Li Yifei, head of Man Group in China, is said to have gone on holiday after being summoned by officials investigating the plunge in the stock market. As regulators, executives and journalists face allegations of manipulation and “rumour-mongering”, China wants others to take a break too.
There is something peculiarly impressive about the video below of Mark Zuckerberg, founder of Facebook, talking in Mandarin to students at Tsinghua University in Beijing. If nothing else, it shows a dedication to the country’s customs that very few foreign business leaders can match.
When China’s Communist leaders under Deng Xiaoping launched their assault on the Tiananmen Square protesters in 25 years ago, they were supposedly following the socialist road and Marxist principles of proletarian rule. “Workers of all lands, unite!” declared Karl Marx and Friedrich Engels in the 1848 Communist Manifesto.
The Chinese backlash against the US decision to charge five Chinese military officers with cyber-espionage has started. Of the US companies likely to be affected, Cisco is the most obvious.
The New York Times, quoting Caixin magazine and the Xinhua news agency, says China plans to make security assessments of foreign equipment entering the country to ensure that it cannot be used for espionage: Read more
Shuanghui sausages on display at a Beijing supermarket
First Alibaba, then Watson, now WH Group. The decision from the world’s top pork producer – with dominant businesses in China, the US and much of Europe – to ditch its initial public offering in Hong Kong is not just a blow to the company, which must now fork out millions in extra debt service costs, but also to the city itself. Having started the year with four possible blockbuster deals, Hong Kong will be lucky now to get even one.
The first blow came in January, when Hong Kong Electric – a spin-off by Li Ka-shing’s Cheung Kong – chose to slash the size of its deal on tepid demand. Even the smaller deal was tough – getting it over the line was a ‘near-death experience’ according to those familiar with the sale. Investors just weren’t convinced.
When L’Oréal said last week it would stop selling Garnier products in China, many outsiders assumed the French cosmetics group was joining a wholesale retreat by big western brands, led by Revlon of the US, which last month closed all its operations in mainland China, eliminating 1,100 jobs, including those of 940 beauty advisers. It all looked pretty ugly.
Having become used to A grades being handed out liberally in New York schools, I was taken aback to find a report card with an overall grade of D+. That is the current assessment of US infrastructure by the American Society of Civil Engineers.
The ASCE has a stake in persuading the US public to invest in infrastructure. Still, it is hard to contest the view that one of the weaknesses of the country’s economy is the poor state of its roads, railways, airports and other transport infrastructure. Read more
There is more than one way to lead in the smartphone industry, and China is at work on all of them.
No longer content to copy foreign products. China is developing brands to compete with Apple and Samsung. Xiaomi is known as its answer to Apple, and Huawei and ZTE, the equipment companies, have moved into handsets. Read more
The new free trade zone in Shanghai is a fascinating experiment by the Chinese government – among the most radical since it established the special economic zone in Shenzhen in 1980. But what does “free” mean?
As my colleague Simon Rabinovitch writes, there is uncertainty about how much economic liberalisation will be permitted in the zone, although plenty of big ideas have been bandied about: Read more
The controlling Jack Ma
Well done, Hong Kong. By sticking to its principles and not bending to Alibaba’s pressure for an unusual board control structure, the city’s stock exchange has struck a blow for investor rights over the increasing demands of technology executives.
Not that it will make a jot of difference. Read more
The US investigation into JP Morgan Chase having hired the children of well-connected officials in China is one of those events that threatens to up-end a business practice that is long-established and widespread, yet hard to justify when it is placed under a harsh spotlight.
The problem is at least as much for China itself as for the Wall Street banks and financial institutions that have followed the local practice by trying to get themselves some good connections. It speaks to the justified resentment of many Chinese at the way the elite “princeling” class accrues wealth.
As it happens, the investigation has emerged in the same week that Bo Xilai goes on formal trial on charges of bribery, corruption and abuse of power. Mr Bo’s downfall was a catalyst in exposing the extreme internal strains within the Chinese leadership caused by such issues. Read more
When Huawei’s new handset manufacturing complex opens in 2016 at Songshan Lake in southern China, it will include a building modelled on Krakow’s Wawel Castle. The former Polish royal residence was preferred over proposals based on other European beauty spots including the palace of Versailles, Granada’s Alhambra and Windermere in the English Lake District. That a fast-growing telecoms group should draw inspiration for the next phase of its assault on the 21st-century global phone market from a 16th-century castle is not as strange as it sounds.
Even by China’s standards, Wuhan Iron & Steel is enormous. As we drive along the four-lane highway beside the 22 square-kilometre site – with its eight blast furnaces, hot and cold rolling mills, port on the Yangtze River and Red Steel City workers’ town where 300,000 people live – the scale of Mao Zedong’s favourite steelworks is staggering.
The western image of Chinese higher education is of relentless self-improvement and of hundreds of thousands of students graduating from universities with degrees in science and engineering. From China’s perspective, it looks a little different.
The slowing of growth and the fact that most new job creation is now taking place in the private sector, rather than in the public sector and state-owned enterprises, has led to a glut of new graduates. The unemployment rate among 21 to 25-years olds is now highest for university graduates.
But some Chinese analysts think it is not simply a demand problem – there is also a supply issue. Victor Yuan, chairman of Horizon Research, a Shanghai-based research group, argues that many universities are offering poor quality vocational education. Read more
Being invited for tea in China sounds like the sort of hospitable gesture that visitors come to expect. For the growing arm of Chinese bloggers – and users of Sina Weibo, China’s equivalent of Twitter – it has a different connotation.
In that context, “he cha” (drink tea), means being asked to come and talk to the state security services about what you have been writing. That doesn’t mean being arrested, or even banned from Weibo permanently, but it is a shot across the bows. Read more
You would think that an American executive who came to China in 2006 and has only made one sale since then might be feeling a little discouraged. But, as I discovered on a visit to the city of Wuhan in Hubei province, Brad Bean is not.
Since Mr Bean is trying to sell luxury yachts to billionaires – 70-to-100-metre vessels that retail for between $50m and $120m each – he thinks he is making good progress. China, after all, is not the obvious place to buy a yacht. Read more
In 2010, seven managers from PSA Peugeot Citroën and five from Chang’an Automobile met in Shenzhen, southern China, to lay the groundwork for a new car factory. Three years later, Capsa, a 50-50 joint venture between the French and Chinese companies, is in the final stages of preparing a 1m square metre plant for the September launch of Chinese-made premium cars under the DS brand. “Because we were beginning from a blank sheet, people wanted to make it as perfect as possible,” says Gilles Boussac, Capsa’s president, between meetings with his team of mostly Chinese managers. “So often in China, if you’re trying to rework or improve something, it takes years to achieve.”
Expect more Chinese heroes. That seems to be the clear message of the tie-up announced on Wednesday between China’s Seven Stars and Pinewood Shepperton Studios. Among other things, it should allow Chinese co-productions wider distribution in the fast-growing Chinese market, provided, my colleague Robert Cookson writes, they have “at least one Chinese actor, some scenes to be filmed in China, and somehow relate to China”. Read more
Having now read Tim Cook’s letter of apology to Chinese consumers, I think the Apple chief executive has rather deftly achieved his objective – a public act of contrition – without admitting that his company did anything wrong.
According to the Wall Street Journal’s translation, he says:
We are aware that a lack of communication … has led to the perception that Apple is arrogant and doesn’t care or attach enough importance to consumer feedback. We express our sincere apologies for any concerns or misunderstandings this gave consumers.
This is at best an apology for creating a misperception, rather than for discriminating against Chinese consumers, one of China Central TV’s accusations. Read more
It takes an Orwellian sense of irony – or a complete lack of it – for a censor to ban the phrase “freedom of speech”. Yet that was among the search terms blocked on Sina Weibo, China’s equivalent of Twitter, in the row over censorship that erupted in Guangzhou this week.