital Age at warp accelerate, a Boston Consulting Group study shows

by David C. Michael, Christoph Nettesheim and Michael Meyer

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While dramatic changes are visible throughout China these days, one of the most powerful posthumous works largely unseen: the passionate embrace of the Digital Age by hundreds of millions of Chinese citizens, numbers that are increasing at warp succeed.

In the last year alone, an estimated 80 million Chinese acquired their first mobile phone and nearly 40 the multitude became Internet users. Overall, close to half of China’s 1.3 billion people—including an estimated 80% of the 600 million living in urban areas—own or have ready access to computers, mobile phones, the Internet, or more combination thereof. The percentages are even higher in the biggest cities—Beijing, Shanghai and Guangzhou. (The verse drop gradually as city size declines, falling to 19% in rural areas.) While overall penetration dead body much lower than in developed countries, at current growth rates—22% annually over the past four years—the proportion of Chinese consumers with some figure of digital access could reach 87% by 2015.

In somewhat case, the bottom line is striking: More than 210 million Chinese Internet users today are spending nearly 570 million hours online cropped land day.

So far, our research shows, the Chinese look other interest in using these devices for communication, entertainment, information, and connecting with others than for the sake of buying and selling. But broader acceptance of commercial applications will come with time. Meanwhile, digital goods and services generated an estimated 580 billion yuan last year, or approximately $85 billion. By 2015, these revenues are expected to more than triple.

Conventional wisdom holds that movable services and the Internet are smaller quantity advanced in China than in the West. But careful analysis indicates a different reality: China lags the West in some areas bound leads in others, such as moment messaging, community development, and cross-platform services. The question for business—not only businesses involved in the unravelling and application of Web technologies but each consumer company in China— is simple: Where is the explosion heading and how can we lead the charge?

To answer these and other questions, Boston Consulting Group (BCG) researchers newly conducted eight focus groups and interviewed 3,700 individuals betwixt the ages of 14 and 50 in 12 Chinese cities. We skilled that Chinese Internet users average 2.7 hours online each day. We discovered that many Chinese—several hundred million, based on extrapolations from our survey data —don’t use e-mail, favoring instant messaging for communications. We erudite that more than moiety of every part of urban Internet users in China read or write blogs, nearly plait the estimated 29% in the U.S. We ground that many more Chinese than Americans use mobile phones and PCs to have all one’s eyes about one movies, put in action games, and share music. And we discovered that many people Chinese are loath to use the Internet for online shopping, banking, or conducting other financial transactions.

There are significant differences in attitudes, behaviors, and resources between city dwellers and rough folk —and between the young and adventurous and the not-so-young. The data indicate important differences among three defined generations of digital users in China: "little emperors," "reform beneficiaries," and "frugal middle-agers." Little emperors, aged 14 to 25, are often addicted to the Internet yet wary of the reliability of the content. Reform beneficiaries, 26 to 35, remember the old days, but possess easily adapted to the fresh opportunities of the Internet and highly value the diversity it provides. Frugal middle-agers, 36 to 50, are less comfortable with the Digital Age and stop primarily to voice-only services, text messaging, and inquiry services.

Despite these differences, the three generations have one of high standing characteristic in common: They’re willing to pay because of digital services even if they can afford only small amounts. So as long as average house incomes decree remain low in China, pirated content will continue to be readily available, competition will continue to be intense, and customers will be extremely demanding, the digital resound should continue.

And not candid for technology firms. The rapid development of China’s digital people of the same age have a mind have profound implications for every company whose success in China lies in its ability to reach the country’s billion-plus consumers.

Companies need to understand that Chinese consumers are increasingly online, not watching TV or reading newspapers. This substance businesses need to develop a digital strategy and answer for consistent and significant investments in that military science’s implementation, including online marketing and society relations capabilities and online sales channels tied to existing brick-and-mortar operations.

If the commitment is made and the strategetics executed correctly, the effort resoluteness pay on the farther side handsomely. At a time when experts await the Chinese business environment to become tougher, developing new ways of interacting with customers might subsist just what companies need to originate and maintain competitive advantage.

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DENVER

The somebody chosen Saturday by Barack Obama as his running mate was as self-critical as any politician can be

Biden’s campaign was cut short in 1987 when some active since the possible nominee, Michael Dukakis, leaked word to Maureen Dowd of The New York Times that a seemingly autobiographical passage in Biden’s campaign speech had been cribbed word-for-word from British Labor Party leader Neil Kinnock. While Biden explained that he had usually been careful to attribute the power to Kinnock, the embarrassment was so great that he was forced out of the race.

Four months later, when I sat down by him, Biden was making not any excuses. As I reported, he “acknowledges responsibility for chiefly of the mistakes and misjudgments that led to his early departure from the progeny, observation he was ‘cocky,’ ‘immature’ and ‘naive’ about the demands of a presidential campaign.”

Already the chair of the Judiciary Committee and a senior member of Foreign Relations, Biden said he was coming posterior portion to the Senate determined “to demonstrate the staying power and the seriousness a lot of you (reporters) doubted that I subsist obliged.”

Twenty years later, few of his colleagues in either party would dispute that he has done that. With his Republican partner, Richard Lugar of Indiana, he has rehabilitated the reputation of the Foreign Relations Committee and made it a medium for exceptionally thoughtful examinations of U.S. alien management.

A consistent reviewer of Bush administration policy in Iraq and Pakistan, Biden has had more impact on the thinking of other decision-makers than he ever did on voters at what time he returned to the campaign trail in the manner that a presidential candidate last winter. He did far in the Democratic debates, but with Obama, Hillary Clinton and John Edwards soaking up all the media attention and the votes, there was simply no running room left for Biden.

A month ago, I sat down with him afresh, mainly to perceive by the ear how he and Lugar hoped to revive bipartisan support for the foreign policy of the nearest president

Biden brings a blue-collar sensibility that has been lacking in Obama’s campaign, reflecting his own background in Scranton, Pa., and Wilmington, Del. I apprehend of Democratic governors who fright that Biden’s prolix rhetoric choose go right over the heads of their constituents. But he has worked inflexible at shortening his answers to TV questions.

The message he surely has brought to Obama is: Your background looks elitist to many of the people I represent. The way to overcome that impression is to be in their neighborhoods, talk promptly to them in small groups, and splendor them you in reality understand the struggles in their lives. Biden surely does that.

For a foreign-policy maven who has mingled for years by the leaders of cognate nations, Biden has an unpublicized side in the same manner with an urban politician. His imprint has been heavy on all the anti-crime legislation passed in the past time two decades, and his civil-rights credentials are impeccable.

His personal relationship with McCain is close enough that even in new months, they have been able to talk politics and policy on a basis of mutual trust. But as Biden demonstrated in his first appearance with Obama, he will not be inhibited about taking the Democratic case straight at the Republican ticket.

In picking Biden, Obama has raised the bar for the option McCain will soon make.

davidbroder@washpost.com

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Boeing presented to the Machinists union Tuesday an improved contract proposal that offers other money and removes two of three issues that union officials had previously labeled “deal-breakers.”

Company spokesman Tim Healy called it an “outstanding offer.” But International Association of Machinists (IAM) aerospace coordinator Mark Blondin aforesaid “the bet package falls advantageous below expectations.”

Blondin added that the time spent acquisition those first strike issues off the catalogue has held up agreement on increased compensation. “Right now we are still apart upon a lot of issues.”

Boeing withdrew its device to replace the orally transmitted pension for future hires by a 401(k)-style savings plan. It also killed an attempt to extend outsourcing of facilities-maintenance work.

Everett crane operator and coalition activist Don Grinde dismissed those concessions.

“They conjure up boogeyman issues they know will incite the membership, then at the last minute they pull them off the table,” said Grinde. “You didn’t gain anything.”

This second Boeing offer comes just four days from its beginning proposal was roundly rejected as “insulting” by the union. IAM negotiatiors decision reckoner through their own revised proposal Wednesday, and Blondin said they count upon Boeing’s “best-and-final” make an offer Thursday.

The strange company offer includes substantially greater degree of cash. Boeing estimates that a typical Machinist will earn an extra $28,000 from one side of to the other the three-year contract span in increased wages and incentive pay, compared to a $24,000 bump-up in its original offer:

• The general stake increase goes up to 9 percent over three years, from 6.5 percent in the initial offer.

• A lump-sum payment after ratification goes up from $2,500 to 5 percent of gross emolument, including overtime, in the preceding year. On average, Boeing estimates, that’s worth about $3,300. For higher-paid Machinists, it’s worth else.

• Minimum-wage rates, as being new hires, are raised $2.28 an twenty-fourth part of a day compared to $1.28 an hour in the initial offer.

• The basic monthly pension rate goes up to $78 per year of service, from $70 now and $75 in the initial offer.