Shopping Malls: Canada vs. China

Post ImageQuick – which shopping mall is the world’s largest? If you said Edmonton’s own West Edmonton Mall, you’d be wrong. Despite holding the title for two decades, WEM is now number six on the list. A building boom in Asia has landed that continent nine of the world’s ten largest malls (the article says eight, but Wikipedia says nine):

Just three years ago, the top 10 list would have included a pair of popular California destinations—South Coast Plaza in Cost Mesa and Del Amo Fashion Center in Los Angeles—along with the famed Mall of America in Bloomington, Minn.

Here in North America the shopping mall is kind of passé, replaced by big box shopping centres like South Edmonton Common. A logical question to ask, then, is if the shopping malls in Asia will one day be seen as passé?

I think probably not. It seems to me there are two main differences between North America and Asia (when it comes to the importance of shopping malls). The first is population density – in Canada it is a mere 3.2 people per square kilometer, and in China it is 137 people per square kilometer (and these numbers are probably even more different if you look at just urban areas). There is clearly more space in Canada to build big box stores. In China, perhaps the shopping mall makes more sense because it is a more efficient use of space.

The second difference is in transportation. More families in North America own a vehicle (or two) than families in Asia do. This is changing, to be sure, as the income levels of countries like China and Thailand continue to rise. If you have lots of cars, it’s easier to drive to big box stores. The large number of vehicles in North America has probably helped the switch from malls to big box stores.

The first difference (population density) is more important than the second (transportation), in my opinion. Even though more Asian families will have vehicles in the future, the problem of population density will probably only worsen. For that reason, I would guess that shopping malls will continue to be important in Asia for a very long time.

As for the future of malls like West Ed, I am not sure. They seem to be doing okay for now, even if growth isn’t what it used to be, but that may change in the future. I think shopping malls in North America will probably have to reinvent themselves one day to stay competitive.

Read: USA Today

More on the oil sands

Post ImageA week ago today I wrote a post explaining how I think Canada should be making a greater effort to develop and benefit from the oil sands in Alberta. Naturally, I’ve been keeping my eyes open for any news regarding the oil sands, and I’ve actually come across a couple things.

First is The Oil Sands of Alberta which aired on 60 minutes on Sunday. A couple things stood out for me:

There are 175 billion barrels of proven oil reserves here. That’s second to Saudi Arabia’s 260 billion but it’s only what companies can get with today’s technology. The estimate of how many more barrels of oil are buried deeper underground is staggering.

We know there’s much, much more there. The total estimates could be two trillion or even higher,” says Clive Mather, Shell’s Canada chief. “This is a very, very big resource.”

Very big? That’s eight times the amount of reserves in Saudi Arabia.

Clearly, there’s a lot of oil there. We just need the technology to be able to get it out of the ground for a reasonable cost! That’s key to my argument – we need to work on ways of fostering that research and development.

“I think it’s bigger than a gold rush. We’re expecting $100 billion over the next 10 years to be invested in this area – $100 billion in a population that, currently, is 70,000 people,” says Brian Jean, who represents the region in Canada’s parliament.

There’s a lot of money coming in too. More than I expected, to be honest. However, I am still not convinced that big corporations are going to be the ones who find a way to improve the technology and thus the ROI. Sure companies make progress in a lot of areas, but more often than not, it’s an individual or smaller group of individuals that find a way. Corporations then either copy or acquire.

For more commentary on the piece, The Oil Drum has a very good post with a ton of interesting comments too.

The 60 Minutes episode makes it seem as though China currently doesn’t have much interest in the oil sands, though not for lack of desire. A press release I found yesterday though tends to suggest that the country is starting to make investments:

What is certain is that global demand for oil – especially from Asia – is far outstripping the ability of companies to meet current demand and replenish their diminishing reserves. These factors are being exacerbated by global political uncertainty. The oil sands are increasingly on the U.S. radar screen as they focus on reducing their reliance on oil producing countries outside of North America. The Chinese have become increasingly involved in the oil sands with the China National Offshore Oil Corp., recently investing $150 million in MEG Energy Corp., a private company engaged in the oil sands.

In a different press release, I learned that Purvin & Gertz, an independent energy consulting firm, made available a study that analyzes the challenges and opportunities presented by development in the oil sands.

Producers face issues of growing existing and new markets for oil sands crudes. The need for diluent to transport heavy crude will increase with bitumen production. Upgrading in Alberta could reduce diluent demand, but requires major capital investment and does not eliminate the market risks associated with marketing SCO.

I’d have thought that with the increasing demand for oil there would be little or no risks associated with marketing synthetic crude oil! I’m not an expert though, so maybe I’m missing something. You can find out more on the study at the Purvin & Gertz website.

I need to dig around a little more, but I would not be surprised if much of the $100 billion that has been announced turns out to be nothing more than a foot in the door for the companies making the investments. If you’re in the oil business, you don’t want to miss out on the oil sands. In order to benefit though, we need to get better at extracting and refining the oil!

I guess one reason Canada wouldn’t be all that interested in sponsoring research and development is that so much of the oil sands has been sold to foreign investment (at least that’s how it appears). Like I said, more research is needed, but if that’s the case, it’s potentially a major loss for Canada.

Mobile Podcasting in China

Post ImageStan Sorensen at the Mobile Podcasting blog notes that Melodeo, a company that provides music and podcasts to cell phones, has formed a joint venture in China:

Melodeo has gotten together with ACCESS China to form a joint venture in China. The JV will deploy the first secure mobile network for digital content in China. This is a huge opportunity for us. The 2 largest carriers in China represent 350m users. Each one is accustomed to using their mobile phone as a computer – it’s the primary device for communicating, accessing the web, downloading data.

Stan also notes that “this is a first for mobile in China.” I’m not exactly sure what it means for mobile podcasting, but presumably a larger presence and user base for a company like Melodeo will only help.

Read: Mobile Podcasting

China and the US

Post ImageMost of the articles I read about China (and to a lesser extent India) are pretty much the same thing. It’s almost as if there’s a cookie-cutter formula for these stories so that no one really has to write anything new. And the article I came across in the New York Times today was no different, except for one paragraph:

If finding a way out of Iraq is an immediate problem for Mr. Bush, then dealing with China’s increasingly assertive tone on economic and military issues, and with Mr. Hu’s quiet resistance to Washington’s calls for political liberalization, is a challenge that will last far beyond his presidency.

If you had to sum up relations between the United States and China in a single sentence, that would be it right now. The next president of the US will have to worry about Iraq no doubt, but I suspect China will be higher up on the list of priorities than it is now.

Read: New York Times

Piracy in China

Post ImageThere always seems to be something in the news about China (and to a lesser extent, India) these days, and it’s usually about how China is changing in one way or another. Even articles that seem to talk about a lack of change really talk about change:

But one thing never seems to change, and it’s as obvious on street corners today as it was six years ago. In 1999, when “Star Wars Episode 1–The Phantom Menace” debuted, it was quickly pirated on DVDs that sold throughout China for next to nothing.

Fast forward to May 2005–four years after China joined the World Trade Organization and embraced its stringent rules on intellectual property rights. When “Star Wars: Episode III–Revenge of the Sith” opened in U.S. theaters, copies again hit the streets of Beijing within days. Sold out of bicycle baskets by roving vendors, available in mom-and-pop retail stores everywhere, the counterfeit DVDs retailed for about 75 cents each.

Yes, piracy is a big problem in the world, and not just in China though the problem is particularly evident there. Why is it bad though? Change!

What’s standing in the way of better intellectual property rights enforcement? “It’s not a plot,” says Bruce Lehman, former commissioner of the U.S. Patent and Trademark Office and the chairman of the International Intellectual Property Institute. “It’s the result of a system in transition.”

It’s a pretty safe bet actually, when you hear China, just guess change!

Read: CNET

China Goes Shopping

Post ImageQuick – where is the world’s largest shopping mall? Nope, it is not Mall of America. Nor is it our very own West Edmonton Mall. The largest mall in the world is Beijing’s massive Golden Resources Mall, which measures a mind-boggling six million square feet. It opened last October, and is still growing:

How big is six million square feet? That mall, which is expected to cost $1.3 billion when completed, spans the length of six football fields and easily exceeds the floor space of the Pentagon, which at 3.7 million square feet is the world’s largest office building. It is a single, colossal five-story building – with rows and rows of shops stacked on top of more rows and rows of shops – so large that it is hard to navigate among the 1,000 stores and the thousands of shoppers.

As impressive as the mall is, there are larger malls on the way for China. The South China Mall is expected to be three times the size of Mall of America when completed.

Already, four shopping malls in China are larger than the Mall of America. Two are bigger than the West Edmonton Mall in Alberta, which just surrendered its status as the world’s largest shopping mall to an enormous complex in Beijing. And by 2010, China is expected to be home to at least 7 of the world’s 10 largest shopping malls.

Not to be outdone, the Ghermezian’s are planning to expand Mall of America, and have two ten-million-square-foot malls in the works in China, called Mall of China and Triple Five Wenzhou Mall. I wonder if there are plans to expand WEM too?

While it might seem like a needless game of “I’m bigger than you!”, taking note of these malls in China is important. For one thing, it certainly casts doubt on the western-held view that the Chinese don’t have much disposable income. Perhaps not as a whole, but there are obviously enough wealthy Chinese to support such massive shopping malls. And the outlook must be positive enough to be planning the construction of even more malls in the country.

It’s also interesting to see that China is sort of following in America’s footsteps. Owning an automobile has become possible and extremely desirable in China, and now shopping in gigantic malls has hopped the Pacific too. Makes one wonder what else the Chinese do like the Americans.

Read: New York Times

China's Next Cultural Revolution

Think we’re advanced with our hybrid electric cars? Think again, and read the hook for a new article in Wired: “The People’s Republic is on the fast track to become the car capital of the world. And the first alt-fuel superpower.”

China has a both a huge problem and a huge advantage over Western nations when it comes to energy sources. The big problem of course is the gigantic population. A population as big as China’s, which is expcted to hit 1.5 billion by 2030, means that “pollution-related illness will suck up as much as 15 percent of the country’s gross domestic product” by the same time. Rising GDP means that more families have disposable income and thus money to spend on cars, seen as a sort of status symbol much like North America of a few decades ago. The big advantage of course, is that China lacks an entrenched energy industry.

For hydrogen powered cars to work in North America, one has to deal with the oil companies. They don’t want to see the combustion engine go – that’s their bread and butter. China doesn’t have such an industry. There are no oil companies to deal with. They could very well leapfrog the entire combustion engine era and go straight to alternative fuel automobiles. And that’s probably a good thing for the rest of the world too because as Yang Yiyong, the deputy director of the Institute of Economic Research says, “If you pump for oil, you have to fight wars for it.” China is already the world’s second largest oil consumer after the United States, so anything to avoid confrontation between the two when reserves run low is a good thing.

And in North America, clean fuel sources are being developed out of interest and a desire by a relatively select few to protect the environment. In China, the same technologies are being “created by people desperate enough to imagine it.” There’s a big difference there, and I think that’s the reason China will become the world’s alt-fuel superpower.

Read: Wired