Private companies: not free of government control - Paul Gillis

Paul Gillis

The Hangzhou government raised eyebrows as it announced last week it would send 100 officials to private companies to check on them. Professor Paul Gillis at Peking University’s Guanghua School of Management did not see that much news, he tells Bloomberg.

Bloomberg:

Government agencies may also be heightening their monitoring of the vast private sector at a time the Chinese economy is decelerating — raising the prospect of destabilizing job cuts as enterprises try to protect bottom lines. 

Alibaba is hosting its annual investors’ conference this week in Hangzhou against the backdrop of a worsening outlook for the country. 

“They might be checking whether the [Chinese] Communist Party [CCP] units are working effectively within the companies,” said Paul Gillis, a professor at Peking University’s Guanghua School of Management. 

“While China legitimized capitalism, the level of government influence was never intended to disappear. Occasionally private entrepreneurs forget about this and are reminded of it,” Gillis added. 

Zhejiang is considered the cradle of modern Chinese private enterprise, home to a generation of self-made billionaires from Alibaba’s Jack Ma (馬雲) and Geely founder Li Shufu (李書福) to Wahaha’s Zong Qinghou (宗慶后).

More in Bloomberg.

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How China's urbanites create new identities - Ian Johnson

Ian Johnson

China's big cities are developing a new city life, including new identities, writes journalist Ian Johnson, author of The Souls of China: The Return of Religion After Mao, at the opening chapter of, Shanghai Sacred: The Religious Landscape of a Global City, by photographer and anthropologist Liz Hingley, quoted in a review of the photo exhibition in Liverpool at Creative Boom.

Creative Boom:

With around 26 million inhabitants, the megalopolis is home to a multitude of religions from Buddhism and Islam, to Christianity and Baha'ism, to Hinduism and Daoism and many other alternative faiths, which are constantly growing and evolving. 

In the book's introduction, Ian Johnson, Pulitzer prize-winning journalist and specialist in Chinese religion, adds: "Freed from being defined by where they were born, China’s urbanites have created new identities, discovering for themselves what they truly believe with the aid of new technologies, social media and convergence of faiths and cultures. 

"Some of this religious life takes place in skyscrapers and apartment blocks, but also in the pockets of the past that still dot Shanghai: a traditional New Year’s dinner, the persistence of burning paper houses, cars, and money for the dead, or a rambunctious music group announcing a wedding, birth, or funeral. Faith in China may be vulnerable, yet its unwavering importance is beyond doubt. Its very presence in people’s hearts makes it impossible to eradicate. More than economics or politics, it is these moments that are the new heart of China."

More in Creative Boom.

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The abyss between Hong Kong and mainland people - Zhang Lijia

Zhang Lijia

Western media too easily assume the protests in Hong Kong are supported by many mainland Chinese. Wrong, says author Zhang Lijia. There is a wide dived between mainland Chinese and Hongkongnese, and that is not only because of the media censorship in the mainland, she adds at the South China Morning Post.

Zhang Lijia:

When I travel around the world, people like to guess when I am from. “Hong Kong?” “The mainland,” I like to correct them, and add: “We are all Chinese.” 

Ethnically, we are all Chinese. But mainlanders’ reaction to the Hong Kong protests tells me that there’s a deep divide between the two – a geopolitical one. 

There’s no poll on the carefully censored topic on the mainland. From measuring the pulse on the internet and talking to friends, I sense that there’s indifference, confusion, anger, fascination, and even admiration. Overall, I would say that most are not sympathetic to the protests.

The propaganda has certainly played a role. Some have readily bought the government line that the protests are being fuelled by foreign influence – the black hands. 

A lot of ordinary Chinese simply don’t understand why millions of Hongkongers would take to the street over the extradition law. “They already enjoy a lot more freedom and rights than us. What’s the fuss?” asked my brother-in-law, a small-business owner from Nanjing. 

Interestingly, even some well-educated Chinese who have access to international reports don’t necessarily support the ongoing protests in Hong Kong. 

Nick Shen, an English tutor based in the southern city of Zhuhai, has been following the developments from the very beginning, reading reports from both domestic and international media, partly because he can see Hong Kong from the sea front, a sling shot away from his apartment. 

“These silly young people,” he said in a phone interview. 

“They are wasting their time. They are going to achieve nothing, but to destroy Hong Kong’s economy and ultimately hurt the mainland itself.” 

The problem is that mainlanders and Hongkongers have little understanding of each other since they come from drastically different places.

More at the South China Morning Post.

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Why multinationals eye incubators for a competitive edge - William Bao Bean

William Bao Bean

China's competitive landscape is changing fast, and the blooming incubators for startups offer multinational a much-needed edge in local competition, says William Bao Bean, managing director of the Chinaccellator in Shanghai to Forbes. “When you’re under pressure and local players are taking market share from you, you look to innovation.”

Forbes:

“The competition from the local players is really intense,” especially at a time of slowing economic growth this year, said William Bao Bean, managing director of Chinaccelerator, one of the most active foreign-backed accelerators in the country, in a recent interview. 

To get an edge, more and more multinationals are turning to accelerators and incubators. “When things are going smoothly, you’re not feeling that pressure,” Bean said.  

“When you’re under pressure and local players are taking market share from you, you look to innovation.”... 

Bean, a graduate of Bowdoin College, knows his way around Asia, having moved to the region in the 1990s. After positions in Deutsche Bank, Softbank and SingTel Innov8, he in 2014 joined SOSV, a venture capital firm that runs accelerators. Chinaccelerator, where Bean is a managing director, provides seed capital and mentoring for globally minded technology entrepreneurs. 

The search for innovation solutions helped spawn a Johnson & Johnson incubation facility in Shanghai that opened in June and will house up to 50 startups. It started with 31 resident companies at an event that was attended by Paul Stoffels, the company’s chief science officer.   

“Johnson &Johnson has deep roots in China with an innovation footprint dating back nearly four decades,” Stoffels said in a statement. “We are committed to fueling innovation in the region and unleashing the power of science and technology to advance the health of people in China and around the world.”  

Sanofi and Microsoft have also been notably active with a similar approach, Bean says.  Merck, for its part, plans to open the Merck China Innovation Hub in Shanghai in October. 

Yet it’s not only tech and pharma multinationals that are looking for new ideas through startups in China, Bean said. “Consumer brands are really looking for new cutting-edge solutions from startups to help them become more competitiveness versus much stronger local brands,” he said. The consumer-focused companies partnering with startups are no slouches:  ABInBev and Unilever.

More in Forbes.

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Companies flee, rather than fight China - Sara Hsu

Sara Hsu

US President Donald Trump wants US companies to fight China, but they rather flee for greener pastures not to their home countries, says financial analyst Sara Hsu at the ChinaUSFacus. But some might decide to swap countries too early, she warns.

China US Focus:

Moving to another country may make sense for companies whose new grounds of operation have sufficient infrastructure to provide a proper manufacturing environment. 

Firms reshoring to Japan and Taiwan find themselves back home with well-constructed roads and telecommunications systems, although such factors may yield higher costs of production. Those shifting to Vietnam and Thailand are faced with poorer conditions and potential added costs of production. 

Vietnam has a lack of transport infrastructure, power supply networks, and urban infrastructure. Ho Chi Minh City and Hanoi face severe traffic congestion. Government funding and planning fall short of providing sufficient resources to improve the infrastructure environment. It has been estimated that the country needs to invest $400 billion in infrastructure over the next decade. However, corruption and lack of skills prevent this from occurring. 

Thailand has better infrastructure than Vietnam, but it has experienced bottlenecks in pushing infrastructure development further. This is because it takes the central government a long time to approve projects, and state governments lack the capacity to build the infrastructure projects that are slated for construction. Thailand’s political elite view infrastructure projects as long term, while their tenure may be short term. 

As companies move to developing Asian nations to take advantage of Asian supply chains, they are facing challenges. In Vietnam, companies have a harder time locating factories, and ports are struggling to coordinate container ship traffic. Costs of labor in Thailand are higher than in China, even after wage increases in China. Firms attempting to move to Indonesia, Malaysia, and Cambodia are facing similar problems. In Cambodia, for example, almost of half of all goods inspected in the last quarter did not satisfy inspection standards. 

This means that the trade war is forcing some companies to shift production to less attractive locations prematurely. It’s one thing to move abroad in order to increase profitability, but quite another to move out from an established location due to complications resulting from an anti-free trade stance taken by the center country. So far, companies that make Crocs, Roomba vacuums, and Yeti beer coolers are moving out of China due to increased tariffs.

More at the ChinaUSFocus.

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China's consumers hate to go for a premium product - Ben Cavender

Ben Cavender

Competition between Starbucks and Luckin has been heating up, and Luckin seems to focus on a higher segment of the market. But business analyst Ben Cavender warns the company might fall into a sword it helped to create itself, he tells to Reuters.

Reuters:

Luckin CEO Qian Zhiya said the company was on track to break even at a store level at every store during the third quarter because rising scale would it give it more bargaining power to lower input costs. Store level costs exclude marketing expenses. 

Ben Cavender, Shanghai-based principal at China Market Research Group, cautioned that might prove to be a tall order. 

"It's difficult because they have trained consumers to only want to go to the stores when there are big discounts," he said, adding that each store does not attract enough customers to cover cost of operations. 

"Eventually they will probably have to cut non-performing stores and find a way to convince people that they have improved coffee quality along with slightly higher prices."

More in Reuters.

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How an impoverished China started to expand in Africa - Howard French

Howard French

China is nowadays even compared with former colonial powers when it comes to its economic rise in Africa. Journalist Howard French, the author of China's Second Continent, takes a step back and looks at how it all started in the 1960s for Worldpoliticsreview, and how it relates to South Africa.

Howard French:

As I have written in “China’s Second Continent,” the early 1990s was precisely the moment when Beijing began to put together its own initiative to become a leading force for global economic integration, beginning in Africa. The continent would come to serve as a kind of Chinese laboratory and workshop for an even bigger infrastructure and development scheme known today as the Belt and Road Initiative. 

But even as China has ultimately built the new railroad and highway networks in Africa, along with many other things, it is easy to forget how much less wealthy and powerful the country was when this all started. In 1994, when Mandela became president, China’s per capita GDP was a mere $473. South’s Africa’s was more than seven times higher, at $3,445. China’s wager on Africa has paid off stunningly well, for the government and for Chinese companies and workers who by the hundreds of thousands have sought their livelihoods and built new fortunes on African soil. 

Some of this, and perhaps even a great deal of it, could have been achieved instead through South Africa’s initiative and agency—by energetically expanding the pie instead of dividing it. New wealth could have been built through intra-African supply chains and networks, and millions of new jobs created, both for South Africans and Africans from other parts of the continent. While most countries have little choice about their place in the world economy, for a select few, history presents more options, including whether to be a globalizer or be globalized by others. South Africa in the 1990s had a rare chance, and made the wrong choice. 

Today, a diminished South Africa still tries to sell itself to the world as a gateway to Africa, but it’s unconvincing. Its people, all too often including black South Africans, talk about the rest of Africa as if it sat on an entirely different continent, and its leaders are impassive in the face of spreading anti-African sentiments and violence at home. 

As if to illustrate how far South Africa has fallen, another story circulated in newspapers in Johannesburg during my recent visit, about a spate of deadly attacks on foreign truck drivers across the country. An estimated 213 people, most of them foreign drivers, have been killed over the past year, and some 1,200 vehicles and their cargo destroyed in ongoing violence. Rather than call for calm, though, South African truck drivers are calling for companies not to employ foreign drivers, “in order to protect South African jobs.” What seems clear is that China has understood the power of economic integration, while sadly South Africa still has not.

More at Worldpoliticsreview.

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Hong Kong loses its clout as a financial market - Jim Rogers

Jim Rogers

Hong Kong's days as a financial market are not yet numbered, but in the long run, the city has tough problems, says celebrity investor Jim Rogers to RT. Rogers is Singapore-based, an island that hopes to benefit from the downturn of Hong Kong as a recession is looming.

RT:

The deteriorating situation has been forcing investors to look for ways to move their money to a more stable place. Capital outflows happen not “because there is any immediate danger, but it indicates in the future that there will be less and less security in Hong Kong,” finance guru Jim Rogers said in an interview to RT. 

According to Rogers, Singapore is one of the main beneficiaries of that capital outflow. It can be explained not only by the fact that it is easier and more convenient to deal with Singapore, as locals speak Chinese, but also by the security issues since countries like Austria or Lichtenstein are not as secure as they used to be, the investor points out. 

“This is already making Hong Kong less of a major financial center because it’s unlikely that people will take their money to Hong Kong now,” the analyst said. “So even if nobody takes their money out of Hong Kong, but people are taking it out, other people will not take their money to Hong Kong.”

Hong Kong is losing its status as a major financial center as investors seek a ‘safe haven’ for their assets in places like Singapore amid rising tensions in the city, legendary investor Jim Rogers told RT.

Weeks of unrest have already taken a toll on tourism, stock and property markets, as well as the entire financial sector. Even before the recent shutdown of the airport by protesters, between July 14 and August 9, bookings to Hong Kong from Asian countries fell by more than 33 percent compared to same period last year. 

The ongoing trade war between Washington and Beijing in addition to the protests affected the economic situation in the autonomous region, bringing the quarterly contraction in GDP to 0.4 percent in the three months to June. If the trend continues and losses extend in the third quarter, the city would technically fall into recession for the first time in decades. 

The deteriorating situation has been forcing investors to look for ways to move their money to a more stable place. Capital outflows happen not “because there is any immediate danger, but it indicates in the future that there will be less and less security in Hong Kong,” finance guru Jim Rogers said in an interview to RT. 

According to Rogers, Singapore is one of the main beneficiaries of that capital outflow. It can be explained not only by the fact that it is easier and more convenient to deal with Singapore, as locals speak Chinese, but also by the security issues since countries like Austria or Lichtenstein are not as secure as they used to be, the investor points out. 

“This is already making Hong Kong less of a major financial center because it’s unlikely that people will take their money to Hong Kong now,” the analyst said. “So even if nobody takes their money out of Hong Kong, but people are taking it out, other people will not take their money to Hong Kong.”

“I expect the Hong Kong dollar to break free of the US dollar once the renminbi [Chinese yuan] is convertible. The Hong Kong dollar will disappear… but that will not happen until the renminbi is completely convertible,” said Rogers.  

Another indicator of the capital outflow is the Hong Kong dollar, which is pegged to its US equivalent and has weakened within the pegged exchange rate over the last month, Rogers believes. He predicts that the local currency will further weaken, untie from the greenback, and eventually disappear.

More in RT.

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The drama behind Alibaba purchasing NetEase's Kaola - Ashley Dudarenok

Ashley Dudarenok

E-commerce in China showed drama this month, as Alibaba purchased NetEase's Kaola for US$2 billion, says e-commerce expert Ashley Dudarenok at her vlog. The number one and two in cross-border e-commerce did not change hands so easy, and Dudarenok explains why.

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Jack Ma's departure: a loss for Alibaba - Shaun Rein

Shaun Rein

Alibaba will not be the same after its charismatic chairman Jack Ma has left, says business analyst Shaun Rein, according to the China Daily." "I'm not sure that people want to meet Daniel Zhang in the same way they want to meet Jack Ma."

The China Daily:

Analysts were cautious about whether his departure would dent Alibaba's globalization ambition of serving 2 billion users and creating 100 million jobs by 2036 amid economic uncertainty and rising protectionist sentiment. 

"He has got the charisma to call the CEO of a big company in America and say, 'Let's sit down and talk'," Shaun Rein, managing director of consultancy China Market Research Group, told Nikkei Asian Review. "I'm not sure that people want to meet Daniel Zhang in the same way they want to meet Jack Ma." 

Ma has been explicit about devoting more time and energy to education and philanthropy upon his resignation as Alibaba chairman. His inspiring speeches have been praised by many people across China.

More in the China Daily.

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What happens when China's economy slows down - Ben Cavender

Ben Cavender

The effects of a slowdown in China's economy on foreign companies might vary, on the industry they are working in and on their size, says Shanghai-based business analyst Ben Cavender to Reuters. Smaller firms might close down, while larger ones try to diversify over time, he adds.

Reuters:

Growth in the stickier foreign direct investment (FDI), however, has been trending lower. Net FDI, as per Nomura estimates, will more than halve this year to $40.3 billion. 

Ben Cavender, Managing Director of consultancy China Market Research Group (CMR), said that although it would take time for big global firms to diversify part of their capacity out of China if the trade war drags on, smaller players will more likely shut their China business. 

“Any time you have government policy frictions like this, it tends to slow down FDI and so I think that’s the reality. The other reality is that the Chinese economy is slowing down, and so is the return on investment,” he said.

More at Reuters. Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Why China cannot miss Hong Kong - Victor Shih

Victor Shih

Hong Kong might have lost much importance as a gateway to mainland China, for the financial markets Beijing still needs a stable Hong Kong, says financial analyst Victor Shih in NTD. The reason Chinese entities are borrowing through Hong Kong is that the financial institutions around the world, including the International Monetary Fund, legally treat Hong Kong as a separate entity, he said.

NTD:

Chinese companies use Hong Kong’s capital markets to attract foreign investors, while international companies use the city as a base to expand into mainland China. Experts warn that Beijing would shoot itself in the foot if it takes an increasingly hard line against protestors, seriously damaging Hong Kong’s standing as a stable financial center. 

There’s $3 trillion in dollar-denominated debt issued by Chinese companies, according to estimates. And Hong Kong, an important source of capital for China, provides roughly a trillion dollars of that amount, according to Victor Shih, a professor of political economy at the University of California–San Diego School of Global Policy and Strategy. 

U.S. banks and investors have lent roughly $180 billion to Chinese banks and Chinese companies mainly through Hong Kong, Shih said in his testimony at a congressional hearing held by the U.S.–China Economic and Security Review Commission on Sept. 4. U.S.-based pension and mutual funds also own additional billions in bonds issued by Chinese entities, he said. 

“When you’re in debt to the tune of $3 trillion, you don’t want your creditors to suddenly compress your credit limit by $1 trillion,” Shih said at the hearing. “That would be a big problem for China. And I think that may be one of the reasons why China thus far has chosen, I would call it, a very moderate and soft-line approach in Hong Kong.” 

The reason Chinese entities are borrowing through Hong Kong is that the financial institutions around the world, including the International Monetary Fund, legally treat Hong Kong as a separate entity, he said. 

The debts are issued by the subsidiaries of Chinese companies headquartered in Hong Kong, allowing them to enjoy lower interest rates compared to debt issued in mainland China.

More in NTD.

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How services are neglected in the US-China trade war - Harry Broadman

Harry Broadman

Tarifs imposed in the US-China trade war focus on goods, but US politicians missed that most of the world trade consists of services, writes international trade expert Harry Broadman in the Gulf News. What has happened to Trump and his advisors over the past twenty years?

Harry Broadman:

While the importance of services trade to US competitiveness may have once been out of the mainstream of trade policy thinking, that was decades ago. If Trump’s economic advisers are worth their salt, they should know better. If they do, then why can’t they get through to the boss?

Perhaps Trump’s distorted view towards the importance of international trade in services stems from sheer ignorance. That is hard to believe. After all, he did attend the Wharton School of Business at the University of Pennsylvania, from which he graduated in 1968 with a Bachelor’s Degree in Economics. 

Such training, one would assume, equipped him with the tools to understand the concept of cross-border services transactions, even if they were not as commonplace then as they are today. 

Alternatively, does it stem from a nostalgic hope to return to years gone by when manufactured merchandise and other goods dominated economic activity in the US and elsewhere? If so, he would do well to recognise that such a wish is far-fetched. Why?

Because over the last 20 years, in every country of the world — rich as well as poor — manufacturing’s contribution to GDP actually has been declining while the share of GDP accounted for by services has been rising. 

It’s ironic that not only is the core of the Trump Organization in the real estate industry, a prime component of the services sector, but Trump’s course concentration in economics at Wharton was in real estate. Even television, Trump’s second occupation, is a services industry. 

Despite this, Trump might well believe that a shift to a services-oriented economy is a sign of economic decline. If so, the latest data, which are for 2015, suggest he would be quite mistaken. In high-income countries, services’ share of GDP has risen to 75 per cent. In low- and middle-income states, the share of GDP accounted for by services has increased to 56 per cent.

Whatever the reason for Trump’s myopia toward the fastest growing portion of international trade, he needs to realise that he — like the rest of us — is not living in an economy of years gone by.

More in Gulf News.

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The trade war will not be a game changer in China - Victor Shih

Victor Shih

If some US politicians hope the trade war between China and the US might undermine Xi Jinping's domestic power base, they are on the wrong track, says political analyst Victor Shih at US-China Economic and Security Review Commission hearings at the US Congress, according to the South China Morning Post.

The South China Morning Post:

Policy analysts gave written and spoken testimony to the US-China Economic and Security Review Commission annual review just hours before top trade negotiators confirmed a face-to-face meeting in early-October in a step resolve their increasingly bitter trade conflict.

Among them was Victor Shih, associate professor of global policy and strategy at University of California San Diego, who said that the trade war may succeed in creating divisions among policymakers in Beijing as to how to deal with China’s economic slowdown. 

As economic losses accumulate under the trade war, Shih expects divergent camps in the ruling Chinese Communist Party to emerge and pressure Xi to ramp up economic stimulus. Beijing has already announced a series of monetary easing steps and increased fiscal spending in a step to push for new growth under the tense trading environment. “It would take a truly massive economic shock to threaten [Xi’s] power,” Shih said, adding that high domestic debt and trade frictions with the US are leading to increased state intervention in the Chinese economy.

More at the South China Morning Post.

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Why Chinese like their government - Kaiser Kuo

Kaiser Kuo

It's the economy, stupid, says China commentator Kaiser Kuo in his masterclass for Quora. Journalist and blogger Cory Doctorow  reviews his masterclass " on contemporary Chinese politics, authoritarianism, liberalism and dissidence" for BoingBoing.

Cory Doctorow:

The short answer is "it's the economy, stupid." The dissolute rulers of pre-Revolutionary China governed badly, and between their wealth hoarding and colonial extraction by the British, China was a deeply unequal place whose political instability tipped over into revolution. But the post-Revolutionary Chinese catastrophes -- the Great Leap Forward, the Cultural Revolution -- left tens of millions dead and scarred the psyches of hundreds of millions of others. 

The market reforms of the Deng era changed that, creating massive, sustained growth and (less unequal, but still imperfectly distributed) prosperity. The result is a kind of bargain between the authoritarian technocrats of the Chinese state and its people: "let us govern as we wish, and we will keep chaos at bay and sustain the growth that is lifting you out of poverty." As Kuo notes, this is the opposite of the American doctrine of Benjamin Franklin: "Anyone who would trade a little freedom for a little personal safety deserves neither freedom nor safety." 

This explains why anti-corruption programs are so popular (and why corruption scandals are so politically consequential), even if they hint at the political purges of the Cultural Revolution; it explains why Chinese censorship is so focused on social order and preventing online dissent from erupting into physical manifestations of political anger. 

As China's political star rises and rises on the world stage, many western thinkers are looking to the Chinese people to demand a more pluralistic, participatory state with respect for human rights and democratic fundamentals. Kuo explains why so many people in China are indifferent to this proposition (though Hong Kong is a different story!).

More in BoingBoing.

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WeChat: still expanding, despite its dominance - Matthew Brennan

Matthew Brennan

Tencent's WeChat and its mini-programs are still very much in the expansion mode, says WeChat expert Matthew Brennan, even though two out of three Chinese use the tool, he tells the Asia Nikkei Review.

 Asia Nikkei Review:

Consumers, often, are all but forced to use some super apps, like it or not. In Hangzhou, the birthplace of Alipay, a number of restaurants, coffee shops and supermarkets only accept the e-payment service. Similarly, few people bring stacks of business cards to conferences in China -- they simply add each other on WeChat. 

With two out of three Chinese on WeChat, the app "is so ubiquitous" that it has essentially become a "public utility," said Matthew Brennan, managing director of Shanghai-based tech consultancy China Channel, who specializes in WeChat-based marketing. 

"It is like your phone number, water, gas and electricity," Brennan said. 

As popular as it is now, WeChat is still in expansion mode. Tencent has made companies and developers an offer that is hard to refuse: They can build a mini-app for WeChat cheaper and faster than a conventional app... 

Companies that helped drive WeChat's rise are showing they are not necessarily wedded to it. Brennan, who is writing a book about the super app, said top Chinese ride hailer Didi Chuxing used to rely on WeChat to attract passengers. Now, he said Didi -- which is also backed by Tencent -- gets about 90% of its orders through its own app. 

"They want direct access [to users]," Brennan said. "Otherwise, their business is at risk."

More in the Asia Nikkei Review.

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Can Costco succeed where other foreign competitors gave up? - Ashley Dudarenok

Ashley Dudarenok

US discount retailer Costco made a blast this week in Shanghai with the opening of their first flagship store. Can it succeed where Carrefour, Amazon, Tesco, and others give in to domestic and online competition, wonders branding expert Ashley Dudarenok.

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First Rome-approved bishop good news for Vatican - Ian Johnson

Ian Johnson

The first ordination of a bishop, Father Yao Shun, approved by the Pope and the central government is good news for the Vatican, says journalist Ian Johnson, author of The Souls of China: The Return of Religion After Mao, to AFP. 

 AFP:

State media reports said another Chinese bishop was set to be ordained Wednesday, although the official church did not confirm this. 

Pope Francis recognised seven clergy appointed by China as part of the September deal, despite fears the accord would be used by Beijing to further crack down on worshippers outside the official church. 

"The consecration of Father Yao Shun is good news for the Vatican," said Ian Johnson, an author who writes on Chinese religion. 

"This was someone they wanted installed in office and now Beijing has allowed that to happen. 

It shows that the compromises are not all one-way, which is how some of the Pope's critics have portrayed the deal." 

Although ties have improved as China's Catholic population grows and the Vatican intensifies efforts to restore relations, tensions remain. 

The Vatican is the only European diplomatic ally of self-ruled Taiwan, which is viewed by China as a breakaway province awaiting reunification.

More at AFP.

  Ian Johnson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Costco looks to China consumers for trade war support - Sara Hsu

Sara Hsu

The US discount retailer Costco made a blast when it opened its first flagship store in China this week. Business analyst Sara Hsu see it as a way to keep costs down when tariffs go up during the ongoing trade war, she tells the Vancouver Star. Solid sales to Chinese consumers could keep costs in check for US consumers too. If they succeed in China.

The Vancouver Star

Costco’s business model of offering discounted products in bulk could have enduring popularity in China, said Sara Hsu, CEO of the China Rising Capital Forecast research firm. 

“People already got used to the idea from Pinduoduo, a Chinese app where people can get together in a group and buy in bulk and distribute the goods among friends. It’s really hot right now,” Hsu said. 

In May, Costco executives had warned that costs for North American consumers could go up at its stores due to the ongoing trade war between the U.S. and China, with each side slapping down new tariffs. 

“If Costco can make goods in China and sell them to domestic Chinese consumers, tariffs won’t apply, and that could offset loss of profit from tariffs on goods that have to be shipped out of China,” Hsu pointed out. 

So rather than supporting a trade war, Chinese shoppers could end up keeping prices low in the United States — at least at one retailer. It’s a reminder that people in China are no different from consumers the world over in that their first loyalty is not to the state but the almighty yuan.

More in the Vancouver Star.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at our meeting or conference? Do get in touch or fill in our speakers' request form.

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Taiwan: excellent launch path for pan-Asian ventures - William Bao Bean

William Bao Bean

Shanghai-based MOX (Mobile Only Accelerator) works from different places in the world, including Taipei. Taiwan offers an excellent launching platform for ventures who look for international expansion into the rest of Asia, says MOX managing director William Bao Bean, according to the News Lens.

The News Lens:

By partnering with promotion partners such as mobile operators in each country, MOX enables the strongest mobile startups from around the world expand into new markets without spending money on customer acquisition. 

“The first billion internet users accessed the Internet using their PCs, but the next 4 billion users — Southeast Asia, Eastern Europe, and South America — are mobile-only. Hundreds of millions of users are getting on the Internet with smartphones,” said William Bao Bean, the managing director of MOX. 

MOX is operated by the Silicon Valley-based venture capital firm SOSV with US$650 million assets under management. SOSV operates six vertically-focused accelerator programs in different cities around the world, and MOX is the first international accelerator in Taiwan. 

“The cost of living and staffing resources [in Taiwan] are relatively low, and there’s a large pool of highly educated professionals suitable for startups. Additionally, for companies looking to expand into Southeast Asia, South Asia, China, and other emerging markets, Taiwan provides an excellent launchpad for international growth," Bean said.

More in the News Lens.

William Bao Bean is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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