Tuesday, May 29, 2012
(Reuters) - China's Sina Corp has introduced a code of conduct for users of the local version of Twitter amid accusations of censorship to rein in what has grown into a raucous online forum to air political and social grievances.
Thursday, February 24, 2011
Alibaba Group's business-to-business trading platform Alibaba.com identified fraudulent transactions involving 2,326 suppliers who were committing the crimes against the site's buyers.
The fraud cases caused Alibaba.com's CEO and COO to both resign from the company, even though the two were not found to be involved with the fraud cases. An investigation, however, found that 100 sales people, along with several supervisors and sales managers were responsible for allowing the fraud to evade detection.
"The investigation concluded that the pursuit of short-term financial gain at all cost had tainted parts of our sales organizations, risking serious damage to our Company's core values," Alibaba said in a statement on Monday.
Alibaba has already shut down the virtual storefronts of the suppliers. At the same time, the company has paid $1.7 million to 2,249 customers who were victims of the fraud.
But the loss of Alibaba.com's top executives came as a major surprise to China's IT industry. The CEO David Wei was contacted, but would not comment on his resignation. However, in a letter to employees, Wei had said his resignation was a necessary one, even though it might cause shock.
"Without such a shock, it would not be enough to reawaken our sense of mission and our values," he wrote. Wei urged employees to do the right thing, without getting tied down to simply making business.
Alibaba.com currently dominates China's business-to-business (B2B) e-commerce market, with a 69.7% market share, according to Beijing-based research firm Analysys International. China's thriving B2B market generated 2.09 billion yuan ($318 million) in income last year, growing by 32% from the year before.
Alibaba's move to be transparent and disclose the fraud cases, rather than hide them has been seen as a "positive step," said Cao Junbo, the chief analyst at iResearch. "In this way, the negative impact of the news will be easier to control," he added.
Wei had been at Alibaba since 2006 and had been leading a company expansion strategy to help small online business in the U.S. to source their products from China. The loss of Wei, however, was seen as necessary move in order to preserve confidence in the company, Cao said. "The value of the company is the bigger than the person," he added.
The disclosure of the fraud cases, however, could still drive customers away from Alibaba.com. Not only did Alibaba.com fail to prevent the fraud with its protective measures, but members of its sales groups were found to be liable, said Ma Rongsong, an analyst at Analysys International. The fraud cases could now make it more of a challenge for Alibaba.com to become a supplier for small businesses overseas like in the U.S., Ma added.
The abrupt resignation of Wei as CEO, however, did seem strange to some. "It feels like there is more going on here," said Mark Natkin, managing director for Beijing-based Marbridge Consulting. "What's the last major scandal you can remember where the CEO claimed to have no direct involvement and then stepped down? In Japan, all the time. But here, in China, I just don't see it that much."
"The way this has played out is surprising and we feel like there might be more details to come," he added.
Friday, January 28, 2011
And the world should stay open for business
N THEORY, the ownership of a business in a capitalist economy is irrelevant. In practice, it is often controversial. From Japanese firms’ wave of purchases in America in the 1980s and Vodafone’s takeover of Germany’s Mannesmann in 2000 to the more recent antics of private-equity firms, acquisitions have often prompted bouts of national angst.
Such concerns are likely to intensify over the next few years, for China’s state-owned firms are on a shopping spree. Chinese buyers—mostly opaque, often run by the Communist Party and sometimes driven by politics as well as profit—have accounted for a tenth of cross-border deals by value this year, bidding for everything from American gas and Brazilian electricity grids to a Swedish car company, Volvo.
There is, understandably, rising opposition to this trend. The notion that capitalists should allow communists to buy their companies is, some argue, taking economic liberalism to an absurd extreme. But that is just what they should do, for the spread of Chinese capital should bring benefits to its recipients, and the world as a whole.
Why China is different
Not so long ago, government-controlled companies were regarded as half-formed creatures destined for full privatisation. But a combination of factors—huge savings in the emerging world, oil wealth and a loss of confidence in the free-market model—has led to a resurgence of state capitalism. About a fifth of global stockmarket value now sits in such firms, more than twice the level ten years ago.
The rich world has tolerated the rise of mercantilist economies before: think of South Korea’s state-led development or Singapore’s state-controlled firms, which are active acquirers abroad. Yet China is different. It is already the world’s second-biggest economy, and in time is likely to overtake America. Its firms are giants that until now have been inward-looking but are starting to use their vast resources abroad.
Chinese firms own just 6% of global investment in international business. Historically, top dogs have had a far bigger share than that. Both Britain and America peaked with a share of about 50%, in 1914 and 1967 respectively. China’s natural rise could be turbocharged by its vast pool of savings. Today this is largely invested in rich countries’ government bonds; tomorrow it could be used to buy companies and protect China against rich countries’ devaluations and possible defaults.
Chinese firms are going global for the usual reasons: to acquire raw materials, get technical know-how and gain access to foreign markets. But they are under the guidance of a state that many countries consider a strategic competitor, not an ally. As our briefing explains (see article), it often appoints executives, directs deals and finances them through state banks. Once bought, natural-resource firms can become captive suppliers of the Middle Kingdom. Some believe China Inc can be more sinister than that: for example, America thinks that Chinese telecoms-equipment firms pose a threat to its national security.
Private companies have played a big part in delivering the benefits of globalisation. They span the planet, allocating resources as they see fit and competing to win customers. The idea that an opaque government might come to dominate global capitalism is unappealing. Resources would be allocated by officials, not the market. Politics, not profit, might drive decisions. Such concerns are being voiced with increasing fervour. Australia and Canada, once open markets for takeovers, are creating hurdles for China’s state-backed firms, particularly in natural resources, and it is easy to see other countries becoming less welcoming too.
That would be a mistake. China is miles away from posing this kind of threat: most of its firms are only just finding their feet abroad. Even in natural resources, where it has been most active in dealmaking, it is not close to controlling enough supply to rig the market for most commodities.
Nor is China’s system as monolithic as foreigners often assume. State companies compete at home and their decision-making is consensual rather than dictatorial. When abroad they may have mixed motives, and some sectors—defence and strategic infrastructure, for instance—are too sensitive to allow them in. But such areas are relatively few.
What if Chinese state-owned companies run their acquisitions for politics, not profit? So long as other firms could satisfy consumers’ needs, it would not matter. Chinese companies could safely be allowed to own energy firms, for instance, in a competitive market where customers could turn to other suppliers. And if Chinese firms throw subsidised capital around the world, that’s fine. America and Europe could use the money. The danger that cheap Chinese capital might undermine rivals can be better dealt with by beefing up competition law than by keeping investment out.
Not all Chinese companies are state-directed. Some are largely independent and mainly interested in profits. Often these firms are making the running abroad. Take Volvo’s new owner, Geely. Volvo should now be able to sell more cars in China; without the deal its future was bleak.
Show a little confidence
Chinese firms can bring new energy and capital to flagging companies around the world; but influence will not just flow one way. To succeed abroad, Chinese companies will have to adapt. That means hiring local managers, investing in local research and placating local concerns—for example by listing subsidiaries locally. Indian and Brazilian firms have an advantage abroad thanks to their private-sector DNA and more open cultures. That has not been lost on Chinese managers.
China’s advance may bring benefits beyond the narrowly commercial. As it invests in the global economy, so its interests will become increasingly aligned with the rest of the world’s; and as that happens its enthusiasm for international co-operation may grow. To reject China’s advances would thus be a disservice to future generations, as well as a deeply pessimistic statement about capitalism’s confidence in itself.
Wednesday, January 26, 2011
The logistics industry involves manufacturers and logistics enterprises, including a series of links such as storage, transportation, package, distribution and information processing. By the end of 2010, there have been about 100,000 related enterprises of the logistics industry with low industrial concentration.
After the entry into WTO, China comprehensively carried out the policy of opening-up. In 2008, the Ministry of Commerce listed modern logistics in industries encouraged for foreign investment. And China was listed as one of the most important logistics markets in the world by a number of foreign logistics enterprises.
In recent years, international logistics enterprises constantly increase the investment in China and speed up logistics network expansion. Currently, China has become an important overseas market for various international logistics enterprises, and the number of international logistics enterprises in China increases. International logistics enterprises speed up mergers of large-scale logistics enterprises and provide increasingly abundant services in various forms(joint ventures/mergers, especially with large private logistics enterprises). At present, multinational logistics enterprises have formed strategic superiority in air freight field, while that in express delivery has been initially formed. Following port, parks and transit center, domestic airports become new investment spots for foreign investors, who are optimistic about investment in China's domestic airports in the long term. In recent years, foreign industrial estate developers bring in new development mode of logistics estate, break original market pattern, accelerate transformation, reorganization and upgrade of China's logistics industry, and also bring competition to China's local logistics enterprises.
International operation is an important way for local logistics enterprises to tackle the international competition. It will be the development direction for China's local logistics giants to explore multinational service demand of domestic and overseas clients with local advantages, provide powerful support of logistics and supply chain management for domestic clients to expand business overseas, and offer complete localized logistics and supply chain solutions. In fact, local logistics enterprises represented by COSCO Logistics and Sinotrans Logistics are improving their services to enhance their competitiveness. For instance, COSCO Logistics emphasizes on high value-added supply chain and logistics service related to the shipping industry and transnational transportation. On the basis of storage resources, China National Materials Storage and Transportation Logistics Co., Ltd. form comprehensive logistics business mode efficiently combining spot market, movable property supervision, bulk trade, processing and distribution with freight agency.
In China, foreign logistics giants like Maersk, ProLogis and four international express giants successively adopt more sound and pragmatic business strategies. The innovative and value-added services of many foreign logistics enterprises such as vendor managed inventory, supply chain finance and logistics in duty-free zones show powerful risk resistance capacity.
The main business revenue of China's top 50 logistics enterprises totaled CNY 450.60 billion in 2009 with a slight decrease over 2008. Among China's top 50 logistics enterprises, the main business revenue of COSCO Group exceeded CNY 100 billion, and that of 9 enterprises represented by Sinotrans Shipping Limited exceeded CNY 10 billion. The average main business revenue of China's top 50 logistics enterprises in 2009 exceeded CNY 1 billion, among which the 50th logistics enterprise's main business revenue reached CNY 1,219.70 million.
Through this report, readers can acquire more following information:
-Development status of China's logistics industry
-Key enterprises of China's logistics industry and their operations
-Investment opportunities in China's logistics industry
-Prediction on development trend of China's logistics industry
Following people are suggested to buy this report:
-Road, railway and air transport enterprises
-China's local logistics enterprises
-Foreign logistics enterprises concerned about China's logistics industry
-Port and airport
-Investors concerned about China's logistics industry
-Research institutions concerned about China's logistics industry