What if your customers cannot pronounce your name - Shaun Rein

Shaun Rein

Chinese brands like Huawei and Xiaomi have not only legal problems to enter the lucrative US market, says business analyst Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order. It would also help if potential buyers would be able to pronounce the name of the product they are expected to purchase, he tells the South China Morning Post.

The South China Morning Post:

Huawei isn’t alone. Xiaomi, aiming to revolutionise China’s consumer electronics along the style of Apple, is almost impossible to pronounce. Xiaomi literally means “little rice.” 

Or take Tsingtao Beer, arguably the most internationalised among China’s brewers, its distinctive green bottle often the only Chinese brand found anywhere outside mainland China. Its name, spelt in the Wade-Giles system for romanising Mandarin, is the name of its home base of Qingdao city in Shandong province. 

Chinese brands need to be “something that roll off the tongue easily” to succeed, said Shaun Rein, founder and managing director of the China Market Research Group in Shanghai. Names like Huawei or Xiaomi, which “haven’t created English names that Americans and western Europeans can memorise or pronounce easily” have a bigger problem breaking into the market, he said. 

Americans spent US$14,564 per person on retail spending in 2014, more than three times the per-capita spending by Chinese consumers in the same year. That underscores the attraction of the consumer market in the planet’s biggest economy, even if its population is a quarter of China’s size... 

There are exceptions. DJI, the world’s largest producer of recreational drones, is headquartered in Shenzhen in southern China. Its full name, spelt out, is Da Jiang Innovations, inspired by the Chinese adage “Great ambition has no boundaries”.

But the company rarely goes by its full name in English, preferring to obscure its origins. It has an estimated 75 per cent share of the world’s market for drones, with the US among its biggest market. 

“American consumers sees DJI and they don’t know its heritage,” said Rein. “DJI is easily memorised by Americans and I think that’s the reason why Alibaba and Tencent do reasonably well, at least in recognition by Americans investors. Because their English names are easily memorable.”

More in the South China Morning Post.

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"Star Wars" lacks cult following in China - Ben Cavender

Ben Cavender

While many movie watchers even get fussy feelings when they hear the words "Star War", China is lacking such a cult following, explains branding expert Ben Cavender to CNBC. Movies that would be a hit elsewhere in the world, are just not working in China, he says.

CNBC:

While it's been suggested the Disney movie's late arrival in China could have contributed to its poor performance — meaning pirates would have already had ample opportunity to see the film — other "Star Wars" movies have also seen soggy receptions on the mainland. 

"Star Wars: The Force Awakens," which premiered on the mainland in January 2016, took in $52 million and "Rogue One: A Star Wars Story" recorded $30 million in the opening weekend, Variety reported. 

"[T]his is a franchise which has always struggled in China ... the cult following just doesn't exist," Ben Cavender, principal at consultancy China Market Research Group, told CNBC. 

He attributed the less-than-outstanding performance of "The Last Jedi" at the Chinese box office to the lack of "generational awareness" among Chinese consumers of the franchise... 

Disney also recruited popular Chinese singer Lu Han to star in a themed music video ahead of the mainland release of "The Force Awakens" back in 2016. 

This year, cast and crew members of "The Last Jedi" — including actress Daisy Ridley, actor Mark Hamill and director Rian Johnson — attended a premiere at Shanghai Disney Resort some two weeks ahead of the film's mainland release to drum up support. 

Meanwhile, the relative popularity of the latest "The Ex-File" sequel could also be due to Chinese consumers becoming more attached to local "story-driven" films, Cavender said, citing the outperformance of "Wolf Warrior 2" last year.

More at CNBC.

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Related articles

• 'Star Wars: The Last Jedi' Stays Atop Box Office on New Year's Weekend, Passes $1B Mark Worldwide
• 'Star Wars: The Last Jedi' Rockets To Year's Top Domestic Opening, Disney Says

China's road ahead for self-driving cars - Mark Schaub

Mark Schaub

China’s National Development and Reform Commission (NDRC) has published last week an ambitious draft road map for the development of self-driving cars in the coming decades. Lawyer Mark Schaub summarizes the latest details of the fast-moving central planning office on the China Law Insight.

Mark Schaub:

The Draft Strategy sets out the goal for China to establish independently controllable technology innovation systems for intelligent vehicles. These systems will include break-through key technologies, testing appraisal technology and development of a cross industrial ecosystem. 

In this regard China’s plans includes the development of a network of road and facilities for intelligent vehicles, including infrastructure, wireless telecommunications networks for vehicles to cover the whole enormous country, establishment of a nationwide basic mapping system for vehicles and big data cloud computing platforms for intelligent vehicles. In comparison the UK government has recently announced funds in its budget for autonomous cars including hi-tech projects, research on artificial intelligence, for electric car charging points and to boost clean car sales – but no funds earmarked for the development of the physical infrastructure to enable mass autonomous driving.[3] 

Crucially, the NDRC recognizes that not only physical infrastructure is required but also legal infrastructure. The NDRC states China will eliminate legal barriers for market access to intelligent vehicles, issue regulations on autonomous vehicle road testing on public roads and strengthen research for autonomous driving systems and clarify legal liability in respect of traffic accidents, amend China’s road traffic law to allow for intelligent vehicles, adjust China’s laws and regulations to allow for mapping for intelligent vehicles, establish intelligent vehicles safety management system, strengthen vehicle cybersecurity and protect privacy. 

NDRC has set 15 days for public comment on the Draft Strategy. This period will expire by 20 January 2018. 

The Draft Strategy notes the development of intelligent vehicles is a matter of significance for China and that it is essentially a now or never chance to allow China to overtake global incumbents in the auto industry and taking a leadership role.

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.

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Related articles

• Hyundai aims for Level 4 self-driving car by 2021, with help from Aurora Innovation
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• Apple just gave us the first hint at how it envisions the user interface in a self-driving car (AAPL)
• Toyota Research Institute to debut its 3.0 self-driving research car at CES
• Nvidia partners with VW, Uber and Baidu on artificial intelligence for self-driving cars
• Hyundai, Volkswagen ink deals with autonomous vehicle firm Aurora Innovation

Making maps: key for self-driving cars - Mark Schaub

Mark Schaub

Map makers have always found legal restrictions by the Chinese government as a barrier 0n their way. But now the country wants to become a leader in self-driving cars, Shanghai-based lawyer Mark Schaub expects fast changes in the legal bureaucracy for maps, he tells at China Law Insight. Restrictions for foreign investors might stay in place, he fears.

Mark Schaub:

China does face a dilemma – on the one hand it has a strong interest in tightly regulating surveying and mapping activities but on the other hand it has a strong ambition to become a world leader in autonomous cars. 

We expect that autonomous cars is so important that China will indeed make necessary change as to how it regulates surveying and mapping laws or at least their practical implementation in regards to HD maps. 

One example of China’s efforts in this regard is the 2017 revision to the Surveying and Mapping Law which required a unified national system of continuously operating reference stations (CORS). The CORS system is able to provide accurate positioning to the centimeter or even millimeter level. In May 2017, the national CORS system was put into operation – this is a fundamental step in providing the accurate positioning data needed for HD Maps in China. 

In addition, the 2016 NASG Notice also notes that the authority is speeding up the study and formation of policies on autonomous driving maps. In a news conference held by NASG in 2017 it was announced that the authority will strongly support the development of autonomous driving in China and has been actively conducting research on relevant policies and map processing technology. 

However, we are less optimistic about the restrictions on foreign investment being relaxed anytime soon. We would anticipate that these will remain in place so that foreign companies interested in the China market or needing to serve the China market as part of a global strategy will need to find an accommodation within the current framework – either a joint venture or cooperation.

More in 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.

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Meeting controversial artist Qiu Zhijie - Ian Johnson

Ian Johnson

Author Ian Johnson of The Souls of China: The Return of Religion After Mao meets controversial artist Qiu Zhijie for the New York Review of Books.Before the interview, Ian Johnson puts Qiu and their first meetings into perspective. Here is the introduction of the interview.

Ian Johnson:

One of China’s most influential artists is forty-eight-year-old Qiu Zhijie. A native of southern China’s Fujian province, Qiu studied art in the eastern city of Hangzhou before moving to Beijing in 1994 to pursue a career as a contemporary artist. At the time, contemporary art was illegal in China and artists often lived in villages on the outskirts of town, held underground exhibitions, and were patronized almost exclusively by foreigners. 

Qiu quickly made a name for himself as one of China’s leading artists, creating one of the most famous images of that era: a picture of himself from the waist up, shirtless, against a white wall with an enormous red character, 不, or “No,” painting across his face and torso. Another was a video of him copying a classic piece of calligraphy, the fourth-century Preface to the Poems Collected from the Orchid Pavilion, one thousand times until it became illegible. More recently, he has embarked on major conceptual art projects, such as an exploration of the suicides that take place at a major bridge that for decades was a symbol of Communist self-reliance, and dozens of enormous idea mapsthat juxtapose mythology, politics, and social critique. 

I got to know Qiu in 1999 when I wrote about the controversy surrounding an influential exhibition called “Post-Sense, Sensibility, Alien Bodies & Delusion.” Held in the basement of an apartment block, it was a backlash against the political pop art of that era, purposefully creating art that couldn’t be sold or collected: a human cadaver encased in a block of ice, for instance, or dead animals nailed to the wall. Disgusted, the authorities closed the show the day it opened—a response reminiscent of the one that greeted the Guggenheim’s current major retrospective of Chinese art, with authorities forcing the museum to remove live animals from several exhibits. 

Qiu’s work features prominently in the Guggenheim show. He was the only artist commissioned to make an original work, one of his idea maps; his Orchid Pavilion calligraphy is also on display. 

Unlike prototypical dissident-artists such as Ai Weiwei, who have shunned China’s art establishment and work mainly abroad, Qiu is now firmly part of the Chinese art establishment. He teaches at the Central Academy of Fine Arts, the most influential art school in China, as head of the Department of Experimental Art, and curated the Chinese pavilion at last year’s Venice Biennale. Last month, I met Qiu at his studio in the eastern suburbs of Beijing, where we talked about the challenges of maintaining artistic integrity inside the system, censorship, how he lectures on Communist Party ideology, and the Party’s transformation to a party of nationalism.

The interview in the New York Review of Books.

Qiu Zhijie (by Ian Johnson)

(The New York Review of Books is mostly hidden behind a firewall, but was this time free available for us. If you run into a firewall, you will have to wait till China File offers free access next month.)

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Why the sex industry boomed in China - Zhang Lijia

Zhang Lijia

Author Zhang Lijia of Lotus: A Novel, a book on prostitution in China, divided into the current sex industry and explains to Brave Media why it boomed. Earnings can be ten times as high compared to a factory job, she says.

Brave Media:

What kinds of women did you encounter through your research? Had most of them moved from villages into urban areas in search of work, like the protagonist in your novel, Lotus? 

They are usually migrant workers, from the countryside; something has gone wrong in their life, they are uneducated, unskillful, and of course there’s the temptation of money. In the vast majority of cases, women enter the trade of their own accord, but often driven by desperate poverty or something gone wrong: domestic violence, dumped by the husband, or falling pregnant as a single mother… 

How much more does prostitution pay in comparison to, say, a factory job? 

It’s huge. It could be ten times more. 

The sex industry has developed rapidly in China in recent years. Why is that? 

For many reasons. First, the growing wealth. We have a saying in Chinese: ‘once you have clothes to wear and your stomach is full, you start to think about sex.’ Of course in China for a long time people didn’t have enough to eat. 

And also relaxed social control: before, if you had a mistress or an extra marital affair, you probably ended up in a labour camp. China for a long time was sexually repressed. Now there’s freedom. I think some of the old attitudes towards women, which had been suppressed by Mao, have made a comeback. STDs are growing fastest among older men of above 55 or 60… They’ve probably now got some money, and felt they’ve missed out on something, and they are not switched on to how to protect themselves. They belong to the generation that believes that a decent woman shouldn’t have an interest in sex. 

Also, prostitution has become part of the business deal. For example I have a friend who is from Nanjing; he has a cushy job and his company does high end products, green energy, high tech stuff. According to regulations, such a company enjoys 15% of a tax deduction. But in order to get that, they have to invite tax bureau officials wining and dining. But these days wining and dining is not enough… Prostitution has become the lubricant of business. It’s very common. 

But the fundamental reason is the growing income gap between men and women. Many of my friends find it hard to believe, because within their circle they meet many very capable, high achieving young women. Sure. The reform brought lots of opportunities to both men and women, especially educated urban women. But overall China has shifted from a planned economy to the market economy, and women have shouldered too much of the burden in cost. 

When a company has to let off workers, women are always the first to go, and it’s so much harder for them to find jobs. Female graduates – before, they were allocated jobs. Women of child-bearing age are often refused. And sometimes when women get pregnant, they sack them. Sometimes they force them to write, ‘I promise I will not get pregnant,’ otherwise they will not get hired. UN Women did a research: women in the city earn 67.3% of what men make, and in the countryside only 56%. That has driven some of the most vulnerable women to take up prostitution.

More in Brave Media.

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Economic optimism for China's 2018 - Arthur Kroeber

Arthur Kroeber

Economists seldom all agree when it comes to China's economic future, but there is a widespread optimism about the expected country's performance for 2018, tells leading economist Arthur Kroeber, author of China's Economy: What Everyone Needs to Know®, to the South China Morning Post.

The South China Morning Post:

Optimism about the year ahead, albeit cautious, is gaining ground but there are persistent worries about China’s debt mountain and the threat of trade disputes with the United States and Europe. 

Gavekal head of research Arthur Kroeber said talk of China risking a “Japan-style lost decade” of economic stagnation was banished after Beijing engineered a property and infrastructure stimulus last year. 

“This credit-fuelled surge raised predictable worries that China was flirting with financial meltdown. But impressively, Beijing spent most of 2017 cracking down on financial risk, sharply cutting the growth in shadow lending – with zero impact on economic growth,” Kroeber wrote in an article published on Friday. 

Kroeber said it was his bet that China could easily maintain growth while containing financial risk for at least one more year.

More at the South China Morning Post.

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Market economy eroded gender equality - Zhang Lijia

Zhang Lijia

Women have been bearing most of the burden of China's shift from state economy to market economy, says author Zhang Lijia of Lotus: A Novel, on prostitution in China, at the BBC World Service. Despite a lot of advantages, women suffered severe setbacks. State owned companies let women go at 45 years of age, and getting hired at the sexist job market has been harder than ever, she adds. "Some refuse to hire women at a child-bearing age."

You can hear the audio here.

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The Return of Religion: larger than a China quest - review

Ian Johnson

Journalist Ian Johnson's latest book The Souls of China: The Return of Religion After Mao is not short of positive reviews. But Jeremiah Jenne gives in the World of Chinese his review an extra twist. The Return of religion in China is not limited to the country's search of new values, but might be part of a worldwide search of values, Jenne writes.

The World of Chinese:

Overall, this is an impressive book, combining ethnography, journalism, substantial scholarship and an excellent prose style, as one would expect from an author whose work regularly graces the New York Times, the New York Review of Books and other publications around the world. It is also a subtle memoir. Johnson makes no secret of how his own religious journey is intertwined with many of the people he writes about. Rather than being a distraction, as might have been the case with an author of lesser talents, these asides provide insight into the practices and beliefs described by his interviewees. 

As religious historian Jaroslav Pelikan has said (via the eminent Chinese historian Joseph Levenson’s classic Confucian China and its Modern Fate): “Tradition is the living faith of the dead, traditionalism is the dead faith of the living. And, I suppose I should add, it is traditionalism that gives tradition such a bad name.” 

And yet, Johnson shows how today’s religious revival is more than just the reanimation of sages and practices, and that, ultimately, this might be a story bigger than China. As Johnson writes in his final chapter, “Perhaps because Chinese traditions were so savagely attacked over the past decades, and then replaced with such a naked form of capitalism, China might actually be at the forefront of this worldwide search for values.”

More in the World of Chinese.

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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Daoism is key to understand China - Ian Johnson

Ian Johnson

Daoism is key to understand today's China, says journalist Ian Johnson, author of The Souls of China: The Return of Religion After Mao. to ABC News. "You can provide values, an escape for people, or turn inward to piety, but you cannot challenge the Government. You can't be an alternative source of values or the Government will turn against you."

ABC News:

Author and journalist Ian Johnson has been investigating the revival of Chinese folk religions like Daoism for the past two decades, and he says to understand Daoism is fundamental to understanding China. "It's the DNA of Chinese culture, it includes the ideas like calligraphy, Chinese medicine, things like Feng Shui — all of these things come out of Daoist ideas," he said... 

Mr Johnson says there is much more suspicion of Western religions. 

"You can provide values, an escape for people, or turn inward to piety, but you cannot challenge the Government. You can't be an alternative source of values or the Government will turn against you." The Government is watching the growth of Daoism carefully. It wants to ensure it does not turn into another Falun Gong type movement that could threaten the Government and lead to another brutal crackdown like that which happened two decades ago.

More in ABC News.

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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How WeChat is different in sharing data - Matthew Brennan

Matthew Brennan

Tencent's WeChat, one of China's leading data companies, might be easier in sharing data with the government compared to its Western competitors, says WeChat expert Matthew Brennan. But when it comes to sharing data with marketeers, the company is way more restrictive, he tells in Harvard Political Review.

Harvard Politics:

One of the app’s most popular features is WeChat Pay, a mobile payment service. WeChat Pay has “grown organically from micropayments to offline payments” as phones have replaced wallets in major Chinese cities, according to Matthew Brennan, WeChat expert and founder of the platform’s largest marketing conference. WeChat is betting on its nearly 200 million WeChat Pay users to expand its ecommerce services to include full-fledged mobile banking, a potential threat to state-owned and traditional banks. 

With a vast amount of data at stake, critics have often called WeChat’s privacy policies into question. According to Brennan, “In terms of government access to data in China, there’s government access if they [the government] request such access.” This policy applies not only to WeChat, but also to other Chinese platforms. However, Tencent is more restrictive than many U.S. technology companies in sharing data with third parties, such as marketers. 

Furthermore, user data from WeChat app usage outside of China is routed through servers outside of the Chinese mainland, and therefore does not fall under Chinese legal jurisdiction.

More in Harvard Political Review.

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China's changing attitude towards white people - Kaiser Kuo

Kaiser Kuo

When opening and reform of China took off, Western visitors were received as saviors. But that attitude has changed dramatically, writes Chinese-American Kaiser Kuo at SupChina. "While I full-throatedly decry this kind of anti-foreignism, I think at some level it’s entirely natural, and I’m actually thankful that it’s kept mostly in check," he says.

Kaiser Kuo:

But as the Olympics approached, China’s growing online population in China had both the means and the incentive to see what the rest of the world was saying about their country. This was a generation that had been taught English — well, taught enough English, anyway, to understand when China’s honor was being besmirched. And they clearly believed it was being besmirched, constantly. Comments sections on any online media allowing comments exploded with vitriol, coming to a real boil in March of 2008 in a groundswell of Chinese anger over Western (read: American) reporting on the Lhasa riot of that month. This was the time of AntiCNN.com, and of the fenqing — 愤青, the “angry youth.” Ensuing months saw things worsen, with protests against the Olympic torch relay in some Western capitals touching off retaliatory boycotts (most notably of the French store Carrefour). 

More importantly, in the first decade of the century and still more in this one, Chinese were traveling, studying, and working abroad much, much more than had been the case in the early days of reform and opening. Not surprisingly, the rose-colored glasses came off, and the picture they formed of Western society — always a comparative exercise — was colored now by the changes they had seen in China. 

While I full-throatedly decry this kind of anti-foreignism, I think at some level it’s entirely natural, and I’m actually thankful that it’s kept mostly in check. It lacks, mercifully, a religious tradition around which it might congeal (unlike, say, Hindutva, or various Islamic nationalisms, or extreme forms of Christianity). The party-state keeps the embers glowing because it’s occasionally useful for the rally-round-the-flag effect. But it recognizes the double-edged nature of it and doesn’t allow it to flare up uncontrollably. 

As for the second part of this question — “Conversely, what do old Chinese think about the young Chinese attitude towards white people?” — my sense is that there’s a wide range of responses to it. Some are sympathetic, and perhaps even embarrassed over any sycophancy they might once have evinced. Some are probably analytical about it, and see it as natural for many of the same reasons I’ve sketched out. And some doubtless see it as dangerously hubristic — and shake their heads sadly at the irony that these angry youngsters should take on the same pathologies they profess to loathe in the Westerners.

More at SupChina.

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How bike-sharing might work - Jeffrey Towson

Jeffrey Towson

Bike-sharing firms like Mobike and Ofo might work out, explains Jeffrey Towson, investment professor at the Peking University. "It is unusual but not crazy," he tells about the pervasive marketing strategy of bike-sharing. Independent assets moving around might just be the new thing.

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 in our speakers' request form.

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33 Ways to dispel a mistress - Zhang Lijia

Zhang Lijia

The BBC reports on a booming, but secretive industry in China: how to get rid of the mistress of your husband. Author Zhang Lijia of Lotus: A Novel on prostitution in China explains why flaws in the current divorce rules cause this weird phenomena.

BBC:

It's hard to measure how widespread these dispelling operations have become. In 17 years, Weiqing claims to have carried out more than 100,000. The company is hoping soon to list on the Shanghai stock exchange. Author and social commentator, Zhang Lijia believes the phenomenon can be partly explained by China's divorce laws. Since 2011, any wealth that a divorcing man can show he has brought with him into a marriage does not have to be shared with his ex-wife. Courts will also grant the man's family sole custody of the children, especially in rural areas. 

"They say that the divorce laws were written to make men laugh and women cry," Zhang says. "Also, outside of the cities it's seen as shameful for a woman to divorce."

Much more at the BBC. Zhang Lijia 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.

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Ant Financial, Didi Chuxing and Xiaomi top 2017 best Chinese unicorns - Rupert Hoogewerf

Rupert Hoogewerf

Ant Financial, Didi Chuxing and Xiaomi made it to the top-3 Chinese unicorns in 2017 on a list of 120 most successful unicorns in Greater China, announced the Hurun Greater China Unicorn 2017 Index last week. Beijing is leading the pack, says Hurun founder Rupert Hoogewerf, followed by Shanghai, Shenzhen, and Hangzhou. Keeping up with the amazing growth is tough, Hoogewerf tells AsiaVenturepedia.

Asiaventurepedia:

The Hurun Research Institute released today the Hurun Greater China Unicorn Index 2017, where Ant Financial, Didi Chuxing, and Xiaomi top the chart. The report listed out 120 best unicorns in the Greater China region that are valued over $1 billion as of the end of November 2017. 

“We select the companies valued over $1 billion based on the initial definition of a unicorn startup. However, for many investors nowadays, only those valued over $10 billion or over $15 billion are considered unicorns,” says Rupert Hoogewerf, chairman of Hurun Report, in a statement. 

It’s worth noting that Beijing accommodates the most unicorn startups, holding up 45% of the companies on the list, followed by Shanghai, Hangzhou, and Shenzhen. Among the selected companies, 17 of them are from the internet finance industry with valuations totaling RMB 700 billion (roughly $106.5 billion). 

On top of that, the list also sees a slew of startups from the internet service and e-commerce sectors, both of which account for 18% of all the listed companies. Startups from the entertainment, transportation, and health sector are active as well. 

Also, among the top 10 unicorns, eight of them are valued over RMB 8 billion ($12 billion). Sequoia Capital, on the other hand, became the venture capital that invested in the most unicorns, followed by Tencent and MatrixPartners China. 

On the list, Ant Financial, Didi Chuxing, and Xiaomi are named the top three unicorns with valuations respectively at RMB 400 billion ($60.84 billion), RMB 300 billion ($45.63 billion), and RMB 200 billion ($30.42 billion). The other unicorns include China Internet Plus, Toutiao, CATL, Lufax, DJI, Koubei, Cainiao, JD Finance, and Ele.me.

More in Asiaventurepedia.

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.

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Beijing rules as first on self-driving cars - Mark Schaub

Mark Schaub

Getting rid of legal barriers is key for using innovation in real life, and Beijing approved the first regulations in China on self-driving cars, writes lawyer Mark Schaub at the China Law Insight. He elaborates on the details. "We expect more regions to follow Beijing’s lead and compete for innovation in this key sector," he adds.

Mark Schaub:

On 15 December 2017, Beijing Municipal Commission of Transport, Beijing Traffic Management Bureau and Beijing Municipal Commission of Economy and Information Technology jointly issued the Beijing Guidance on Accelerating Road Testing for Self-driving Vehicles (Trial) and Beijing Implementing Rules for Managing Road Testing for Self-driving Vehicles (Trial) (collectively “Regulations”)[1]. 

 While the Regulations only apply to testing of autonomous vehicles in Beijing, this is something of a milestone as it is the first regulation of its kind in China. 

The Regulations may have been spurred in part by Baidu CEO Li Yanhong’s test drive of Baidu’s autonomous vehicle on public roads in July 2017. At the time this test drive was the cause of some controversy as it was wholly unregulated. 

A review of the Regulations show that the legislators have borrowed concepts of good practice from leading jurisdictions including the United States, Germany and Australia... 

The release of the Regulations is a concrete step in China’s regulation on road testing of autonomous vehicles. This will no doubt boost the development of autonomous vehicles and speed the commercialization of autonomous vehicles in China. The Regulations also facilitate China’s autonomous vehicle road testing. We expect more regions to follow Beijing’s lead and compete for innovation in this key sector.

More at the China Law Insight 

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Fosun's Tsingtao purchase might go down well - Ben Cavender

Ben Cavender

China's financial authorities have scrutinized in 2017 many investments by Chinese companies, but the purchase by Fosun of the Asahi 19.9% stake in China's key brewer Tsingtao might go down well with them because the capital goes into a domestic company, explains business analyst Ben Cavender to Reuters. 

Reuters:

“Fosun has been able to pick up the shares at a fairly significant discount,” said Ben Cavender, Shanghai-based principal at China Market Research Group, adding there was room to grow both at home and overseas if Fosun could help Tsingtao move up-market. 

“China’s beer market is going through a reinvention right now as younger consumers shift towards more niche brands. Tsingdao is kind of an outlier because it has mass scale and volume but is also looked upon as being more premium than other domestic beer brands.”... 

It comes as a handful of Chinese conglomerates including Fosun have turned their sights back on the domestic market amid a crackdown by Beijing on eye-catching overseas ventures. 

Cavender said the deal would likely go down well with Chinese regulators because it was “an example of Fosun coming home and investing in a Chinese asset” rather than overseas. “Tsingtao is both a leading brewery in China, and a leading Chinese brand that has successfully penetrated the international markets,” Fosun Chairman Guo Guangchang said in the company’s statement. 

Fosun’s business model and global reach would help grow Tsingtao’s brand and tap into Chinese demand for more premium beers, he added.

More in Reuters.

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KPMG partners sued over another US accounting spat - Paul Gillis

Paul Gillis

China and the US worked out a deal on the age-old argument where Chinese firm are not allowed to hand over paperwork to US institutions for audits. But the agreement is not valid for Hong Kong, and so close to a hundred current and former KPMG partners got sued over the case of the bankrupt US-listed China Medical, reports Beida accounting professor Paul Gillis last week at his weblog.

Paul Gillis:

It is a bad day for KPMG. Reuters reports that the Hong Kong High Court has issued a contempt summons to 91 current and former KPMG partners for their failure to hand over audit working papers for US listed China Medical. China Medical is in liquidation and the court apparently has been overseeing the liquidation of Hong Kong subsidiaries. The case is a repeat of an earlier spat with EY over working papers for Standard Water, which was resolved when EY “found” the working papers on a server in Hong Kong. 

KPMG says it cannot turn over the working papers without permission from mainland regulators. The US PCAOB reached an enforcement agreement with China that allowed it access to working papers in connection with investigations (but not inspections). Hong Kong has no such arrangements, and this is private litigation. 

China has argued national sovereignty and state secrets concerns trump foreign laws requiring the production of documents on Chinese companies listed abroad or doing business abroad. Hong Kong, while part of China, is being treated the same as the United States, presumably to avoid undermining arguments used against the U.S. I seriously doubt there are any state secrets in these working papers.

More at the Chinaaccountingblog.

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Beijing shatters China dream for migrants - Zhang Lijia

Zhang Lijia

Author Zhang Lijia of Lotus: A Novel, a book on prostitution in China, comments on the forceful eviction of migrants in Beijing. It shatters their China dream, she tells Sky News. How can you do that when you call yourself a socialist country?

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