Bottom line: A new global tie-up between UnionPay and PayPal could auger another alliance by the end of the year that would allow the US company to launch a domestic electronic payments service in China by the end of this year.
PayPal in tie-up with UnionPay
In what must certainly be one of the slowest marches to China of all time, US electronic payments giant PayPal (Nasdaq: PYPL) has just formed a tie-up with UnionPay, operator of China’s largest electronic transactions settlement network. On reading the headline I thought that PayPal had finally cracked the market for domestic transactions in China, following more than a decade of trying to enter the lucrative business. But it turns out the new tie-up only covers cross-border transactions and is mostly for UnionPay’s benefit, meaning PayPal is still being locked out of the domestic China market. Read Full Post…
Bottom line: A new PR campaign by Huawei and Microsoft to ease Washington and Beijing cybersecurity concerns that are hurting their cross-border business will have limited impact, and what’s really needed is better technology to prevent against hacking.
Huawei, Microsoft in odd new alliance
The growing paranoia in Beijing and Washington over cybersecurity threats is creating odd bedfellows of two of the world’s leading tech companies on opposite sides of the Great Firewall of China. That pairing is bringing together software giant Microsoft (Nasdaq: MSFT), one of the biggest China boosters among US tech firms, with Huawei, a globally ambitious Chinese company that would desperately like to enter the lucrative US market for telecoms networking equipment. Read Full Post…
The following press releases and news reports about China companies were carried on September 15-19. To view a full article or story, click on the link next to the headline.
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WuMart Joins Bidding for China McDonald’s (NYSE: MCD), 3 Groups Submit Bids (Chinese article)
PayPal (Nasdaq: PYPL) Reaches Deeper Into China With UnionPay Partnership (English article)
Tesla (Nasdaq: TSLA) Investigates Potential Autopilot Link in Fatal China Crash (English article)
China or India Next on Pokemon Go Roadmap – Reports (Chinese article)
Mengniu (HKEx: 2319) Unexpected Changes Chief, Danone (Paris: DANO) Plays Bigger Role (Chinese article)
Bottom line: Apple’s decision to keep iPhone 7 prices in China roughly the same as the 6s is aimed at reversing its sliding sales, but won’t have much effect due to lack of major new features and stiff competition from domestic rivals.
Apple holds firm on iPhone 7 prices in China
Despite skidding sales and early bets that its latest smartphone won’t do well in China, Apple (Nasdaq: AAPL) won’t be giving any bargains to its fans in the world’s biggest smartphone market, according to newly released global prices for the iPhone 7. The move comes as a bit of a surprise, since Apple desperately needs to reverse its recent downward plunge in China, which is now its second biggest global market after only the US. But a number of factors are at play here, including a rapidly devaluing Chinese currency and also Apple’s hesitation to lower its prices into the same realm as some of its fast-rising homegrown Chinese rivals. Read Full Post…
Bottom line: NetEase is likely to complete a spin-off of its news division, possibly through a sale to Sina, while Postal Savings Bank’s massive IPO will meet with tepid reception due to limited growth prospects.
NetEase plans portal spin-off
Two significant but very different IPOs are in the headlines as we get set for the Mid-Autumn holiday break, one from China’s vibrant private sector and the other from a big state-run behemoth. In the former category is NetEase (Nasdaq: NTES), one of China’s oldest Internet companies, which is reportedly mulling an IPO for its news portal, one of its original businesses with a history dating back to the 1990s. In the other news, China Postal Savings Bank has reportedly placed most of the shares for its massive $8 billion listing with a group of 6 cornerstone investors. Read Full Post…
Bottom line: Western Digital’s new China joint venture is unlikely to raise national security objections from Washington, but could add to a looming global semiconductor glut due to an aggressive build-up of the sector by Beijing.
Western Digital China JV moves ahead
Just a half year after Washington killed its plans for a major investment from China, memory storage giant Western Digital (Nasdaq: WDC) is thumbing its nose at US security regulators by moving ahead with joint venture that was part of the earlier tie-up plan. I’m probably overstating Washington’s objections in this instance, since US officials never formally vetoed a deal that would have seen Western Digital sell 15 percent of itself to China’s Unisplendour for $3.8 billion.
Instead, Washington simply said the deal would require a review for national security risk, refuting Western Digital’s earlier view that the sale shouldn’t require such approval. The threat of a review was enough for both sides to decide to scrap the sale, though their latest announcement shows they are continuing ahead with a joint venture that was part of their broader tie-up plan. Read Full Post…
The following press releases and news reports about China companies were carried on September 14. To view a full article or story, click on the link next to the headline.
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China Postal Savings Bank $8.1 Bln IPO Mostly Covered by Cornerstone Investors (English article)
LeEco (Shenzhen: 300104) Launches Smartphones in Russia (Chinese article)
Microsoft (Nasdaq: MSFT), Huawei Join in Cybersecurity Message (English article)
NetEase (Nasdaq: NTES) Plans to Spin Off News Unit for IPO or Sell for $300 Mln (Chinese article)
Second-Hand Car Site Guazi Raises $250 Mln, to Spend 1 Bln Yuan on Ads (Chinese article)
Bottom line: A new alliance between Youku Tudou, Weibo and UCWeb, combined with reports of the imminent resignation of Youku’s CEO, point to a sale of Weibo parent Sina to Alibaba within the next 6 months.
New alliance hints at Sina sale
Two new developments involving several Alibaba-backed (NYSE: BABA) assets are hinting at a major new shakeup in the firm’s online video and social networking (SNS) division, which could include an acquisition of stalwart web portal Sina (Nasdaq: SINA) that I’ve been predicting for a while. This particular series of corporate shuffles is quite complex, but does seem to hint that Alibaba is trying to rationalize and synergize some of its major web-based entertainment and SNS assets outside its core e-commerce business. Read Full Post…
Bottom line: Beijing should mete out stiff punishment, including big fines and jail sentences, for companies that fraudulently obtained subsidies under the government’s program to promote new energy vehicle development.
Chery accused of fraud in new energy car scandal
What started as a wave of criticism against new energy car makers for producing mediocre products that nobody wanted is rapidly becoming a major scandal, with reports that many of those companies submitted fake information in order to get lucrative government subsidies. The scandal netted major car makers King Long and Chery last week, and reports have emerged that even industry leader BYD (HKEx: 1211; Shenzhen: 002594 )may be suspected of illegally obtaining government grants.
Such trickery is an extension of another trend that sees Chinese companies rush into unfamiliar sectors that Beijing has targeted for development, often resulting in a flood of mediocre or inferior products into the market. Such rushes not only create big market disruptions, but also result in huge sums of wasted investment and slow down development of emerging industries. Read Full Post…
The following press releases and news reports about China companies were carried on September 13. To view a full article or story, click on the link next to the headline.
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Alipay Adds Transaction Fee for Transfers to Bank Accounts (Chinese article)
China’s Regulator Tightens Control on Live Video Broadcasting (English article)
Didi Chuxing, Uber China Join With Local Partner to Promote New Energy Cars (Chinese article)
Google’s (Nasdaq: GOOG) Former China Chief Raises $674 Mln in New Funds (English article)
Thomas Cook, Fosun (HKEx: 656) in Joint Venture to Tap China Travel Market (Chinese article)
