Qihoo’s Co-CFO: New Storm Clouds? 奇虎360财务疑云未散

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Controversial Internet software maker Qihoo 360 (NYSE: QIHU), accused by some of inflating its user data, has just announced some nice new figures that show a big jump in first-quarter sales tempered by a forecast for slowing growth in the current quarter. But what caught my attention in the report was the more unusual announcement that the company is appointing a new “co-CFO”, a title which I have never heard before and a move that, for me at least, increases my suspicions that perhaps there may be some truth to claims of exaggerated accounting. Let’s take a quick look at the actual results, as investors seem to be focused on that element of the report, with Qihoo saying its revenue tripled in the first quarter to $69.3 million, as it swung back to a profit after reporting a net loss a year earlier. (earnings announcement) But it also predicted a sharp slowdown in its top-line outlook, with revenue growth expected to slow to just 100 percent, not a bad figure on the surface but still about half the 200 percent rate it just recorded. Investors seem to be focused on the big revenue growth and return to profits, bidding up Qihoo shares nearly 5 percent during regular-hours trade on Tuesday in New York before the results announcement came out. Shares also rose another 4.5 percent in after-hours trade after the report came out. But below all the pretty numbers, the company near the bottom of its report also announced it is promoting its vice president of finance, Jue Yao, to the new position of co-CFO, sharing the role with the current CFO Alex Xu, citing its rapid business expansion for the move. I should at least credit Qihoo for being relatively transparent about this move, as the only reason I even noticed it was because they included it in the headline of their earnings report. At the same time, this kind of move involving a high-ranking financial official at a company is always a bit of a red flag that perhaps something is happening behind the scenes that the company would prefer investors didn’t know about. In Qihoo’s case, the company has already been living beneath a cloud for the last half year, following the release of a report by a short seller named Citron last fall claiming that many of the company’s figures were vastly overstated. (previous post) Qihoo’s shares largely survived that attack, even after Citron issued another report repeating its allegations. But then early last month Forbes magazine published its own article also questioning several of Qihoo’s numbers, again strongly implying that the company’s accounting might be exaggerated and that its accountant, Deloitte, would probably pay extra scrutiny to Qihoo’s records in upcoming audits. (previous post) Unlike the Citron report, the Forbes article seemed to carry a bit more credibility since the magazine wasn’t trading in Qihoo shares. But Qihoo strongly denied any wrongdoing, and its share are right now at around the same level where they were before the first Citron attack. This new co-CFO announcement looks to me like something is indeed happening behind the scenes, though I don’t want to speculate what. But I do feel fairly confident that the Qihoo accounting story isn’t over just yet, with 1 or 2 major new developments likely in the next 3-4 months.

Bottom line: Despite an upbeat earnings report, Qihoo 360’s naming of a new co-CFO could indicate an ongoing saga of allegations of exaggerated accounting isn’t over yet.

Related postings 相关文章:

◙ Qihoo: The Next Accounting Victim? 奇虎360：下一个会计丑闻受害者？

◙ Qihoo 360 At Center of New Scandal 奇虎360陷入新的丑闻

◙ Deloitte, SEC Butt Heads As China Looks On 我觉得“德勤与美国证券交易委员会在中国公司问题上的冲突

China 3G: Entering Slow-Growth Phase? 中国3G：进入缓慢增长阶段？

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After a year of rapid growth for China’s young 3G mobile networks, the nation’s 3 carriers have suddenly slowed down their addition of new subscribers, perhaps tiring of aggressive promotions that have hurt profits and signaling a new slower growth phase for high-speed wireless services. The slowdown in addition of new 3G subscribers during April surprised me a bit, as China Mobile (HKEx: 941; NYSE: CHL), China Unicom (HKEx: 762) and China Telecom (HKEx: 728; NYSE: CHA) all seem to have decided at the same time to rein in their new sign-up efforts, according to the latest monthly data from the 3 companies. (Chinese article) According to Chinese media reports that have analyzed the latest numbers, new monthly 3G subscribers in April at China Telecom and China Mobile were the lowest for both carriers this year. April additions at Unicom were also the second lowest monthly total this year, behind only the traditionally slow month of February. The drop for China Mobile was quite dramatic, falling to just 2.3 million new subscribers in April from figures closer to 2.7 million or higher in previous months. Likewise, China Telecom, the most aggressive of China’s 3G carriers in 3G, added just 2 million new 3G subscribers in April, well below the 2.4 million it was averaging in each of the first 3 months of this year. It’s probably still too early to say if this sudden slowdown marks the beginning of a new trend, especially since April contained the 3-day Qing Ming holiday that may have dampened sales somewhat. But I suspect this slowdown could turn into a trend in the summer months ahead and perhaps all the way through to the fall, as the 3 carriers take a rest from aggressive 3G promotions that have helped them to quickly gain new subscribers but have cost them on their bottom lines. China Telecom has been the most aggressive in 3G, spending heavily to promote the service with bit subsidies and a recent deal to offer Apple’s (Nasdaq: AAPL) iPhone on its network. Those heavy promotions took a toll on the company’s bottom line, with China Telecom’s profit falling 6.5 percent in the first quarter, as the company largely blamed its aggressive 3G strategy for the unexpectedly big decline. (English article) China Mobile had been less aggressively promoting its 3G, largely due to problems with its network that is based on a homegrown Chinese technology called TD-SCDMA. But the company was showing recent signs of becoming more aggressive following the recent retirement of its long-serving chairman Wang Jianzhou, with its new leadership restarting talks to develop an iPhone for its 3G network. (previous post) Unicom had also been less active last year due to a series of management shuffles, but was also showing signs of becoming more aggressive this year. I suspect that this slowdown will probably last for at least the next 3 months, with China Telecom in particular wanting to show investors some better profit figures for the current quarter. But when fall comes, look for the competition to heat up again, especially as all 3 carriers rush to meet aggressive annual targets set by the telecoms regulator. (previous post)

Bottom line: The latest data show a sudden slowdown in 3G promotions by China 3 telcos, which will probably last until the fall.

Related postings 相关文章:

◙ China Mobile Nears iPhone Deal 中国移动引进iPhone在即

◙ China Telecoms Regulator Plays 3G Target Games 工信部制定3G目标

◙ China Telecom Turns Up Volume in 3G Drive 中国电信计划一鼓作气 3G市场欲再下一城

News Digest: May 23, 2012 报摘： 2012年5月23日

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The following press releases and media reports about Chinese companies were carried on May 23. To view a full article or story, click on the link next to the headline.

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◙ Microsoft’s (Nasdaq: MSFT) MSN China to Launch E-Commerce Business (English article)

◙ Qihoo 360 (NYSE: QIHU) Reports Q1 Unaudited Financial Results, Appoints Co-CFO (PRNewswire)

◙ Nissan (Tokyo: 7201) Aiming For 10 Percent of China Luxury Car Market (English article)

◙ China 3G Users Reaches 159 Mln, New Subscribers Hits New Low in April (Chinese article)

◙ Camelot Information Systems (NYSE: CIS) Announces Unaudited Q1 Financial Results (PRNewswire)

Wanda’s AMC Buy: The Show Isn’t Over Yet 万达并购美国AMC影院：表演还未结束

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The headlines are buzzing today with word that China’s leading theater chain operator Wanda Group has agreed to buy struggling US chain AMC Entertainment, calling it a landmark cultural exchange for Chinese firms expanding overseas. But to those applauding the deal, I would quickly caution not to celebrate just yet, as I see a greater than 50 percent chance that the sale will never close due to opposition from US politicians in this presidential election year. Let’s look at the deal first, which looks benign enough and was actually first reported 2 weeks ago when talks were in advanced stages. (previous post) Under their agreement, Wanda will buy struggling AMC from its current private equity owners for $2.6 billion, in what foreign media are calling the largest ever buyout of a US company by a Chinese one. (English article) Chinese media are noting the deal comes just a week after Rupert Murdoch’s News Corp (Nasdaq: NWSA) agreed to buy 20 percent of Bona Film (Nasdaq: BONA), a leading Chinese film distributor, implying the doors are opening in both directions to cross-border investment in the sensitive media and entertainment sectors. But anyone who follows Chinese investments in the US will know that US politicians love to get involved in anything even remotely sensitive, and that is even more likely to happen in this election year as candidates look for votes by portraying themselves as tough on China. That kind of grandstanding has led to problems mostly in the telecoms space so far, with China Mobile (HKEx: 941; NYSE: CHL), Huawei and ZTE (HKEx: 763; Shenzhen: 000063) all running into recent obstacles in their attempts to expand in the US. Politicians have also attacked the banking regulator for recently allowing several of China’s top banks to set up branches and make small acquisitions in the US for the first time, again reflecting how candidates are seizing on fears of these kinds of Chinese investments to raise their profiles. (previous post) Considering that movies are such a central part of American culture and that movie theaters are clearly a part of that picture, I could very easily see politicians raising objections to this latest deal, questioning the wisdom of letting such an important company into Chinese hands. Never mind that AMC and the theater industry in general are struggling due to tough competition not only from other theaters, but also from DVDs and newer products that let people watch and download movies over the Internet. The politicians won’t care about any of that, and they probably won’t care if AMC goes bankrupt in the end because no other company wants to buy it. All they will care about is looking tough against China in order to gain votes. All that said, I predict we will hear the first political objections to this deal within 2 weeks and potentially much sooner, and that all the negative publicity will give the deal a greater than 50-50 chance of ultimately collapsing, to the benefit of no one except the politicians.

Bottom line: The planned purchase of struggling US theater chain AMC by a Chinese buyer is likely to collapse due to objections from vote-seeking US politicians.

Related postings 相关文章:

◙ Welcome to the US Dollhouse, China Mobile 中移动和万达进军美国料将失败

◙ News Corp Makes New Play for China 新闻集团入股博纳影业集团

◙ Disney, Tencent Tie-Up to Animate China 迪斯尼、腾讯合作研发动漫

Alibaba Buyout: Finally Something for Investors 阿里巴巴筹资为机构投资者提供良机

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E-commerce leader Alibaba’s long-awaited announcement that it will buy back 20 percent of its shares from Yahoo (Nasdaq: YHOO) is finally offering investors something they haven’t seen in a long time: A new chance to buy into a Chinese Internet firm that actually earns money. Unfortunately for most investors, they won’t have a chance to buy into the company anytime soon, as Alibaba is likely to sell most of its recently repurchased shares to big institutional buyers willing to fork over a minimum of tens of millions of dollars and more likely hundreds of millions of dollars for a piece of China’s top e-commerce company. But smaller institutional and retail investors could also get their opportunity in the not too distant future, with word that the buyout deal announced earlier this week provides strong incentives for Alibaba to make its own IPO by the end of next year, a deal that could help to return some excitement to the struggling market for Chinese Internet stocks. Just a day after announcing its landmark buyback, Alibaba is reportedly already in talks with a number of institutional buyers who want to purchase some of the stake, including Singapore’s massive sovereign wealth fund Temasek, which wants to invest some $500 million, according to a Chinese media report. (Chinese article) That kind of investment wouldn’t come as a surprise at all, as Temasek has always been particularly bullish on China, with a special interest in companies that are leaders in their spaces. Earlier this month Temasek purchased a major stake in ICBC (HKEx: 1398; Shanghai: 601398) for $2.5 billion, picking up shares that were being sold off by Goldman Sachs (NYSE: GS). (previous post) I would expect to see other major financial investors, including other sovereign wealth funds, insurance companies and pension funds, buying into Alibaba in these latest talks, with a probable minimum investment of $100 million each. On the other hand, don’t look for any new strategic investors like Yahoo to sign on in this new round of stake sales. That’s because Alibaba’s founder Jack Ma seems determined to run his own show and, based on his unhappy experience with Yahoo, doesn’t want strategic investors looking over his shoulder and offering suggestions. But while strategic investors may be out, Alibaba is clearly aggressively courting the financial investors, seeking to quickly sign them up to help it pay off the billions in debt it is assuming to buy back the Yahoo stake for a total of $7.1 billion. The company already counts such big names as Japan’s Softbank and Russia’s Digital Sky Technologies among its current investors, and will no doubt be looking for more high profile names to raise its own profile. While anyone with less than $100 million is unlikely to get a stake in this latest fund raising round, there should still be plenty of opportunity to buy into Alibaba for smaller investors if it moves ahead with an expected plan for an initial public offering by the end of next year. Such an offering could come as a big boost for Chinese Internet stocks in general, which were once investor darlings but have become pariahs over the last year due to a series of accounting scandals. Investors have also grown increasingly intolerant of Chinese web companies that are losing money, which describes the big majority of firms to list over the last 2 years. An Alibaba IPO would address both of those issues, providing a company with reliable accounting due to its relatively long history and major foreign investors, as well as a company that is highly profitable. From a broader market perspective, an Alibaba IPO will be good for the market by offering a quality company with strong long term prospects both at home and abroad. But on the downside, that offering won’t come for at least a year, meaning the broader market for China Internet companies could remain in the doldrums for quite some time unless another exciting offering comes along.

Bottom line: Alibaba’s new capital raising will offer good opportunities for institutional buyers, and an IPO as soon as next year could return some excitement to the weak market for China Internet stocks.

Related postings 相关文章:

◙ Yahoo, Alibaba in Slow-Motion Divorce 雅虎和阿里巴巴踏上漫漫离婚路

◙ Alibaba-Yahoo Buyout: Back to Square One 阿里巴巴股权回购重回起点

◙ Alibaba’s Yahoo Buyback: Deal Finally Near? 阿里巴巴回购雅虎所持股权可能为期不远

Tencent E-Commerce: Another Money Loser IPO 腾讯电商：将又一个失败的

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I was amused to read this morning that Internet titan Tencent (HKEx: 700) may choose its money-losing e-commerce platform for its first IPO, following its recent reorganization into 6 business units to allow each of those areas to sink or swim by themselves. The reports are a bit unclear about the timing of a potential IPO, and indeed say that such an offering is just one possibility for the newly formed unit as it seeks to raise more money to eventually create a broader e-commerce platform, presumably similar to Alibaba’s highly successful TMall. (English article) If that’s the case, I hope that executives are reading the newspapers these days, as investor appetite for money-losing Chinese Internet IPOs is extremely low these days and showing no signs of improving anytime soon. The only company to make an overseas Internet IPO this year so far has been Vipshop (NYSE: VIPS), a money-losing discount retailer, and that was a complete disaster. Other potential offerings from Shanda’s online literature unit, called Cloudary, and leading group buying site LaShou have all been delayed or disappeared completely, although Shanda appears to be moving ahead with its offer after its surprise disclosure that Cloudary recently turned profitable. (previous post) In terms of Tencent’s e-commerce business, it seems to me like the unit’s biggest asset is the Tencent name itself, since Tencent is clearly China’s biggest Internet firm and its leading player in online games and instant messaging. On the other hand, Tencent has had much less success in areas like e-commerce, which rely on an older, more cash-rich demographic of users unlike games and its instant messaging that tend to draw people in the 15-25 year old age range. Tencent’s newly formed e-commerce unit contains its older Paipai online auctions business, also known as C2C, along with a more recently established B2B platform that I’ve never heard of. The unit’s new head says that one of its strengths is its strong social networking element, which presumably helps to create a community among online buyers. Social networking is certainly one of Tencent’s strengths, but I doubt whether its core base of young users, with their low consuming power, would be very attractive to most e-commerce sellers. All that said, I wouldn’t expect to see Tencent make an IPO for this new e-commerce unit anytime soon due to the current frosty market. If I were advising Tencent founder Pony Ma on how to proceed, I would tell him to make an IPO first for one of the company’s more successful units, such as its social networking or online games business, which would certainly create a bit more excitement among investors. But if e-commerce does go first in the march to market for these new little Tencents, look for weak investor interest and a stock that probably won’t go anywhere but down after its trading debut.

Bottom line: Tencent’s spin off and potential IPO for its money-losing e-commerce unit looks like a poor choice for its first IPO following its recent reorganization.

Related postings 相关文章:

◙ Tencent: Preparing for Breakup? 腾讯或为分拆铺路

◙ Shanda Cloudary Wows Investors With Profit 盛大文学利润令投资者惊叹

◙ Tencent in Monopoly Spotlight; Baidu Next? 腾讯被诉垄断 下一个是百度吗？

News Digest: May 22, 2012 报摘： 2012年5月22日

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The following press releases and media reports about Chinese companies were carried on May 22. To view a full article or story, click on the link next to the headline.

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◙ Alibaba Already in Fund-Raising Talks, Temasek to Invest $500 Mln – Source (Chinese article)

◙ China’s Wanda to Buy AMC Cinema Chain for $2.6 Billion (English article)

◙ Tencent (HKEx: 700) E-Commerce Subsidiary May IPO (English article)

◙ China Mobile (HKEx: 941) Spends 193 Bln Yuan Over 3 Years to Commercialize TD-SCDMA (Chinese article)

◙ China Mobile Subscribers Rise 1.1 pct to 1.02 Bln in April (English article)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)

China Approves Google’s Motorola Buy 中国批准谷歌收购摩托罗拉

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I have to admit that perhaps I was wrong in my initial skepticism about Beijing’s motivations in repeatedly delaying approval for Google’s (Nasdaq: GOOG) purchase of Motorola Mobility (NYSE: MMI), speculating that its foot-dragging might have been motivated by political factors. (previous post) But now that the anti-monopoly regulator has finally approved the deal, I feel like I should actually congratulate it for addressing an important concern that was probably the real source of the delays, namely the potential that Google might give Motorola phones preferential treatment for its Android smartphone operating system at the expense of other major handset makers who also rely heavily on the popular OS. The long-awaited approval, which was delaying closure of a $12.5 billion deal first announced last August, finally came after Google agreed to conditions required by the Chinese regulator aimed at making sure that Android remains open and free to everyone, and that Google treats all cellphone makers who chose to use the operating system equally. (English article) I’ll be the first to admit that my first reaction to most actions by China’s anti-monopoly regulator is one of skepticism, since it has a history of allowing political considerations into its decisions that are largely unrelated to its main mission of ensuring that major M&A deals don’t harm market competition. The regulator’s bias was on glaring display in 2009, when it vetoed Coca Cola’s (NYSE: KU) plan to buy leading domestic juice maker Huiyuan (HKEx: 1886), citing monopolistic concerns even though most observers believed that Beijing simply didn’t want to see the promising domestic brand swallowed up by a foreign company. The regulator seemed to be changing its ways last year when it approved the purchase of another promising Chinese brand by a foreign name, in this case allowing Yum Brands (NYSE: YUM), operator of the KFC and Pizza Hut chains, to buy Little Sheep, operator of China’s largest hot pot restaurant chain. (previous post) The delays behind this latest approval of Google’s purchase of Motorola look like a smart move to me, aimed at addressing the very real concern by many of Android’s users that they might lose access to the OS if Google gives preferential treatment to Motorola. The major regulators in the US and Europe were unlikely to focus on this particular concern, since most of the major cellphone makers that use Android are based in Asia, such as Taiwan’s HTC (Taipei: 2498) and Korea’s Samsung (Seoul: 005930). A growing number of Android users are also in China, most notably Huawei and ZTE (HKEx: 763; Shenzhen: 000063), which are 2 of the world’s fastest growing players in the smartphone space. Thus the regulator was clearly addressing very real concerns from these and other domestic smartphone makers about becoming second-class Android citizens after a Google-Motorola merger, hence the regulator’s decision to impose its conditions. At the end of the day I’m quite encouraged by this action, and increasingly confident that we’ll see more decisions from the regulator based on market concerns rather than political considerations.

Bottom line: China’s long-delayed approval of Google’s Motorola purchase was due to real anti-competitive concerns, and reflects growing maturity at the Chinese regulator.

Related postings 相关文章:

◙ Huawei-Motorola Rumors Look Logical 华为收购摩托罗拉手机业务传言看似合情合理

◙ Google Tussles With China on Motorola 延迟批准摩托罗拉移动交易 中国政府对谷歌仍心存芥蒂

◙ Little Sheep Gets Swallowed: Good for Yum, Good for China M&A 小肥羊被收购对百胜和中国是双赢

Yahoo, Alibaba in Slow-Motion Divorce 雅虎和阿里巴巴踏上漫漫离婚路

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UPDATE: Since writing this post this morning, Alibaba and Yahoo have announced an actual deal, whose terms are largely the same as those described below. Congratulations to both sides for finally reaching a deal!

It looks like I was wrong in predicting that the latest shake-up at the top of Yahoo (Nasdaq: YHOO) might derail its advanced discussions to sell back some or all of its stake in Alibaba to the Chinese e-commerce leader, with media now reporting that a deal is imminent that looks smart for Yahoo but also somewhat messy. To recap quickly, Alibaba has been trying for more than a year to buy back the 40 percent of itself that Yahoo purchased in 2005 when the 2 sides thought they could become good strategic partners. That relationship never really materialized and the situation became rather acrimonious instead, leading the 2 sides to pursue their divorce with talks that began last fall. After a false start due to unrealistic expectations by both sides, talks resumed a couple of months ago and it looked like the 2 sides might finally reach a deal. But then recently named CEO Scott Thompson abruptly had to resign last week after false claims were discovered in his resume, prompting me to say the departure could derail any progress in the latest buyback talks. (previous post) Now it seems the buyback talks must have been far more advanced than I realized, and that the Yahoo board wants to conclude a deal to give as a present to the new CEO who will eventually fill the spot vacated by Thompson’s abrupt departure. Media are saying that under the deal that could be announced as early as later today, Yahoo would only sell back half of its current Alibaba stake, or about 20 percent of the company for $7 billion, and retain the remaining 20 percent for the moment. Alibaba would then pursue an IPO in the next 18 months, at which time Yahoo would sell down half of its remaining stake, or about 10 percent of Alibaba, into the offering. (English article) Yahoo’s motivation for structuring the deal this way is relatively clear, though it looks a bit messy to me from Alibaba’s perspective. But Yahoo is clearly in the position of strength in these discussions since it’s the one holding the 40 percent Alibaba stake, and thus Alibaba has limited leverage to get what it wants out of a deal. From Yahoo’s perspective, the initial sale of 20 percent will instantly give it a nice cash infusion of $7 billion, and also show the world that its remaining Alibaba stake is worth another $7 billion or more, valuing Alibaba itself at a tidy $35 billion. That could help to quickly boost Yahoo’s laggard shares, which now value the company at just $18 billion, by boosting expectation that the company could soon use its new cash infusion to pay a dividend. What’s more, Yahoo could get more cash for future dividends if Alibaba can boost its valuation by the time of its IPO, which looks likely as the company is China’s e-commerce leader and most of its businesses are quite profitable. From my personal perspective, this deal doesn’t look too attractive since I really think these 2 companies need to get completely divorced, the sooner the better, so that each can move ahead with developing its business without unneeded distractions. But since neither Yahoo or Alibaba is asking me what I think, we’ll just have to proceed with this slow-motion divorce and eagerly await the day when these 2 companies with a stormy past finally complete their separation once and for all.

Bottom line: Yahoo’s imminent signing of a buyback deal with Alibaba looks like the beginning of a long and potentially messy divorce that will mostly benefit Yahoo.

Related postings 相关文章:

◙ Alibaba-Yahoo Buyout: Back to Square One 阿里巴巴股权回购重回起点

◙ Alibaba’s Yahoo Buyback: Deal Finally Near? 阿里巴巴回购雅虎所持股权可能为期不远

◙ Alibaba, Yahoo: The Never-Ending Story 阿里巴巴股份回购“马拉松”再现曙光

Passive Beijing Blasts New US Solar Tariffs 中国炮轰美高关税不实用 解决太阳能产品纷争需更主动

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Beijing issued a predictably defiant statement late last week after the US announced unusually tough punitive tariffs in an ongoing dispute over what it considers unfair government support for China’s solar panel industry. (English article) Rather than sit back and wait to react in this and other similar disputes, China needs to adopt a more proactive approach by taking steps to address its trading partners’ concerns, which usually involve generous levels of state support for Chinese companies. The latest development in the US-China trade dispute over solar panels came late last week, when the US Department of Commerce recommended punitive tariffs of between 30-250 percent for imported Chinese panels. (previous post) That recommendation surprised many, as just two months earlier the Obama administration had recommended much milder punitive tariffs of 3-5 percent. (previous post) While Beijing remained relatively mute after the March decision, it was quite vocal after higher figures were announced, saying it was displeased by a decision that it said lacked fairness. This kind of reaction is typical of Beijing, which is always happy to issue angry comments whenever someone does something it considers unfair or runs counter to its goals. But this solar dispute didn’t happen overnight, and Beijing has had plenty of time to see last week’s decision coming and take steps to prevent it. The actual spat started almost a year ago, when US politicians opened a hearing into unfair trade after several US panel makers complained that Beijing unfairly subsidized its industry, which now supplies more than half the world’s solar cells, through a wide range of state-support policies, from export rebates to low-interest bank loans. A formal complaint soon followed, with an actual investigation by the US Commerce Department beginning in October – now a full seven months ago. The low punitive tariffs announced in March could be interpreted as a sign that the US was willing to compromise on the matter if China took steps to address some of its concerns. If that was the case, Beijing’s lack of response to that signal perhaps prompted the US to take a harder line. Regardless of US motivations with its tougher tariffs, the fact remains that China’s reactive approach to its trade disputes may have been suitable for its previously closed society but is much less practical as it tries to assume a place on the global stage. If it wants to become a serious player in world politics and the global economy, it needs to take a more proactive approach to settling disagreements, and do so in an open way that lets others know it is taking their concerns seriously.

Bottom line: Beijing needs to become more proactive and make gestures to ease US concerns about unfair subsidies in order to avoid a trade war in the solar panel sector.

Related postings 相关文章:

◙ Solar War Reignites With Big US Tariffs 美国拟对中国太阳能电池高征税

◙ Suntech, Canadian Solar in Latest PR Moves 尚德电力和Canadian Solar就西方倾销顾虑作出回应

◙ Solar Tariffs: US Takes Middle Road 太阳能关税：美国采取折中路线

News Digest: May 19-21, 2012 报摘： 2012年5月19-21日

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The following press releases and media reports about Chinese companies were carried on May 19-21. To view a full article or story, click on the link next to the headline.

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◙ Yahoo (Nasdaq: YHOO) Finally Set to Strike Alibaba Share Deal (English article)

◙ Tencent (HKEx: 700) Reorganizes Into 6 Units, Splits Off E-Commerce (Chinese article)

◙ China Cries Foul After US Sets Tariffs on Solar Imports (English article)

◙ NetEase (Nasdaq: NTES) Upgrades Youdao Search Engine (English article)

◙ China Unicom (HKEx: 762) Announces April Subscribers Data (HKEx announcement)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)