Quick Hits: China Imports American Vice
Brief scrutiny of today's headlines.
Beneath the headlines, however, are some interesting facts about what China is importing from the U.S.
Despite record high oil prices, the Chinese are buying gas-guzzling cars at an astonishing rate. Government subsidies have kept gas prices abnormally low, enabling auto makers like General Motors (GM) and Ford (F) to supplement slackening U.S. demand with sales overseas. GM highlighted the Escalade at a recent auto show in Beijing, and sales of luxury cars and SUVs in China are expected to jump by as much as 45% this year.
Americans aren't just exporting outsized cars. China's ditching its chopsticks and rice for fried chicken and pizza. Yum Brands (YUM), parent company of Taco Bell, KFC and Pizza Hut, reported better than expected first quarter earnings yesterday on the back of strong growth in Asia. Chinese same-store sales rose 12% and profits came in 33% above last year's numbers.
Economists may be fretting about a slowdown in global economic growth, but plenty of multinationals are still expanding at full speed. Yum plans to open 1,000 new stores outside the U.S. for the eighth straight year. In its earnings release yesterday, competitor McDonalds (MCD) cited China as one of the countries exhibiting the strongest growth.
Chinese consumer habits are shifting, and American companies are poised to capitalize.
For more on the the fast food industry, check out Hoofy and Boo's always astute analysis:
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter