BUSINESS >> Insight

Government reins in industry with new rules seeking sounder development

Metropolises around the world have sought to rein in the runaway growth of the sharing economy in 2016, of which Beijing and Shanghai are representative. Some believe the regulations aim to curb the development of the prominent industry, which has received a great deal of attention, as well as venture capital funding. However, analysts argue that the industry has grown too fast for its own good, giving rise to problems such as unreliable services, irresponsible customers and phony products. In this regard, government rules can slow the pace of growth so companies can focus more on the quality of their services.
Source: Global Times | 2017/1/2 19:28:39

In-flight Internet about to take off

More and more major Chinese airlines, including China Eastern Airlines, China Southern Airlines and Air China, have received approval to test in-flight Wi-Fi.
Source: Global Times | 2016/12/29 18:43:40

Facing stiff competition, Airbnb could repeat defeat of Uber in China

The home-sharing app Airbnb has taken a stronger foothold in China, establishing a new subsidiary – Airbnb China – just two months ago. But the recent unhappy experience of an Airbnb host has put the company and the rest of the industry under the spotlight in the country. Analysts said a more effective credit system for both hosts and guests is needed before the industry can expand around the country. Airbnb also faces strong competition from domestic rivals, and it could possibly repeat the defeat of Uber in China, an analyst said.
Source: Global Times | 2016/12/28 19:48:16

Rising costs, financing trouble, excess capacity lead firms to shut down

Many companies in the Yangtze River Delta and Pearl River Delta have been struggling with rising labor and raw material costs, as well as difficulties obtaining financing. An estimated 48,000 domestic small and medium-sized enterprises (SMEs) reported losses at the end of 2015, according to one official report. The losses amounted to 461 billion yuan ($66.34 billion). Experts predicted that more labor-reliant manufacturing SMEs will shut down due to policies aimed at reducing excess capacity. Still, China’s manufacturing sector is not recessing. The State Council released guidelines in December that stressed the development of strategic emerging sectors including high-end manufacturing, information technology and new energy.
Source: Global Times | 2016/12/27 19:18:39

Alibaba, Amazon to face off in region as both continue international expansion plans

After securing dominance in its home market, China’s Alibaba Group Holding is racing to conquer the still nascent e-commerce market in Southeast Asia. Although the size of the market in Southeast Asia pales in comparison with China’s, it is expected to grow 32 percent on average each year through 2025, according to one industry executive. US-based Inc also has its sights set on the region, making a face-off with Alibaba all but certain. Alibaba got to the Southeast Asian market first, but its victory is far from assured. Experts said there is no silver bullet for success, especially in an evolving e-commerce market facing difficulties of its own.
Source: Global Times | 2016/12/26 18:13:39

In wake of govt regulations, live streaming platforms can’t just rely on audience of hormone-driven men

More than 300 million users have signed up for the 600 or so live streaming websites and apps that have emerged in China, according to a recent research report. Analysts say that China’s live streaming industry is more developed than that of the US, though it hasn’t been free of issues. Obscene content remains an alarming problem. The industry’s success has depended largely on pretty faces to create content and horny men to consume it. It may have worked so far, but for the industry to reach its potential, analysts said it can’t simply depend on male hormones.
Source: Global Times | 2016/12/25 19:53:39

Govt constraints succeed in curtailing surging home prices, though more restrictions believed on the way

China’s real estate market grew overheated in 2016 as home prices in first-tier and some second-tier cities surged several times earlier this year. In response, local governments in about 20 cities rolled out home purchasing restrictions in October. Although the market has since cooled, experts said it remains under pressure and faces some challenges in the coming year. The Chinese government has showed its determination to stabilize the real estate market and crack down on speculative buying.
Source: Global Times | 2016/12/22 17:43:39

Companies, govts meet 2016 goals for reducing overcapacity

In February 2016, the State Council laid out a plan to tackle one the country’s major economic problems: overcapacity in the coal and steel industries. The plan called for cutting coal output by 500 million tons and crude steel output by 100 million tons to 150 million tons from 2016 to 2020. The cuts have weighed upon the country’s coal and steel industries, but also upon the local economies where the industries were especially prominent. Although the 2016 goals have been met, the costs have yet to be fully determined.
Source: Global Times | 2016/12/22 17:33:39

Mainland investors hungry for assets denominated in US currency

As the yuan’s depreciation trend has intensified in 2016, many domestic investors have started to put money into US dollar-denominated assets, such as insurance, stocks and real estate. Much of the investment has been legitimate, but some has violated laws governing overseas investment. Recently, the central government vowed to keep the US dollar-yuan exchange rate at a “reasonable level,” so it has grown stricter about controlling capital outflows. At the same time, it is seeking to lowering expectations for further yuan depreciation.
Source: Global Times | 2016/12/21 18:23:39

Domestic remote sensing, 3D scanning and VR tech embraced at digs around the world

During archaeological excavations along the “One Belt and One Road” initiative, various cutting edge technologies, including remote sensing, three dimensional (3D) scanning, virtual reality (VR) and unmanned aerial vehicles are being widely used to help archaeologists get a better idea about the lives of people in ancient times. What’s more, China’s advanced archaeological methods are now going global.
Source: Xinhua | 2016/12/20 18:33:39

Govt works to eliminate debt-ridden COEs in NE China

Revamping Northeast China’s State-owned enterprises (SOEs) has become one of the central government’s priorities in revitalizing the region’s lackluster economy. For example, the central government plans to make substantial progress in eliminating collectively owned enterprises (COEs) by the end of 2017. The Global Times recently visited Northeast China’s Liaoning and Jilin provinces to look into the operating status of COEs there and the difficulties that have emerged in reforming them. This is the last part of a four-part story.
Source: Global Times | 2016/12/19 18:43:40

Hunchun-Zarubino link aims to reshape sea freight routes in NE China

For cities, a seaport means a lot in terms of development, which explains why two of China’s first-tier cities – Shanghai and Tianjin – are located on the coast. Jilin and Liaoning provinces have highlighted transportation as a key to revitalizing Northeast China’s struggling economy. The Global Times recently visited two transportation hubs in the region to look into the role they are playing in facilitating trade. This is the third part of a four-part story.
Source: Global Times | 2016/12/18 19:48:39

Manufacturers struggle with low value-added products, weak industrial chain

Manufacturers in Northeast China, once the cradle of the country’s manufacturing sector, are struggling with shrinking orders and revenues, which have left the region’s economy stricken. In response, the central government unveiled a target in the end of 2016 to transform the region into a modern and highly competitive industrial base. The Global Times recently visited Northeast China’s Liaoning and Jilin provinces to find out the major challenges facing manufactures and learn how they are dealing with them. This is the second part of a four-part story.
Source: Global Times | 2016/12/15 19:08:39

NE China’s high-tech firms face talent shortage, different govt relations

Building up the private sector in northeastern China has become the central government’s primary goal in revitalizing the region’s ailing economy. Only six of the country’s top 500 private companies are based in Northeast China’s Jilin and Liaoning provinces. The Global Times recently visited the two provinces to learn about the major challenges private companies are facing there and what role the local governments have played in their development. This is the first section of a four-part report.
Source: Global Times | 2016/12/14 20:03:39

For Dec 12 shopping festival, Alibaba, Tencent, UnionPay battle for bigger share of offline payment market

Over the weekend, China’s Internet giants again went to war for users of their mobile payment tools during the December 12 shopping festival. Alibaba Group Holding and Tencent Holdings, as well as the bank card association China UnionPay, each launched immense promotions for the event. To take advantage of these promotions, which offer large discounts, consumers have to use these companies’ mobile payment tools. Alibaba’s Alipay remains the market leader in the sector, but experts said the landscape is changing. Tencent’s WeChat has been gaining ground in the mobile payments segment. And China UnionPay has been revamping its own mobile payment tools to be more competitive, with its own standards for Quick Response (QR) code payments released on Monday.
Source: Global Times | 2016/12/13 18:43:39

How millennials are changing the way Chinese think about money

The Ma household, a single-child family in Southwest China’s Tibet ­Autonomous Region, offers insight into how China’s youth are changing the country’s economy. The family’s child, 24-year-old Ma Yiqing, borrows and spends freely, a departure from how his parents and grandparents treated money. Elder generations pushed China’s household savings rate to roughly 50 percent of GDP, one of the highest in the world. As the country’s leadership attempts to transform the economy to be more consumer-driven, it needs spendthrifts such as Ma. However, as China’s debt levels have risen precariously over the last few years, it is becoming clear that consumer borrowing poses its own risks to economic stability.
Source: Reuters | 2016/12/12 17:18:39

Western companies getting serious about infrastructure initiative

It has been three years since President Xi Jinping proposed China’s “One Belt and One Road” initiative (“B&R” initiative), and Western companies are finally taking serious note. The initiative, with its focus on infrastructure construction abroad, has garnered attention of companies such as Caterpillar Inc and associations such as the China-Britain Business Council. They see the “B&R” initiative as an enormous opportunity. Experts have said that the infrastructure demand in countries and regions along the “B&R” is a prize worth fighting for, yet the late-comers may face challenges getting in on the initiative.
Source: Global Times | 2016/12/11 18:53:39

OEMs strive to climb value chain by creating own brands

In recent years, China’s original equipment manufacturers (OEMs) have suffered slowing growth due to rising production costs. By upgrading their equipment and technology, a growing number of OEMs have begun to focus more on quality and creating their own brands to survive in the competitive global markets. However, many challenges remain because the quality of China’s manufactured goods continues to lag behind those of the top global brands. Nonetheless, domestic companies have confidence in their prospects and plan to promote their products around the world through e-commerce platforms.
Source: Global Times | 2016/12/7 18:08:39