Cost-cutting pressure is putting a squeeze on China’s 3 big telcos, creating an unusual set of conditions that could claim smartphone giants Samsung (Seoul: 005930) and Apple (Nasdaq: AAPL) as victims. The latest signs of trouble for the world’s 2 largest smartphone makers comes in the form of an article in the English language China Daily newspaper, calling on China’s big 3 mobile carriers to stop offering packages with Samsung and Apple smartphones and instead only offer models from domestic manufacturers like Lenovo (HKEx: 992), ZTE (HKEx: 763; Shenzhen: 000063) and Huawei. Further evidence of the pressure the telcos are feeling comes in an unrelated report, which has the trio denying reports that they’re preparing massive layoffs. Read Full Post…
Apple promises to safeguard data on Chinese servers
Apple (Nasdaq: AAPL) has emerged as a rare voice of reason in the war of words between China and the west over cyber security, with word that the global tech giant has decided to host some of its users’ personal data on Chinese-based computers. Apple’s move was almost surely a business decision first and foremost, providing its Chinese users with speedier services. But the move also sends a signal that other western companies should consider following, reflecting Apple’s belief that using Chinese infrastructure doesn’t pose a risk to compromising a company’s private data. Read Full Post…
After saying little or nothing about its wave of anti-competitive probes against some of the world’s top firms, China is finally breaking the silence with its justification for actions that have targeted everyone from software giant Microsoft (Nasdaq: MSFT) to leading US car maker General Motors (NYSE: GM). The justification is coming via the state-owned English-language newspaper the China Daily, and argues that such investigations are common in the west and aren’t targeted against foreign firms. This long-overdue explanation also hints that Beijing may be worried about a potential action by the US and European Union, who may be preparing to complain to the World Trade Organization (WTO) that Beijing discriminates against western companies. Read Full Post…
A summer full of negative news for Sino-foreign trade relations got a rare piece of positive news over the weekend, with word that the US has approved the sale of IBM’s (NYSE: IBM) low-end server business to Chinese PC giant Lenovo (HKEx: 992). The case looks a bit like another deal between the pair of tech giants nearly a decade ago, when IBM agreed to sell its high-profile PC business to Lenovo, only to see the deal run into political headwinds before finally getting approved by Washington. But this latest approval is slightly different, as it comes against a backdrop of heightened trade and other national security tensions between China and the west, especially from the US. Read Full Post…
A widening web of anti-trust investigations has snared one of China’s biggest overseas investors, with word that General Motors (NYSE: GM) has become the latest foreign company to be probed for monopolistic practices. News of this particular investigation shows that no one is exempt from such probes, since GM is one of China’s oldest and largest foreign investors in the automobile sector and is quite chummy with longtime partner SAIC (600104), one of Shanghai’s largest companies. Thus by potentially punishing GM, China’s anti-monopoly regulator would also be punishing a leading Shanghai company, hurting its profits and potentially slowing its growth and future investment from GM. Read Full Post…
I’ve been writing regularly about the flood of anti-monopoly probes against western firms recently, so it seems only appropriate that I end the week with a flurry of new headlines involving cases against chipmaker Qualcomm (Nasdaq: QCOM), luxury car maker Audi (Frankfurt: VOWG), and a long-overdue response from a major western business group. In the first news bit, the anti-monopoly investigator has reportedly nabbed a government insider who was helping Qualcomm in the case against it. The second bit has media reporting the regulator is preparing to levy a large but relatively manageable fine against Audi. And the third bit has the EU’s local chamber of commerce calling on China to stop bullying its members. Read Full Post…
I’m no fan of censorship, but I still have to compliment Beijing on its recent unusual decision to inform South Korea of the reasons behind its recent decision to block the popular mobile instant messaging service called Line in China. This kind of explanation would sound normal in any other country; but it represents a big step for Chinese censors, who are highly secretive when they choose to block Internet sites, ban foreign films and TV shows and take other similar actions.
Many people, myself included, won’t be truly satisfied with China until it completely removes its practice of censoring material that simply expresses different views from the central government or is critical of high government officials. But at least this unusual act of openly explaining one of its censorship actions marks a move in the direction of more transparency, which could be a small sign of improvement in helping companies navigate the difficult Chinese media market. Read Full Post…
The microblogging realm was filled with words of sympathy this past week at the woes for some of China’s longest-serving foreign tech firms whose names have become household words over the last 20 years. Leading the list were a flood of comments on Nokia, whose name was once synonymous with cellphones in China but later fell on hard times and last week laid off a big part of its Chinese workforce. Meantime, other tech executives looked on in wonder at the recent plight of Microsoft (Nasdaq: MSFT) and Mercedes-Benz, which have joined a growing list of western firms being investigated by Chinese anti-trust regulators.
Chinese firms haven’t been the only ones feel the pain these past few weeks, as the nation’s Internet regulator has also cracked down on social media sites with its eye squarely on industry titan Tencent (HKEx: 700). As that happened, the operator of the popular WeChat and QQ instant messaging platforms got some rare sympathy from rival Weibo (Nasdaq: WB), the Chinese equivalent of Twitter, which itself came under a similar crackdown 2 years ago. Read Full Post…
After a failed bid at buying the world’s largest aircraft leasing company last year, China appears to be gearing up for a second attempt to enter the lucrative space with plans to bid for European giant Avolon. In this instance, the report is coming from a major Chinese newspaper that says China Investment Corp is teaming up with Aviation Industry Corp of China (AVIC) in the bid, which could be worth some 12 billion euros ($16 billion). That would easily make it the largest global acquisition by a Chinese firm outside the resource sector, reflecting the country’s growing financial might as many European firms continue to struggle with after-effects of the continent’s debt crisis of several years ago. Read Full Post…
Update: Since originally writing this post, several reports have appeared saying Apple’s name wasn’t included on the latest government procurement list because it failed to submit the necessary paperwork.
I really didn’t want to write again about another major multinational getting bashed in China, but it seems hard to ignore the latest reports that gadget giant Apple (Nasdaq: AAPL) has formally joined the list of companies being banned from selling to the government due to national security concerns. At this rate, Chinese government agencies won’t be able to buy technology products from any foreign companies soon, and will be forced to do all their buying from domestic firms. That’s somewhat ironic, since many of those domestic firms are far less experienced than big global names like Apple and Microsoft (Nasdaq: MSFT), and thus are far more likely to unknowingly design products with major security flaws. Read Full Post…
Mercedes under microscope for after-sales practices
It’s a new day, which means it’s time for yet another government investigation into foreign firms that are coming under increasing scrutiny for both their products and business practices. This time it’s luxury automaker Mercedes-Benz (Frankfurt DAIGn) that’s coming under the microscope for anti-competitive pricing in China. Word of this latest probe comes just a week after software giant Microsoft (Nasdaq: MSFT) revealed it is being probed for monopolistic business practices. (previous post)
Other major western multinationals have been probed for similar anti-competitive behavior in the latest year-long campaign, and still others have been targeted over allegations of corruption. Yet another group has been blacklisted from selling to to government organizations over concerns their products could create national security risks. Read Full Post…
