Tag: China

  • McDonald’s showcases its China headquarters flagship

    McDonald’s showcases its China headquarters flagship

    31 years ago, McDonald’s opened its first store in China on the 8th of October. 31 years later, the fast-food industry giant announced the opening of a new China headquarters building in Shanghai’s West Bund. It will be home to the company’s over 600 HQ-based employees.

    Zhang Jiayin, McDonald’s China CEO, compares the move of the headquarters to a new journey. The cube-shaped building contains more futuristic elements of McDonald’s: an intensive-style innovation lab, the seventh Hamburger University, and the largest McDonald’s flagship store, which represent the company’s commitment to the Chinese market.

    “The Chinese market will be one of the most important markets in the world, and we will witness more here,” said Zhang Jiayin.

    The flagship store, which opened the same day as the new building was officially launched, is also the company’s first cube-style flagship restaurant in East China and McDonald’s China’s first LEED platinum-certified flagship restaurant. Another highlight is its various cross-over attempts with the CITIC Press Group, including the children’s bookstore and mini-theater.

    The third floor of the building contains McDonald’s in-house training institution, the Hamburger University, which will launch its first class next Monday.

    “The reason why we chose Shanghai is that it is a highland of talents, where you can find the best talents in the country and even the world,” noted Zhang. This year, McDonald’s China has planned over 130 university recruiting events across the country, to support the rapid development of its business. At present in McDonald’s China, employees born from 1995 account for more than 60%, and employees born from 2000 are close to 43%.

    Apart from talented people, the company chose Shanghai for its headquarters as it is a giant test field for cutting-edge concepts, be it light meals or plant-based meat. “It is a base camp radiating the entire market in China. We will continue to develop, continue to expand in scale with brand differentiation, and serve more consumers,” added Zhang.

  • China’s Fintech Crackdown Not Over Yet

    China’s Fintech Crackdown Not Over Yet

    The governor of the country’s central bank said it would be taking more steps to curb monopolistic behavior among internet platform companies and strengthen consumer privacy and data security.

    We will continue to cooperate with anti-monopoly authorities to curb monopolies and actively deal with algorithm discrimination and other new forms of anti-competition behavior, Yi Gang, governor of the People’s Bank of China, said on Thursday.

    Yi added that the country would be strengthening the regulation of the payments sector and require all financial services companies to be licensed, Yi said at a Bank for International Settlements conference.

    According to the governor, financial businesses must be licensed to operate, firewalls must be set up between different parts of the business to prevent cross-sector risks, and the direct link between non-banks and banking information services must be cut.

    China’s once-flourishing fintech industry has been hit by a wave of regulation. State authorities forced Jack Ma’s Ant Group to cancel its much-awaited initial public offering last fall, and peer-to-peer lending, once booming in in the country, is now virtually nonexistent.

    The crackdown has also extended to the wider tech industry, with tightened restrictions in numerous areas such as payment links to financial products, collection of customer data, credit scoring services and overseas listings.

    In recent months, authorities have also introduced new rules to regulate the online gaming, after-school classes, and entertainment sectors.

  • Chinese labels flock to Paris to go global in high fashion

    Chinese labels flock to Paris to go global in high fashion

    Chinese fashion labels, including Shang Xia, Icicle, and Fosun Fashion Group, are embracing Paris as a springboard for their international ambitions, opening flagship stores in the city and hiring French designers to burnish their credentials.

    Chinese shoppers are the biggest buyers of luxury goods worldwide, including those of big European players like LVMH and Gucci owner Kering. But China also has its own fashion companies that are growing fast at home and are now targeting the global market.

    Chinese-owned brands are looking to expand abroad, sparking a trend of new labels being established in the country with the goal of international growth, said Yishu Wang, co-founder of Half a World, a firm that offers marketing advice to brands seeking to expand overseas.

    “The Chinese market is very saturated and it’s just become very, very expensive to grow,” she said, noting that it was easier to find backing from investors when taking a global view.

    But in fashion’s upper echelons, Chinese companies, including ones that have purchased established European labels, have so far found it hard to take off in Western markets.

    Shang Xia, founded a decade ago by Jiang Qiong Er and French luxury group Hermes International, who both remain shareholders, started out as a lifestyle brand focused on showcasing Chinese craftsmanship and then expanded into ready-to-wear fashion.

    While the label is well-known in China, it has yet to achieve the broader commercial success that many in the industry had expected.

    “Chinese luxury brands are still quite niche,” Kathryn Parker, a luxury sector analyst with Jefferies, said.

    Shang Xia showed its commitment to Paris when it held its first fashion show on Monday on the official Paris Fashion Week schedule, sending a lineup of models in polished suits in bright colors along a circular runway.

    With backing from a new majority shareholder, the Agnelli family holding company Exor, the label recently set up a design studio in Paris to complement production in Shanghai.

    “It’s a very bold move to do a show in Paris Fashion Week,” said Exor managing director Suzanne Heywood, who is also chairman of Shang Xia.

    FRENCH INFLUENCE

    “We are being watched closely,” said Isabelle Capron, international vice president at ICCF, the owner of Chinese label Icicle, noting that Chinese companies have so far had limited success in building high-end fashion businesses with an international reach.

    The French luxury executive was recruited in 2013 by Shouzeng Ye and Tao Xiaoma, founders of Icicle, which bought the historic French couture house Carven in 2018 and in July created the ICCF Group.

    Icicle, with sales of 334 million euros in 2020, up 12 percent from 2019, has 270 stores in 100 cities in China. The brand caters to urban professionals with earthy-toned overcoats and suits in high-quality materials, often made with natural dyeing techniques.

    Icicle’s founders chose Paris over London, New York and Milan for their investment, setting up design studios, and recruiting talent from French luxury labels.

    “It’s in Paris where you can find the talent to raise the level of the collections so that the label can reach an international level,” Capron said.

    LANVIN REVIVAL

    Fosun Fashion Group has been working to revive the historic French label Lanvin with younger, international consumers in mind, and hired Bruno Sialelli French designer from LVMH-owned Loewe label for the job.

    For the spring 2022 ready-to-wear runway show in Paris, the designer showed slim party dresses, worn by models in towering platform shoes with flared heels, along with an array of handbags and a new pair of futuristic sneakers – accessories are key to the label’s growth strategy.

    Supermodel Naomi Campbell closed the show, sweeping the runway with a long cape.

    Shang Xia executives said they are seeking to broaden their customer base among younger consumers, add new stores in Asia this year and push into the digital realm beyond China next year.

    “We are seeking new means to embrace digitalisation,” said Shang Xia founder Jiang Qiong Er, who flew in from Shanghai for the Paris show.

    Shang Xia’s new creative director Yang Li said he seeks to apply Asian and Eastern design principles to the products, pointing out a bag in the collection in the shape of a triangle.

    “In our culture, when we define shapes, they’re absolute and pure,” he said.

    “What I want to do here is to say that China is not just a market, but a creative force as well,” Yang Li added.

  • ZTE deepens partnership with China Telecom Global in Hong Kong

    ZTE deepens partnership with China Telecom Global in Hong Kong

    ZTE Corporation has signed a strategic cooperation agreement with China Telecom Global Limited in Hong Kong.

    According to the agreement, both parties will further deepen their strategic cooperation in cloud network services, ICT, data centers and global operation in the DICT field.

    “China Telecom and ZTE have a long-standing partnership. In the overseas markets, ZTE has become one of our major equipment suppliers since we started the project from scratch in Philippines in the second half of 2019,” said Mr. Donald Tan, CEO of CTG. “ZTE delivered the project with speed and quality, reaching a new milestone for our cooperation.”

    “As to the key strategic planning in the next few years, I believe that both CTG and ZTE will continue to strengthen the strategic cooperation and build a comprehensive, in-depth and long-term partnership to create synergies for future growth,” Mr. Tan added.

    “China Telecom has always been one of ZTE’s most important partners. Through CTG’s project in Philippines, our cooperation has started to expand in the overseas markets, which is greatly valued by ZTE,” affirmed Mr. Xiao Ming, SVP of ZTE Corporation.

    “Currently, ZTE has achieved the high-level delivery of the project in Philippines, and we believe in the future, both parties will deepen our cooperation and share more excellent experience with each other to take our cooperation to the next level.”

    Moving forward, ZTE and China Telecom Global will stay committed to the cooperation on cloud network services, ICT, data centres, digital transformation, compliance and risk control. The two parties are set to make full use of their comprehensive resource advantages and jointly expand overseas markets for a win-win future.

  • Alibaba apps start offering WeChat Pay option after government order

    Alibaba apps start offering WeChat Pay option after government order

    China’s Alibaba Group Holding Ltd has begun offering payment services from Tencent Holdings Ltd’s WeChat on a number of its apps, after the government ordered major tech firms to stop blocking each other’s services and links.

    Local tech blog 36Kr reported on Tuesday that users of Alibaba’s food delivery app Ele.me, luxury goods app Kaola and e-book app Shuqi can now purchase goods via WeChat Pay, one of China’s most popular online payment options.

    Alibaba’s used-goods marketplace app Xianyu and supermarket app Freshippo have also applied for WeChat Pay integration, the tech blog said.

    Alibaba confirmed the contents of the report to Reuters. Previously, the main way users could make payments on those apps was via Alipay, from Alibaba’s financial affiliate Ant Group.

    Earlier this month, the Ministry of Industry and Information Technology said it had asked internet companies to end a long-standing practice of blocking each other’s links and services on their sites. Such practices prevented app users from seamlessly jumping to services between rival companies.

    Days later, Tencent’s WeChat messaging app started allowing users to access links to rival platforms. Previously, it had not allowed users to click on links sent via chat to, for instance, product listings from Alibaba’s Taobao marketplace.

    The changes come as authorities continue to tighten regulation in the internet sector.

    In April, antitrust regulators fined Alibaba a record $2.75 billion for anti-competitive behavior.

  • Morgan Stanley’s China CEO Retires

    Morgan Stanley’s China CEO Retires

    Morgan Stanley’s chief executive of China will reportedly retire after nearly two decades with the American lender.

    Wei Sun Christianson will retire from her role as China CEO and APAC co-CEO – roles she held since 2006 and 2011, respectively – according to a memo from the bank.

    Christianson will remain as an advisory director at the bank while fellow APAC co-CEO Gokul Laroia will take over as the sole CEO for the region.

    Christianson first joined Morgan Stanley in 1998 and, thereafter, took on senior roles at Credit Suisse and Citi before rejoining in 2006 as China CEO. Under her leadership, Morgan Stanley expanded its footprint in China across domestic securities and bonds underwriting, commercial banking, asset management, trust services, and yuan-denominated private equity investing.

  • Italian brand Frette opens doors in Singapore

    Italian brand Frette opens doors in Singapore

    Italian home accessories and lifestyle brand, Frette, has expanded its footprint in Singapore with its first boutique in Marina Bay Sands.

    The store also marks the brand’s first mono-brand boutique in the territory. Designed by Milan-based architecture studio Archibrando, the new Frette store features elements used in the brand’s global flagship boutique on Milan’s Via Manzoni and custom furnishings crafted from natural Afara wood, “encapsulating the luxurious ambience and timeless elegance and essence of the brand”.

    Frette Singapore occupies a 65sqm area of the shopping centre, offering crafted linens and decorative home accessories, ranging from embroidery bedding, bath towels, to men’s and women’s loungewear. The Marina Bay Sands boutique also offers custom embroidery and personalisation, bedroom styling as well as installation.

    The 160-year-old brand is known for its “chic, original designs and inimitable finish and feel”. Frette operates nine retail locations in the US and 25 in Asia. The brand has flagship stores in China, South Korea, Taiwan, Vietnam and Cambodia.

  • Starbucks launches Asia’s first Greener Store

    Starbucks launches Asia’s first Greener Store

    Starbucks has expanded its Green Store initiative into Asia with the first store opening in Shanghai, focusing on reducing waste and repurposing foods.

    Greener Store Shanghai is the Chinese mainland’s first Starbucks store to use recycled and lower-impact building materials such as wood reclaimed from the renovation of other Starbucks stores.

    The store features a bar made of modules which allows the store to adjust the layout by adding, removing or replacing them for different functions, such as ordering, beverage production and food display. At the ‘end of life’, modules that meet reuse standards can be refurbished and used again, hence reducing waste.

    Meanwhile, its signature green aprons are made from recycled Starbuck PET cups using advanced plastic-to-textile technologies. According to the company, each apron achieves approximately 1kg of carbon reduction in its lifecycle.

    Greener Store Shanghai will also host ‘Sustainable Coffee Classrooms’ with coffee masters selected from across the market, covering different sustainability practices adopted by Starbucks throughout the entire coffee supply chain.

    The store is the first in the country to recycle its coffee grounds for use as fertiliser. After composting, they can be used in suburban farms and shopping mall gardens. Customers can also take coffee grounds back home for free.

    In addition, Greener Store Shanghai marks the world’s first Starbucks store to host sustainability-themed exhibitions, where artists will be invited to give coffee grounds and other materials a new lease of life. Called the “Circular Lifestyle Lab,” the exhibition features sustainability-themed art installations made from recycled materials.

    The store provides coffee grounds straws and cutlery made of biodegradable materials while encouraging customers to bring their own reusable cups or tumblers. Half of the menu is plant-based food, including 15 new food items and two limited-time offer beverages. Oatmilk will be used as the default option for most beverages.

    First introduced in 2018 in collaboration with the World Wildlife Fund, Greener Store Framework has more than 2300 stores across the US and Canada. Starbucks aims to build and retrofit 10,000 Greener Stores globally by 2025.

  • More Warning Signs at Another Chinese Developer

    More Warning Signs at Another Chinese Developer

    Tianjin-headquartered Sunac is the latest major property developer to reportedly face troubles, with a letter to Chinese authorities asking for policy assistance.

    Sunac China Holdings Ltd. asked authorities in Shaoxing – a city in the eastern coastal province of Zheijiang – to offer policy assistance due to operational difficulties, according to a report citing a letter from a subsidiary.

    The letter did not elaborate on the type of assistance requested but said that it had never experienced such a radical change in the external environment, underlining a 60 percent year-on-year drop in home sales in Sunaac’s Shaoxing office.

    The market is almost frozen, the letter said. The radical change in policy and environment has seriously disrupted our business and made it very difficult to maintain normal operations.

    Year-to-date, Sunac’s Hong Kong-listed share price has more than halved to HK$13.44, as of publishing.

    On Friday, Sunac’s dollar bonds slumped after the letter circulated in the market with its 5.95 percent bond due 2024 dropping 4.6 cents on the dollar to 85 cents – a record-low closing level.

  • Chinese solar panel producer invests $500 mln in Vietnam

    Chinese solar panel producer invests $500 mln in Vietnam

    Chinese solar panel maker JinkoSolar Holding Co. has announced a $500 million investment into Vietnam to build a manufacturing facility in the northern province of Quang Ninh.

    The new facility is set to be operational in the first quarter of next year and has an annual capacity of 7 gigawatts, the company stated Monday.

    It will produce panel components including ingots and wafers.

    “The decision to build a facility in Vietnam is one component of our strategy to ensure the long-term stability of our global supply chain,” said Nigel Cockroft, general manager of JinkoSolar U.S. Inc.

    The company has nine manufacturing facilities globally and 22 overseas subsidiaries.

  • China Intensfies Crypto Ban

    China Intensfies Crypto Ban

    China is ramping up its cryptocurrency prohibition efforts again with a directive issued by ten institutions last Friday covering a range of activities including offshore transactions and hiring.

    All crypto transactions in China are banned, according to authorities in a statement that highlighted examples such as Tether, Bitcoin and Ether.

    Banned crypto-related activities extend to services provided by offshore exchanges to domestic residents.

    The statement was issued by the People’s Bank of China alongside nine other institutions that included the supreme court, the police and the internet and securities watchdogs.

    The nation’s top economic planning agency asking local officials to investigate abnormal power usage, call in loans and eliminate preferential tax treatment to accelerate the shutdown of mining operations.

    In addition, crypto platforms will also be forbidden to hire locally for roles like marketing, tech and payment, limiting their ability to serve Chinese customers.

    The latest efforts are part of an ongoing crackdown that traces back to September 2017 when authorities first banned initial coin offerings in China.

  • Tesla Shanghai’s Jan-Sept 2021 Production To Reach 300,000 Units Despite Chip Shortage

    Tesla Shanghai’s Jan-Sept 2021 Production To Reach 300,000 Units Despite Chip Shortage

    Tesla’s Shanghai factory is expected to produce 300,000 cars in the first nine months of the year, capped by a delivery rush in the end of the July-September quarter, despite a global semiconductor shortage, two sources said. The factory makes the electric Model 3 sedans and Model Y sport-utility vehicles for domestic and international markets, including Germany and Japan.

    Around 240,000 vehicles were shipped from the factory in the first eight months, including many for export, according to data from the China Passenger Car Association. Tesla has not announced details on the factory’s production.An official in the area where Tesla’s factory is located said it is expected to produce 450,000 vehicles this year, including 66,100 for export.

    The sources requested anonymity, as they were not allowed to speak to media. Tesla did not immediately respond to a request for comment.

    In August, an official in the area where Tesla’s factory is located said it is expected to produce 450,000 vehicles this year, including 66,100 for export.

    Tesla is hiring managers for legal and external relations teams in China as it faces public scrutiny in the country over data security and customer service complaints.

  • Yum China and Lavazza plan 1000 cafes across China

    Yum China and Lavazza plan 1000 cafes across China

    Italian coffee chain Lavazza is set to increase its store network in China to 1000 by 2025 through scaling up its existing joint venture with fast-food operator Yum China.

    The joint venture –in which Yum will be Lavazza’s exclusive distributor in Mainland China, will also receive an initial US$200 million funding from both companies for its future growth.

    The expansion plan will see more Lavazza store openings in higher-tier cities with different store formats. As of last month, Lavazza China operated 22 stores across Shanghai, Hangzhou, Beijing, and Guangzhou. It aims to double the store number by the end of this year.

    “The potential for coffee in China is vast; there is a lot of unexplored white space,” said  Antonio Baravalle, CEO of Lavazza Group. “As the largest restaurant operator in China, Yum China is the best partner to further grow the Lavazza brand in this market given its deep understanding of local consumers and market dynamics.”

    The joint venture will also ​​market, sell, and distribute Lavazza’s retail products in Mainland China, including coffee beans, ground coffee, and coffee capsules.

    Lavazza entered China last year with Yum China, with stakes of 35 percent and 65 percent respectively. Lavazza’s first China store, its first international presence, was launched in Shanghai in April last year. The company said sales to its members accounted for about 50 percent of the sales for the first half of this year.

    “The recent progress of Lavazza cafes in China has been encouraging and reaffirms our belief that our partnership is well-positioned to capture the significant coffee opportunity in China with accelerated store network development,” said Joey Wat, CEO of Yum China.

  • Evergrande’s Lenders Prepare Loan Loss Provisions and Rollovers

    Evergrande’s Lenders Prepare Loan Loss Provisions and Rollovers

    Several of China’s largest banks that issued loans to Evergrande are now reportedly considering taking on loan loss provisions and rolling over near-term obligations.

    Agricultural Bank of China – the nation’s third-largest lender by assets – has made some loan loss provisions for Evergrande-related exposure, according to a report citing unnamed sources.

    Separately, China Minsheng Banking Corp and China CITIC Bank Corp are prepared to roll over some of Evergrande’s near-term debt obligations.

    According to the report, Chinese bank exposure to Evergrande has decreased in the past year, such as a 10 billion yuan ($1.55 billion) reduction of Evergrande loan exposure to 30 billion yuan at Minsheng.

    There is a possibility that the government may intervene to manage an orderly collapse of Evergande, the report said, adding that regulators have completed related risk assessments.

    In a leaked 2020 document, Evergrande was believed to have liabilities with over 128 banks and 121 non-banking institutions. Although the document was written off as a fabrication by Evergrande, it is reportedly viewed with credibility amongst analysts.

  • UBS China Fund Caught in Tech Maelstrom

    UBS China Fund Caught in Tech Maelstrom

    UBS’s $10 billion China Opportunity fund caught in the downdraft of the country’s harsh tech crackdown.

    It was only last April that Bin Shi gave a fireside chat on a UBS asset management hosted website. The bank’s head of China equities appeared optimistic about the outlook for Chinese equities, saying it was likely the tech sector had seen the worst in terms of anti-trust penalties.

    As a result, he felt confident buying high-quality A-share titles listed in Shanghai and Shenzhen.

    And when Shi talks, investors tend to listen – given he currently manages four different vehicles focusing on Chinese equities, the largest being the China Opportunity Fund.

    It is one of the most important equity funds at UBS. It has a highly successful track record, and assets under management were $14.4 billion at the end of 2020. Over the past five years, it posted an annualized return of more than 12 percent.

    Until this year, Morningstar ranked it as a five-star fund while Citywire has long rated Shi highly.

    What that means is that Shi gets talked about. In Switzerland, the fund seemed to attract new money almost by magnetic force, envious market competitors say.

    But over the past few months that force has likely weakened significantly. Things have not turned out as Shi expected. A-shares continue to tank, as do Chinese securities listed overseas. In summer, the fund recorded double-digit declines and it lost a Morningstar star in July. As of right now, the fund is down almost 22 percent this year.

    That means that it trails the MSCI China Index and many of its peer funds. It still managed $10.4 billion in assets in June with the first half report recording redemptions of about $3.8 billion, although that was still more than offset by inflows of $4.2 billion. But if you factor in market performance, the current shortfall is more likely to be about $1.2 billion.

    That is more than likely to be a big hit for Shi. When asked by finews.com, UBS said that it takes the long-term view when it comes to identifying market prospects and it invests in companies with strong management and a long-term vision that allow them to ably manage geopolitical, regulatory and other external events.

    China is more volatile than other markets, and such an environment creates opportunities for active managers to create value,, a spokesperson said.

    It appears that the fund bet billions of dollars on the Chinese companies bearing the brunt of the anti-cartel and regulatory crackdown. Its holdings of Tencent comprise 9.76 percent of the portfolio, Alibaba and other Jack Ma companies, including Ant, which is being split up, make up 5.74 percent. In comparison to peers, it appears to be overweight in financials.

    In the meantime, the Chinese government seems to be ramping up scrutiny of the insurance sector. One of the largest insurers is Ping An, which is 5.29 percent of the portfolio. Authorities are also taking steps against video games, which is likely to impact major games producer Netease (4.97 percent of the portfolio).

    The brutal decline in Chinese equities has proven controversial, given that it has become mixed up in the U.S.-China trade war, the pandemic and violations of human rights in China. Market legend George Soros has called Blackrock’s recent move into China a «tragic mistake». He warned that the world’s largest asset manager was likely to lose money as a result, warning that the recent steps against the tech sector are a symbol that Chinese President Xi Jinping will do anything to remain in power.

    One of the world’s mostly closely watched investors, Cathie Woods, recently sold off a sizeable chunk of her funds holdings in China tech.

    Blackrock and UBS have no choice but to grin and bear it. The Chinese investment market is a long-term gamble and one in which UBS managed to position itself before other competitors. UBS is also intent on making more investments there. That also holds for the funds business. It is expanding its palette of products and it is shortly expected to launch a new China Healthcare fund.

    But if UBS China funds continue to bleed, that could change. It is mostly investors outside the mainland that have been burned by the tech crash and they make most of their money from them.

    They seem to have had enough of the way Chinese authorities have been acting, which they see as unpredictable and overly draconian.