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Journalist China
Business news from China By Doug Young.
Doug Young, journalist, has lived and worked in China for 20 years, much of that as a journalist, writing about publicly listed Chinese companies.
He is based in Shanghai where, in addition to his role as editor of Young’s China Business Blog, he teaches financial journalism at Fudan University, one of China’s top journalism programs.
He contributes regularly to a wide range of publications in both China and the west, including Forbes, CNN, Seeking Alpha and Reuters, as well as Asia-based publications including the South China Morning Post, Global Times, Shanghai Daily and Shanghai Observer
An interesting trend is emerging these last few weeks as a growing number of investors and governments use offshore venues to probe the business practices of domestic and international firms doing business in China. The latest headlines have global banking giant Morgan Stanley (NYSE: MS) and leading domestic oil producer PetroChina (HKEx: 857; Shanghai: 601857; NYSE: PTR) coming under investigation in the US for such potentially illegal practices. The 2 cases highlight the fact that many foreigners believe they can’t find justice in China in cases of corporate wrongdoing, and thus may increasingly take their cases to other countries where justice systems are more independent and mature. Read Full Post…
I haven’t written about LDK Solar (NYSE: LDK) for a while, so it seems like the release of its latest quarterly results might be a good chance for a final look before the lights go off permanently at this struggling solar panel maker. Somewhat appropriately, LDK announced its results on the same day it also said it continues to negotiate with international investors who are still waiting for an overdue payment on their bonds. (company announcement) The bondholders have just agreed to extend their talks for another 2 weeks, but there’s always the very real danger that they could force LDK into bankruptcy when this new deadline expires on December 10. Read Full Post…
Leading cellphone chipmaker Qualcomm (Nasdaq: QCOM) has become the latest foreign firm to encounter resistance in China following the Edward Snowden spying scandal, as Beijing shows it can also play the national security card to the detriment of big western tech firms. But in this case, the US chip giant is not only seeing sales to its Chinese customers drop, but is also facing scrutiny from China’s powerful state planner on allegations of monopolistic behavior. Both of these developments show that Beijing is quite capable of using the national security pretext to play tit-for-tat games with Washington, potentially costing US tech firms billions of dollars in lost China sales. Read Full Post…
Some longtime Chinese workers at a Nokia (Helsinki: NOK1V) plant in Guangdong got a rude surprise when they were recently asked to take pay cuts, as the former cellphone giant struggles to halt its rapid decline. But rather than accept the cuts, the workers went on strike to protest the cost-saving measure after Nokia’s recent purchase by Microsoft (Nasdaq: MSFT), a move which could offer the best chance of saving the company. Read Full Post…
Media are hailing the big first-day gains of 500.com (NYSE: WBAI) and Sungy Mobile (Nasdaq: GOMO) in their New York trading debuts, saying the strong performance reflects a return of investor confidence to Chinese Internet stocks after a 2 year pause. I agree with that assessment somewhat, but would also offer the contrarian viewpoint that this pair of offerings was quite small, and thus the gains for both companies could have been easily influenced by the big banks underwriting the deals. Read Full Post…
My emotions were mixed on reading recent news of a major factory relocation by leading car maker Geely (HKEx: 175), reflecting a larger transformation of China’s cities from centers of industry to ones of commerce and modern living spaces. On the one hand, I felt some nostalgia knowing that yet another factory would be leaving one of China’s big cities, slowly stripping away a flavor so closely associated with Chinese urban landscapes. But on the other hand, these urban factories are part of history and really have no place in 21st century cities, where they are a major source of noise, congestion and pollution. Read Full Post…
The ongoing crackdown against corrupt officials at major state-owned enterprises continues to pick up momentum, with word that a top official at aluminum giant Chalco (HKEx: 2600) has resigned after being targeted in a probe. News of this latest probe comes at the same time another former high-level executive from leading telco China Mobile (HKEx: 941; NYSE: CHL) has just been formally sentenced to life in prison after his own trial for corruption. Other major state-owned enterprises whose top executives have become targets of recent corruption probes include that oil giant PetroChina (HKEx: 857; Shanghai: 601857; NYSE: PTR) and shipping leader Cosco (HKEx: 1919; Shanghai: 601919). Read Full Post…
Baidu reportedly near deal to buy Zongheng literature site
Internet stalwarts Baidu (Nasdaq: BIDU) and Sohu (Nasdaq: SOHU) are back in the M&A headlines with news of relatively small acquisitions, indicating the market may be running out of big targets as we prepare to end a landmark year for major deals in China. I’ve been reporting on Chinese Internet companies for more than a decade, and during most of that time would be lucky to see 1 or 2 major acquisitions or equity tie-ups in any single year. But all that changed this year, with top Internet names like Baidu, Alibaba and Tencent (HKEx: 700) emerging as major buyers in a series of deals collectively valued at billions of dollars. Read Full Post…
A new report in the Chinese media nicely illustrates why I seldom write about big state-owned enterprises (SOEs) in this space, and shows more broadly why even many of the nation’s entrepreneurial firms are often suspected of misleading accounting. The report details an ongoing scramble among SOEs like shipping behemoth COSCO (Shanghai: 601919; HKEx: 1919) and aluminum giant Chalco (HKEx: 2600; Shanghai: 601600) to sell off assets to make themselves appear profitable and avoid possible de-listing on the Shanghai stock exchange. The report also reveals some other tricks these companies are using to hide their losses and look more attractive to Chinese investors, many of whom often lack the sophistication to look beyond a company’s bottom line. Read Full Post…
Smartphone makers may soon be getting an ally from China’s cash-rich Internet companies, with word that e-commerce leader Alibaba is preparing a massive giveaway in a bid to boost its mobile business. This move looks strikingly similar to something Alibaba did nearly a decade ago, when it made the strategic decision to offer its e-commerce services for free on its newly launched Taobao platform. That decision was derided by eBay (Nasdaq: EBAY), its chief rival in China at the time, which said that giving away services for free was not a real business model. As Chinese Internet historians know, eBay ultimately lost that battle and Alibaba has gone on to become one of the world’s biggest e-commerce companies. Read Full Post…
More mixed signals are coming from the IPO space, with listing candidate 500.com raising the price range for its shares indicating that demand is better than previously thought. The lifting of the range for its American Depositary Shares (ADSs) comes just a day after 2 recently listed Internet companies, Qunar (Nasdaq: QUNR) and LightInTheBox (NYSE: LITB), announced new quarterly results that showed both were losing money. In what could be another piece of IPO news, Internet aspirant Suning (Shenzhen: 002024) has made a high profile move outside China by opening an R&D center in the US, leading me to speculate that perhaps the company could be eying an offshore IPO in the next year or two. Read Full Post…
