IT-investments: moving from solving basic problems to AI - William Bao Bean

William Bao Bean

A major shift is taking place in financial IT investments, tells William Bao Bean, managing director of the Chinaccelerator at CNBC. In the past 15 years VC's helped to solve basic problems, he says. That's done and we move now to AI.

CNBC:

William Bao Bean, general partner at early stage venture capital firm SOSV, said at a panel at the Singapore Week of Innovation and Technology that significant sums of money were flowing into AI. 

"So the last 15 years, entrepreneurs and [venture capitalists], like us, have been investing in companies that solve basic problems," he said, adding most of the problems today are solved "pretty well" in the country. 

Currently, China is a "lot more like the U.S., where, in order to make an impact, you have to have a revolution in tech," Bao Bean said. "So you're seeing massive amounts of money going into AI."... 

China not only has a vast population but a majority of the people have some form of access to the internet. 

Some of the companies to watch out for in China's drive for AI, according to Goldman, are the big three internet giants — Baidu, Alibaba and Tencent. Others include ride-hailing company Didi Chuxing, on-demand services provider Meituan-Dianping and speech and language recognition firm iFlytek. 

At SOSV, Bao Bean is also the managing director of a Shanghai-based accelerator program called Chinaccelerator that helps global start-ups enter the Chinese market and Chinese firms go abroad. 

The big problem Chinese start-ups face at the moment, he said, is user acquisition due to the fact that so much of the market is dominated by a very small number of companies. 

"Unless you ally yourself with one of the big players, no one will ever see your product," Bao Bean said. 

Experts have previously told CNBC that, in most tech sectors in China, investors tend to bet on two-to-three dominant players. Often, some of those start-ups merge to capture the majority of the market. For example, in the ride-hailing sector, the merger between two of the top start-ups resulted in the creation of Didi Chuxing, which currently dominates the market. 

Bao Bean also said at a CNBC panel on Monday afternoon that start-ups planning to enter the Chinese market needed to rethink their products and services.

More at CNBC.

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.

Fintech is one for the key investment focusses in IT. Are you looking for more fintech experts at the China Speakers Bureau? Do check out this list.

Why caviar from China will boom - Shaun Rein

Shaun Rein

When it comes to caviar, China seems to be able to become a major producer, despite its reputation of food-scandals, says business analyst Shaun Rein in Bloomberg. A boycott of both other producers, Iran and Russia, does help too, he adds.
Bloomberg:

Mention China alongside almost any food product, and people get nervous. After international incidents involving bleach-soaked meat, antifreeze-laced apple juice, and pine nuts “unfit for human consumption,” the country “is known for tainted food because of repeated quality-control scandals,” says Shaun Rein, managing director for the China Market Research Group. 

Kaluga Queen, which produces its caviar about 300 miles southwest of Shanghai, is mindful of these associations 

“The biggest obstacle is the low trust of Chinese food safety,” says Lily Liu, marketing manager for parent company Hangzhou Qiandaohu Xunlong Sci-tech Co.... 

Until recently, Russia and Iran dominated the caviar export market, harvesting the delectable eggs from beluga sturgeon in the Caspian Sea. Overfishing there eventually landed them on the endangered species list, and as supply dwindled, other nations, including Japan, Israel, and China, have started to fill the gap. 

“Exports of Chinese caviar will boom because of sanctions and limited supplies from Iran and Russia,” Rein says. “Many restaurateurs will buy Chinese caviar because of good quality, reasonable price, and ample stock.”

More in Bloomberg.

Shaun Rein 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.

Are you looking for more stories by Shaun Rein? Do check out this list. 

Why so many financial scams are emerging - Victor Shih

Victor Shih

Financial scams are emerging in China on an epidemic scale. Rising costs of living have enticed many to join these scams, says Victor Shih, associate professor in political economy and China expert at the University of California San Diego to the BBC. Local government did not step in.

BBC:

It's a social problem the government is fighting to contain. Victor Shih, associate professor in political economy and China expert at the University of California San Diego, says a combination of factors have spurred the spread of these scams. 

"The rapid proliferation of pyramid schemes is caused by high growth in living costs, especially housing costs, which enticed many to look for higher returns - and previously light regulation at the local level," Prof Shih says. 

Under pressure to grow their economies, local governments had in the past endorsed some dubious investment schemes - without properly understanding them - on the belief they would deliver strong returns and spur growth.

More at the BBC.

Victor Shih 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.

Are you looking for more political experts at the China Speakers Bureau? Do check out this list.  

Try to solve a problem, not sell your product - William Bao Bean

William Bao Bean

Try to solve a problem, do not focus too much on your own product, tells Chinaccelerator managing director William Bao Bean at a CNBC tech talk panel in Singapore entrepreneurs looking for VC money. He saw too many entrepreneur trying to enter China and Asia without asking themselves whether it was needed.

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.

Are you looking for more experts on innovation at the China Speakers Bureau? Do check out this list. 

Aussie startups: stay away from China - William Bao Bean

William Bao Bean

Managing director William Bao Bean of the leading Chinaccelerator, on tour in Australia, warns Aussie startups to stay away from China and much of Asia, he tells the Australian Financial Review. They should look for their opportunities much closer to home, he added.

The Australian Financial Review:

"I think Australian start-ups should take a look at expanding closer to home. The vast majority do not belong in South East Asia or China," he said. "Something you build for Australia is almost certainly not going to work in the rest of Asia. If you want to expand there, the first step is to take your product and throw it in the garbage. Then take your special sauce and build a new product."

Mr Bao Bean, who has also worked with Softbank China and India and SingTel Innov8, also recommended Aussie entrepreneurs interested in Asia "get out of the building" and spend time exploring and understanding the market before attempting to launch a business there.

Despite his hesitancy around the potential of Australian businesses in Asia, Chinaccelerator has backed two local companies in the last three years – travel services business Chozun and careers platform QLC.io. To meet more local start-ups, Mr Bao Bean has arranged an event at Sydney start-up hub Haymarket HQ on Wednesday. With both companies he has backed, Mr Bao Bean said rather than being specific to the Asian market, he saw potential in them as global platforms. "It comes down to solving a problem. For Chozun, it's not a Chinese problem, it's for international travellers. With QIC, they're solving a problem for millennials and connecting them to jobs in start-ups and those jobs are all with English-speaking companies," he said.

More in the Australian Financial Review.

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.

Are you looking for more experts on innovation at the China Speakers Bureau? Do check this list.  

China needs revised traffic laws to push self-driving cars - Mark Schaub

Mark Schaub

When Baidu CEO Robin Li was arrested by Beijing police for sitting in a self-driving car, it was obvious the country needs an update of its traffic laws, just like the US, Australia and several European countries did have. Shanghai-based lawyer Mark Schaub gives at his firm's website an overview of what is needed to support the development of self-driving cars, including testing on public roads and setting standards.

Mark Schaub:

Automated driving road testing is key step to move automated driving vehicles from the theoreticals of the lab to the realities of the market. A number of jurisdictions are taking the lead in this regard. Although, China has made great advances in constructing closed test sites it has not kept pace with others in respect of regulatory rules or guidelines on road testing. 

China may wish to consider the approaches of other jurisdictions when formulating China’s automated driving test regulations in order to lay a good foundation to enable China to become a global leader in development of automated driving vehicles.

More at China Law Insight.

Mark Schaub 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.

Are you looking for stories by Mark Schaub? Do check out this list.  

Related articles

• Samsung will test its mysterious self-driving cars in the U.S.
• Audi bringing 2 self-driving concepts to 2017 Frankfurt auto show
• US government releases updated guidelines for self-driving cars
• Samsung launches $300M autonomous driving fund, puts $90M into TTTech
• A driverless utopia is our destination ��� but the road there is perilous

The amazing shows by China's tycoons - Jeffrey Towson

Jeffrey Towson

The world looked with awe when Alibaba's chairman Jack Ma performed as Michael Jackson during a massive show for employees and customers last week. But Chinese tycoons like to put up a show, says Beida business professor Jeffrey Towson to CNN. Western CEO's seldom let themselves go (perhaps with the exception of former ABN Amro CEO Gerrit Zalm).

CNN:

Robin Li, the founder and CEO of internet giant Baidu, likes to mix things up. 

He turned his performance at the company's summer party into a family affair this year. His daughter sang "Call Me Maybe" while accompanied by professional dancers. Proud papa, dressed in jeans and a polo shirt, strolled on stage at the end of the song, strumming the last few bars of the song on an acoustic guitar while his daughter crooned along. 

That performance was understated compared with a 2015 extravaganza, when Li donned a studded gold lamé outfit to sing and play the drums in a dazzling routine -- complete with smoke machines and a laser show -- at the company's annual gala. 

Many other Chinese business leaders like to put on a show, according to Jeffrey Towson, a private equity investor and professor at Peking University. 

"You see these kinds of crazy events all the time," he said. The outlandish galas allow bosses to be playful and self deprecating while also demonstrating how successful the company has been, according to Towson.

More in CNN.

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

Are you looking for more stories by Jeffrey Towson? Do check out this list.  

China's war against poverty - Sara Hsu

Sara Hsu

China has lifted hundreds of millions out of poverty and president Xi Jinping vowed to give the last millions of poor also a better life. Economics professor Sara Hsu of the State University of New York explains in CCTV what the country's receipt for poverty relief has been.

Sara Hsu 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.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list.

Related articles

• Chinese President Xi Jinping says BRICS nations should stand up against protectionism - BELLWETHER: China: BRICS and stones may break our loans
• No fire, just fury: Lack of consensus between China, US and Russia is emboldening North Korea

Why a drag queen at a funeral? - Ian Johnson

Ian Johnson

Strippers are invited at funerals in Taiwan, drag queens in Sichuan. Author Ian Johnson of The Souls of China: The Return of Religion After Mao discusses at ChinaFile how those drag queens are rooted into society.

Ian Johnson:

How about this sociological answer: funerals are a reflection of a person's status in society. In some parts of Chinese society, status has been achieved through the centuries—whether at a funeral or a fair or a wedding—by having a big raucous party: something renao, or hot and noisy, in Chinese. What’s more renao than a stage full of drag queens belting out songs or wailing for the dead person? 

Unprecedented? No. Since the 1980s, many rural Taiwanese have had strippers at their funerals. The dead like to have fun. They liked strippers while alive and so they get strippers after they’ve died—with a hole cut in the coffin so they can peek out at the girls as they doff their clothes. In 2011, the documentary filmmaker Marc L. Moskowitz made the film “Dancing for the Dead” about the phenomenon. He noted that highers-up—like officials over the millennia—were embarrassed about the practice, seeing it as bad publicity for Taiwan, while locals carried it on as, in their views, part of “tradition.” 

What tradition? The ethnomusicologist Chiung-Chi Chen wrote about this in a 2006 doctoral thesis, “From the Sublime to the Obscene.” She wrote that half the temple fairs she observed in Taiwan and many funerals included strippers as a kind of super renao catalyst. She posits that ghosts are kinds of hooligans. Hooligans like strippers so ghosts must too. Another idea is that funerals are places where social constraints are loosened and people can do what they usually can’t.

More (including pictures) at ChinaFile.

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.

Are you looking for more experts on cultural change at the China Speakers Bureau? Do check out this list.

What do auditors know about HNA? - Paul Gillis

Paul Gillis

Beida accounting professor Paul Gillis points at his weblog at the rumor Goldman Sachs has decided to suspend work on a HNA subsidiary IPO in the US, because they are unable to get enough information on this Chinese conglomerate. Gillis wonders what auditor PwC knows about their client.

Paul Gillis:

There is a shocking report that Goldman Sachs has suspended its work on HNA’s planned US IPO of subsidiary Pactera because it was unable to meet the bank’s internal “know your customer checks”.  HNA has been criticized for its opaque ownership structure, but it is surprising that Goldman Sachs could not get a look under the sheets. 

Bank of America Merrill Lynch, Citigroup and Morgan Stanley were reported earlier to have dropped HNA because of concerns over completing know your customer checks. 

HNA’s public companies are audited by PwC. This raises the question of how PwC is able to continue as auditor. Auditing standards require auditors to annually assess whether to continue a relationship with a client.

More at the ChinaAccountingBlog.

Paul Gillis 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.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list.    

Setting the China trends - Shaun Rein

Shaun Rein

Shaun Rein predicted in his two previous books The End of Cheap China and The End of Copycat China major trends in China's development. While he is working on his third book , The War for China's Wallets, he looks with Business Tianjin back at the effects of his first two bestsellers.

Business Tianjin:

You’re probably best known as the author of ‘The End of Cheap China’. What are the effects of the end of cheap labour pool and how do you think we’re seeing them being played out? 

When it came out I was heavily criticized. People said that China was a cheap place and would always be, and I’ve been proven 100% right. Five years later salaries are still going up 10-15% a year, it’s only about 20% cheaper to manufacture in China than in the United States. People need to understand that China is no longer cheap for labour and that’s not going to change. Secondly, rents are soaring. So the only time you want to manufacture in China right now is if you’re trying to sell into the Chinese market or if you’re going into high-end value-added manufacturing, because it’s still cheaper to do high-end consumer electronics here than in the United States. 

There are some things companies are doing to handle this. They’re moving west, into Sichuan or Chongqing. They’re expanding operations in the United States. And they’re working on worker efficiency and automation. Automation grew about 58% last year, there’s a lot of investment in robots and China is really leading the way in manufacturing innovation. 

Your second book ‘The End of Copycat China’ was published in 2014. Your thesis was that Chinese companies did not innovate technologically because they didn’t have to but now they’re doing so. We’ve seen a huge wave of M&As – is that in pursuit of technology? 

It’s hard for lots of Chinese companies to develop technology internally so they either buy technology from overseas or they buy the companies. Germany actually exports more to China than China exports to Germany. There is some technology innovation that’s taking place organically with companies like Alibaba and Tencent. But there’s definitely innovation in China. There has to be, because if companies don’t focus on innovation, they’re not going to be able to earn profits. Even SOEs understand this. A couple of weeks ago, I gave a keynote as the State-owned Assets Supervision and Administration Commission (SASAC). They brought me in to give a keynote to 200 leading cadres from SOEs to talk about how innovation is changing China and how they have to reform and recruit the right talent in order to keep innovating. Even the SOEs understand this. 

The question is does the senior government get it? And because of the way SOEs are set up, where they are very risk-averse, how do you create the right incentives for SOEs and their executives to focus on innovation? If you are in an SOE, if you innovate but you lose a lot of money, you’re not going to get promoted. And if you lose your job you’ll probably never get a good job in an SOE. So they have to change the culture. And that’s what SASAC understands and why they brought me in to talk to the cadres. The private sector really gets it. They’re making tons of money and they understand that the SOEs are dinosaurs. If Bank of China was halfway decent, there’s no way anyone would have made AliPay.

More in Business Tianjin.

Shaun Rein 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.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list.

Demand fuels house prices - Rupert Hoogewerf

Rupert Hoogewerf

Demand for houses, both inside and outside China, fuels a strong spike in house prices, says the latest Hurun Global House Price Index 2017 Half-Year Report, set up by its chief researcher Rupert Hoogewerf. It is the first report taking the value of the Chinese Renminbi as a starting point, as most Chinese investors would do, Hoogewerf tells International Investment.

International Investment:

The report is different than some others that rank global markets on the basis of affordability in that it considers the annual house price changes and rental yields alongside the change in the value of the Chinese renminbi, the currency with which Chinese investors typically start out with as they look to invest. 

Also unlike some other reports, it focuses on the most popular Chinese investment destinations, with the result that there may be cities in the world with higher property rises than those included in its database but which aren’t included because they aren’t considered of interest to Chinese high-net-worth individuals. 

With respect to the rapid house-price rises in these Chinese cities, Rupert Hoogewerf, the British founder, chairman and chief researcher of the Hurun Research Institute, noted that they are generating  “real concern in China about the impact on the future economy”. 

“Although there are measures in place to curb excessive growth, by restricting high prices on new developments, for example, there is an underlying demand for housing that is fueling further potential price hikes.” 

Among high-net-worth Chinese, Hoogewerf went on, “global asset allocation”, led by real estate, remains a major trend, in spite of Chinese government efforts to curb overseas investment by its citizens.

More at International Investment.

Rupert Hoogewerf 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.

Are you looking for more financial experts at the China Speakers Bureau? Do check out this list.

Financial institutions: earning on data - Shaun Rein

Shaun Rein

Online financial institutions like Alibaba's Ant Financial and Tencent are developing new business models, where they make money on the giant amount of data they collect. Financial authorities are stepping in, for the right reasons, says business analyst Shaun Rein to the China Daily.

The China Daily:

Ant Financial and Tencent, which according to iResearch make up the lion's share of China's 22.7 trillion ($3.4 trillion) mobile payment market, have just completed a weeklong battle in which they dished out generous incentives to lure users to their payment systems. 

Ant said in a statement that it will comply with the requirements of the central bank. Tencent said it will cooperate with regulators and other relevant parties to build a justified, fair and source-sharing platform for a nonbank payment network. 

"Online payments generate a significant amount of data that payment firms can use to their benefit," said Shaun Rein, managing director of China Market Research Group. 

"The government should really step up to limit their power and ensure financial security."

More in the China Daily.

Shaun Rein 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.

Are you looking for more fintech experts at the China Speakers Bureau? Do check out this list.  

The fast-growing housing market of Wuxi - Rupert Hoogewerf

Rupert Hoogewerf

Traditionally Shanghai, Beijing and Guangzhou were benchmark cities when looking at the housing market in China. But when you want to know where global wealth is growing fastest, you might have to look at a few unfamiliar names, including Wuxi, overtaking Hong Kong as the most expensive city, says Rupert Hoogewerf, chief researcher of the latest Hurun Report, according to the South China Morning Post.

The South China Morning Post:

Complied by research house Hurun Report, the study highlights growth in global home prices in the 12 months to June 30, with 42 of the 50 cities under the spotlight from 12 countries it examined, being hit with price rises of more that 10 per cent in the period.

The five cities to suffer the fastest growing prices were Toronto, Reykjavík, Wuxi, Hong Kong and Zhengzhou, the provincial capital of Henan Province. 

Six Chinese cities were named in top 10, while that total of 21 makes the country the most listed, followed by the US (Seattle, Orlando, Dallas, Denver, New York, Sacramento and Miami), Germany (Berlin, Hanover, Stuttgart, Frankfurt, Munich and Hamburg), Canada (Toronto, Hamilton, Victoria and Vancouver), Australia (Melbourne, Sydney and Canberra), Ireland and New Zealand with 2 cities each... 

Maybe surprisingly, the eastern Chinese city of Wuxi – around 140 kilometres or a 2-hour drive, west of Shanghai – overtook Hong Kong, recently dubbed “the world’s most expensive housing market”, to become the Chinese city so see the highest growth in home prices, as it is much less known than other major population centres such as Beijing and Shanghai.. 

Wuxi, in the southern Chinese province of Jiangsu, borders two other large cities, Changzhou to the west and Suzhou to the east, and saw a 22. 9 per cent rise in prices in the period, exceeding Hong Kong’s 20.8 per cent rise, according to Hurun Report, which is best-known for its rankings of the richest people in China. 

The other four Chinese cities in top 10 are Zhengzhou, the capital of east-central China’s Henan province (+20.2 per cent), Changsha in Hunan province (+18.5 per cent), Guangzhou (+17.9 per cent) in Guangdong province and Shijiazhuang (+16.1 per cent) in Hebei. 

“Global asset allocation is one of the biggest trends now for China’s high-net-worth individuals, led by real estate,” said Rupert Hoogewerf, chairman and chief researcher of Hurun Report. 

Jinan, Hefei, Wuhan, Xiamen, Hangzhou, Xi’an, Fuzhou, Nanjing, Tianjin, Nanning, Chongqing, Beijing, Qingdao, Nanchang and Shanghai are those ranked outside the top 10 but also among the top 50, said the report.

More in the South China Morning Post.

Rupert Hoogewerf 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.

Are you looking for more financial experts at the China Speakers Bureau? Do check out this list.  

Outbound deals: small is beautiful - Ben Cavender

Ben Cavender

China's financial authorities are cracking down on outbound deals, but not all deals are off-limits, says business analyst Ben Cavender. Especially smaller deals seem to avoid political scrutiny, he tells CNBC.

CNBC:

So far this year, about 70 percent of China's outbound deals have been valued at $1 billion or less, according to Dealogic data. Experts said they expect the trend of smaller acquisitions to continue. 

That's because with larger acquisitions, "you start getting questions on national security ... and overall stability and growth of the Chinese economy, so there's a lot more scrutiny over large, marquee deals," said Benjamin Cavender, principal at consulting firm China Market Research. 

But "when you're talking about small, medium enterprises, there's a little less pressure — the government doesn't see that as having any way to shape the economy, or cause issues with policy," he said.

More at CNBC.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch fons.tuinstra@china-speakers-bureau.comor fill in our speakers' request form.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list.  

The uptick in spending on real estate, Tesla and Baijiu - Rupert Hoogewerf

Rupert Hoogewerf

The China's luxury Consumer Price Index (CPI) rose 3.6% on a yearly basis in 2017, both based on more wealthy Chinese, and an uptick in the money they spend. Chief researcher of the Hurun China rich list Rupert Hoogewerf says expenditure on real estate, Tesla and Baijiu going up, he tells in Asia Times.

Asia Times:

The Luxury Consumer Price Index, released by Hurun each year, aims to measure the price changes for a predetermined basket of goods and services purchased by China's high-net-worth individuals (HNWI). The index covers the consumption activities of wealthy Chinese in the following 11 categories: real estate, health, education, luxury tourism, weddings, watches & jewelry, accessories & beauty products, cruises & private jets, lifestyle, liquor & cigarettes, and automobiles. 

The 2017 index, which gauges prices from June 2016 to June 2017, was calculated based on a basket of 116 high-end goods and services, 20% of them imported. The issue marks the 11th edition of the index. 

The depreciation of the Chinese yuan against major global currencies over the past year has been the main reason for the decreasing purchasing power of China's rich population with respect to buying luxury property worldwide and high-end imported goods. 

Based on Hurun's estimates, there were nearly 1.34 million HNWIs in mainland #China by May 2016, while the number of individuals with over a billion yuan of wealth was close to 89,000. Over the past year, this population has borne the brunt of the price spike in the areas of luxury property, liquor, lifestyle and travel. 

'What impresses me most, this year, is how much the price of real estate, baijiu (a traditional Chinese liquor) and Tesla has increased,'said Rupert Hoogewerf, chairman and chief researcher of the institute, 'completely lifting up the luxury CPI.' 

For affluent Chinese buyers, the price of luxury property has gone up 16.6% since last year. Domestically, a villa in China's southwestern city Chengdu spiked 56.5%, followed by properties in Hainan (a rising tourism city) and Shanghai. Housing prices in overseas cities such as Vancouver, San Francisco, Los Angeles and New York also jumped.

More in Asia Times.

Rupert Hoogewerf 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. 

Are you looking for more experts on luxury goods at the China Speakers Bureau? Do check out this list.    

Related articles

• Why private jets are the next big thing for 'poorer' millionaires
• Revealed: the top 10 cars bought by premiership footballers

New strict regulations for infant formula - Mark Schaub

Mark Schaub

China has released new rules for infant formula milk powder, one of the most-discussed products after massive domestic scandals and waves of foreign imports, both legally and illegally. Shanghai-based lawyer Mark Schaub discusses at Lexology the impact, as domestic and foreign formulas are now treated equally, and it is going to be more complicated.

Mark Schaub:

The registration procedures for infant formula outlined by the Registration Measures were based upon the PRC drug management system and accordingly the registration procedures for infant formula are complicated and time-consuming. The registration procedure for infant formula has several stages, namely acceptance, review and evaluation, on-site verification, sampling inspection, determination and issuance of decision. 

In addition it should be noted that each stage has a time limit and these time limits can be complicated to determine. At most the procedure will take 170 working days to finish registration commencing from acceptance until issuance. This period does not include collection of supplementary documents required by the CFDA. 

However, it should be noted that the Registration Measures do not provide clear guidance as to how to proceed with on-site verification and sampling inspections for imported formula products and verification periods. 

The Registration Measures provide detailed provisions aimed at avoiding false advertising and causing confusion amongst consumers in respect of  the products including:

• Prohibited to use ambiguous terms such as “imported milk source”, “ecologic pasture”, “imported raw materials”. The applicant is required to clearly identify the source of the product;
• Prohibited from  explicitly or implicitly expressing that there is a health care function;
• Prohibited from including functional expressions, implicitly or explicitly, that the products may increase intelligence, build up resistance, increase immunity or protect the intestine;
• Prohibited from using misleading or negative expression(s) (i.e. “no additives”);

As the Registration Measures would become effective on October 1, 2016, as such, unless the laws stipulated otherwise, the infant formula milk powder manufactured in and imported to China via the trade in goods would subject to this Registration Measures sooner. 

It is important to note the complexity and time limits in respect of registration it is recommended that both domestic or foreign manufacturing enterprises engaging in production of infant formula milk powder to start preparing for and initiating registration procedures as quickly as possible. 

Time is ticking – it should be noted that PRC Ministry of Finance regulations[2] require that registration requirements for infant formula will come into force on January 1, 2018. Accordingly, although there is still time for companies to register but the clock is ticking.  

Brands relying strongly upon the cross-border ecommerce channel should start registration preparations immediately. It is likely that supervisory requirements and procedures for formula products which have not been imported to China via general trade will become more complex and subject to more scrutiny.

More at Lexology.

Mark Schaub 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.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list.  

After English and Mandarin, Singapore turns to Chinese dialects - Ian Johnson

Ian Johnson

Singapore's directive government has long focused language training on English and later Mandarin, for commercial reasons. But journalist Ian Johnson notes at the New York Times that traditional Chinese dialects, including Hokkien, are making their comeback, allowing families to talk to each other and understand their past.

The New York Times:

“Singapore used to be like a linguistic tropical rain forest — overgrown, and a bit chaotic but very vibrant and thriving,” said Tan Dan Feng, a language historian in Singapore. “Now, after decades of pruning and cutting, it’s a garden focused on cash crops: learn English or Mandarin to get ahead and the rest is useless, so we cut it down.” 

This linguistic repression, and the consequences for multigenerational families, has led to a widespread sense of resentment — and now a softening in the government’s policy. 

For the first time since the late 1970s, a television series was recently broadcast in Hokkien, which in the 1970s was the first language of about 40 percent of Singaporeans. Many young people are also beginning to study dialects on their own, hoping to reconnect with their past, or their grandparents.

More in the New York Times.

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.

Are you looking for more articles by Ian Johnson? Do check out this list.  

Women: key spenders on China's Single's Day: Shaun Rein

China single's day (28 August) triggered off a range of commercial activities. Business analyst Shaun Rein looks on AFP at the industries focusing on this attractive target group. Women play a key role in consumer spending, he says.

AFP:

A range of businesses are targeting singles, including travel, dining, online video games, online video streaming, sports apparels and cosmetics, according to Shaun Rein, founder of China Market Research Group and author of the book The War for China's Wallet... 

The high-earning urban female population is a major economic player. 

Online flower retailer Reflower says almost 80 per cent of weekly orders come from female customers, with more than half buying flowers to "comfort themselves". 

"Females who are single especially spend most of their paycheck. Males tend to save more because they want to buy a house later on," Rein told AFP. 

"It's really being empowered by women, because they are the most optimistic consumers, they tend to have higher paying jobs than men, and they tend to spend more."... 

"In urban areas especially, parents are saying to their girls 'don't settle'. Only marry if you want to marry, only have kids if you want to have kids," Rein said, adding that the phenomenon is signalling social progress. 

"I view that as showing female empowerment... I think it's a very healthy shift, showing more male-female gender equality than ever before."

More at AFP.

Shaun Rein 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.

Are you looking for more stories by Shaun Rein? Do check out this list.  

Risk and opportunities of the bitcoin - Mark Schaub

Chinese authorities have started to regulate the usage of the bitcoin. That is not necessarily a bad thing, writes Shanghai-based lawyer Mark Schaub at the website of his law firm. "Regulation should be seen as an opportunity, too. More stringent rules translate to lower investment risk and increased legitimacy."

Mark Schaub:

The opportunities with Bitcoin remain ample, as is demonstrated by its sustained growth. (Some of the most optimistic commentators have stated the value will rise above 6,000 USD.[18]) This is occurring alongside the continuous creation of new and derived cryptocurrencies, as was recently demonstrated by Bitcoin’s hard fork, which created ‘Bitcoin Cash’. Moreover, developers are continuing to find novel uses for blockchain technology as a whole. 

Regulation should be seen as an opportunity, too. More stringent rules translate to lower investment risk and increased legitimacy. Investors in cryptocurrencies, particularly ICO tokens, will likely be afforded some level of legal protection on their investment in certain jurisdictions. Start-ups, too, stand to gain from regulation as a means to build trust amongst an increasingly skeptical pool of investors. Indeed, the perceived legitimacy of the blockchain system as a whole seems to be on the rise, earning clout with institutions as large as the Bank of England, which signed up to participate in the Hyperledger project in March.[19] 

Regulation should also be seen as a way to stabilize the extreme volatility of the currency by making it harder for speculators to instantaneously purchase and liquidate Bitcoin on a whim. This will also open the door to more risk-averse investors. 

On top of these, there are opportunities specific to China, which looks poised to continue its role as a global hub for Bitcoin. Between Hong Kong and the mainland, it hosts some of the world’s most established Bitcoin exchanges[20] as well as significant infrastructure for Bitcoin mining, which generates 70% of the world’s Bitcoins.[21] Moreover, the trend of China-based cryptocurrency startups is only going to increase, as the government continues to incentivise a burgeoning ‘Silicon Valley in China’.[22] Recommendations have also been made by PBOC officials to foster a ‘regulatory sandbox’ for blockchain innovation. That is, an ICO-inclusive market with minimal intervention bounded by some basic regulations such as Singapore-style KYC rules.[23]

\

Cryptocurrencies continue to bring a variety of risks to investors. The sheer variety of potential uses for blockchain technology is a double-edged sword. Increasingly, businesses are turning to blockchain as a panacea to a variety of database issues, or as a part of a marketing strategy to appear more modern. In reality, blockchain technology is a system with high energy costs and a narrow scope of uses.[24] Lacking the need for a single database with multiple writers and no trusted intermediary, many companies are better off employing a traditional relational database. Investors should beware of start-ups touting the use of blockchain where, in fact, it adds cost and does not increase efficiency. 

Furthermore, companies looking to maintain environmentally-friendly policies should also be aware of the significant energy costs of maintaining a blockchain system, as well as increasing public awareness of it. 

The volatility of Bitcoin and other, smaller cryptocurrencies continues to be a risk. Even with regulation, the digital nature of cryptocurrencies means they will also be more liquid than physical currencies or ‘real’ assets. 

Also, the new rules concerning Bitcoin stand to limit its uses. One focus of regulation, particularly in the Unites States, appears to be cryptocurrency products that seek to incorporate elements of traditional financial assets. These include the DAO token, which aimed to be a cryptocurrency venture capital fund, as well as the attempt by Winklevoss Capital to list an Exchange Traded Fund on the NYSE that tracked the price of Bitcoin, which was blocked by the SEC. Investors should be wary of these. 

Considering risks unique to China, some commentators have suggested that the newly-created ‘Bitcoin Cash’ is an attempt to create a Chinese version of Bitcoin. The larger block sizes of Bitcoin Cash pose a significant advantage to industrial-scale mining operations. Indeed, Jihan Wu, the creator of Bitcoin Cash is also the manufacturer of the ‘AntMiner’ mining device. At any rate, a pivot by the Chinese market to Bitcoin Cash may result in the loss of a significant driving factor for the growth of Bitcoin. 

Moreover, Bitcoin in China remains largely unregulated, at least for the time being. The nearly-catastrophic move by Huobi and OKCoin to invest idle client funds into wealth management products should be closely considered as an example of the potential losses to be incurred in the Chinese Bitcoin market. 

Regulation in China has started, however, and will continue. This poses risks for investors. For instance, Bitcoin was once seen as a potential “golden ticket” to bypass China’s increasingly harsh capital controls on getting money out of the country.[25] Following the PBOC investigation earlier this year, using Bitcoin as a means of repatriating funds will be throttled, at best. Users and investors in China must consider the very high possibility of the PBOC imposing further regulations on cryptocurrencies, both expected and otherwise. Financial laws in China are strict, and penalties are harsh. Another factor that may affect Bitcoin investors is further restriction on Bitcoin trading that may be imposed by the Chinese regulators. During the NPC & CPPCC in 2017, Mr. Zhou Xuedong, the Director of Business Administration of PBOC, proposed a bill for establishing a negative list with respect to the business activities that should not be conducted by a Bitcoin trading platform.[26] Furthermore, the Legal Affairs Office of the State Council issued the draft regulation on the penalty of illegal fund-raising activities, stating in its Article 15 that the department dealing with illegal fundraising shall conduct an illegal fundraising administrative investigation when any such acts are found and explicitly mentioning virtual currencies in this draft regulation. As such, there is the risk that issuing or trading in Bitcoins (particularly relevant to the ICO market) may be deemed and sanctioned as illegal fundraising.

More at the China Law Insight.

Mark Schaub 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.

Are you looking for more fintech experts to deal with your China risk? Do check out this list.