Here are this week’s news and highlights for China:
Corruption in Media Needs to be Stamped Out With Decisive Steps: Xinhua cancelled a ¥3.5 million ($590,000) contract with the Bank of Communications last week after it was exposed that state-run 21st Century Business Herald was effectively selling good news and not publishing bad news, further eroding trust in state media.
Reaching China’s Silver Generation: 22 min video – China’s 50+ year old consumers are looking for new forms of connections and social structure to take the place of what’s changed around them in China. Xiaomi is marketing its entry level Hongmi as a phone that can connect the young with older generations.
Internet Giant Alibaba Valued at $231 Billion After Frenzied Debut as Public Company: Last Friday Alibaba officially became the biggest IPO in history. Shares were initially priced at $68 and closed the first day of trading at $93.89, valuing the company at over $231 billion, more than Amazon and eBay combined or Facebook, IBM or Oracle. More than 1,000 Alibaba staff have become millionaires. Over half of the 20,000 staff were given shares, with the value exercised by staff estimated to exceed $46 billion. Despite that, Li Na’s retirement from tennis was the most-talked about item on Weibo on Friday.
Internet Power Balance Tilts Toward Asia: With Alibaba’s listing, China now has four of the ten most valuable Internet companies in the world. Nearly 45% of the world’s 3 billion online population now live in Asia, and it’s growing fast.
Why is Jack Ma a Big Deal for You & Your Kids?: Jack Ma is an inspiration for Chinese kids, particularly given he isn’t even a techie, he failed China’s national college entrance exam twice and he had such a normal Chinese upbringing.
Security Risks Found in Half of China’s Government Websites: 1,367 of the 2,714 Chinese Government websites evaluated had 21,000 security risks collectively, including trojan horses, phishing plug-ins and theft of user information.
Xi Jinping to Chinese Tourists: Please Eat Less Instant Noodles: China’s president says his country’s 100 million+ international tourists this year should try local food and eat less instant noodles. Chinese ate more than 46 billion packets of instant noodles last year – 43% of the world’s supply.
Inside China’s International Tourism Boom: Shopping still accounts for Chinese outbound tourists’ 58% of spending. Just 32.5% are aged over 35.
US Tourism Site for Overseas Chinese Gets $20M Investment from Tencent: After officially launching just 6 months ago, online travel site Woqu has received $20 million funding from Tencent. Rather than competing with the dominant players and being just being another travel booking site, Woqu is focusing on the ‘niche’ of Chinese travelling to the US. 1.8 million Chinese travelled there in 2013, with 2 million expected this year.
Poor Health Spurs Spending by Chinese Millionaires: A third of Chinese worth more than ¥10 million ($1.6 million) suffer from insomnia, headaches, fatigue and memory loss, while smaller proportions endure hair loss, immune problems, numb limbs and smokers’ coughs according to Hurun. This is driving burgeoning demand among wealthy Chinese for health-related products, treatments and lifestyles. On average, they spend three hours a week exercising and 80% have an annual health check up. 40% don’t drink, up from 20% five years ago and 84% consider eating healthily to be important.
Why a U.S. Immigrant Investor Program is Being Maxed out by Chinese Applicants: For the first time in its 24-year history, the US’s EB-5 Investment Visa will reach its annual cap of 10,000. Chinese accounted for 85% of visas issued. According to Barclays research, 47% of Chinese worth $1.5 million or more want to leave the country in the next 5-years.
Chinese Jewellery Firms Design Brighter Future: China’s consumers spent ¥470 billion ($76.6 billion) on jewellery in 2013, 107% more than in 2011, putting them on track to become the world’s largest market by 2020. Although most wealthy consumers still put a premium on famous imported brands, Chinese jewellery designers are making inroads with home grown designs. Chinese are also behind a record of $79 billion of global diamond sales last year. Chinese buyers account for 50% of diamonds sold in London and Paris.
Chinese Car Owners Eager To Switch Brands, Says BCG: Nearly 85% of owners of Chinese car brands in China plan to switch brands when they buy their next car – just 30% said they’d buy another Chinese brand. More than 70% of owners of foreign mainstream brands wanted to switch and 55% of owners of foreign luxury brands plan the switch.
Hermès Takes the Long View of its Position in China: In the midst of sinking luxury sales in China due to the Government austerity measures, Hermès has opened a standalone mansion-cum-store on Shanghai’s expensive Huaihai Road. Whilst their logo-laden, mass market competitors are feeling the pain, the more understated Hermès Asian sales (excluding Japan) have grown 17% in the first half of 2014, versus industry growth of less than 4%. Chinese consumers are different to other nationalities as they buy across all categories.
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