Category: Financial Times

Chinese New Year Products Not to Miss

The possibilities are endless as the Chinese New Year approaches. Everyone wants to make money off of the major event, and they are thinking of many creative ways of doing so. Here are two examples.

You can now get your Air Force 1 Nike shoes for the New Year. They offer options to cover your shoes with metallic gold graphics in a few color choices. The Nike Air Force 1 Low Chinese New Year shoes will cost you $160.

Rather than just making money on products, some people have thought of actually making money to celebrate the Chinese New Year. That’s right. The United States Department of the Treasury is selling “Lucky Money” which is a special one-dollar note that comes with a series of numbers that start with 8888. This is considered to be a lucky number in Chinese culture.

Of course, the dollar comes in a red envelope with Chinese symbols and the envelope has a picture of a rooster on it. Of course, this is appropriate since 2017 is the year of the rooster. The director of the Treasury Department’s Bureau of Engraving and Printing, Leonard Olijar, said “It’s our most successful cultural product that we have. We expect we’ll sell out in the first week of its release.”

There will be exactly 88,888 lucky dollars so get one while they last. And don’t think they sell for $1. They sell for $5.95.

 

 

 

 

China’s New VAT System

China has just started a value-added tax (VAT) system across all industries that used to have a business tax. This is the most ambitious overhaul of their tax regime that they’ve had in three decades. They have created tough reforms in their transition to being a services-oriented economy, rather than one powered by manufacturing.

The government first started to think about VAT in 1979 and they started using the tax in 2012. The final four sectors that they have added the VAT to include construction, property, finance and life services.

Consumers will feel the VAT in different ways depending on what they are buying, according to China’s Vice Minister Shi Yaobin. The revenue from the VAT will be shared between China’s central and local governments and each will receive 50%.

Ad Age Adds Adam Roseman to 40 Under 40 List

Marketing and advertising journal Ad Age named Los Angeles businessman Adam Roseman to their annual list of 40 Under 40 in recognition of his achievements in the marketing and advertising industry.

Roseman is the CEO and Co-Founder of FansTang, a Western digital entertainment company selling content in China.

“I’m honored to be recognized by Advertising Age amongst all the other established, talented industry leaders,” said Roseman. “I’m extremely proud of what our business has achieved. Our strategy is built around utilizing our extensive data analytics and production capabilities to create positive and localized international content consistent with Chinese culture and appealing to Chinese millennial consumers. In 2016, we will continue to focus on producing and curating high quality digital content, expanding our brand partnerships and further developing our exceptional international team.”

Roseman founded FansTang in 2012. It is wholly owned by its parent company, China Branding Group, which specializes in providing western digital media to meet China’s growing demand for localized international content. With offices in Los Angeles, Beijing and Shanghai, Roseman and his teams have launched into new markets for their Chinese and Western entertainment content collaboration.

FansTang is China’s largest provider of localized international content of live events, social media, and non-studio Hollywood and related video content into the Chinese marketplace.

JD Finance Subsidiary Receives Backing

JD.com Inc. has said that its financial subsidiary has raise $1 billion in financing. In this financing round, lead investors include Sequoia Capital China and China Taiping Insurance. They have valued the e-commerce company JD.com’s JD Finance subsidiary at $7 billion.

JD.com has said that it will continue to have majority ownership in JD Finance and that the transaction should be completed in the first half of the year.

Read the whole story to learn more.

China Adding 5 Privately Financed Banks

China’s banking regulator has recently announced that they will create as many as five privately financed banks to support economic growth. The goal is to promote “modernization of governance.”

China’s economic growth took a turn for the worst in the second quarter of last year with a low of 7.5%. In the third quarter, growth did rebound to 7.8% and the Cabinet is expecting growth for the full year of 7.6%. This would end up being the weakest performance since 1999.

The Chinese banking authorities will be supervising the new institutions, although they will be funded through private enterprise. As described in a recent article, “The new move is part of an effort by CBRC to ease to flow of foreign capital into the Chinese banking sector. According to Xinhua, the regulator will also be investigating the possibility of lowering the threshold required for foreign banks to enter the country.”

Kathleen Tan Honored with Most Influential Industry Person Award

The China Finance Summit 2013 just awarded the AAE Travel Chief Executive Officer Kathleen Tan the “Most Influential Industry Person” Award. She was the first foreigner ever to be honored with the award.

The China Finance Summit 2013 awards enterprises and corporations in a number of industries with recognition for the efforts that they make in economic development and environment. There were 600 attendees at the summit, including government leaders, NGO leaders, media, industry experts and more.

Kathleen is the CEO of AAE Travel, a combined effort of AirAsia and Expedia, which is the world’s largest online travel company. She is in charge of their businesses in Southeast Asia, India, china, Japan, Korea, Taiwan and Hong Kong.

As the China Finance Summit 2013 said, “During the past eight years, Kathleen’s strategic vision, boldness, and leadership have grown AirAsia’s revenue twenty-fold to over RM 10 Billion (US$ 3.5 Billion) in 2012. Her self-motivation and passion for the work won respect and trust from many partners in China.”

As Tony Fernandes said, “Kathleen deserves this award and I am incredibly proud of her. Clearly, her commitment, energy, leadership and engaging personality have endeared her to China. She’s so passionate about the business it has won her many fans throughout the industry. Amongst them are high-ranking government officials and respected leaders from the aviation, business and media world.”

In her acceptance speech, Kathleen said, “When I took on the big mission to change China, I never dreamt that I would someday win an award for my work. I am truly humbled and honoured by this award, it is such a sweet moment for me. This award is dedicated to everyone who has supported me especially my team in China. I’d also like to share this award with my 200,000 Weibo fans and last but not least, Tony, for believing in me. I hope this will inspire more women and enterprising young individuals in China to step up, work hard and keep believing. One day, your efforts will pay off.”

Imports to America from China on the Rise

While most Americans may not be aware of it, more and more foods that end up on their tables come from China today. The US imported 4.1 billion pounds of food products from China by the end of last year, according to the Agriculture Department. The imports included half of the apple juice in the country, 80% of the tilapia and more than 10% of the frozen spinach.

These issues were recently in the news, as the largest takeover of an American company by a Chinese one just occurred. Recently, Smithfield Foods agreed to be sold to Shuanghui International, one of China’s largest meat processors.

The $4.7 billion deal has created fear among Americans about China’s expanding role in the American food supply world.

As Patty Lovera, the assistant director of the Food and Water Watch, recently said, “We are importing more and more food from China at the same time we are hearing more and more about food scandals involving Chinese companies.”

More bluntly, Jeff Nelken, a food safety expert, said “We should definitely give the Chinese an award for creativity in adulterating foods. They are a great resource for counterfeited foods, like honey products that don’t seem to have any pollen in them.”

China Looks to Gambling Opportunities in Matsu

China and Matsu are hoping that the offshore island group of Matsu will attract a large number of gamblers from China. As Anita Chen, a Taipei-based managing director for US-based lobbying firm Park Strategies said, “People that are looking to building casinos anywhere in Taiwan are eyeing Chinese tourists.”

The Matsu government explained that they had a turn out of 40% of eligible voters, and a vote of “yes” from 1795 voters (as compared to 1341 no). Matsu has a population of about 10,000 and is eager to attract tourists since it has been hit by a drawdown of troops in the Taiwan Strait.

It is predicted that Matsu will need three to five years to set up their gambling industry. They need to finish getting the Gambling Act approved by the Taiwan Cabinet and then need to put together a bid for an operator. It could take another three years from that point before the casino is actually built and ready for operations.

China Consumer Sector Booming According to DBS Group Research

According to many, the Chinese consumer sector is really the hot spot to watch at the moment. As DBS Group Research explains, the consumer sector allows for "beauty of both sides."  This means, as they explain it, that these consumer companies offer "better resilience during the harsh times as well as fruitful returns whenever skies clear again."

The Chinese government is encouraging this emphasis as well, creating policies that help with consumption. They have focused on increasing minimum wage, limiting the medical costs that individuals can accrue, building more affordable housing and increasing transportation systems.

As the yuan continues to appreciate, this also increases the potential purchasing power that mainlanders have.  There will be more interest in gold, luxury items and high-end merchandise, according to the DBS Group. In addition, the government implemented energy saving subsidies in 2011 that will help the home appliance industry.

Companies to watch, according to the DBS Group include: China Foods, China Resources, and Golden Eagle Retail Group.

Trade Between China and North Korea Dramatically Increases

In a fascinating turn of events, North Korea is taking notes from China and starting to create megamarts like Walmart.  Pyongyang will soon have a superstore like Walmart.  The new consumer approach in North Korea is part of an official campaign that they launched three years ago to build up their economy – and to change the image of their leader Kim Jong Un.

The Kwangbok area supermarket in downtown Pyongyang is the first of these examples.  Consumers there can get everything from Minnie Mouse pajamas to popcorn to frying pans.  As shopper Pak So Jong said, "It is very good to come to this shop and buy goods which I like by feeling them and looking over them myself."

The Chinese has been introducing these cheap goods to a small niche market in Northern Korea in the country’s border regions.  Time will tell if it will take off, and if this will be a brilliant economic move for China.

Trade between China and North Korea has been booming for the last few years.  In 2010, North Korea did $3.5 billion in trade with China, which was a 30% increase from the year before. That figure increased to $5.1 billion in the first 11 months of 2011, a 70% increase from 2010.