Journalist China

Business news from China By Doug Young.
Doug Young, journalist, has lived and worked in China for 20 years, much of that as a journalist, writing about publicly listed Chinese companies.

He is based in Shanghai where, in addition to his role as editor of Young’s China Business Blog, he teaches financial journalism at Fudan University, one of China’s top journalism programs.
He contributes regularly to a wide range of publications in both China and the west, including Forbes, CNN, Seeking Alpha and Reuters, as well as Asia-based publications including the South China Morning Post, Global Times, Shanghai Daily and Shanghai Observer

Solar: New Tie-Ups as US Ruling Looms 光伏产品倾销裁决临近 中国企业忙于外联公关

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There are a couple of new tie-ups in the solar space as the US prepares to levy punitive tariffs for China-made panels, one involving Chinese oil giant CNOOC (HKEx: 883) and another involving industry leader Suntech (NYSE: STP). Let’s look at the big picture first, which has Chinese media reporting the US will make its final decision on whether to levy the tariffs on March 2. (English article) I have no doubt that the US will rule against the Chinese solar panel makers, resulting in punitive tariffs for all Chinese panels imported to the US since December 3. That date is important, because Chinese solar firms started exporting huge numbers of their cells to the US in the fourth quarter in anticipation of punitive tariffs, so at least some of those exports will be subject to the new tariffs. I forsee turbulence in the market as China and the US work through this issue, which is likely to end in a settlement around year end that will see China end many of the subsidies that are the source of the complaint, such as low-interest loans and cheap land. Meantime, China companies have embarked on a PR campaign to show the world they don’t receive unfair subsidies and that it’s in everyone’s interest to continue setting up new solar plants. The 2 new tie-ups look at least partly related to that PR campaign. In the first, CNOOC will put $300 million into a new joint venture with Spain’s Isofoton to build new solar plants in Asia using Isofoton panels manufactured in China. (English article) This new venture by a major Chinese state-owned company seems aimed at showing that China supports not only its own homegrown solar companies, but anyone that wants to manufacture solar cells in China. The second tie-up, which looks largely symbolic, involves a new Suntech tie-up with US chemicals giant DuPont. (company announcement) I read the announcement twice and am still unsure what it means, as the language is quite vague. But it does make special effort to point out that the US was a net exporter of materials used to make solar panels last year, reinforcing a previous message that US firms will also be hurt by punitive tariffs. Look for more tie-ups throughout the year, some strategic to avoid US tariffs and others more PR in nature, as the 2 sides work through this issue and hopefully reach a settlement after the US presidential election in November.

Bottom line: 2 new solar tie-ups involving Chinese firms look like PR moves aimed at diffusing a trade war that could come to a head with the US issue of punitive tariffs next month.

Related postings 相关文章:

◙ Solar Slips Squarely Into the Red 太阳能行业陷入全线亏损

◙ LDK’s German Buy: Two Losers Combine 赛维LDK收购Sunways将使前者境况雪上加霜

◙ China Retaliates With Own US Solar Probe 中国启动对美可再生能源补贴调查

Spreadtrum, Samsung in Latest China 3G Model 展讯与三星再度联手开发中国标准3G智能手机

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After surviving a short seller attack last year, cellphone chip maker Spreadtrum (Nasdaq: SPRD) has taken the latest step in its drive to become a specialist in smartphone chips for use with China’s homegrown 3G standard, TD-SCDMA, by co-developing a second model with global giant Samsung (Seoul: 005930). (company announcement) Samsung’s roll-out of the Galaxy Note GT-I9228, using a Spreadtrum TD-SCDMA chip, is the Korean company’s second such model since last September, and signals the companies are forming a strong partnership for phones based on the 3G standard being used by China Mobile (HKEx: 941; NYSE: CHL). Now, of course, the big question will be whether China Mobile will start to promote TD-SCDMA service more aggressively, following a disappointing 2011 that saw it lose steady share in the 3G market to rivals China Unicom (HKEx: 728; NYSE: CHU) and especially China Telecom (HKEx: 728; NYSE: CHA). Spreadtrum shares have gone on a roller coaster ride over the last year, partly due to the inherent risk of investing so much in a technology with no track record and one that could ultimately see only lukewarm sales. Its share plunged in July after a short seller attack questioning an inventory buildup as the company broadened its product line as part of its TD-SCDMA bet. It ultimately survived that attack and its shares more than doubled from their lows at that time. But since November its shares have again lost about half of their value, due at least in part to disappointment about China Mobile’s lackluster promotion of 3G. Of course, part of the problem for China Mobile has been a lack of exciting smartphone models to run on its 3G network, so the introduction of 2 Samsung TD-SCDMA models should help address that problem. China Mobile has also sent out its own recent signals indicating it will make a stronger push in 3G this year under new management, though we have yet to see much real results of that. (previous post) If you’re a Spreadtrum investor, you’re most likely going to be closely watching China Mobile’s 3G subscriber numbers closely this year, as the chip maker’s stock price is likely to move in step with how quickly the network develops.

Bottom line: Spreadtrum’s latest tie-up with Samsung affirms its commitment to TD-SCDMA 3G standard, putting it at the mercy of China Mobile’s promotion of the untested technology.

Related postings 相关文章:

◙ China Mobile 3G: Where Are the Subscribers? 中国移动3G：订户在哪里？

◙ Spreadtrum, Mediatek in Cheap Smartphone Plays

◙ Spreadtrum Takes Smart Gamble on China 3G

Google: Getting Mapped Out of China? 谷歌地图：会退出中国市场吗？

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When you’re the world’s biggest Internet company even the smallest hiccups can make headlines, which is what Google (Nasdaq: GOOG) seems to be learning amid a flurry of chatter about the future of its online mapping service in China. The current saga actually began last year, when China required all mapping service providers to get new licenses, and it wasn’t clear whether Google would apply, leading some to predict another high-profile pull-out could be coming after the company moved its China search site to Hong Kong in 2010. (previous post) Google didn’t say much throughout the saga, perhaps due to the sensitivity of the matter, but eventually word got out that it had set up a joint venture as required by Beijing and indeed applied for a license. What has the world buzzing now is that a February 1 deadline has now passed for all mapping service providers to get their licenses, but Google still has yet to receive one. Reports have sprung up in the Chinese media like weeds in the last 2 days, most simply quoting the regulator saying Google has yet to receive its license without any further explanation. (Chinese article; English article) Of course, the lack of a reason has everyone guessing what is happening, with the implication that Google and Beijing are once again at an impasse similar to the one that saw it withdraw from the China search market. The only problem with all these theories is they make no sense, as there’s clearly no censorship issues, which were the major point of contention in the search dispute, involved with the mapping business. One of the more rational reports out is saying the delay is being caused by a technical issue, namely that some people at Google’s mapping venture are still waiting to get necessary clearances for the license to be issued. Clearly Beijing and Google have very little to gain from another high-profile spat, which is probably the reason both are trying to keep a low profile until the license is finally granted, which I fully expect in the next month or 2. In the meantime, look for the noisy Chinese media to keep printing conspiracy stories about what would be an insignificant story if it was about anyone else besides Google. At the end of the day, Google is still firmly committed to China, and, as I said at one point last year, I wouldn’t be surprised if it ultimately returned its search engine business to the country over the medium- to longer-term. (previous post)

Bottom line: Google’s failure to get a China mapping license before a February 1 deadline is most likely due to administrative issues, and it is likely to get the license in the next 1-2 months.

Related postings 相关文章:

◙ Latest Google Move: Gearing Up For China Return? 谷歌最新动向：打回中国市场？

◙ Google Map Impasse Resolved With New JV 谷歌地图风波解决

◙ Google Falling Off The China Map 谷歌地图：谈判也没用

55tuan Restarts IPO Race With LaShou 窝窝团和拉手网重启IPO争先赛

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An IPO race pitting 2 of China’s top group buying sites, LaShou and 55tuan, is showing signs of restarting in the Year of the Dragon, though I’m still a bit dubious of whether either of these 2 companies will ever really make it to market. New reports in the Chinese media say 55tuan is denying rumors that it has scrapped plans for a New York IPO, saying it is moving forward with a timetable for an offering in the second quarter. (Chinese article) The denial marks the latest twist in a race that started to take form last summer, when both 55tuan and LaShou appeared to be moving ahead with plans for offerings to raise much-needed cash. Both companies had trouble finding underwriters for their offerings, with names like Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) resigning from LaShou’s plan (previous post), while Credit Suisse (NYSE: CS) and Merrill Lynch reportedly declined to bid for the 55tuan deal. (previous post) All the big banks were reportedly concerned about the accounting used by both companies for some of their many acquisitions, amid a broader series of accounting scandals that hammered US-listed Chinese stocks last year. LaShou ended up hiring several second tier-players, including domestic heavyweight CICC and Japan’s Nomura; but one of my sources tells me that even Nomura ended up dropping the deal and was replaced by Britain’s Barclays Capital. LaShou appeared to have the edge in the race when it made its first public IPO filing last fall, but then saw that plan derail after the US securities regulator grew suspicious and asked for more information. (previous post) That happened in November and we haven’t heard anything since then, leading me to believe that the plan could be delayed indefinitely while LaShou does some major reworking of its books to satisfy both regulators and its own underwriters. In the meantime, I’m also skeptical that 55tuan will really make a second-quarter IPO, as it is having its own problems in the highly competitive group buying space that saw it make mass layoffs last year. Turmoil in the space appeared to claim its latest victim earlier this week when Groupon.cn, which has no relation to US giant Groupon, reportedly put most of its employees on extended holiday after the Chinese New Year break. (previous post) At the end of the day, one or both of these companies could finally make it to market, but both would be well advised to wait until the end of the year when they can generate more excitement — if they have the financial resources to survive that long.

Bottom line: A second-quarter IPO timetable for group buying site 55tuan looks overly ambitious, and an offering closer to the end of the year looks both more prudent and realistic.

Related postings 相关文章:

◙ Groupon.cn Becomes 2012 First Group Buy Victim 团宝网员工被放假 中国团购业料将加速整合

◙ LaShou IPO Derails

◙ 55tuan: A Company in Denial 窝窝团拒不接受现实

Starbucks Raises Prices, But Who Cares? 没人会在意星巴克提价

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If someone raises the price for an already ridiculously overpriced Gucci handbag, will shoppers really care? That’s the big question for Starbucks (Nasdaq: SBUX), which is tempting the lower-end luxury lifestyle market with its first price hike in 5 years, challenging China’s growing ranks of yuppies to pay 1-3 yuan more for their favorite cup of daily coffee. (English article) From a price perspective, this looks like a relatively modest hike, amounting to a 5-10 percent increase for coffee that already cost as much or more than a full meal at many local eateries. What’s more, Chinese consumers are already accustomed to price increases in this range, as inflation in 2011 hit some of the highest levels seen in years. But the real question is: will consumers even care when they are already so obviously spending money on a product that is really an extraneous low-end luxury good one of whose main functions is simply to let consumers show off their yuppie status? All of that said, my answer to the question is a definitive “no”, and I see little or no impact to Starbucks sales from this price increase. In fact, I could even see the opposite happening, with even more consumers flocking to Starbucks for coffee in order to show the world that higher prices won’t deter them from pursuing the yuppie lifestyle that Starbucks represents. Such consumers may also appreciate the fact that Starbucks waited for inflation to cool before making its move, unlike most companies that already raised their prices last year at the height of the inflationary cycle. I also like the way that Starbucks announced the move, informing its customers first on the popular Weibo microblogging platform in an attempt to ease the mild shock that some may soon feel on learning the price of their coffee has risen. What all of this says more broadly is that people will be willing to pay a premium for luxury goods in general regardless of mild price changes, as the value they get from such goods contains many intangible elements that can’t really be measured by the cost of the good to start with. All that said, Starbucks also realizes it’s not exactly a Gucci or Louis Vuitton, and has taken a prudent approach to its increase by keeping it modest, waiting until broader inflation is showing signs of cooling and being as transparent about it to consumers as possible.

Bottom line: Starbucks’ new price hike is unlikely to deter customers from buying its pricey coffee, and could even bring it more business from China’s growing ranks of yuppies.

Related postings 相关文章:

◙ Starbucks Goes Downmarket in China Drive 星巴克在华开拓低端市场

◙ Disney Bets on China Thirst for Luxury 迪士尼押注中国名品市场

◙ Starbucks Wide Open for China Business with New JV 星巴克在云南建合资厂

Citron Keeps Up Qihoo Assault 香橼继续攻击奇虎

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The year of the Dragon is off to a noisy start for controversial Internet security software firm Qihoo 360 (NYSE: QIHU), which is coming under yet another assault from a small western research house named Citron over the credibility of some of its user figures. Chinese media are reporting that Citron founder Andrew Left has taken his attack to China, where he did an interview with Shanghai’s influential China Business News telling the paper he will continue his campaign to debunk user numbers from Qihoo that he says are vastly inflated. (Chinese article) Citron began its assault back in November last year (previous post), saying at the time that Qihoo’s stock was probably worth about $5 per share rather than the $20 where it was trading. At the time Qihoo put out a strongly worded statement denying the allegations. But now the company’s controversial and usually combative founder Zhou Hongwei is keeping uncharacteristically quiet, saying he won’t engage in war of words over the issue which has clearly become quite sensitive. Qihoo’s shares initially fell to as low as $14 after Citron’s report first came out, but have bounced back since then and now trade at around $18. I’ll be quite frank and say I’m 1,000 percent confident that Citron has probably taken a big short position in Qihoo, and is starting to worry that it could lose big money on its bet, hence its reluctance to end its assault. At the same time, Zhou, who often uses ethically questionable business tactics, is actually taking a smart approach this time by staying quiet and letting his company’s performance speak for itself. All that said, I don’t think this story is over just yet, as I really do believe that Qihoo overstates its user numbers, though the magnitude of those overstatements is still unclear. By the time this story plays out, I’d look for Qihoo shares to trade a bit lower than where they are now, perhaps as low as $10, though I doubt they will hit the $5 mark unless a major scandal emerges. On a broader basis, what this prolonged war shows is that this kind of attack on US-listed Chinese companies, which became a common theme last year, will continue into the first half of 2012, as short sellers take advantage of the deep suspicions that still remain over Chinese accounting practices.

Bottom line: The protracted battle by a short seller against Qihoo 360 shows that such attacks will continue into 2012 and last at least through the first half of the year.

Related postings 相关文章:

◙ Report Takes Wind Out of Inflated Qihoo 奇虎遭遇Citron釜底抽薪

◙ Short Sellers Target China in Year End Assault 做空抛盘年底将矛头对准在美上市中国企业

◙ Xunlei, Muddy Waters Sound Upbeat Notes 迅雷和Muddy Waters保持谨慎乐观

China Telecom 3G Drive Set For Boost With iPhone 4S 中国电信3G推出电信版iPhone 4S

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It’s not exactly news at this point, but Chinese media are reporting that China Telecom (HKEx: 728; NYSE: CHA), the most aggressive of China’s 3 mobile carriers in the 3G space, has finally reached a deal to begin selling Apple’s (Nasdaq: AAPL) iPhone 4S on its network, with sales likely to begin sometime in the first quarter, possibly as soon as February. (English article; Chinese article) Talks for this deal have been going on for months and reported frequently in the media, and the debut would be at least a month behind the official iPhone 4S launch in China by one of the nation’s other carriers, China Unicom (HKEx: 762; NYSE: CHU) earlier this month. Still, the latest news was apparently enough to spook investors, with Unicom stock shedding 5 percent in Monday in Hong Kong trade and falling even more in overnight trade in New York. Apple’s iPhones are extremely popular in China, and security concerns over long lines at one Beijing Apple store actually led it to cancel its plans to sell the phone there earlier this month, resulting in some mild skirmishes. (previous post) That fact, combined with China Telecom’s generally aggressive approach to 3G, clearly has investors excited that China’s smallest mobile carrier will be able to further boost its momentum in the 3G space to take even more market share from Unicom and China Mobile (HKEx: 941; NYSE: CHL), the nation’s largest mobile carrier. China Telecom saw its share of China’s 3G market zoom to 28 percent by the end of 2011 from just 19 percent when the year began, as it took advantage of inferior technology at China Mobile and management missteps at Unicom to steal share from both of its rivals. The gains have brought China Telecom to within spitting distance of Unicom, whose 3G market share now stands at about 30 percent. If the iPhone deal finally does happen, which looks likely, and a launch occurs in February or March, I wouldn’t be at all surprised to see  China Telecom’s 3G share pass Unicom’s by the middle of the year, making China Telecom the company to watch in 2012.

Bottom line: China Telecom’s imminent launch of the iPhone 4S on its 3G network could help to propel it past Unicom to become China’s second biggest 3G carrier by the middle of this year.

Related postings 相关文章:

◙ Google, Apple OS Rivalry Intensifies 苹果与谷歌在华智能手机战白热化

◙ China Telcos In New Drives at Home, Abroad 中国三大电信运营商海内外发力

◙ 2011: China Unicom’s Lost Year 中国联通失落的一年

Groupon.cn Becomes 2012 First Group Buy Victim 团宝网员工被放假 中国团购业料将加速整合

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While recently listed Groupon (Nasdaq: GRPN) struggles with a tough group buying market in its US home base, one of its Chinese copycats, Groupon.cn, may be facing an even grimmer future as a much-needed cleanup of the ultra-competitive China market continues. Chinese media are reporting that Groupon.cn, which has no relationship with the US Groupon, has told most or all of its staff to stay on extended vacation following the end of the weeklong Chinese Lunar New Year holiday that ended on Sunday. (Chinese article) It also says a group of Groupon.cn’s partners are preparing to sue the company, presumably because it failed to pay them for their products that it offered for sale on its group buying site. Groupon.cn has denied the reports through a Weibo microblog posting, saying all of its activities have returned to normal since the end of the Lunar New Year holiday. Of course it’s possible the Chinese media reports are exaggerated, but I’m inclined to believe there’s at least an element of truth to them considering the disarray and rampant competition in the China’s group buying space. Gaopeng, the group buying  joint venture between the real Groupon and Chinese Internet giant Tencent (HKEx: 700), struggled during most of its first year of business last year, laying off hundreds of employees in the process. (previous post) Meantime, LaShou, China’s largest group buying site, is in the midst of trying to make a New York IPO that is showing few if any signs of moving forward after the securities regulator asked for more information, reportedly over concerns about some of its accounting. (previous post) Other signs of turmoil also emerged in the second half of last year, including layoffs at another top player 55tuan, giving this latest report about problems at Groupon.cn even more credibility. I would look for more headlines on this company once the situation becomes clearer, as it won’t be able to hide massive layoffs for too long if they really are happening. Perhaps the company will even sell itself to a rival, though such deals are relatively rare in China due to the big egos of bosses who hate to give up control of their businesses. Meantime, this development looks like the latest sign of distress for an overheated industry that is set for a major clean-up in 2012.

Bottom line: Reports of woes at Groupon.cn mark the latest phase in a cleanup for China’s overheated group buying space, which will see a major acceleration this year.

Related postings 相关文章:

◙ LaShou IPO Derails

◙ Latest Group Buying Turmoil Shows Up at 24quan, Meituan

◙ Lashou Files For IPO, Launching Race With 55tuan 拉手网与窝窝团打响IPO竞争战

Sany and Yingli Take Different German Tacks 三一重工和英利的德国交易或前景迥异

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I’ll start off today with a couple of news bits from Germany, one from the industrial equipment sector where Sany Heavy Industry (Shanghai: 600031) has made a major acquisition, and the other from the solar sector where Yingli (NYSE: YGE) has made a major sale. These 2 deals don’t really have much in common beyond the fact that both are in Germany, but for me the former illustrates a dubious approach for Chinese firms that want to enter Europe’s largest market, while the latter looks much more prudent. The first deal will see Sany acquire Putzmeister Holding, a concrete pump maker, in a purchase both companies say is the largest ever for a Chinese firm in Germany. (English article) The fact that they don’t give a price leads me to believe Sany didn’t give much cash for this deal, but rather is going to assume a big debt load for a company that may be marginally profitable or is more likely losing money. That would follow a pattern by other Chinese companies in Western Europe, including TCL’s (Shenzhen: 000100) purchase of the TV assets of France’s Thomson and the purchase of Siemens’ cellphone business by Taiwan’s BenQ, both of which ended in complete disasters and nearly drove their acquirers to financial ruin. In this case Sany looks equally unprepared for such a purchase, especially dealing with Germany’s tough labor laws and unions, and I see bad things ahead for both companies. In the other deal, Yingli has signed a deal to sell up to 200 megawatts worth of solar modules to a German company, IBC Solar AG, including 180 megawatts in 2012 alone. (company announcement) This kind of deal is of course much more traditional, involving a simple sale of products that has much less risk involved than the M&A approach being used by Sany. It also comes as Germany prepares to cut back many of its government incentives for installation of new solar projects, and looks like Yingli and IBC are racing to take advantage of some of those incentives while they can. (previous post) My final comment on these deals would be: Nice job on a big sale for Yingli, and, Look for stormy weather ahead, Sany.

Bottom line: Sany’s purchase of a German firm will see numerous problems in the next 2 years, while Yingli’s latest German sale looks like a major deal before government incentives are reduced.

Related postings 相关文章:

◙ LDK’s German Buy: Two Losers Combine 赛维LDK收购Sunways将使前者境况雪上加霜

◙ More Turbulence For Alternate Energy

◙ Year End Brings Problematic New IPO Wave 中国新一波IPO潮或无法达预期效果

Baidu’s Silence: Shortfall Ahead? 百度低调发财报：或开始下坡路？

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I certainly don’t think of myself as a believer in conspiracy theories, but I have to say I was a bit surprised to read several reports over the weekend saying that leading search site Baidu (Nasdaq: BIDU) was going to report its fourth quarter results on Monday US time and can’t help but wonder if there’s a bigger story here. (English article; Chinese article) Let’s backtrack a bit and review what exactly happened, or in this case what didn’t happen. Most importantly, Baidu has made no public announcement of its plan to release its latest earnings, even though numerous websites have clearly learned of its intent based on all the reports. The company usually puts out an announcement via PRNewswire around 3 weeks ahead of its earnings date, which is notably absent this time on both the PRNewswire site and Baidu’s own investor relations site. What’s more, the date isn’t even marked on Baidu’s own investor relations calendar, even though quarterly reports are clearly one of the most important events for publicly listed companies, especially ones like Baidu whose revenue and profits  keep growing by very attractive rates even as companies in other sectors stumble. This time is no different, with analysts looking for Baidu’s top and bottom lines to grow by more than 80 percent. The timing of this announcement also looks a little odd, as it comes on the first day of the new work week after most of China took off the previous week for the Lunar New Year holiday. The last time someone tried to do something like that was last fall, when B2B e-commerce leader Alibaba.com (HKEx: 1688), which is listed in Hong Kong, quietly announced its less-than-stellar results on the US Thanksgiving Day holiday when many people had just started a 4-day vacation. (previous post) Of course I should also point out that Baidu released its fourth-quarter results at just about the same time last year, and the odd timing could just owe to the fact that the Lunar New Year fell quite early this year. It’s also possible that Baidu simply just forgot to send out a notice about its latest reporting date, and also forgot to include it on its investor relations calendar. In fact, one research house said it talked recently to Baidu management, which was confident of meeting expectations for its results. Still, I can’t help but wonder if we’ll perhaps see the beginning of the slowdown for this company that I predicted around the middle of last year (previous post) and seems all but inevitable, if not now then later this year.

Bottom line: Baidu’s low-profile approach to its latest earnings due out on Monday US time could signal a downside surprise, as its booming ad sales finally start to slow.

Related postings 相关文章:

◙ Advertising Squeeze Continues, Slowdown Looms 广告支出初显放缓迹象

◙ Baidu, ZTE Earnings: More of the Same 百度和中兴财报：看上去没变化

◙ Search Wars Heat Up With Latest Anti-Baidu Moves 中国网络搜索战升温

 

Twitter Eyeing China? Twitter想进中国？

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The world was buzzing over the weekend with news from the world’s 2 biggest social networking sites, Facebook and Twitter, with implications not only for themselves but also the China market in different ways. Twitter’s move was the more interesting in that regard, as it announced a new policy that could let posts on its site be seen in some markets but not others — a move that could clearly make it more viable in places like China where many sensitive topics are officially banned for online discussion. (Chinese article) Meantime, the markets were also buzzing with word that Facebook could file for its highly anticipated IPO this week, news that got investors excited about China SNS sites, with shares of both Renren (NYSE: RENN) and Sina (Nasdaq: SINA), operator of the wildly popular Weibo service, both posting nice gains on Friday. But let’s return for a moment to Twitter, as that’s the news that has the biggest potential to shake-up China’s microblogging sphere now dominated by Weibo. Anyone who lives in China knows that both Twitter and Facebook have been blocked in the market since the spring of 2009, presumably because they operate offshore and thus aren’t subject to China’s strict self-censorship laws for all of its websites. Facebook has signaled a number of times it still intends to make a play for China (previous post), with founder Mark Zuckerberg visiting China about a year ago and saying he wants to visit again as clearly the market is a critical piece of any global Internet strategy. Twitter has been much quieter on the subject, without ever really saying what its future plans are for the market now dominated by Weibo, which has around 250 million users. This latest adjustment at Twitter looks clearly aimed at the China market, as it would ease Chinese regulators’ concerns about the service’s ability to keep unwanted posts from outside markets off the site. Still, I’m not totally convinced Twitter has its eye on China just yet, mostly because Weibo itself has struggled to make any money in the market, despite its incredible popularity. Furthermore, anyone who plays in China SNS will now have to deal with Beijing’s recently announced real-name registration system, which will not only put a big burden on the SNS services themselves but is likely to deter many web surfers who like to remain anonymous. On the whole, I suspect this move by Twitter may be designed to test the China waters and will be followed by a visit to Beijing to see what regulators think. If the reaction is positive, I wouldn’t be surprised to see Twitter taking some kind of modest initiative in China by the end of this year, though it will face a difficult road catching up to Weibo.

Bottom line: Twitter’s latest policy shift allowing market-specific content controls could signal it is considering a move into China, which could come by the end of this year.

Related postings 相关文章:

◙ Despite China Rebuff, Facebook Going Back for More Facebook明知山有虎，偏向虎山行

◙ Cleanup Resumes, Facebook Sniffs Out China Investors 在美上市的中国企业将继续面临“大清洗”

◙ Weibo Gets Confidence Vote From Digital Sky DST投资消息或提振新浪短期前景