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Two recent cases show that China is finally getting serious about punishment for economic crimes, a crucial step needed to clean up the nation’s often unruly business environment. The stricter punishments in both cases could mark the end of an era where such crimes faced little or no consequences, the result of lax guidelines from a socialist era when everything was state-owned. Read Full Post…
After a dismal first quarter, we’re seeing the latest signs of new life in the moribund market for offshore Chinese IPOs with the planned launch of 2 major new offerings later this week in Hong Kong. The pair of IPOs, one for brokerage Galaxy Securities and the other for a unit of oil major Sinopec (HKEx: 386; Shanghai: 600028; NYSE: SNP), could raise up to $3.5 billion combined, following a dismal first quarter for new listings. The IPOs would also come as online retailer LightInTheBox seeks to launch the year’s first public offering for a Chinese company in New York later this month. Read Full Post…
I wrote a couple of weeks ago about a “scandal” involving mineral water giant Nongfu, pointing out the case highlighted China’s confusing and often contradictory national and local standards for regulating everything from food to product warranties. Now the case has taken a new and interesting twist, with a Beijing trade group lobbying for Nongfu to be banned in the Chinese capital due to its failure to follow a national standard for bottled water. The new development underscores yet another danger of doing business in China for domestic and international firms, showing how they can face big headaches created by local rivals playing games with China’s maze of rules and regulations. Read Full Post…
Media are buzzing today with word that talks have broken down in a landmark deal that would see PC giant Lenovo (HKEx: 992) buy the low-end server business from IBM (NYSE: IBM), in a multibillion dollar deal that would have been Lenovo’s largest purchase ever. But my observation from years of reporting this kind of deal is that the story isn’t over yet, and this disagreement is just a negotiating ploy by both sides before they resume their talks and reach a deal. The reason is simple: both sides want to see this deal happen, because it makes too much strategic sense for either to abandon.
A couple of interesting news bits are in the headlines from the telecoms sector, led by word that the regulator could issue a highly anticipated plan later this month that would pave the way for formation of virtual network operators or VNOs. At the same time, leading wireless carrier China Mobile (HKEx: 941) is also in the news with reports that one of its top officials is under investigation for corruption, in the latest of a series of similar investigations of executives from the nation’s 3 major telcos. Read Full Post…
Solar panel makers are finally seeing signs that the clouds could be lifting from their embattled sector, sparking a stock rally for their volatile shares. Canadian Solar (Nasdaq: CSIQ) led off the upbeat news, releasing preliminary results that included better-than-expected first-quarter sales and margins. But perhaps more importantly, other reports said the industry is seeing some of its first sustained price increases after more than 2 years of declines. Read Full Post…
The latest numbers and outlook from telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063) look decidedly ugly, leading me to wonder if the struggling former superstar is destined either for extinction or a radical makeover in the next few years. ZTE’s woes come as crosstown rival Huawei faces similar challenges due to a rapidly slowing global market for networking equipment. Huawei is responding to the challenge by aiming for big new orders in Australia, and is also discussing its succession plans as media-shy founder Ren Zhengfei nears his retirement. Whoever Ren ultimately chooses to replace him will certainly have a difficult job ahead, as Huawei could easily follow the same path as ZTE, which itself appears to be on the edge of a downward spiral like those followed by defunct former giants Motorola and Nortel. Read Full Post…
A new crackdown on Chinese websites that traffic in pirated material is coming as welcome news to China’s struggling online video sharing sector, where companies are still struggling to find success in a tough market. But while it’s easy to blame the pirates for their woes, China’s money-losing video sharing sites are also simply victims of choosing a sector where earning profits is extremely difficult if not impossible. That reality is reflected in the fact that sector pioneer YouTube still struggles to earn money, even some eight years after it was first established. Read Full Post…
Local media have been buzzing these past few days with word that online search leader Baidu (Nasdaq: BIDU) is on the cusp of clinching a deal to buy video sharing site PPS, in a move that would instantly create a solid new number-two player in China. The only problem is that this space is turning out to be a very difficult one to earn money, as reflected by an unrelated new interview showing profits could still be years away for money-losing industry leader Youku Tudou (NYSE: YOKU). Read Full Post…
The recent tale of two Hollywood blockbusters and their very different fates in China is casting a spotlight on both the huge potential and challenges of the Chinese box office, which has boomed in recent years to become the world’s second largest but remains tricky to navigate. Read Full Post…
Note: Since originally writing this post, Sina and Alibaba have formally announced their tie-up. (company announcement) Under the deal, Alibaba has purchased 18 percent of Sina Weibo for $586 million, valuing Weibo at about $3.3 billion. The pair said they expect the alliance to generate $380 million in revenue for Weibo over the next 3 years. Sina shares jumped nearly 10 percent after the news came out.
It looks like I may have been premature in declaring last month that talks for a tie-up between leading web portal Sina (Nasdaq: SINA) and e-commerce leader Alibaba were dead. According to the latest reports, the pair have resuscitated their negotiations that began late last year and later collapsed due to disagreement over a valuation for Sina’s popular Weibo microblogging platform. Now media are reporting the talks have quietly resumed in recent weeks, and a deal could be announced very soon. (English article; Chinese article) Read Full Post…
