A Chinese rock band hired by Puma, a leading sports lifestyle company, plays American music covers during a public marketing event at an international fashion mall in Beijing. Foreign companies hoping to do business in China often hire local musicians, celebrities and athletes to help promote their brand to the largest consumer market in the world.

Not surprisingly, use of apps is growing fast in China.

China, represented by the red line, began the year ranked tenth in terms of app sessions, with 1.8% of all sessions tracked by Flurry. By April, China had climbed to fifth with 2.7% of all sessions, and, in July, overtook the United Kingdom to become the second largest country, with 5.4% of sessions. By the end of October, China had further grown to 7.3% of sessions. The U.S., which declined in sessoin-share over the year, finished in October with 47%. If both China and the U.S. were to continue along their respective trajectories, China could overtake the U.S. by the end of 2013, with both countries converging around 23% app session-share.

The implications here are huge. Of course from a business point of view, sellers of apps have a huge opportunity in China. But it’s also important from a cultural point of view. The Chinese government wants to control its population by controlling information, but mobile apps present yet another source of information. Like the despots in the Middle East, the dictators in China will have to face a more educated and informed citizenry, and that will cause them problems.

Executive Vice President Andy Palmer announces that Nissan will establish a global headquarters for Infiniti in Hong Kong from April 2012. This is a big move for the automaker and demonstrates the huge importance of the Chinese car market, particularly for luxury brands like Infiniti.

With all the massive growth in China, there are serious problems below the surface. The basic problem is that the huge national and local governments are corrupt and cronyism rules. This has led to huge real estate loans that make little sense.

Meanwhile, small businesses who legitimately need capital have to resort to a shadow banking system, and that poses a whole new set a problems. The Chinese government is trying to address the issue.

Risks stemming from China’s shadow banking system and private lending must be “strictly controlled,” and such loans will be curbed, the head of the nation’s banking regulator said.

Loans to local government financing vehicles and the real- estate industry, which also pose dangers for the banking system, can be managed, Liu Mingkang, chairman of the China Banking Regulatory Commission, said at a conference.

The government and regulators have already implemented “effective measures” that will ensure the overall risks are “controllable,” Liu said, according to a transcript of his speech posted on the regulator’s website yesterday.

Premier Wen Jiabao last week pledged to support smaller companies after media reports highlighted a credit squeeze that has driven many businesses to the so-called shadow banking system to obtain loans. More than 80 businessmen in the eastern city of Wenzhou have disappeared, committed suicide or declared bankruptcy to avoid repaying debts to informal lenders, the official Xinhua News Agency reported on Oct. 12.

The story in China is much more complicated than you would learn from conventional wisdom and simple headlines.

Tom Friedman writes often about China, and his latest column addresses current hot issues like currency valuation, manufacturing and trade. But this paragraph grabbed my attention:

But we also need to stop thinking that a middle class can be sustained only by factory jobs. Thirty years ago, Hong Kong was a manufacturing center. Now its economy is 97 percent services. It has adjusted so well that this year the Hong Kong government is giving a bonus of $775 to each of its residents. One reason is that Hong Kong has transformed itself into a huge tourist center that last year received 36 million visitors — 23 million from China. Their hotel stays, dining and jewelry purchases are driving prosperity here. The U.S. Commerce Department says 801,000 Mainland Chinese visited the U.S. last year, adding $5 billion to the U.S. economy. More Chinese want to come, but, for security reasons, visas are hard to obtain. If we let in as many Chinese tourists as Hong Kong, it would inject more than $115 billion into what is a highly unionized U.S. hotel, restaurant, gaming and tourism industry.

The United States needs to get beyond some of the over-zealous security restrictions imposed after 9/11 and let as many Chinese and other tourists come visit as possible. Tourism has helped to sustain Europe for years, and the U.S. needs to take advantage of this as well.

This article offers some interesting insights on where China is investing in foreign markets, particularly in places like Libya and Iraq.

Chinese automaker BYD just reached an epic milestone for the company. The company’s vehicles have been part of an electric taxi initiative known as the Green-Taxi Project, operating full electric vehicles in Shenzen for an entire year. As of April 29th, the fleet has reached a total of 2.77 million kilometers driven with an estimated fuel savings of $1167 per month, per taxi.

From the press release:

In total, BYD EVs have accumulated over 1.769 million all-electric miles and have seen no diminished range or capacity due to rapid-charging. BYD vehicles are estimated to have already saved $360,000 in fuel costs and over 2.776 million lbs of carbon-dioxide. BYD launched consumer sales of the F3DM in September 2010 and anticipates very good demand for the BYD e6 and all electric vehicles in China, fueled in part by government incentives for the purchase of electric vehicles.

This is big news as China continues to work toward a more balanced national carbon footprint. For more about the BYD initiative, check out the official press release.

Despite Ford’s proclamation that it is rapidly expanding in China, the company seems to falter when it comes to actually getting the job done. The most recent JD Power Sales Rankings show Ford at number 14 in China, way behind, well, everyone else. In the first two months of 2011 the company sold just 51,170 cars, while brands like Volkswagen and Hyundai sold 276,137 and 129,430 models, respectively. That’s a big gap to overcome, and unfortunately we probably won’t be seeing much progress this year.

Chinese production of the Ford Focus doesn’t start until 2012. An initial flight of 150,000 units is meant to help Ford catch rival manufacturers, but will it be too late? All signs point to yes. If Ford is already at a quarter of the sales of other major players, it doesn’t look good for the company to play catch up.

As The Truth About Cars has it:

Ford is a late-comer in China. It started in 2003, building some 20,000 Fiestas from kits. In 2006, Mazda joined the fray for a threesome. Like most threesomes, it didn’t work out. After Ford and Mazda disengaged in Japan, Ford and Mazda parted ways in China and started their own joint ventures – both with Changan. The separation is not finished yet and won’t be finished until the Chongqing plant will be operational in 2012. All this does not help.

You can’t say it any better than that.

In an interview with Reuters last week, General Electric CEO Jeffrey Immelt said that he believes China and the United States need to open up their borders for trade and abandon protectionist thinking. The interview came after Immelt attended a White House meeting with President Obama and Chinese President Hu Jintao.

Just this week, General Electric signed $2 billion worth of deals supply electric turbines, railroad locomotives and aircraft components to Chinese companies.

From Reuters:

It also agreed to work with Chinese companies on gas and coal-powered turbines in China, on high-speed rail in the United States and formed a joint-venture company with China’s AVIC to develop electronics for a new single-aisle commercial jetliner being developed by a Chinese state-owned company.

“We want to make sure we see the evolution of free trade and transparency,” Immelt said. “From China, how can they invest more in the United States? How can they grow their companies here? There’s a little bit of angst on both sides, but on balance there is comfort that over time a lot of these things will get solved.”

It’s certainly an interesting take in the age of ‘Buy American’ campaigns. For the full story, head over to Reuters.

Ford Motor Co. may have got off to a late start in China but Mullay and Company aren’t sitting around now! The Blue Oval is adding 100 dealerships this year alone in China with more to come at a brisk pace. This is where the growth is going to come from for the global automakers and the gloves are off to and the bank vaults opened up to grab as many new customers as possible!

From AutoNews.com:

BEIJING — Ford Motor Co. is adding 100 dealers in China this year, mostly in smaller cities in inland provinces where new car demand is surging, the company said today.

The move, more aggressive than a previously announced plan, will bring the number of Ford dealers in China to 340 by the end of the year, up from an original target of 310, said Joe Hinrichs, president of Ford’s Asia and Africa operations.

The company plans to introduce four new models in China over the next few years, including the Ford Edge crossover next month.

Read the full article.