Scan, unlock and ride – such is the simplicity of online bicycle-sharing services in China, which have grown more and more popular in major cities such as Beijing, Shanghai and Guangzhou. The companies allow almost anyone to ride a bicycle for rates of 1 yuan ($0.16) an hour or even less. With the help of investment from eager venture capital firms, these bike-sharing start-ups have put tens of millions of bikes onto city streets. However, their success has also drawn scrutiny, with many questioning if their business model is viable, especially with authorities expected to soon draft regulations for the business.
During a recent visit by the king of Saudi Arabia to China, the two countries signed deals worth $65 billion, including a partnership for manufacturing drones, foreign media reported. In recent months, Saudi Arabia has repeatedly turned to China to buy drones. Experts said that the choice reflects the growing popularity of Chinese drones on the global market, especially in the Middle East, due to their high cost-efficiency. They also noted that Saudi Arabia needs support from China to wean its economy off oil exports.
One might figure that India’s $72 billion in merger and acquisition (M&A) deals in 2016 would have investment bankers scrambling to get into the country. One would be wrong, however. In a recent $23 billion tie-up between India’s Idea Cellular and the Indian subsidiary of Vodafone Group, Vodafone hired six outside advisors. Idea Cellular hired none. Rather than bringing in big investment banks for advice on such deals, India’s family-owned conglomerates have increasingly been turning to their own in-house teams of advisors. The trend, bankers said, is about bringing back control for Indian tycoons behind some of the country’s biggest companies. The result: More and more big banks are pulling out of the country.
After a new round of home-buying restriction policies were released around the country, authorities began conducting inspections of some real estate agencies to further stabilize the domestic housing market and curb speculative buying. Experts said that measures such as examining online home sales information should be implemented to better regulate real estate agents. Industry insiders said that restrictions should cool China’s overheated residential housing market, but they will spur growth in the commercial property market. Given the realities of the current housing market, the home rental market also has great growth potential.
The number of Chinese visitors to Ukraine hit a 10-year-high in 2016 thanks to looser visa rules. The Eastern European country hopes to extend its success in drawing travelers from the world’s largest outbound tourism market by offering tours more tailored to Chinese tourists. To achieve that goal, Ukraine’s tourism industry is training a brigade of Chinese-speaking guides and forging alliances with neighboring European countries and other former members of the Soviet Union to offer packaged tours.
In the government work report, Chinese Premier Li Keqiang said one important task in 2017 will be integrating economic and military development, as well as deepening reforms in the science and technology industries related to defense. The Beijing-based China Reform Daily (CRD) spoke with industry experts and insiders attending the annual session of the National People’s Congress (NPC), which concluded last week, to shed light on means to tackle institutional barriers in the integration of economic and military development and ways to channel more resources to better develop the national defense industry and benefit Chinese society.
The economic data released so far this year indicate that the economic turnaround that emerged in the second half of 2016 may have extended into 2017 – or at least that’s what some experts think. Others see the promising economic numbers as simply the result of yet another unsustainable increase in infrastructure spending. Economists have diverging opinions about the longevity of the turnaround because no one is sure what’s behind it, so it remains unclear whether it is the beginning of a trend or just a flash in the pan.
Chinese mainland’s lingerie market is in the midst of consolidation. On one hand, growing demand for lingerie, especially in the high-end market, has been drawing big international brands to the mainland. On the other hand, the lower-end market has been saturated with domestic products and brands, few of which stand out. The resulting fierce competition has left domestic lingerie companies with falling profits, though some are finding ways to set themselves apart.
China has one of the highest Internet penetrations in the world, thanks to the country’s efforts to rapidly build out its telecommunications infrastructure. Chinese companies hope to accomplish the same feat in Africa, where for years they have been pursuing the same strategy of building up telecom infrastructure and upgrading broadband networks. Hong Kong-based China Communications Services Corp has moved some of its business to Ethiopia as it attempts to tackle projects that major Chinese telecommunication companies like Huawei and ZTE could not accomplish, because they lacked supportive policies from the central government.
China boasts some of the biggest makers of construction equipment in the world, but these names are barely heard of in the US. The country’s heavy-industry heavyweights, Sany Heavy Industry Co, Zoomlion Heavy Industry Science & Technology Development Co and Xuzhou Construction Machinery Group Co have stuck to traditional marketing to get their names out, yet remain nearly unheard of across the Pacific Ocean. For its part, Sany has dived deep into social media marketing, hoping that it will be as successful for them as their American competitors
The garment-making sector in East China’s Zhejiang Province is undergoing a difficult time as its profits continue to shrink. Some factories have closed, while others have held on by the skin of their teeth. Garment makers said rising labor costs are primarily to blame. One expert said the decline of lower-end manufacturing is inevitable, but new industries will rise to replace them.
More and more villages in China have embraced e-commerce to boost their local economies, and the e-commerce boom is helping to alleviate rural poverty in Southwest China’s Guizhou Province, one of the poorest regions in the country. Internet giants such as Alibaba Group Holding and JD.com Inc have responded to the central government’s call to fight poverty by setting up service centers in rural areas. The centers are run independently by local entrepreneurs, who sell locally produced agricultural products. The Global Times recently visited one service center in Huishui county, an hour’s drive from provincial capital Guiyang, to see how those online businesses operate and what role they play in poverty reduction.
The fight against poverty has been one of the hottest topics at the ongoing two sessions of 2017, the major annual political event that takes place this week. In 2016, the rural population living under the poverty line declined by 12.4 million people as the central government put 100 billion yuan ($14.49 billion) into poverty alleviation, according to the government work report delivered on Sunday by Premier Li Keqiang at the opening of the annual session of the National People’s Congress (NPC). The government vowed to continue to tackle poverty in 2017 by reducing the impoverished population by 10 million. The Global Times recently traveled to one of the poorest regions in the country, Southwest China’s Guizhou Province, to look into how local authorities, companies and villagers are working together to fight poverty.
Assessing China’s rapidly changing consumers and how businesses are coping in the face of the increasing activism of communities and consumers were the central topics of a Global Times-organized roundtable on Wednesday. The event has brought together senior executives from a full range of businesses, including agriculture, food and beverage, manufacturing, energy, healthcare, entertainment, financial, banking and luxury goods. They made for a lively exchange of views on the trends shaping China’s transformation to a consumption-based economy. North Head is strategic counselor of the roundtable.
In February, the Ministry of Agriculture (MOA) released a plan to pilot a fertilizer-replacement program by the end of 2017 in 100 counties and districts. Over the years, Chinese farmers have grown dependent on chemical fertilizers to boost output, but that dependency has taken its toll on the land and has increased risks to public health. To curb the overuse of chemicals in agriculture, China is promoting bio-fertilizers as an alternative. But change comes with a price, as organic fertilizers cost around four times as much as their chemical brethren. The situation begs the question of whether Chinese farmers can go green without government support.
Bike-sharing has taken China by storm. But along with the business’s success have come questions about how bike-sharing companies manage their user deposits. Over the last few days, domestic media reports have questioned what the companies do with the deposits and speculated whether there is anything stopping them from misusing the funds. Experts predicted that the government will step in this year and impose a wide range of regulations on the industry, including rules on how companies deal with user deposits. Right now, the industry continues to expand rapidly, but the intensifying competition will likely soon lead to acquisitions, as leading companies attempt to cement their position in the market.
China’s luxury product market started growing again in 2016 after three straight years of stalling. The return to growth resulted largely from luxury brands lowering their prices, diminishing the long-grumbled-about price gap between the Chinese mainland and other markets, consumers and analysts said. Luxury brands have seen sales jump as they have moved sales channels online, hoping to reach younger shoppers and potential consumers in second- and third-tier cities.
More and more overseas branches of Chinese banks are getting investigated on money laundering charges, including Bank of China, Agricultural Bank of China and China Construction Bank. Experts said the investigations are largely the result of a strengthened supervision, the banks’ own lack of vigilance and imperfect internal controls to catch money laundering. Although China has established laws and regulations to combat money laundering, they have not been very successful because the penalties are not severe enough to be a deterrent. Authorities need to enforce the regulations better to show China’s consistent stance in the fight against money laundering.