China Business

It's ominous in China to give someone a timepiece as a gift, but that may soon be happening as a Chinese software company unveils a new smart watch. Nut Shell Electronics, a subsidiary of China's Shanda, announced that the company will launch several new products on June 17, 2013, including two second-generation Shanda smartphones, a [...]

So far China’s new leadership has resisted short-term fixes to the country’s slower growth and held true to the need for deeper structural reforms to rebalance the economy. The latest measure of economic activity — HSBC’s flash purchasing managers’ index … Continue reading →

Dee Lee What is happening to China's labor force? That will be a recurring theme in the +China Weekly Hangout and on Thursday 23 May we will start discussing the state of China factory floor. Together with +Dee Lee (Inno) of Inno in Guangzhou we will explore the current state of the blue collar workers. This is how the +Asia Society described Dee Lee in 2012 when he was one of their fellows: Dee Lee is Director of the Inno Community Development Organization which focuses on public health, poverty alleviation and emerging issues. The organization currently manages nine ongoing projects that include the workers’ hotline, fair-trade online, HBV advocacy campaign. Together with sixteen colleagues spread across three offices in China, Dee is working with thirteen international foundations and brands to provide assistance to more than two million beneficiaries, most of whom are migrant workers in China. Dee started his Labour NGO career in 2007 with the first systematic workers’ hotline in China. He has a Master’s Degree in marketing communication and five years of work experience at a marketing research and PR firm. Of course you are welcome to join us, you can register here at our event page and join the discussion. A few subjects that might come up in our exchange: has the position of workers changed now there is a relative shortage of factory workers? What is the influence on social media (Inno works mainly through QQ)? How different are today's factory workers from their parents? How are the wages developing, and what are the trade union doing? To mention a few possible subjects. The China Weekly Hangout on labor will take place on Thursday 23 May, 10pm Beijing Time, 4pm CEST (Europe) and 10am EST (US/Canada). You can register here for participation, leave you comments here or at the event page. During the event you can watch also our YouTube video here and at our event page. You can also go directly to our live YouTube channel. During the event you can leave comments and questions at Twitter and Google+ (add the hash tag #CWHCWH). Later this year we will discuss the position of white collar workers, whether we can call them the 'middle class', who is going to save China's economy with their consumption - or not. For next week we are still looking for a subject, but we might selection one from our Australia/New Zealand planning session on Monday. You can register here if you are interested. Last month the +China Weekly Hangout discussed how political reform could take place under Xi Jinping's tenure with +Steve Barru and +Fons Tuinstra. Related articles How to pitch your China book to a publisher - Paul French Australia/New Zealand session - China Weekly Hangout Australia goes easy on China's military rise - Wendell Minnick Chinese brands fighting global heavyweights - Shaun Rein Bird flu: what learned China from SARS? - China Weekly Hangout

This post is an extract from the Danwei Bulletin, a briefing of company and market news collected from the Chinese news and social media before the information appears in English language reporting and sent to premium subscribers of the FT’s China Confidential and Danwei. Please click here for more information. ? The Beijing municipal government has announced initiatives to install charge points for electric cars around the city and to promote electric vehicles for public transport and rental.  The Beijing Science & Technology Commission (BSTC) launched an initiative this week to encourage the private use of electric cars, selecting twelve areas across the city to equip with charge points, parking spots, and rental offices, to grow to 20 major areas by 2015. Beijing will also add 2,000 electric taxis this year to the existing fleet of 750. Xu Xinchao, director of the BSTC’s New Energy and New Materials Department, mentioned Ecar (a leasing company under China Automotive News ???? ?) and China Auto Rental as agencies that would be rental partners in the city’s electric car initiative. Zhan Jingjing, general manager of Ecar, told China Business News ?????? that the first batch of 15 E150 EV electric cars would be provided to customers in the pilot area of Tsinghua Science Park, which has been equipped with ten slow charging stations and one quick-charge point. The vehicles will rent for 49 yuan an hour or 99 yuan a day, Beijing Daily ???? reported. Lin Yi, director of E150 EV manufacturer New Energy Auto (a BAIC subsidiary), told the Legal Mirror ???? that the company will put at least 5,000 electric vehicles on the road this year, including more than 3,000 sales to the private sector. The new charging stations might go some way towards alleviating some of the teething problems facing China’s electric car industry. As the chart above illustrates, the stock price in Hong Kong of one of the companies set to profit from the new charging stations, namely BYD, has been on the up in the last month. Companies and brands affected BYD (????? HKG:1211) Beijing Automotive Industry Holding Co. Ltd. (BAIC ???? Not listed) New Energy Auto (????? BAIC subsidiary) Ecar (???? Privately held. Note: also spelt as Yika in English media) China Auto Rental (???? Privately held)

In a market where consumers are on edge about what they are eating, there are going to be opportunities for firms with a brand supported by safe to enter the market.  In China, this market has recently been filled by the importation of products that were easily transportable, and an explosion in the organics market, but few Western firms had been able to penetrate into a wider market. Que up Chiquita, with their locally sourced, three times washed, chemical free, salad mixes…. which are sold at a very reasonable 17-22RMB (depending on store). They are hitting the market in a big way, and over the last couple of months I have begun to see their penetration into new stores and product groups expand… and I expect this will only continue as consumers continue to look for safe alternatives. One issue that they may face though.  the Chinese market is not a huge fan of raw and cold salads.  It is a market that has legs, but for me where things for Chiquita (and others) get interesting is when they are able to move into categories of food that are core to the Chinese diet.

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

Chinese Internet company Qihoo 360 published its unaudited financial report for the first quarter of 2013, stating that by March 31, the company's operating revenue was USD109.9 million, a year-on-year increase of 58.6%; however, its net profit was USD5.6 million, a year-on-year decrease of 60%. The company said the decrease of net profit was mainly [...]

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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 [...]