The start of a new year is seeing 2 of China’s top smartphone and telecoms equipment makers lay out their new goals for 2014, with the fast-rising Xiaomi aiming to continue its explosive growth as the more mature Huawei targets more modest gains. Meantime, another leading telecoms player, ZTE (HKEx: 763; Shenzhen: 000063), is also detailing a major reorganization aimed at rekindling growth as it tries to diversify beyond its core business of building networks for big telcos. All of these plans are consistent with previous signals from each of the 3 companies, and in that regard aren’t very surprising. But they do provide a hint of where priorities will lie in the new year. Read Full Post…
Just when China was improving its reputation as a global arbiter of fair trade, a recent string of delays is throwing an embarrassing spotlight on just how opaque and bureaucratic the country’s deal approval process remains for global mergers and acquisitions (M&A). Beijing needs to move quickly to reverse this worrisome trend that has seen China hold up a growing number of global deals. Otherwise, China risks gaining a reputation as an obstructionist to the natural flow of global deal making.
Chinese employees are quickly discovering that working at a major foreign firm doesn’t necessarily guarantee lifetime employment, even when that firm is a top global name like online employment specialist Monster Worldwide (NYSE: MWW). Less than 3 months after announcing plans to exit the China market through sale of its local subsidiary, ChinaHR, Monster is quickly discovering that many of its Chinese employees hardly expected that they could ever be laid off and are refusing to accept the company’s plans to offer them severance packages. (
I’ve been following the world of technology for more than a decade now, and so many big names have come and gone during that time that nothing really surprises me anymore, especially in the cellphone space where 2 years is the equivalent of an eternity. That seems like an appropriate backdrop for the latest smarphone data, which show that Huawei has come roaring out of nowhere to become the world’s third largest player, according to the latest quarterly figures from data-tracking firm IDC. (
China Eastern’s (HKEx: 670; Shanghai: 600115; NYSE: CEA) announcement of a massive new order for Airbus (Paris: EAD) planes last week looked suspiciously political, coming just after China and the EU resolved an aviation-related dispute. If politics were indeed a factor, which seems likely, Beijing set another unhelpful precedent by tying what should have been a purely commercial decision to non-commercial factors. By continuing to act this way, Beijing will show the world that it calls the shots for what should otherwise be big commercial decisions by Chinese companies rather than leaving those decisions to market forces. That will only give China’s opponents further fuel in their steady accusations of unfair trade by Beijing.
An internal company memo penned by Robin Li, one of China’s richest men and founder of Baidu (Nasdaq: BIDU), has been buzzing through the domestic media, which are interpreting the message as the sign of a looming crisis at the nation’s leading search engine. The theme of the memo revolves around the concept of the “Wolf Spirit”, which Li says has been lost at his company that pioneered the online search market in China. (
Chinese smartphone makers have surged in their home market over the last year, coming from out of the blue to challenge big global names like Apple and Samsung. But their rise could be short-lived if they fail to innovate, paralleling a similar rapid rise and fall a decade ago for names like TCL (HKEx: 2618) and Ningbo Bird that are now just footnotes in the history of China’s large but highly competitive mobile market. The rapid rise of Chinese brands over the last year has been nothing short of remarkable, as China gets set to overtake the United States as the world’s largest smartphone market. At the end of last year, the market was still dominated by foreign names, with Samsung (Seoul: 005930), Nokia (Helsinki: NOK1V) and Apple (Nasdaq: AAPL) occupying three of the top four slots to control more than half of the market collectively.
The colorful love-hate relationship between Beijing and Google (Nasdaq: GOOG) never seems to stop evolving, flaring up this time with extensive coverage in state-run media over big China layoffs at Google’s recently acquired Motorola cellphone unit. In all fairness, Motorola’s decision to lay off 1,400 China employees is certainly big news by itself, with the China reductions accounting for more than a third of a recently announced round of 4,000 global job cuts by Motorola. But that said, I have little doubt that domestic media are being quietly encouraged to report extensively on the cuts by Beijing leaders who still feel stung by Google’s 2010 high-profile decision to withdraw from the China online search market.
