The following press releases and media reports about Chinese companies were carried on December 15-17. To view a full article or story, click on the link next to the headline.
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- Regulator: Amazon (Nasdaq: AMZN) China’s Kindle Store Violates Regulations (English article)
- US Drops China’s Alibaba’s Taobao, Sohu’s (Nasdaq: SOHU) Sougou From ‘Notorious’ List (Chinese article)
- iPhone 5 Gets Chilly China Reception, Apple (Nasdaq: AAPL) Shares Drop 3.8 Pct (Chinese article)
- Sina (Nasdaq: SINA) COO Du Hong to Become CEO – Source (Chinese article)
- Huawei’s US-Based Telecoms Infrastructure Unit Cuts More Than 100 People (Chinese article)
Global e-commerce giant Amazon (Nasdaq: AMZN) was decidedly low-key in the launch last week of its Kindle bookstore in China, and now perhaps we know why. Just days after Amazon formally opened the store on its China site selling books for its Kindle tablet PCs, media are reporting the government agency that regulates the publishing industry has said Amazon’s new store violates Chinese regulations, implying the store may have to close until the situation gets sorted out. Whether or not such a closure, if it comes, would be temporary or permanent remains to be seen, though I think it would probably be temporary. But this case does once again underscore the regulatory risk of doing business in China, where numerous government agencies often oversee specific industries and anyone who operates needs to take care to keep all those regulators happy.
Chinese e-commerce leader Alibaba and web portal Sohu (Nasdaq: SOHU) won a major victory last week when web sites operated by both were removed from an annual US list of companies that facilitate rampant piracy. The victory came after both firms made efforts to aggressively police their sites and quickly remove any pirated or counterfeit materials. While the companies should be commended for their effort, the achievement came with an important footnote that shows there is still work to be done.
Cellphone chipmaker Spreadtrum (Nasdaq: SPRD) and solar panel maker LDK (NYSE: LDK) are both using good news as a smokescreen to draw attention away from bigger bad news, with the former announcing a new dividend and the latter a minor victory in a business dispute. In both cases, each company is grappling with much bigger problems that have caused their share prices to sag as investors lose interest in their tarnished growth stories. In LDK’s case the situation is much worse, with the company essentially being supported by the government as it teeters on the brink of insolvency.
Let’s close out the week with a look at a few developments in the mobile space, including news of a pending crackdown on applications developers that looks quite counterproductive, along with word of layoffs at mobile services pioneer Sina (Nasdaq: SINA). I’ll wrap things up with a look at the hot new location based services (LBS) space, where a company called Jiepang is teaming up with Starbucks (Nasdaq: SBUX) for a promotion that underscores the big growth potential of this new kind of service. All of these tidbits underscore the huge growth potential of China’s mobile services space, which has spawned a huge range of new products but also a somewhat unruly marketplace where competition has also become fierce.
Several e-commerce items are in the headlines today, including Google’s (Nasdaq: GOOG) latest retreat in China as it shutters its Chinese online shopping search service. At the same time, domestic players Jingdong Mall and Suning are continuing their aggressive expansion, with the former pouring big new money into cloud-based services as the latter launches a major initiative based in its new chain of brick-and-mortar superstores. The common theme to all of these news bits is that e-commerce remains an incredibly competitive business in China, and is likely to remain that way for at least the next year or 2 until cash-rich companies fighting for supremacy in the space finally tire of losing massive amounts of money.
In writing this blog, I generally try to keep my own views muted and focus instead on the latest news and what it means for the companies involved. But I’m making one of my occasional exceptions to that rule today to say that the US really should go ahead and approve the sale of bankrupt battery maker A123 Systems to a Chinese company, since this deal seems to have few if any national security implications and blocking it would send a bad signal about Washington’s commitment to fair trade.
China’s solar panel industry is starting to look more and more like a beggar kneeling on the doorstep of Beijing, with the latest word that the central government is preparing to hand out an additional $1.1 billion in subsidies to the struggling sector. That news comes just after a government official was quoted saying Beijing is considering a plan to double its already ambitious target for a massive building spree of new solar electricity plants, again in a bid to support the struggling sector.
