Much is being written about the beating that Japanese automakers are taking as a result of the territorial spat between China and Japan over a small island chain, but Chinese joint venture partners of Toyota (Tokyo: 7203), Honda (Tokyo: 7267) and Nissan (Tokyo: 7201) are also suffering lower-profile fallout due to the conflict. The current clash over the island chain claimed by both China and Japan casts a spotlight on the smoldering uneasiness between these 2 regional superpowers that is likely to haunt not only automakers but also all Japanese companies operating in China for at least the next few decades. And it also underscores that these companies need to take steps to lessen the impact, such as introducing brands for the China market that aren’t so easily identifiable as Japanese and thus are less likely to be targeted by angry Chinese consumers each time a conflict occurs.
Journalist China
China Telecom: French Tie-Up Coming? 中国电信与法国电信结盟初露曙光
Beijing has been sending a steady stream of signals this year indicating it will soon open up its telecoms services market to foreign operators, and it’s looking more and more look like the first big tie-up that will come from this new openness could well be between China Telecom (HKEx: 728; NYSE: CHA) and France Telecom (Paris: FTE). I should be clear here that I don’t have any insider news about such a tie-up, but a growing number of low-key signals indicate a close relationship is fast developing between France’s leading telco and the smallest of China’s 3 major wireless carriers that could soon result in a major announcement.
M&A: Lenovo Slows, Suning Surges 并购：联想集团减速 苏宁加速
Some interesting signs are coming from 2 major Chinese tech firms on the M&A front, with PC leader Lenovo (HKEx: 992) signaling it may finally slow down its acquisition frenzy, even as e-commerce aspirant Suning (Shenzhen: 002024) sends the opposite message with its announcement of a new major purchase. The news from Lenovo would represent a welcome break from the company’s steady stream of acquisitions, which look destined to give the company some major indigestion as it tries to digest such a wide array of assets in a number of very different markets. Meantime, Suning’s purchase of an e-commerce site targeting infants and toddlers isn’t too worrisome by itself, but from a broader perspective also reveals a company trying to grow too big too quickly.
No Buyers for China Mobile Games IPO 中国手游上市无买家
A major catalyst is clearly needed to thaw the current frigid market for US-listed Chinese stakes, but unfortunately the newly listed China Mobile Games (Nasdaq: CMGE) was not what investors were seeking. Meantime in other Internet news, video sharing leader Youku Tudou’s (Nasdaq: YOKU) first major strategy announcement since closing its historic merger a month ago has also failed to inspire investors, who are already running out of patience with the company.
Huawei’s Slowing Growth, Google-Hisense Tie-Up 华为高增长一去不返 海信与谷歌联合研发智能电视
A couple of items from the consumer electronics space are worth looking at today, including one that shows Huawei’s consumer unit forecasting surprisingly slow growth while electronics giant Hisense (Shanghai: 600060) is cementing an interesting TV tie-up with Google (Nasdaq: GOOG). Both of these news bits highlight China’s growing prowess as a consumer electronics maker, as the country rapidly rises to challenge traditional powerhouses like Japan, South Korea and Taiwan with products that can compete globally not only in price but also in quality.
China Gallops Off With US Digital Effects Star 小马奔腾收购数字领域
The growing China-Hollywood love affair has taken an interesting and new twist with the purchase of a major bankrupt US digital effects studio by a partnership between a Chinese production house and one of India’s leading communications groups. Adding further intrigue to the picture are the bankrupt US venture’s links to blockbuster director James Cameron, who seems to have taken his own a sudden interest in the China market. If all of this sounds like something from a Hollywood movie, then perhaps it’s because so many US entertainment executives are getting overly excited about the huge potential of the Chinese movie and TV markets, which appear to finally be opening after years of being largely closed to foreign investment. My main advice to all the excited parties, both in China and the US, would be to temper their big expectations with some realism, as it’s quite possible that either Beijing or Washington could quickly become worried about this rapidly evolving love affair and take steps to cool things off.
Kellogg Takes on Congee With New JV 凯洛格成立合资企业对峙热粥
As inventor of the western-style breakfast cereal that is typically eaten cold with milk, Kellogg (NYSE: K) is a household name in the US and many European markets. But it has yet to find the right formula for Asia, where rice porridge and soy milk served hot still dominate the breakfast market. Now the US breakfast giant is preparing to try to change Chinese tastes through a joint venture with a Singaporean company that will sell Kellogg brand products, presumably including its trademark breakfast cereals, to millions of Chinese.
Cars: Volvo Sputters, GM Sails 中国汽车市场：沃尔沃遇阻 通用启航
The latest auto news bits show that domestic nameplate Geely (HKEx: 175) continues to struggle with its plans to resuscitate its Volvo brand, while General Motors (NYSE: GM) is banking on rapid growth for low-end cars to consolidate its position as China’s market leader. Meantime, I’d be remiss not to mention the latest news coming from sputtering domestic automaker Chery, which has disclosed its controversial plan for a joint venture with luxury car maker Jaguar Land Rover has just been approved by the key state regulator.
Sohu Video, Qunar in IPO Marches 搜狐视频、去哪儿网加紧上市步伐
The latest news bits indicate the video sharing unit of web portal Sohu (Nasdaq: SOHU) and online travel services firm Qunar are both marching rapidly towards overseas IPOs, with both companies positioning themselves to move quickly if and when the current market freeze ever eases. Sohu has been saying for much of the last year that it wants to spin off its video unit into a stand-alone company for an eventual overseas listing, and now the company has formally separated the unit’s sales force into a separate entity. (Chinese article) Meantime, domestic media are also quoting a top executive of Qunar, which is backed by online search leader Baidu (Nasdaq: BIDU), as saying his company has passed industry leader Ctrip (Nasdaq: CTRP) in air ticket sales, in what sounds like a drive to raise the company’s profile in the run-up to its own IPO. (English article; Chinese article)
Microsoft Targets SOE Pirates 微软打击国有企业盗版
Despite Beijing’s repeated efforts to stamp out piracy, the problem remains a major one in China, with companies large and small, public and private still engaging in a practice that costs software makers billions of dollars in lost sales each year. The magnitude of the problem was on prominent display last week when reports emerged that Microsoft was seeking Beijing’s help to get four major companies, including the parent of PetroChina (HKEx: 857; Shanghai: 601857; NYSE: PTR), to stop using pirated copies of its popular Office software suite.
CNOOC’s Nexen Bid Clears One Hurdle, Faces Another 尼克森股东批准中海油收购 公众反对声音或加大
Oil exploration giant CNOOC’s (HKEx: 883) record-breaking bid for Canadian rival Nexen (Toronto: NXY) has cleared one hurdle with the Thursday approval of the deal by Nexen shareholders, even as a much bigger obstacle looms in the realm of public opinion where opposition appears to be building. Public opinion could be a major factor that ultimately decides the fate of this deal, which still needs approval from a Canadian administration that has said it will consider national sentiment before making its final decision.
