Archive for ‘China alert’

19/03/2019

Chinese train operator apologises for demanding medical ID from doctor treating sick passenger

  • Physician ‘felt terrible’ after questioning by train conductor
  • Train company says ID check on volunteers is not standard procedure
Dr Chen answered a call for medical assistance aboard a China Railway Nanning Group train, and staff demanded that she produce her licence. Photo: Pear Video
Dr Chen answered a call for medical assistance aboard a China Railway Nanning Group train, and staff demanded that she produce her licence. Photo: Pear Video
China Railway Nanning Group apologised to medical professionals after train staff demanded that a doctor produce her licence as she treated a fellow passenger.
The physician, identified only as Chen, was on a train from Liuzhou to Nanning in Guangxi on Sunday when there was a call for a volunteer to attend an emergency, she told Jianghuai Medicine, a social media news source for medical professionals.

She went to the carriage and found a man in his 40s complaining of severe pain in his abdomen.

Chen asked the man for his medical history, checked his vital signs and examined him before concluding the passenger might have a gastrointestinal disorder.
The man’s condition improved after she gave him medicine from the train’s first-aid kit. She then advised the traveller to go to hospital and request an ultrasound to rule out other conditions.
When Chen made her way back to her carriage, she was stopped by a conductor and asked for her medical licence. The doctor then realised the conductor had recorded her entire diagnosis and treatment.

Chen could not produce her licence, and the conductor asked her to write down her diagnosis, her name, address and signature and photographed her identity card and train ticket details.

Chinese Good Samaritans offered insurance policy to protect them against extortion scams by the people they help

On Jianghuai Medicine, Chen said she “felt terrible” after the questioning and “I may as well not step up in future if something similar happens”.

On social media, some people agreed that a volunteer should be able to identify themselves, while others called for trust. One Weibo user said: “Should such appeals [for help] be changed to ‘doctors with a medical licence on them please come to help’?”

Another asked: “Why not put medical staff on each train since no doctors would dare to come forward?”

On China Railway Nanning Group’s Weibo feed, the company thanked the doctor for attending the patient and apologised for hurting her feelings.

Before being good Samaritans, Hongkongers need to learn the basics

“The staff did not communicate well with Dr Chen, causing a misunderstanding and creating bad feeling … The Nanning section of the group apologises to doctors and other medical professionals who have been participating in saving and treating patients,” it said.

The group said it was not standard procedure to ask for a copy of a medical licence in such circumstances, and recording the treatment on video was for the benefit of the patient.

Source: SCMP

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19/03/2019

Philippines goes cap in hand to China as water shortage bites

  • Delegation from Manila lands in Beijing to seek loans and unlock funds for controversial China-backed Kaliwa dam
  • Critics say the Duterte government has engineered the water shortage to gain backing for the dam, which indigenous tribes oppose
Philippine President Rodrigo Duterte. Photo: EPA
Philippine President Rodrigo Duterte. Photo: EPA
The Philippines has gone cap in hand to China as it struggles with a severe water shortage that has seen taps in its capital city run dry.
A delegation from Manila landed in China on Tuesday hoping to attract further infrastructure investment and speed up the delivery of loans Beijing has pledged for an irrigation project and a controversial dam that government ministers say will ease the water shortage. Any new loans they negotiate would be on top of the US$10 billion China has already pledged to President Rodrigo Duterte’s “build, build, build” project to transform the Philippines’ economy.
The site of the controversial Chinese-funded Kaliwa Dam Project. Photo: MWSS
The site of the controversial Chinese-funded Kaliwa Dam Project. Photo: MWSS

The delegation, led by Duterte’s Executive Secretary Salvador Medialdea, will meet Chinese Vice-President Wang Qishan and officials at the Ministry of Commerce, China’s Export-Import Bank and China International Development Cooperation Agency, which reviews foreign aid projects. They will also brief potential investors from the private sector.

Duterte’s Executive Secretary Salvador Medialdea, right. Photo: PRIB
Duterte’s Executive Secretary Salvador Medialdea, right. Photo: PRIB

The trip comes amid the most severe water shortage to have hit the Philippine capital in the past decade, with dozens of districts having gone days without water. However, it is likely to prove controversial in some quarters, as critics believe the water shortage has been engineered by the Duterte government as a ploy to win support for the long-stalled Chinese-funded Kaliwa Dam Project. The project, which has been shelved for decades, is controversial partly because Duterte asked China to fund it rather than put it to public tender. It is also opposed by indigenous communities, who stand to be displaced, and by NGOs and the Catholic Church, who question its safety.

The task of Medialdea’s delegation will include trying to speed up the delivery of a promised US$211 million loan from the Export-Import Bank to fund the Kaliwa dam.

Finance Secretary Carlos Dominguez said last week the dam was “absolutely” the solution to Manila’s water shortage and defended the conditions of the loan.

Philippine Finance Secretary Carlos Dominguez. Photo: Xiaomei Chen
Philippine Finance Secretary Carlos Dominguez. Photo: Xiaomei Chen

He said the bank was giving Manila a preferential rate of 2 per cent per annum for 20 years, with a seven-year grace period; a commitment fee of 0.3 per cent of the loan amount and a management fee of 0.3 per cent of the loan amount.

The delegation will also seek to speed up the delivery of a US$62 million loan pledged by the Export-Import Bank to build the Chico River Pump Irrigation Project in the north of the country.

Dominguez urged the Chinese contractors in both projects to build quickly.

Still, in the Philippines, “quickly” can be a relative term.

China holds the cards as online betting booms in the Philippines

Even as the delegation landed in Beijing, a senate probe into the water crisis was hearing from the Metropolitan Waterworks and Sewerage System (MWSS) administrator Reynaldo Velasco that it would take five years to build the dam, which was still in the consultation stages.

Velasco said that since the dam would be located in the ancestral domain of indigenous communities, “we have to go through a process to be able to get their approval including the agreement [on what displaced families should be paid and their relocation].”

Velasco said if the tribes did not consent, “we will not start the dam”.

Opposition by the tribes has stalled the project for decades.

Graphic: SCMP
Graphic: SCMP

According to Ramcy Astoveza, chief of the Agta tribe, the tribes will never change their mind because “the dam project is a matter of life and death for us. Once we allow the dam inside our natural habitat, what would follow is the death of our tribe”.

Environmental NGOs including the Save Sierra Madre Network Alliance, Alyansa Laban sa Kaliwa Dam, Task Force Sierra Madre and Tribal Centre for Development have warned that, aside from submerging seven villages, the dam project was “within a zone of two active tectonics – the Philippine Fault Zone and the Valley Fault System”.

The winners and losers in Duterte’s China play

Meanwhile, the Catholic Bishops Conference of the Philippines has warned the dam would endanger 100,000 residents downstream of Kaliwa River, particularly during earthquakes and extreme flooding events brought about by climate change.

As Patrick Ty, chief of the MWSS Regulatory Office, said: “With all the problems Kaliwa Dam is facing, it might get delayed.”

Despite such concerns, the government remains optimistic both projects will go ahead. Velasco said the MWSS hoped to start building the Kaliwa dam by August this year. He denied that Manila’s water shortage was artificial and a ploy to get Metro Manila residents to support the China-funded project.

Source: SCMP

19/03/2019

China’s first cloned police dog reports for duty

  • Kunxun, a two-month-old Kunming wolfdog, was born after scientists took the DNA from a ‘one in a thousand’ animal
  • Police hope the programme to clone the force’s best dogs will eventually give it a bigger pool of animals suited to police work

Police say the cloned puppy Kunxun is already showing promise. Photo: Sinogene

Police say the cloned puppy Kunxun is already showing promise. Photo: Sinogene
A cloned puppy, which was bred using DNA from an award-winning police sniffer dog, has started training with a force in the southwest of China.
Earlier this month Kunxun, a two-month-old female, began training at Kunming Police Dog Base in Yunnan province, according to media reports.
The Kunming wolfdog is China’s first cloned police dog and was born after scientists took a DNA sample from a seven-year-old female named Huahuangma, which has won a string of awards for helping to crack multiple cases in the city of Puer.

Since arriving in Kunming, Kunxun has adjusted well to the local environment, the base’s project analyst Wan Jiusheng told Science and Technology Daily.

“She is friendly to humans, sociable and alert,” said Wan, adding that the pup is not scared of the dark or unfamiliar spaces, has a strong sense of smell and can quickly find hidden food.

Kunxun with friend. Photo: Sinogene
Kunxun with friend. Photo: Sinogene

The project was carried out by Yunnan Agricultural University and Sinogene, a Beijing-based company specialising in cloning pets and animals for commercial uses, the newspaper reported.

To produce Kunxun, Huahuangma’s genetic material was extracted and sent to a laboratory in Beijing. An embryo was engineered using an egg from another dog and implanted into a surrogate mother.

“The surrogate was a gentle beagle. To prevent complications and improve the survival rate, we carried out a caesarean section,” Sinogene project technician Liu Xiaojuan told Science and Technology Daily.

Police hope to expand their pool of cloned dogs. Photo: Sinogene
Police hope to expand their pool of cloned dogs. Photo: Sinogene

Beagles are the standard breed used for lab work by the company, which charges a market rate of 380,000 yuan (US$56,000) for each cloned dog.

It can take years to find a police dog like Huahuangma – she was described by Kunming police dog base as “one in a thousand” – and Sinoegene argued that cloning was a better way than breeding of preserving the genetics of such animals.

In one of her more high-profile cases, Huahuangma helped find a crucial piece of evidence – a hotel key – that led to the arrest of a murder suspect in 2016, the company added.

The cloning programme aims to establish a pool of outstanding police dog specimens.

If basic training proves successful, the young Kunming wolf dog will move on to specialist training. Photo: Sinogene
If basic training proves successful, the young Kunming wolf dog will move on to specialist training. Photo: Sinogene

“Currently, police dog cloning is still in the experimental stage. We hope in the next 10 years, once the technology becomes more sophisticated, to mass clone exceptional police dogs,” project analyst Wan said.

Kunxun, whose name contains characters for her breed and “achievement”, is currently undergoing basic training for police puppies.

After six months, the young dogs will enter a “university” and trained to specialise in tracking, drug detection, security or evidence detection.

South Korea was the first country to introduce cloned dogs for police or military use in 2007.

Animal cloning is becoming increasingly prevalent in China for research and commercial uses. Recently, five genetically edited monkeys were cloned to test drugs to treat mental illnesses.

Source: SCMP

19/03/2019

Hong Kong subway trains collide amid new signal system trials

Mass Transit Railway (MTR) trains collide near Central station during a signal system trial in Hong Kong, 18 March 2019Image copyrightREUTERS
Image captionThe collision was said to have involved a “modernised train” and occurred during a signal trial

Two subway trains have collided during a new signal system test in Hong Kong, halting services and threatening travel disruption for millions of commuters.

The incident occurred between the Central and Admiralty stations before the service was open to the public early on Monday morning.

While the trains had no passengers on board, both drivers were taken to hospital.

Rail officials warned that repairs were likely to take “quite a long time”.

Network operator Mass Transit Railway (MTR) said sections of the Tsuen Wan Line had been suspended and urged commuters to avoid the route affected and to use other forms of transport if possible.

MTR Corporation has said a failure with the new signal system was to blame for the crash, Hong Kong’s South China Morning Post newspaper reports.

An investigation has been launched.

Mass Transit Railway (MTR) trains collide near Central station during a signal system trial in Hong Kong, 18 March 2019Image copyrightREUTERS
Image captionNeither of the two trains involved was carrying passengers at the time

Further disruption was caused later on Monday morning when a woman fell on to the tracks at Kowloon Tong station, causing a temporary suspension of service in that area.

Hong Kong’s subway network is used by up to six million people on weekdays, Reuters news agency reports.

Source: The BBC

19/03/2019

Exclusive: Metro kicks off China unit sale, likely to fetch $2 billion valuation – sources

HONG KONG (Reuters) – German wholesaler Metro AG has kicked off the sale of its China operations by calling for bids, in a deal that would value the business at between $1.5 billion (1.1 billion pounds) and $2 billion, two people with direct knowledge of the deal said.

Metro, which owns 95 stores in China and real estate assets in major cities such as Beijing and Shanghai, is planning to offload a majority stake in its China business, said the people.

The sale move is part of a global reorganisation of the wholesaler and comes as China’s wholesale and retail sectors are experiencing disruption from e-commerce players.

Metro’s China business could yet be valued at up to $3 billion, said two separate sources with direct knowledge of the matter.

Potential bidders include electronics retailer Suning Holdings Group, supermarket chain operators Wumart Stores Inc and Yonghui Superstores, according to three of the people.

Private equity firms such as Hillhouse Capital Group and Bain Capital are also studying a potential deal, they added.

Property makes up the bulk of the value in Metro’s China business, the people said, cautioning, however, that there is a large gap between price expectations among buyers and the seller.

A Metro spokeswoman in Germany said the company is in talks with potential partners concerning the further development of its China business but declined to comment on details of its exchanges with potential partners or the sale process.

Bain and Suning declined to comment. Yonghui and Hillhouse did not immediately respond to requests for comment. Calls to Wumart went unanswered.

First-round, non-binding bids are due in the second week of April, said two of the people. Citigroup and JPMorgan are advising Metro, the people said. The banks declined to comment.

Source: Reuters

18/03/2019

Hong Kong University, Japan’s Tohoku University sign agreement on AI, robotic technologies collaboration

HONG KONG, March 17 (Xinhua) — The University of Hong Kong (HKU) announced on Sunday that it has signed an agreement with Tohoku University, Japan (Tohokudai) to collaborate on the research of transformative AI and robotics technologies.

The signing ceremony was held on Saturday at the HKU campus. HKU and Tohoku University will combine their advantages and strengthen the application of AI and robotics in areas including manufacturing industry, construction industry and the development of smart cities. They are planning to establish the Center for Transformative AI and Robotics Technologies in Hong Kong.

Under the collaboration, top researchers from both universities will be brought together, forming a team to transform and upgrade the technologies of AI and robotics, to improve the automation technology and to develop smart and flexible robots with self-learning ability that are adaptable to different environment.

Zhang Xiang, president and vice-chancellor of HKU said both universities will strive to achieve pioneering world-class research projects, bring more learning opportunities for students, and build greater engagement with industrial partners.

“We are eager to further strengthen the tie between the two universities and closely work together in the field of transformative AI and robotics technology to create social innovation and solve social problems in Hong Kong and Japan,” Hideo Ohno, president of Tohoku University, said.

Nicholas Yang, secretary for innovation and technology of China’s Hong Kong Special Administrative Region government, also attended the ceremony. He said that true innovation comes from collaboration and by pooling together the world’s top scientific institutions to collaborate with local universities. Hong Kong is poised to become a hub for global research collaboration, he said.

Source: Xinhua

18/03/2019

China Focus: Massive coal industry park cleans up “scars”

YINCHUAN, March 17 (Xinhua) — The largest coal chemical park in northwest China’s Ningxia Hui Autonomous Region has launched a campaign to clean up over 120 small and disorderly coalfields.

The Ningdong Energy and Chemical Industry Base, one of China’s largest coal production bases and a coal-to-chemical industry base, is located close to Shaanxi Province and Inner Mongolia Autonomous Region, areas with large coal deposits.

Since last year, it has shut down 127 disorderly coalfields which occupied over 533 hectares. Over 2 million tonnes of coal has been cleaned and 90 percent of the construction above ground has been dismantled.

The coalfields were a major logistical base that stored coal from the local area and Inner Mongolia, and then loaded them onto trucks to send to local fire power plants, boilers, and consumers in Yunnan and Jiangsu provinces. Annual turnover was 25 million tonnes, totaling 10 billion yuan (1.5 billion U.S. dollars).

These coal fields, however, were poorly managed. Most never met environmental requirements. The decision to close them was met with great resistance by the coalfield owners who paid a hefty rent to the villages and created jobs for the people living in the area.

“Money from the coalfields helped cover medical and social insurance costs for the villagers. One of the villages received four million yuan a year for leasing out the land to coal yard owners. Every family received a dividend of over 5,000 yuan,” said Yan Xinmin, an official with the base administration.

Yang Jia, general manager of Ningxia Xinwen Energy Technology Company, said he once had to hide from environmental inspectors because he did not have credentials for operation.

Yang was the first to shut down the old coal yard and move his business to new coalfield, an 133-hectare area at the southern part of the base.

Thirty-four companies have been chosen to move their coal storage facilities into the new coal field, which cost 600 million yuan to build.

Ma Sanqing, an official with the base administration, said the villagers will find new jobs and sources of income at the new coalfield.

The villagers will become shareholders of a special service company for the coalfield.

“If we have 1,000 trucks every day, the management of the trucks, dining and cleaning services will generate 5 million yuan every year,” said Ma.

“It is a necessary step to clean up the old coal yards,” said Yang Fu, head of the Huiminxiang village.

“We are planning to build parking lots, dining facilities, auto repair shops and other services,” he said.

Efforts are underway to clean the black slags and mud that blocked the flood discharge channels. Trees will be planted to restore the greenery at the coalfields, said Ma.

Construction of the Ningdong Energy and Chemical Industry Base began in 2003. Now it is home to around 130 enterprises. The gross industrial output value reached 117 billion yuan in 2017.

Source: Xinhua

18/03/2019

Across China: Top tourist city strengthens cultural protection

KUNMING, March 17 (Xinhua) — Every day, He Runyuan explains what happiness is to hundreds of tourists.

“Dongba symbols are used by China’s Naxi ethnic minority and one of the world’s only remaining pictographs. For them, happiness is a steaming hot pot of food,” He said. “As in the past, having a hot meal means everything.”

In a traditional Naxi costume of goatskin vest and a white robe, 42-year-old He guides tourists to learn the Naxi scripts, history, culture and tradition in his center of Naxi Dongba pictographs and paintings in the Old Town in the city of Lijiang, southwest China’s Yunnan Province.

“Peak seasons such as national holidays and summer and winter vacations see around 5,000 visitors a day,” he said.

“After explaining the symbols, I will ask the tourists to pick one they like and try to write it down,” he added.

As a Naxi minority, He grew up in the Old Town, a UNESCO World Heritage Site with an 800-year history, which attracted more than 14 million tourists last year.

He has been learning Naxi painting and pictographs for about 30 years. “With a population of more than 300,000, less than 700 Naxi people now understand Dongba pictographs, and only a dozen can do traditional Naxi paintings,” he said.

“I think it’s my responsibility to pass down our culture and let more people know about it, which is so vivid and charming,” he said, adding that most Naxi people live in Lijiang. “That’s why I came back here after graduation. The origin of Naxi culture is here.”

His devotion of cultural protection is greatly supported by the local government which entrusted He to open the experience center in 2016 in the busiest area of the Old Town and gives him 400,000 yuan (about 59,600 U.S. dollars) a year for daily maintenance and other expenses.

“The local government offered us this two-story cultural courtyard with traditional Naxi characteristics as our center, covering about 300 square meters. We have separated it into several rooms for exhibitions and classrooms,” he said.

He and four other Naxi guides work 14 hours a day. “During peak seasons, we can barely take a sip of water,” he said.

“It’s hard, but it’s worth it. We are so proud of what we are doing,” he said.

By the end of last year, there were 17 free cultural courtyards in the Old Town of Lijiang, including He’s. With the support of the local government, a further 12 are expected to open to the public this year.

“I think the courtyard is a window for promoting the culture of Lijiang, as well as an important base for visitors to learn and try by themselves to have a more comprehensive understanding of our culture,” he said.

He’s experience center has also cooperated with travel agencies, summer camps and schools to offer free training classes on Naxi culture, receiving more than 7,000 students each year.

“Without the courtyard, nothing would even be close to possible,” he said.

To prevent the ancient Chinese city from over commercialization after years of tourism development, the local government has set up a specialized annual fund of 10 million yuan for cultural protection in the Old Town.

“Lijiang has long been China’s name card to the world with the Old Town as its core. For sustainable development, we must spare no effort in protecting our culture and make it one of the most attractive parts of the city,” said He Tang with the protection and administrative bureau of Lijiang Old Town.

All the buildings in the Old Town are required to maintain traditional ethnic characteristics. Dancing halls, Internet bars, and among others that are inconsistent with the ancient Old Town have all been closed.

A total of 299 traditional houses and 236 yards have so far been restored and renovated by the local government and the Global Heritage Fund.

“We also invite folk artists and culture inheritors to show their skills in the Old Town to get more tourists involved. On traditional festivals, we hold grand celebrations in the Old Town.” He Tang said.

More than 90 sets of books telling stories of Lijiang and the culture of Naxi have also been published.

“Our life is limited, but so long as everyone makes even an effort, the life of a culture can exist forever,” He Runyuan said.

Source: Xinhua

18/03/2019

Cash-strapped Chinese regions seek support from Beijing to meet costs of environmental clean-up

  • Delegates to recent National People’s Congress asked for more help from central government and warn of cost of fighting pollution
Beijing residents wearing masks on a smoggy day last year. Photo: Simon Song
Beijing residents wearing masks on a smoggy day last year. Photo: Simon Song

China’s cash-strapped regions are lobbying Beijing to loosen its purse strings to help fight pollution, saying they do not have the funds to follow state policies aimed at fixing the damage done by decades of unrestricted development.

The cost of environmental compliance was a major theme at this month’s annual session of the National People’s Congress, where thousands of non-binding recommendations submitted by delegates give an insight into the major preoccupations of legislators.

Beijing has been at pains to stress it will not ease up in the “war on pollution” launched five years ago by Premier Li Keqiang, even though the economy grew at its slowest rate since 1990 last year.

But with resources tight and controlling debt a priority, many parliamentary delegates called for more spending support from Beijing and a more “coordinated” approach to keeping pollution in check and the economy on track.

“We cannot stop or hinder economic development in order to pursue environmental protection,” said delegate Pei Chunliang from central China’s Henan province, which has struggled to find new sources of growth.

Provinces have been given a set of targets by central government to reduce emissions. Photo: Simon Song
Provinces have been given a set of targets by central government to reduce emissions. Photo: Simon Song

“In some regions the rules of economic development have not been respected,” Pei warned in a proposal calling for more support for environmentally friendly firms.

For regions under pressure to meet smog targets or resolve long-standing environmental problems while trying to meet growth targets, immediate relief is seen as essential.

Zhang said his city had spent hundreds of billions of yuan to tackle problems like land subsidence, but it was “far from enough”, and the state needed to establish a giant fund to help resource-dependent cities meet their goals.
China pollution pledge: Beijing to cut 60pc of power sector emissions by 2020

Many regions called for state aid to rectify such long-standing pollution problems, with delegates from coal-producing regions like Shanxi lobbying for tax and debt relief.

Other regions are also struggling to implement new directives to prevent agricultural pollution and clean up rivers.

“Due to insufficient local financial resources and historical debts, it is difficult to meet the funding requirements,” said delegate Yu Huiwen, head of the environment bureau in Sichuan province, which is responsible for protecting the upstream area of the Yangtze.

The finance ministry said in its report to parliament this month that it will allocate 25 billion yuan (US$3.7 billion) to a smog prevention fund this year, a 25 per cent increase on 2018, and 30 billion yuan to treat water pollution, up 45 per cent.

Environment Minister Li Ganjie, who acknowledged earlier this year that some regions were struggling with the “historical burdens” of polluting industries, also told a briefing during the parliamentary session that China would provide more support for local governments.

The government was “currently studying and preparing to adopt new measures”, he said, but added it wasn’t just about money, but also policies and technical guidance.

“Whatever the difficulties, we will help them find a reasonable solution,” he said.

Source: SCMP

18/03/2019

China’s crowded co-working industry turns to services amid funding crunch

HONG KONG/SHANGHAI (Reuters) – Co-working space operators in China are shifting their focus from ambitious expansion plans to services such as customising offices for clients, as rising vacancy rates and tighter financing slow their exponential growth of the past two years.

The strategy shift marks a turn of fortunes for the Chinese co-working industry, whose rapid expansion has helped operators such as Ucommune, MyDreamPlus and Kr Space raise hundreds of millions of dollars.

The combined area of co-working space in four first-tier cities in China surged by almost 60 percent between the end of 2017 and October last year, according to industry association China Real Estate Chamber of Commerce.

However, 40 percent of the co-working centres were more than half empty as of October and 40 co-working brands had shut in the first 10 months of 2018, it added.

“There’s a shake-out in the flexible office space,” said Paul Salnikow, global CEO of The Executive Centre, which entered China in 2001 and currently operates 45 premium flexible working centres in nine Chinese cities.

“Since November, we’ve seen operators in China walking away from centres, trying to give it back to the landlord. We’ve been offered furniture from some of these people, saying they’re trying to raise money.”

A common solution for firms appears to be diversification into services that require less capital investment, such as office design and management.

“Our focus this year is ‘management output’,” Mao Daqing, founder of Ucommune, one of the largest co-working space operators in China, told Reuters.

The company expected to partner with enterprise clients and open another 30 flexible working centres for them this year, providing design and management services, from 15 currently, he said. Ucommune’s own branded centres would add five to 10 more to the over 200 already in place.

U.S.-based WeWork started providing such services in China last year and also plans to grow the business.

One industry executive who declined to be identified told Reuters the asset-light model helped to shift rental costs to clients, boosting income.

LANDLORDS AT RISK

A survey of Chinese flexible working space operators by real estate consultancy CBRE in January found that around 68 percent planned to slow or halt expansion this year.

But the rise in vacancy rates and operators dropping out of the business could also spell trouble for Chinese office landlords, especially in major cities like Shanghai where co-working is more common than the rest of Asia-Pacific.“Co-working operators need to go further asset-light and slow one-off CAPEX investment to stay in operation,” said Virginia Huang, CBRE Greater China managing director of advisory and transaction services.

“What this means is landlords also share some risks of this industry, not only the operators.”

Terms of underwriting co-operating operators are also changing, with landlords bearing more costs and risks.

Stanley Ching, Citic Capital’s head of property, said operators were increasingly seeking fit-out subsidies and leasing on profit-sharing models with landlords, as they become more reluctant to pay high rents to secure space.

LaSalle Investment Management, which rents space to co-working operators in China, said picking the right operators and limiting exposure was crucial.

“They’re not recession-proof yet; they haven’t gone through a recession, we don’t know who’s going to survive or who’s not,” said Elysia Tse, LaSalle IM Asia Pacific head of research and strategy.

“So we’ll make sure our portfolio of co-working tenants is a small minority portion.”

One positive trend for co-working operators is the growth in demand from larger corporates amid China’s broader economic slowdown.

“As companies’ outlook on the economy turns conservative and they want to save office costs, they turn to co-working space which provides flexibility,” said Ucommune’s Mao.

“Our clients for office design service also increased for this reason.”

Source: Reuters

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