Conventional wisdom says that people who buy stocks after reading about a company in the newspapers have probably waited too late, since a company is probably past its peak by the time it gets “discovered” by major media. Today I’d like to make a modification to that rule by substituting the name “Microsoft” (Nasdaq: MSFT) for “major media”.
My point is that Microsoft is notoriously slow in discovering new technologies and product areas, with the result that many of the new areas it enters are already either highly competitive or simply passe by the time they’re “discovered” by the world’s largest software maker. With that rule as a starting point, let’s take a look at Microsoft’s latest “discovery” in China, namely the hugely popular TMall online shopping mall operated by e-commerce leader Alibaba. Read Full Post…
A worrisome trend is developing at China’s anti-monopoly regulator, which is showing a growing tendency to take far too long to make decisions on global M&A deals compared with regulators in other major markets. This time the Ministry of Commerce, which reviews all major global M&A under China’s anti-monopoly law, is creating delays for a Taiwanese deal that would see a merger between low-cost smartphone chip maker MediaTek (Taipei: 2454) and smaller rival MStar (Taipei: 3697). 
China has long been a favorite production base for toy makers like global leader Mattel (NYSE: MAT), which typically use the country to make products like Barbie dolls that they then export to their main western markets. But those same toy makers have traditionally ignored China as a market for their products, mostly because an older generation of Chinese parents saw no reason to pay a premium for such relatively expensive toys for their children.
I’d like to take a break from all the hard news stories out there to take a look at a softer piece of news that reflects the ever-changing landscape of China’s Internet sector. While smaller names like Sina (Nasdaq: SINA) and Youku Tudou (NYSE: YOKU) have focused on maintaining their market values in the $1-$5 billion range, Internet search leader Baidu (Nasdaq: BIDU) and online game leader Tencent (HKEx: 700) have been in the more enviable position of having valuations in the tens of billions of dollars, easily making them the biggest of China’s publicly traded web firms. 
We’ve been reading for quite a while about the growing rivalry between homegrown telecoms giants Huawei and ZTE (HKEx: 763; Shenzhen: 000063), who are now taking their increasingly intense battle to Europe with a series of lawsuits. This latest development comes as both companies struggle with stagnating growth due a slowdown in the global telecoms equipment market over the last 2 years. Huawei’s rapid revenue growth has dropped sharply due to the slowdown, and ZTE fell into the red at the end of last year as many customers deferred their payments. 
After writing yesterday about CCTV’s recent series of exposes on big companies that deceive consumers, we’re getting an interesting postscript about the biggest of those attacks, which came against US electronics giant Apple (Nasdaq: AAPL). The postscript involves an embarrassing revelation about CCTV itself, which apparently used its own deceptive tactics to give its expose more impact. The Apple attack was part of a bigger series of televised CCTV reports exposing deceptive business practices. The reports ran last week on March 15, which is Consumer Rights Day. 
An increasingly assertive CCTV has turned its spotlight on some of world’s biggest brands as part of its annual consumer rights program, saving its biggest ammunition for the world’s easiest target: electronics giant Apple (Nasdaq: AAPL). I have to admit that I’m not particularly sympathetic to the highly secretive Apple, which appeals to Chinese consumers by catering to their fondness for famous brands with a certain snob appeal. But at the same time, I do have to say that Apple seems to come under an unusually high degree of scrutiny in China, and most often makes headlines for just about any negative news associated with the company and its partners.
China’s annual National People’s Congress has finally ended in Beijing after 2 weeks of nonstop meetings and appointments, the latest of which demonstrates the kind of musical chairs games that occur between government regulators and top executives of state-owned enterprises. The latest of those games took place over the weekend, when Bank of China (HKEx: 3988; Shanghai: 601988) announced that its chairman Xiao Gang had resigned for unexplained reasons. (
New developments have come rapidly over the past week at Suntech (NYSE: STP), leaving the former solar superstar on the brink of collapse as its founder Shi Zhengrong blocks a potential government rescue. Shi’s exit is believed to be a main condition for the government bailout, and his refusal to leave could well result in the failure of a company that is otherwise an industry leader with strong potential. To prevent such a collapse, the government should take the unusual step of forcing Shi to go so that Suntech can begin a desperately needed reorganization. Such interference should be used only rarely in a true market economy, but does make sense when it means saving important companies in crisis.
I frequently criticize Chinese firms for a herd mentality that often sees them rush blindly into emerging industries, but this time I need to redirect my criticism on foreign companies that are taking the same approach to the nation’s massive car market. The latest media reports cite Volkswagen (Frankfurt: VOWG) saying it will look to China to offset its slowing sales in the west, with plans to nearly double its Chinese production capacity over the next 5 years. (
The ongoing showdown between Internet titan Tencent (HKEx: 700) and China’s 3 major wireless carriers has been in the headlines nonstop these last few days, spotlighting the backward state of China’s mobile sector whose monopolization by massive state-run companies has stifled innovation. The original spat began late last year, when dominant mobile carrier China Mobile (HKEx: 941; NYSE: CHL) complained it was losing traditional text messaging business to Tencent’s popular WeChat mobile messaging service. (
