China Business

We are pleased to announce that we will be co-hosting, and speaking at, the China Edge Symposium: Hospitality and Service for High Net Worth Chinese, in London on 3 July in London. With the Chinese consumer being in the headlines almost every time a major brand issues its results, it is no wonder that luxury retail brands want to get a better understanding of how to attract, engage, serve…and sell to…Chinese buyers. The China Dividend: “Luxury fashion retailer Burberry posts 14% profits rise as Chinese sales surge” (Retail Week) “Armani…said revenue for 2012 rose 16%…The strong numbers, in particular in Armani’s Far East region of China, Hong Kong and Japan, are motivating the company to aggressively expand…” (The Wall Street Journal) A key point for brands to understand is that 60% of Chinese luxury spending happens outside of mainland China. Hong Kong is a big beneficiary. But shopping destinations such as London also have an opportunity to attract these high-spending travellers. With many brands and retailers cautious about international expansion, or with limited resources, in the current economic climate it makes sense to bring the Chinese market a little closer. UK business groups, including the China UK Visa Alliance (“UKCVA”), which have lobbied the UK Government for reform of the visa system, recognise the importance of the opportunity that Chinese shoppers present: “The UKCVA estimates that Britain misses out on around £1.2 billion of spending from Chinese tourists because we underperform in attracting them…New West End Company, the Business Improvement District for London’s West End, estimates that Chinese visitors spend nearly three times as much in the West End than the average overseas visitor – £1,688 compared with £567.” Businesses need to take a long-term, strategic approach, localise their messaging and offers, engage online and through Chinese social media, target key travelling groups, be culturally aware, and know how to serve their Chinese visitors once they arrive in-store. With these issues in mind, together with our specialist partners, we are delighted to launch the China Edge initiative, with our conference on 3 July: Hospitality and Service for High Net Worth Chinese. Find out more, and register to join us here. China Edge is a collaboration of sector experts with a wealth of experience in China that brings you the knowledge of how to target, engage and retain wealthy customers from China. China Edge LinkedIn Group China Edge on Twitter @ChinaEdge

@simonsinek - HIGHLY recommend you pick up Invisible Giants by my good friend @LeadersQuest #leadership

Shanghai Daily reports: IN an underground mall just a stone's throw from the Chinese mainland's border with Macau, a row of 30 small shops with identical gold plaques do a brisk, though shadowy trade with mainland visitors, many of them bound for the gambling hub. "Good rates. Better than the banks," shout salespeople jostling to usher clients into shops where thick wads of notes change hands. Licensed as liquor and dry goods stores with stacked shelves of rice wine and cigarettes, many conduct their real business in back rooms - as underground bankers and remittance agents. "It's very simple," said one agent surnamed Choi. "You give me renminbi here. Then we deliver Hong Kong dollars to you in Macau. We can move tens of millions each day," he said. As China's economy and financial markets mature and gain in sophistication, so too does a vast underground banking industry offering swift, cheap and low risk cross-border fund transfers. Much of that activity is conducted openly on the streets of south China's Guangdong Province, where businesses and individuals depend on underground networks to get around strict currency controls - both for legitimate commercial purposes and to safeguard assets beyond the reach of authorities. Beijing is finding it increasingly difficult to stem the tide of speculative and illegal cash. In the decade since China began cracking down on money laundering, the government has amended criminal laws and strengthened commercial banking rules, but loosening restrictions on capital transfers has made it easier for hot money to be channeled across the border. Read more: http://www.shanghaidaily.com/nsp/Business/2013/05/22/Underground%2Bbanking%2Bindustry%2Bflourishing/

Magnus Ahlqvist, president for Sony Mobile Communications Greater China region, has reportedly resigned and the company is currently looking for his replacement. According to reports in Chinese local media, before finding a replacement, the role is temporarily manned by Zheng Shuren, vice president and head of the marketing unit. Ahlqvist, 39, started leading the Chinese [...]

Tricia Wang Personal space is scarce in China, reason why many Chinese see their PC and mobile devices as their most personal space, writes sociologist Tricia Wang in 88-bar.com. While other academics argue the PC is a shared object, Tricia Wang points at the many advertisements selling PC's as a personal object. Tricia Wang: I’ve seen people more attached to their computers and mobile phones because that is the ONLY space that they can claim is entirely theirs. Apartments are small, space is crowded, sometimes rooms have to be shared, in-laws come over any time – everyone is nosy – but the digital tool is their object. Even migrants who buys a PC are very attached to it and have strict rules around sharing it because it is considered a personal space. Take a walk in any electronics mall or on Taobao and you’ll see ads that sell computers as a personal object. It just isn’t true that a computer won’t sell if isn’t advertised as a shared object. Advertisement selling PC's Tricia Wang is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form. China Weekly Hangout Once a week the China Weekly Hangout discusses current affairs in China with international participants on different continents. Moderator Fons Tuinstra, also president of the China Speakers Bureau, explains the idea in a new introduction. An overview of earlier hangouts, you can find here. Coming Thursday the China Weekly Hangout will discuss the changes in China's labor force, especially the blue collar workers with +Dee Lee (Inno), running since 2007 a workers' hotline at Inno in Guangzhou. Expected is also economist Heleen Mees from New York. Moderation by +Fons Tuinstra, president of the China Speakers Bureau. Our first announcement is here,and you can register for the hangout here. Related articles Debate on contemporary identity of the Chinese - Tricia Wang Why WeChat works better in China - Tricia Wang Why spitting can be dealt with - Zhang Lijia The marginalization of labor - Heleen Mees What is China doing right? - Jeremy Goldkorn

One of the reasons that it is been so hard for a lot of analysts, even trained economists, to understand the imbalances that were at the root of the current crisis is that we too easily confuse national savings with household savings. By coincidence there was recently a very interesting debate on the subject involving several economists, [...]

Danone, the French dairy giant, is hoping that the third is the charm as they re-enter the China market with some creative and well-considered partnerships.

For more than a year, the China International Economic and Trade Arbitration Commission (CIETAC), China’s dominant arbitral institution since its founding in 1956, has been fighting a noisy and public civil war. The resulting chaos shows no signs of ending, and any company considering arbitration in China and any company that has an existing contract with an arbitration clause should take notice. CIETAC, which is based in Beijing, has four Sub-Commissions within the PRC: Shanghai (known as CIETAC Shanghai), Shenzhen (known as CIETAC South China), Tianjin, and Chongqing. In early 2012, CIETAC issued new arbitration rules which considerably strengthened the power of CIETAC’s Beijing office (CIETAC Beijing). CIETAC Shanghai and CIETAC South China strongly opposed the new rules, and in mid-2012 both Sub-Commissions declared their independence. A flurry of rhetoric and news releases followed. CIETAC Beijing stated that CIETAC Shanghai and CIETAC South China did not have the authority to declare independence and were no longer authorized to resolve disputes that called for arbitration by CIETAC Shanghai or CIETAC South China. CIETAC Shanghai and CIETAC South China responded by saying they had always been independent, and would continue to resolve disputes that called for arbitration by CIETAC Shanghai and CIETAC South China. These polar opposite positions placed potential litigants in a bind: who is authorized to hear their claims? The saga continued, with the situation going from bad to worse. On October 22, 2012, CIETAC South China changed its name to the South China International Economic and Trade Arbitration Commission, or SCIETAC, with its own set of arbitration rules that went into effect on December 1, 2012. Realizing that if one new name was good, then two new names must be better, SCIETAC also gave itself a second official name: the Shenzhen Court of International Arbitration (SCIA). Then on April 18, 2013, CIETAC Shanghai changed its name to the Shanghai International Arbitration Center (SHIAC), with its own set of arbitration rules that went into effect on May 1. Naturally they needed a second name as well, and what could be less confusing than the Shanghai International Economic and Trade Arbitration Commission (SIETAC)? Meanwhile, CIETAC Beijing opened up new offices in Shanghai and Shenzhen, using the same arbitration rules that SHIAC and SCIETAC had rejected. The result is as big a mess as it appears, and should give pause to anyone drafting a contract that contemplates arbitration with CIETAC, SHIAC, or SCIETAC. Would you hire a mechanic whose own car keeps breaking down? A more immediate problem faces parties with already signed contracts that provide for arbitration in Shanghai administered by “CIETAC Shanghai,” or arbitration in Shenzhen administered by “CIETAC South China.” The parties to that contract now have to consider two troubling questions. First, which arbitral institution is entitled to arbitrate the dispute? Second, would a court enforce an arbitral award? Consider a contract that provides for arbitration administered by “CIETAC Shanghai.” Both CIETAC Beijing and SHIAC currently claim they are entitled to arbitrate a dispute arising from this contract. If the contract parties can agree on which arbitral body to use, the identity of the “proper” arbitral body is a moot point. But by the time most disputes are referred to arbitration, the parties are not agreeing on much at all. Often, the status quo favors the responding party, and as a result that party will do whatever it can to delay arbitration. In such cases, the responding party will likely argue as follows: (1)    The selected arbitral institution does not have jurisdiction. For a dispute submitted to SHIAC, the responding party would argue that the parties’ intent was for CIETAC, the institution based in Beijing, to handle the arbitration, with Shanghai being merely the location o

Starting in September, I will teach a course in International Marketing in the Fudan-Boston University Program.  The course is delivered through Fudan University's School of Social Development and Public Policy.   This is a study abroad program delivered to students from Boston University's School of Management. - Brian

WSJ reports: How high is inflation in China? Some suspect it is higher than is captured in the official consumer price index.A new measure developed by e-commerce giant Alibaba Group Holding Ltd. seems to give that idea some credibility. The official CPI puts inflation at 2.4% year-on-year in April. Alibaba’s Internet Shopping Price Index – based on transactions on the firm’s Taobao and Tmall websites – puts it at 6.9%. After an article in The Wall Street Journal drew attention to the discrepancy, China’s National Bureau of Statistics went into action. They pored over the description of the Alibaba index (in Chinese), and dispatched researchers to Hangzhou to interview its creators. Read more: http://blogs.wsj.com/chinarealtime/2013/05/20/inflation-deflated-evaluating-the-alibaba-index/