Posts tagged ‘Mainland China’

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01/08/2016

Didi, Uber said to merge in China in $35 billion deal | Reuters

Ride-hailing firm Uber is to merge its China operations with bigger rival Didi Chuxing, and hold a one-fifth stake in the new business, in a $35 billion deal to end bruising competition between the two, according to a source familiar with the matter.

A deal between the two – which have been spending heavily to gain market share and battling fiercely for passengers – could be announced as early as Monday, said the source, who declined to be identified because the deal is not yet public.

The new entity combines Didi’s most recent valuation of $28 billion and Uber China’s $7 billion valuation for the $35 billion market capitalization. Uber China investors will have a 20 percent stake in the new company, the source said.Uber did not offer any immediate comment. Didi could not be reached for comment.

“It makes huge sense, Uber faces an uphill task in China especially since Didi is multiple times larger by transaction value and city coverage,” said Hong Kong-based Richard Ji, co-founder of All-Stars Investment Ltd, which manages about $900 million and owns Didi stock.

“This will lead to favorable outcomes for both companies. The biggest benefit is cost savings, they no longer have to give out subsidies to drivers and passengers. It will give pricing power as the new entity will become the dominant player. That means profitability will come sooner than later,” he added.

Source: Didi, Uber said to merge in China in $35 billion deal | Reuters

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25/06/2015

Indians Buy Gold as Chinese Shift to Stocks – India Real Time – WSJ

The rapid run-up in Chinese shares this year is dimming the allure of another popular investment: gold. Luckily for fans of the metal, demand is looking healthy in India, the other big retail market in Asia.

The divergence between gold’s two biggest consumers is unusual. Normally, gold buyers in both countries snap up the metal when it is cheap, hoping prices will surge as they did in 2011, when gold nearly hit $2,000 an ounce. Individuals in both countries tend to sell when gold gets expensive.

This year, as gold prices have meandered around the $1,200 an ounce mark, shares have been more of a draw for Chinese investors. The Shanghai market is up 41%, while mainland Chinese investors have helped push Hong Kong shares up nearly 16%.

“Everybody wants to get on to the stock-market bandwagon,” said Victor Thianpiriya, a precious-metals analyst with Australia & New Zealand Banking Group Ltd. “It is having a big impact on jewelry demand.”

China’s gold imports may tumble by as much as 20% this year, Mr. Thianpiriya forecasts.

via Indians Buy Gold as Chinese Shift to Stocks – India Real Time – WSJ.

Posted in China alert, Chindia Alert, Economics, India alert | 5 Comments »

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11/05/2015

U.S. Congressman says engagement with China has diminished under Xi | Reuters

A United States Congressman told reporters that China’s engagement with U.S. lawmakers has diminished under President Xi Jinping in a marked change from the policy of his predecessors.

Chinese President Xi Jinping speaks with U.S. State Secretary John Kerry (R) during a lunch banquet in the Great Hall of the People in Beijing November 12, 2014. REUTERS/Greg Baker/Pool

He also said that Chinese and Hong Kong officials were looking for a scapegoat when they blamed last years’ pro-democracy protests on “foreign forces”.

“I think it has diminished,” Congressman Matt Salmon said of China’s engagement with U.S. lawmakers under President Xi. “This president has a whole different philosophy. In fact I think if anything, this president is moving in the other direction, (away) from constructive engagement from the past two presidents.”

Salmon is chairman of the subcommittee on Asia and the Pacific under the House Committee on Foreign Affairs. The Republican representative from Arizona is in the middle of his fifth term in Congress.

Salmon was in Hong Kong as the head of a U.S. Congressional delegation, which also visited Vietnam and discussed political, trade and economic issues.

Salmon said he had not been contacted by anyone from the Chinese Embassy since he became chairman of the Asia Pacific subcommittee.

“It’s kind of strange because every other embassy in the region has reached out to me, and their ambassadors have asked for an audience with me, every one of them except for China,” he said.

The United States and China are the world’s two biggest economies. Chinese President Xi is scheduled to make his first state visit to the United States in September as the countries seek to ease tensions over issues ranging from trade and human rights to Internet hacking and theft.

Salmon said he and his delegation had met Hong Kong Chief Executive Leung Chun-ying and told him the United States had not played any role in last year’s pro-democracy protests, in which tens of thousands of people occupied major highways for two and a half months to demand open nominations in the city’s next chief executive election.

Chinese and Hong Kong officials have blamed “foreign forces” for instigating the unrest, which Salmon said was “a convenient way to scapegoat someone else”.

via U.S. Congressman says engagement with China has diminished under Xi | Reuters.

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08/04/2015

China Aims to Soothe Labor Unrest – China Real Time Report – WSJ

As slowing growth fuels labor unrest in the world’s second-largest economy, China’s top leadership is pushing for greater efforts to foster harmony across its increasingly agitated workforce. As the WSJ’s Chun Han Wong reports;

In a recent directive, top Communist Party and government officials called on party cadres and bureaucrats across the country to “make the construction of harmonious labor relations an urgent task,” to ensure “healthy economic development” and to consolidate the party’s “governing status.”

The policy paper was issued late last month and has circulated widely among Chinese labor scholars, lawyers and activists, who say it signals Beijing’s growing concern that festering labor tensions could soon threaten social stability or even weaken the party’s grip on power.

With China “currently in a period of economic and social transition,” labor relations have become “increasingly pluralistic, labor tensions have entered a period of increased prominence and frequency, and the incidence of labor disputes remains high,” the paper said, according to a copy reviewed by The Wall Street Journal. It cited problems including unpaid wages to China’s legions of migrant workers, growing protests and other issues.

Labor scholars say the paper—titled “the Communist Party Central Committee and the State Council’s opinion on the construction of harmonious labor relations”—marks a rare move by Beijing to formally outline policy priorities for tackling worker unrest. It also comes after Premier Li Keqiang pledged in early March, during an annual policy speech, to curb unpaid wages for migrant workers.

“The government is acknowledging the reality of rising worker unrest and wants to make this a bigger priority,” said Wang Jiangsong, a professor at the China Institute of Industrial Relations in Beijing. “But it also lacks specifics on implementation—it remains to be seen how this would work on the ground.”

via China Aims to Soothe Labor Unrest – China Real Time Report – WSJ.

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11/03/2015

Chinese shoe factory workers strike over benefits | Reuters

About 5,000 workers have gone on strike at a shoe manufacturer in southern China over benefits, two activists and a worker said, marking one of the biggest work-stoppages in the country in months.

The company that owns the factory, Stella International Holdings Ltd, lists Guess? Inc, Michael Kors Holding Ltd, Prada SpA and Burberry Group PLC among its customers.

China’s slowing economy, rising costs and the spread of social media have driven an increase in strikes. Last year, the number of strikes more than doubled to 1,378 from 656 the year before, according to China Labour Bulletin, a Hong Kong-based advocacy group.

The strike at Stella’s Xing Ang factory in the city of Dongguan started on Sunday with workers unhappy about not receiving housing assistance, said Liu Zai, who added she had not received the funds in eight years at the factory.

“We want an explanation. Why haven’t they paid this for so many years?” she said by telephone.

Liu and two activists said all of the factory’s workers, about 5,000 people, were on strike. On Wednesday, most were forced to return to their workplace but were still refusing to work, Liu said.

via Chinese shoe factory workers strike over benefits | Reuters.

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19/10/2014

Chinese Home-Buying Binge Transforms California Suburb Arcadia – Businessweek

“Oh, hey! How ya’ doin’?” Raleigh Ornelas hollers, leaning out the window of his spotless white pickup truck. He’s recognized the man across the street, a developer standing in front of a Tuscan-style mansion under construction. “Where have you been hiding at? I call you, you don’t call me.”

Why Are Chinese Millionaires Buying Mansions in an L.A. Suburb?

Ornelas is an informal broker in Arcadia, Calif., a Los Angeles suburb at the foot of the San Gabriel mountains. He’s been keeping an eye out for the builder, an Asian man with a slight comb-over who goes by Mark. Ornelas has found two older homeowners who’ve finally agreed to sell their properties, and he knows that Mark, like all developers here, needs land on which to build mansions for an influx of rich clients from mainland China.

Ornelas rattles off addresses on a nearby street. “Three-eleven, that guy, he’s wack,” he says, shaking his head. “He wants 2.8.” He means million dollars. “And then 354, they want $2 million.”

The lot is 17,000 square feet. “Seventeen for 2 mil?” Mark asks, incredulous.

“I know,” Ornelas says. “They’re going crazy.”

A year ago the property would have gone for $1.3 million, but Arcadia is booming. Residents have become used to postcards offering immediate, all-cash deals for their property and watching as 8,000-square-foot homes go up next door to their modest split levels. For buyers from mainland China, Arcadia offers excellent schools, large lots with lenient building codes, and a place to park their money beyond the reach of the Chinese government.

The city, population 57,600, projects that about 150 older homes—53 percent more than normal—will be torn down this year and replaced with mansions. The deals happen fast and are rarely listed publicly. Often, the first indication that a megahouse is coming next door is when the lawn turns brown. That means the neighbor has stopped watering and green construction netting is about to go up.

via Chinese Home-Buying Binge Transforms California Suburb Arcadia – Businessweek.

Posted in acquisition, Affluence, China alert, Economics, foreign investments, housing | 1 Comment »

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19/10/2014

China’s Jet Set Spends Overseas While Luxury Sales Rise in U.S. – Businessweek

For the first time since Boston consultancy Bain & Co. began tracking the global luxury market, overall sales of luxury goods declined in mainland China over the first eight months of 2014. The dip was small—sales dropped 1 percent—but significant because of the outsize hopes brands from Prada (1913:HK) to Rolls-Royce (RL/:LN) have placed on wooing China’s socially ambitious spenders.

The fully-booked Nanatsuboshi (Seven Stars) luxury sleeper cruise train in Kagoshima, Japan

In the past year, the number of billionaires in China jumped by more than a fifth (from 157 to 190), according to Switzerland’s UBS (UBSN:VX) and Singapore research firm Wealth-X. But spending on luxury goods within mainland China has been squeezed by two significant trends: the continuing austerity and anticorruption drive led by President Xi Jinping and the growing preference for China’s jet set to snatch up expensive handbags and watches while on overseas trips (in part to avoid pricey import taxes at home).

Bain forecasts that overall global luxury sales will rise 5 percent in 2014, with the largest increases expected in the U.S. and Japan (at 5 percent and 10 percent, respectively). Some portion of that spending comes from Chinese tourists in New York, Los Angeles, and Tokyo, but the report doesn’t attempt to estimate how much. Bloomberg Businessweek has previously reported on the growing market for luxury train service in Japan, where household wealth is rising more quickly than at any time in the past five years and seniors want to enjoy their golden years.

via China’s Jet Set Spends Overseas While Luxury Sales Rise in U.S. – Businessweek.

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01/10/2014

Hong Kong democracy protesters and officials mark uneasy National Day | Reuters

Thousands of pro-democracy protesters thronged the streets of Hong Kong on Wednesday, some of them jeering National Day celebrations, as demonstrations spread to a new area of the city, ratcheting up pressure on the pro-Beijing government.

Protesters sit under umbrellas at a main street at Mongkok shopping district after thousand of protesters blocked the road in Hong Kong October 1, 2014. REUTERS/Tyrone Siu

There was little sign of momentum flagging on the fifth day of the student-led protest, whose aim has been to occupy sections of the city, including around the Central financial district, in anger at a Chinese decision to limit voters’ choices in a 2017 leadership election.

Many had feared police would use force to move crowds before Wednesday’s start to celebrations marking the anniversary of the Communist Party’s foundation of the People’s Republic of China in 1949. Those fears proved unfounded.

The crowds have brought large sections of the Asian financial hub to a standstill, disrupting businesses from banks to jewelers. There were no reports of trouble by mid-afternoon on Wednesday, but witnesses said the number of protesters was swelling.

Riot police used tear gas, pepper spray and baton charges at the weekend to try to quell the unrest but tensions have eased since then as both sides appeared prepared to wait it out, at least for now.

Protests spread from four main areas to Tsim Sha Tsui, a shopping area popular with mainland Chinese visitors on the other side of the harbor. It would usually do roaring trade during the annual National Day holiday.

Underlining nervousness among some activists that provocation on National Day could spark violence, protest leaders urged crowds not to disturb the flag-raising ceremony on the Victoria Harbour waterfront.

Proceedings went ahead peacefully, although scores of students who ringed the ceremony at Bauhinia Square overlooking the harbor booed as the national anthem was played.

via Hong Kong democracy protesters and officials mark uneasy National Day | Reuters.

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06/06/2014

In China, Cruise Lines Hope to Woo Millions of First-Time Guests – Businessweek

Cruise lines are betting that the growing number of middle class consumers in China are keen to sample chocolate buffets and stroll the Lido deck. And that’s leading to an influx of ships being sent to sail year-round from mainland China.

The Carnival Sun Princess

China is expected to be the world’s second-largest cruise market (after the U.S.) by 2017, with growth rates far higher than in North America and Europe, the two regions where the industry has historically collected most of its profits. Carnival (CCL), the industry’s largest player, with 10 brands and more than 100 ships, plans to base four ships in mainland China next year, while also boosting its year-round fleet in Australia. The Asian Cruise Association estimated in a 2013 report that area demand will nearly triple to 3.8 million annual cruisers in 2020, with 1.6 million from China.

“The reality is that the [Asian] market’s huge, and it’s going to be very significant over the next 10 to 20 years,” Carnival Chief Executive Officer Arnold Donald says. “We have never been more committed to China as a market of great strategic importance for our company.”

via In China, Cruise Lines Hope to Woo Millions of First-Time Guests – Businessweek.

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23/05/2014

In China, Cruise Lines Hope to Woo Millions of First-Time Guests – Businessweek

Cruise lines are betting that the growing number of middle class consumers in China are keen to sample chocolate buffets and stroll the Lido deck. And that’s leading to an influx of ships being sent to sail year-round from mainland China.

Cruise Ship

Cruise Ship (Photo credit: sebastien.barre)

China is expected to be the world’s second-largest cruise market (after the U.S.) by 2017, with growth rates far higher than in North America and Europe, the two regions where the industry has historically collected most of its profits. Carnival (CCL), the industry’s largest player, with 10 brands and more than 100 ships, plans to base four ships in mainland China next year, while also boosting its year-round fleet in Australia. The Asian Cruise Association estimated in a 2013 report that area demand will nearly triple to 3.8 million annual cruisers in 2020, with 1.6 million from China.

“The reality is that the [Asian] market’s huge, and it’s going to be very significant over the next 10 to 20 years,” Carnival Chief Executive Officer Arnold Donald says. “We have never been more committed to China as a market of great strategic importance for our company.”

The industry’s second-largest cruise company, Royal Caribbean Cruises (RCL), surprised many in the industry last month by announcing plans to move a brand new ship, Quantum of the Seas, to Shanghai in May after its inaugural six-month run in New York. Traditionally, the industry has deployed only older ships to Asia—a practice that’s likely to wane, given Chinese consumers’ demand for equal access to the newest and best amenities from companies vying to break into the market.

via In China, Cruise Lines Hope to Woo Millions of First-Time Guests – Businessweek.

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