July 26 – August 3, 2014

[Breaking News] Strong quake in China topples thousands of homes, kills at least 367 – Los Angles Times

A strong earthquake in southern China’s Yunnan province toppled thousands of homes on Sunday, killing at least 367 people and injuring more than 1,881. About 12,000 homes collapsed in Ludian, a densely populated county located around 277 miles northeast of Yunnan’s capital, Kunming, China’s official Xinhua News Agency reported. The magnitude-6.1 quake struck at 4:30 p.m. at a depth of 6 miles, according to the U.S. Geological Survey. Its epicenter was in Longtoushan township, 14 miles southwest of the city of Zhaotong, the Ludian county seat… Read Full Story

[Breaking News] Death Toll Rises to 75 in Chinese Factory Blast –ABC News

The death toll in for an explosion at a Chinese auto parts factory has risen to 75 people, as investigators fault poor safety measures and news reports reveal that workers had long complained of dangerous levels of dust at the facility. Metal dust produced from polishing steel hubcaps ignited Saturday morning at the factory in the eastern Chinese city of Kunshan, causing an explosion that destroyed almost the entire roof of the plant, city officials said. More than 200 workers were at the factory at the time of the blast, China’s most serious industrial disaster since a fire at a poultry plant killed 119 people in June last year… Read Full Story

[Technology] Beijing to bar Symantec, Kaspersky anti-virus in procurement: report – Reuters

(Reuters) – China has excluded U.S.-based Symantec Corp(SYMC.O) and Russia’s Kaspersky Lab from a list of approved anti-virus software vendors, according to a Chinese media report suggesting Beijing is expanding efforts to limit use of foreign technology. The state-controlled People’s Daily reported the news early Sunday on its English Twitter feed, saying that the government’s procurement agency “has excluded Symantec & Kaspersky” from a list of security software suppliers… Read Full Story

[Politics] Police-Chief Zhou’s Trial Tests Xi’s Rule of Law Pledge – Bloomberg

China’s biggest trial in three decades may also be the prime test of whether President Xi Jinping’s campaign to bolster the rule of law in the world’s second-largest economy remains a work in progress.Zhou Yongkang, the former internal security chief whose investigation for corruption was made public last week, faces a potential trial akin to that of his allyBo Xilai in 2013. Preparatory work during an 18-month campaign against Zhou’s faction featured officials across the nation being taken for questioning and held incommunicado without trial, often for months… Read Full Story

[Technology] Xbox One coming to FTZ – Shanghai Daily

MICROSOFT and BesTV New Media Co said last week that a new-generation games console, the Xbox One, will go on sale in the Shanghai free trade zone on September 23. The model, priced at 3,699 yuan (US$599), will be the first console to be sold on China’s mainland in over a decade… Read Full Story

[Technology] What Microsoft Has Done Right (And Wrong) In China With Xbox One – Forbes

Half a year after China lifted its console ban, allowing gaming consoles to be legally sold within the country for the first time in over a decade, China’s console gamers are yet to get their hands on anything. But the launch of China’s first official console is drawing ever closer. At the recent ChinaJoy game conference,Microsoft announced the device’s official price (RMB 3699, or about $600) and its official release date (September 23). The Xbox One is coming, and it’s coming soon… Read Full Story

The War of Words in China – The New York Times

BEIJING — I DIDN’T ask for a Wikipedia page, but a few months ago, alerted by a friend, I found that someone had created one, ostensibly devoted to my journalistic achievements. I was flattered. Until I opened the page.“Since 2008, Jacobs has written over 400 articles, the vast majority of which portray China in a negative light,” read the entry, which went on to claim that many of those articles contained “journalistic distortions.”… Read Full Story

China Warns Microsoft Against Obstructing Probe – The New York Times

Chinese regulators on Monday publicly warned Microsoft Corp. MSFT +0.21% against obstructing an antitrust investigation into the firm, in the latest sign that Beijing has turned frosty on the U.S. software maker.China’s State Administration for Industry and Commerce said in a statement that Microsoft should avoid “interfering in or obstructing” the probe. The regulator also said it had questioned Microsoft Deputy General Counsel Mary Snapp as part of the investigation… Read Full Story

Doing Business In China: Terry & The Pirates – Forbes

This is the first in a series of articles about doing business in China.  While my formal job is as a management professor at a business school in China, my educational background and experience has been in political science, the US Air Force, and individual, group and organizational psychology as a Leadership Professor at a European management institute for 25 years… Read Full Story

[Business] China’s Salt Monopoly: Cracking Down on Illegal Contraband –Forbes

China’s 2,132-year old salt monopoly and why it makes sense to finally end it.

Early last year Taobao, Alibaba’s online marketplace, went through a cleansing process to remove contraband being sold by merchants on the site. What was this illicit item? Was it cocaine or heroin sale of which is prohibited under China’s Drug Administration Law? No. Was it firearms which private citizens in China are not allowed to own or sell? No. Was it stolen merchandise being resold by unscrupulous thieves? No. In fact, the Taobao merchants were attempting to sell… common table salt… Read Full Story

[Business] For China Investors, Bad News Erases The Good – Forbes

The tug of war between bears and bulls in China equities rages on, with the bears getting an extra pull of much needed muscle following poor service sector PMI data this weekend. For the past month, investors have been pouring into China equities, according to flow data from EPFR Global.  Manufacturing PMI beat market consensus, but service sector PMI declined. And many in the market view the service sector as the new China. When the new China looks weak, it means the old China has to step up on stimulus programs and fixed-asset investments in order to get investors bullish again.  Technicals aside, China is still a topsy-turvey economy, where the bad news often outweighs the good… Read Full Story

[Technology] Xiaomi Overtakes Samsung in China Smartphone Market – The Wall Street Journal

Xiaomi, the Chinese smartphone maker with the diminutive name, became the leading smartphone vendor in China in the second quarter, with its shipments exceedingSamsung 005930.SE +1.93%’s for the first time, according to figures from market research firm Canalys. Xiaomi led China’s second-quarter smartphone shipment rankings with 14% market share, following by Samsung, Lenovo and Yulong each with 12%. It’s quite a jump from the first quarter, when Xiaomi’s 10.7% market share trailed Samsung’s 18.3% and Lenovo’s 11%. And an even bigger leap from a year ago, when Xiaomi only held 5%… Read Full Story

[Business] U.S., China compete to woo Africa – PewResearch Center

The U.S. and China have been jockeying for economic influence in Africa in recent years as the region experiences robust GDP growth and presents more opportunities for investment…Read Full Story

[Environment] China’s surprise on climate change: Our view – USA Today

With the scientific evidence of human-caused climate change growing stronger all the time, advocates of inaction have turned to another argument: It’s pointless for the U.S. to limit emissions of greenhouse gases, they say, because increases from other nations — particularly China — will overwhelm any U.S. reductions… Read Full Story

[Business] Legal fight chills China metal trade after port fraud probe – Reuters

As global banks and trading houses fire off lawsuits over their estimated $900 million exposure to a suspected metal financing fraud in China, the tangled legal battle to recoup losses is set to drag on for years and hinder a swift recovery in metal trade. HSBC is the latest bank to launch legal action since Chinese authorities started a probe into whether the firm at the center of the allegations, Decheng Mining, used fake warehouse receipts to obtain multiple loans… Read Full Story

[Business] IMF Says China Should Aim Lower As Housing Prices Triple-Dip – Forbes

China’s government should lower its GDP target to 6.5% next year instead of 7.5%, The InternationalMonetary Fund said this Friday as the country’s real estate market continues to decline.Non-performing loans, shadow banking at the municipal level and housing woes were cited as the risks to China growth again next year, Alfred Schipke, senior resident representative at the IMF , said at a news conference in Beijing… Read Full Story

[Business] Global Logistic Properties Invests in China State Firm- The Wall Street Journal

SHANGHAI—Singapore’s Global Logistic Properties is investing 2 billion yuan (US$324 million) for a stake in China’s largest state-owned warehouse logistics provider, the latest deal intended to capitalize on growing domestic consumption in the country. The Singapore-listed GLP will take a 15.3% stake in Shanghai-listed CMST Development Co., becoming its second-largest shareholder, GLP said in a statement Monday… Read Full Story

[Entertainment] China to Open $323 Million Musical Production Center-The Hollywood Reporter

Musicals, a still relatively unknown form of entertainment in China, are about to get a big push with a planned $323 million (2 billion RMB) musical production center in the country, according to a report by the China News Service. The center, to be located in Langfang, just 30 miles outside of Beijing, will be a 1 million square feet compound, including theaters, classrooms and related facilities and is set to be completed in 2017. The center will be tasked with not only creating commercially viable musicals in China, but also promoting the art form in the country… Read Full Story

[Society] Why China’s Second-Baby Boom Might Not Happen-BloombergBusinessweek

Last November, China announced the loosening of its restrictive one-child population policy: Couples would soon be permitted to have two children so long as one parent was an only child. Government planners predicted that roughly half of China’s 11 million eligible couples would chose to have a second child within five years, and investors predicted a boom in sales of diapers, baby formula, and educational toys in China…Read Full Story

[Environment] U.S. Hits China Solar Firms – The Wall Street Journal

NEW DELHI—The U.S. is shaking up the solar-equipment industry by imposing heavy antidumping tariffs on Chinese panel makers, a move that is benefiting not just producers at home but also those operating in Asia and encouraging them to expand. The Commerce Department has issued preliminary tariffs on solar products of between 20% and 40% from China and Taiwan, saying they were sold too cheaply to U.S. buyers. But with prices now rising from Chinese importers as they have to deposit money in U.S. escrow accounts until the preliminary findings are confirmed, buyers are turning elsewhere… Read Full Story

[Business] China Moves to Ease Home-Registration Rules in Urbanization Push – New York Times

HONG KONG — The Chinese government issued proposals on Wednesday to break down barriers that a nationwide household registration system has long imposed between rural and urban residents and among regions, reinforcing inequality, breeding discontent and hampering economic growth.Yet even as officials promoted easier urbanization and the goal of permanently settling an additional 100 million rural people in towns and cities by 2020, they said changes to the system — which links many government entitlements to a person’s official residence, even if that person has long since moved away — must be gradual and must protect big cities like Beijing…Read Full Story

[Business] Banks Fear Missing Collateral in China – The New York Times

Large banks and trading firms are frantically trying to determine whether they have fallen victim to a suspected commodities fraud emanating from the giant Qingdao Port in northeast China. Citigroup and several other big Western banks are concerned that their loans may lack the appropriate collateral of big stockpiles of copper and aluminum at the port. The banks have inspectors on the ground who are trying to assess whether enough of the metals are there… Read Full Story

[Business] Why Do Foreign Brands ‘Break Bad’ in China? – Caixin

One of the major suppliers of famous multinational brands like McDonald’s and KFC was recently found using old meat to produce fast food. The news dragged foreign fast food chains into another wave of public outcry, with “get out, foreign fast food” appearing on the Internet. If I remember correctly, this is the third straight year that KFC’s parent, Yum Brands Inc., was exposed in scandals involving supply chain quality. In 2012, Yum was reported to have used hormones to raise fast-growing chickens in just 45 days, implicating its KFC chains. Last year, Yum’s Little Sheep Mongolian Hot Pot & Grill restaurants were found using chicken, fox and rat meat in place of lamb, damaging its business. These three crises all resulted from problems with upstream supply companies…Read Full Story

[Politics] How the Hammer Falls as China Nails Corruption – Caixin

(Beijing) — Curiosity is one reason the website of the Central Discipline Inspection Commission (CDIC) attracts up to 2 million page views every day.Another reason is fear. Some website visitors, for example, want to know whether they or anyone they know has been targeted by a government campaign to root out corruption led by the CDIC Inspection Team.Since the campaign began in December 2012, 33 high-level government and state company officials – all in positions at the deputy provincial level or higher – have come under investigation for violating laws or Communist Party rules. Each has been removed from office and detained. Some have been kicked out of the party…Read Full Story

[Business] China will soon be the world’s top business travel market – CNN Money

China is the world’s hottest market for business travelers, and spending in the country could surpass the U.S. as soon as 2015, according to a new report…Read Full Story

[Business] Investors Bet on China’s Large Property Developers –The Wall Street Journal

As China’s real-estate market slows, investors are turning bullish and buying up stocks of large property developers, betting they won’t only ride out the storm but also grow. The MSCI China Real Estate Index, which tracks the stocks of mainland developers, has surged 16.5% from the start of July through Friday, on pace for its best month in nearly three years, as local governments have started to ease restrictions on housing purchases to boost sales. The index remained down more than 3% for the year…Read Full Story

[Technology] Baidu’s search engine reaches 500 million active users on mobile – Tech In Asia

Baidu (NASDAQ:BIDU), China’s top search engine, released its Q2 earnings report overnight. The financials were dull, but the conference call with Baidu execs yielded some interesting user numbers and a few new milestones. With a strong focus on mobile – now that China’s mobile internet users outnumber its PC web users – Baidu CEO Robin Li hailed the fact that the company’s “mobile revenue, which is largely comprised of mobile search revenue, accounts for 30 percent of our total revenue.”…Read Full Story

[Technology] China’s JD to take pre-orders for the country’s first official Xbox One shipments on WeChat – Tech In Asia

This morning, Chinese e-retailer JD announced it has attained exclusive rights to accept China’s first pre-orders for the Xbox One. But gamers who open a desktop web browser and input JD’s URL won’t be able to snag the console – instead, the company will accept orders exclusively through Tencent’s WeChat and Mobile QQ apps, from July 28 through July 30. “Through our partnership with Tencent, Chinese consumers are increasingly able to enjoy the JD.com shopping experience directly on China’s most popular mobile communications platforms,” says Shuang Du, vice president of JD, in a statement. “We will continue to focus on providing the most convenient channels for Chinese consumers to purchase authentic products through their mobile devices.”…Read Full Story

[Society] China’s 1 Percent vs. America’s 1 Percent – Bloomberg Businessweek

A new study by Peking University’s Social Science Research Center pulls back the curtain a bit on China’s überwealthy. The richest 1 percent of Chinese households control more than a third of the country’s wealth, according to the July 26 study…Read Full Story

[Society] China gets richer but more unequal – The Guardian

China is becoming more unequal as it gets richer, with about a third of the country’s wealth now concentrated in the hands of 1% of its citizens, according to new research. A report by the Peking University Institute of Social Science Survey also found that the poorest quarter of Chinese citizens owned only 1% of the country’s wealth. The report, which was covered extensively by China’s state media, concludes that while the country is getting richer as a whole – the average net worth of a Chinese household rose 17% between 2010 and 2012 to $71,000 (£42,000) – inequality is a serious and growing problem…Read Full Story

[Business] Managing the Challenges of Food and Agribusiness Investment in China – China Business Review

Demand for foreign-branded foods, beverages, and other agricultural products and services is soaring in China, largely due to the rising income of Chinese consumers and their growing concerns about food safety. This trend affects not just the kinds of food purchased, but every aspect of China’s food industry, including retail, distribution, warehousing, and farming. It also presents an enormous opportunity for multinational agribusiness and food companies. But agribusiness remains a highly regulated industry in China, and multinational companies seeking to invest in China face a number of barriers. Regulatory challenges include restrictions on foreign investment, lengthy anti-trust reviews, and China’s new national security review process for mergers and acquisitions…Read Full Story

[Business] Tiny Luxembourg Wants a Piece of China’s Offshore Currency Market – The Wall Street Journal

The small nation of Luxembourg already boasts a financial sector that has benefited from the Grand Duchy’s proximity to some of Europe’s largest economies. Now, the country of just half a million people wants to be at the heart of a new trend in global finance: the rising use of China’s currency outside its home market…Read Full Story

[Immigration] NY Wheel reels in Chinese EB-5 investors – China Daily

The New York Wheel, an observation Ferris wheel planned for Staten Island that will be the tallest of its kind in the world, has so far received $150 million from foreign investors, the vast majority from China in exchange for green cards. The 630-foot-wheel project has attracted 300 Chinese investors, at least 90 percent of the foreign investors involved, through the EB-5 visa program, which gives foreign investors a temporary visa to the US, said Richard Marin, president and CEO of New York Wheel LLC…Read Full Story

[Business] Investment from China to boom – China Daily

Economic changes in China have set the world’s second largest economy up for a “structural increase” of foreign direct investment (FDI) in a broad range of industries in the United States over the next decade, according to a director at a New York-based global research and advisory firm. “China is only at the beginning of a structural catch-up process in global outbound investment,” Thilo Hanemann, research director with the Rhodium Group (RHG), said July 26 in an email to China Daily. Hanemann, who leads RHG’s cross-border investment work, said the US will see “strong inflows in the next decade,” but the amount of investment from China will depend on a number of factors including: “the relative attractiveness of the US economy; the ability of Chinese firms to compete in an advanced marketplace like the US; and the progress both countries make in sustaining two-way openness to investment.”…Read Full Story

[Business] Alibaba Has Big Hopes for New Big Data Processing Service – Caixin

Alibaba Group Holding Ltd. and its wealth of data on online vendors and shoppers has for a long time inspired imaginations for how big data technologies can reshape life on the Internet and beyond. The e-commerce giant has been using advanced data-analyzing technologies to help extend small loans since 2010, paving the way for clouding computing services that aim to commercialize its computing power. It launched a service on July 8, lifting the veil on the technologies and offering a glimpse into how other companies can make use of them. The Open Data Processing Service (ODPS) allows users to remotely tap into Alibaba servers equipped with algorithms that, according to the company, can process 100 million high-definition movies’ worth of data in six hours…Read Full Story

[Environment] What Do Chinese Dumplings Have to Do With Global Warming? – The New York Times

‘In Sichuan, we’re eaters,” said Chen Zemin, the world’s first and only frozen-dumpling billionaire. “We have an expression that goes, ‘Even if you have a very poor life, you still have your teeth to please.’ ” He smiled and patted his not insubstantial belly. “I like to eat.”…Read Full Story

[Business] China Currency Gaining Among American Corporations – Forbes

Here’s a good one for those who think the dollar’s days are numbered.  A survey released last week by HSBC Global says more U.S. multinationals are closing trade transactions in…you guessed it…the Chinese yuan. Of course, this sort of news is right up HSBC’s alley. They are one of the premier financial centers in Hong Kong, where much of the off-shore Chinese currency transactions take place.  It’s like a dream come true for the old colonial bank: the yuan increasingly being taken seriously as a viable trade currency…Read Full Story

[Environment] Solar Industry Is Rebalanced by U.S. Pressure on China – The New York Times

Even as regulators continue to wrestle with the protracted trade conflict with China over solar panels, the case has already started to reshape the industry, lifting manufacturers based outside China while also raising prices of panels for developers…Read Full Story


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