Creating a Social Network for Global Trade: An Insider’s Perspective

By on May 20, 2013 at 10:30 AM Leave a Comment

Brian Hager, co-founder and president of Tradesparq

Brian Hager and Michael Kleist met while both were employed by Global Sources, a business-to-business (B2B) manufacturers directory headquartered in Hong Kong. There, they worked to connect foreign buyers with Chinese producers through what Hager terms “the Yellow Pages of manufacturers.” At the same time, they watched the spectacular growth of social media both in the U.S., where they’re from, and China, their adopted home, and began to wonder if there wasn’t a better way to connect buyers with suppliers.

By 2010, Hager and Kleist had turned the idea into action, founding Tradesparq – “The Social Network for Global Trade.” Their mission was an ambitious one – by entering the B2B connections realm they were not only taking on their old employer, but also Chinese tech giant Alibaba, whose B2B trading arm, Alibaba.com, is formidable. Nevertheless, Tradesparq has hardly foundered. On the contrary, according to Hager, the Shanghai-based company is projected to become the second largest B2B platform in the world in terms of content – number of suppliers and product listings – by mid-2014, behind only Alibaba.com. [Read more...]

Microsoft Windows 8 Creative Ads Baffle Chinese Audience

By on May 17, 2013 at 9:05 PM Leave a Comment

A few days ago, Microsoft released three wildly creative Windows 8 ads in Asia, dubbed “Windows 8 Training Camps,” to promote its latest operating system. Soon after posting, these videos were made private, but not before they had spread extensively and generated plenty of buzz. GeekWire called them crazy and brilliant, and we tend to agree.

In this first ad, three women race to apply a full face of make-up within 10 seconds. The final woman, apparently representing Windows 8′s attractive and efficient interface, does a face plant into the table in front of her, emerging with a perfectly applied palette.

[Read more...]

China Rx: Demand for In-Home Senior Care is Skyrocketing

By on May 17, 2013 at 1:30 PM Leave a Comment

How big of a problem is senior care in China? Big enough to inspire Chinese officials to pass a new law requiring adult children to visit their elderly parents. Last December, China’s Law of Protection of the Rights and Interests of the Elderly was amended so as to include the following: “Family members should care for the spiritual needs of the elderly and must not ignore or neglect them. The supporters who live separately from the elderly should frequently visit or send a greeting.” Those who don’t comply with this mandate could face legal action.

You don’t have to go too far back into China’s past to find a period when such a law was unthinkable because it simply wasn’t needed – Confucian culture entails a tremendous amount of respect for the aged and Chinese custom has traditionally revered the idea of “three (or even four) generations under one roof” (三代同堂). As Chinese society changes, however, an increasing proportion of the country’s elderly population is living alone. This development combined with the rapidly aging Chinese demographic structure has led to a surge in the demand for senior care services that the aforementioned legal action isn’t likely to satiate. [Read more...]

Q&A with Michael Mattox: 520 Bridge Project Still Under Review for Chinese EB-5 Investors

By on May 15, 2013 at 8:47 PM Leave a Comment

Michael Mattox, principal of Access the USA

On May 13, contextChina published a story on the Highway 520 Bridge EB-5 project managed by Access the USA (AUSA) based in Lacey, Washington. We reported on the background of the project and the sense of disappointment in China of “dreams broken at the 520 Bridge.”

We also cited reports in China that the project had been denied by the U.S. Citizenship & Immigration Services (USCIS) in July 2012. Michael Mattox, Principal of Access the USA, whom we had tried to reach earlier without success, responded to the article and said the project is still under review and has in fact not been denied. We had an opportunity to interview Michael Mattox by email yesterday on the current situation on the 520 Bridge project.

Q: First of all, about the denial. We reported that immigration consulting firm Wei Zhi Mei Cheng (威智美程) in China wrote in an analysis that Access the USA’s 520 Bridge project was denied by USCIS. You said it was not true and the project was under review by the USCIS. Could you tell us the current status of the project? [Read more...]

Amazon Should Introduce its Cloud Computing Services to Chinese Market the Microsoft Way, says China VC

By on May 15, 2013 at 9:57 AM Leave a Comment

What’s the best way for Amazon to take its vaunted cloud computing platform to China? Follow Microsoft’s lead. That’s the opinion, anyhow, of famed China venture capitalist Kai-Fu Lee.

Lee, who has worked for Apple, Microsoft, and Google, is currently head of Innovation Works, a Beijing-based incubator for Chinese tech start-ups. Among the things he is most famous for are his role as head of Google China and his early support for Sina’s now wildly popular microblogging service, Weibo. Having headed both Microsoft’s research department in China and all of Google China’s operations, Lee knows a thing or two about the intersection of multinational tech companies and the Chinese market.

He also hasn’t shied away from criticizing the track record of these companies in China. Lee began an early October LinkedIn article by stating “Almost without exception, American Internet companies failed in China.” Among the companies Lee highlights in his piece is Amazon, whom he characterized as “losing” in China. [Read more...]

Boeing Official: Dreamliner Deliveries to China Will Start Over Next Few Weeks

By on May 14, 2013 at 8:00 AM Leave a Comment

In late April, the Wall Street Journal reported that Boeing’s 787 Dreamliner was likely to be approved by Chinese officials sometime in May. Nearly halfway through the month, China’s Civil Aviation Administration (CAAC) has yet to give the 787 the green light. Nevertheless, Boeing’s top China executive, Marc Allen, remains optimistic that the Dreamliner will make its way to China in the very near future, telling an audience in Chengdu that “Boeing expects to first deliver the Boeing 787 Dreamliner to China over the next few weeks.” If those expectations are fulfilled, both Boeing and its customers will have a reason to rejoice.

The Dreamliner’s path to China has been long and bumpy, plagued by delays in both production of the aircraft and Chinese authorities’ approval of it. Thus far, Chinese airlines have ordered 41 Dreamliners – 10 for China Southern, 10 for Hainan Airlines, 15 for Air China, and 6 for Xiamen airlines, whose order is currently awaiting government approval. At least three of these planes have been completed by Boeing and await only Chinese government approval before delivery. Hainan Airlines and China Southern are reportedly first in line to receive their Dreamliners. Hainan had originally planned to commission its first Dreamliner in 2010, while China Southern had hoped to put its first 787 in the air in late 2012.

The CAAC, which was the last major holdout in approving the 787 for flight before the aircraft’s grounding, now remains the last major authority yet to approve the aircraft following the incident. [Read more...]

Highway 520 Project Was a Bridge to Nowhere for Chinese EB-5 Investors

By on May 13, 2013 at 2:50 PM 9 Comments

You may have to pay a small toll to cross it, but the 520 Bridge exacted a much higher price for some in China: broken dreams of immigration and millions of dollars in investment with no result.

With the recent scandal of the Chicago EB-5 Regional Center, which defrauded $145 million in securities from 250 investors mostly from China, as reported here earlier at contextChina, a heated discussion has been going on in the China media over America’s popular investor immigration program. One in-depth analysis on Chinese website Sohu cautions loudly, “America’s Immigrant Investor Traps Revealed,” listing possible problem areas in the program such as securities, zoning, tenancy, capital structure, etc. A review of EB-5 events in 2012 posted on Sina had a section devoted to “Dreams Broken at Washington’s 520 Bridge.”

An investment-for-green card program, Employment Based Immigration – Fifth Preference, or EB-5 for short, has been around since 1990, established by Congress to help stimulate the economy.  An immigrant investor is required to invest $1 million, or $500,000 in a high unemployment or rural area, in a for-profit business in the U.S. and create at least 10 jobs. [Read more...]

Whose Chinese Dream? Weibo Inspires Many Answers

By on May 12, 2013 at 11:45 AM Leave a Comment

Dreaming is a popular topic in China these days. Through social media, people are turning what began as an abstract political slogan (the China dream) into individual expressions (my Chinese dream).

When Xi Jinping, as the general secretary of the Communist Party, first talked about a “China dream” late last year, he described it as the revival of the Chinese nation, a kind of grand but abstract national dream.  Over the last several months, China’s media has been fixated on the topic, led by the People’s Daily with its series of nine editorials on Building the China Dream, tying the slogan to China’s path, China’s spirit, China’s strength, etc.  In March, President Xi Jinping again spoke about the China dream, but in addition to his grand Party speech, he said China’s dream in the end was the Chinese people’s dream. So now, the China dream has become a more personal one. Using Weibo, people have been posting on #My Chinese Dream#, mentioning everything from flying in a Chinese-made jet to living in a fair society.

Han Song 韩松:  Driving independently China-made cars and flying independently China-manufactured jets is my Chinese Dream. Not sure if it is possible in this life.

Luo Xin 罗新 PKU: I hate “Powerful Nation” “Big Nation” talk. Why is it so good to be big and powerful? The Soviet Union was big and powerful enough. Hitler was big and powerful enough. But where were the people? Here is my Chinese Dream: The state is smaller; people are bigger. [Read more...]

The Significance of Amazon Appstore’s Launch in China

By on May 10, 2013 at 12:00 PM Leave a Comment

A look at some of the mobile applications offered in Amazon’s new China Appstore.

Amazon launched its app store in China last weekend, becoming the first Western company to offer both free and paid Android apps to consumers in the world’s largest smartphone market. Google Play, which is also available in China, carries only free content. The app store’s establishment came as a surprise to many, as China was noticeably absent from the Amazon Appstore expansion roadmap made public by the Seattle tech giant just last month. The creation of the Appstore, which will offer apps produced by both foreign firms and domestic Chinese mobile Internet behemoths like Tencent and Sina, is significant for two reasons: 1) it will likely serve as the red carpet for the Kindle’s impending rollout; and 2) it offers new opportunities both for Chinese consumers to acquire quality apps and for app producers, foreign ones in particular, to monetize their product in the Chinese market.

Speculation regarding the arrival of Amazon’s Kindle devices on the Chinese mainland dates back to 2010. In the last six months alone, reports have emerged several times that the Kindle was about to go on sale. In November, several Chinese news publications stated that the Kindle would be released within the month. In December, the launch of the Kindle Store further heightened speculation that the Kindle was about to enter the Chinese market. More recently, April 16 and then May 1 were cited as likely Kindle launch dates. The Kindle has yet to be released. But it soon will be, according to a bevy of industry analysts. Steven Millward of Tech in Asia writes that Amazon has “leapt the final hurdle in its long pursuit of selling it own hardware in China.”  First Financial and China Daily are among the other publications that expect the Kindle to go on sale in the Chinese market soon. [Read more...]

China’s Slower Economic Growth Has Silver Lining

By on May 9, 2013 at 9:35 AM Leave a Comment

China’s service sector requires more jobs but a smaller resource and carbon footprint.

China’s economic numbers suffered a setback last month, sparking considerable anxiety among China watchers. Though there have been some bad omens when it comes to overall GDP, other indicators are more positive, and slower growth has a silver lining for the environment and China’s economic future.

First, the numbers: On the negative side, GDP growth for the first quarter of 2013 came in at 7.7 percent, falling below the expected 8 percent, CNBC reported. Eight percent has long seen as a benchmark, as it was believed that it was the minimum growth percentage to maintain employment and social stability. This is down from the previous quarter’s growth of 7.9 percent, stoking fears of a downturn. Another commonly used economic indicator, official manufacturing PMI (purchasing managers’ index, indicating new orders, and a contraction if under 50), was down: numbers released early this month for April revealed a figure of 50.6, down from March’s 50.9, and lower than the anticipated 51.0, according to Reuters.  HSBC’s PMI calculation for the service sector fell from 54.3 in March to 51.1 in April. [Read more...]

Chinese Poisoning Case Prompts Online Petition to the White House

By on May 8, 2013 at 1:00 PM 3 Comments

Zhu Ling before she was poisoned.

People in China have an ancient tradition of petitioning the government dating back to imperial times. Today Beijing is no longer enough: they are now appealing to the White House.

They have filed a flurry of recent petitions ranging from the serious — protesting a chemical plant in Kunming — to the frivolous — changing the flavor of tofu. But one in particular is attracting widespread attention.

On May 3, a petition was created on the “We the People” page at the White House website on behalf of a victim named Zhu Ling (朱令), who was left permanently disabled after a 1994 poisoning in China. Petitioners asked President Obama to “investigate and deport” a suspect in the unsolved case. In less than a week, the number of signatures has exceeded 135,000, passing the threshold of 100,000 required for a response by the White House.

A talented and promising 21-year old student at Tsinghua University, Zhu was found poisoned with thallium and sent to the hospital. After five months in coma, Zhu woke up but has been left paralyzed and bedridden ever since. With a mental capacity of a six-year old, she relies on her parents to function.

Why is a 19-year-old case from China being brought up now in an appeal to the U.S. government? [Read more...]

Starbucks, Nestlé Square Off in Bid for Dominance of China’s Coffee Market

By on May 8, 2013 at 9:00 AM 2 Comments

Shanghai Tang special edition Nespresso machine

Could Nestlé, the world’s largest food producer, be Starbucks’ chief rival in China? Early last month, the Swiss company announced an investment of nearly $16 million in the establishment of a Pu’er, Yunnan-based coffee farming institute, warehouses, and a laboratory. Nestlé’s new emphasis on Yunnan as a major coffee production center is only the latest development pushing it and Starbucks, which established a Farmers Support Center in Yunnan last December, toward direct competition. Among the others are their dueling efforts to produce a new coffee product made with Yunnan beans, their battle in the instant coffee business, and Starbucks’ plan to sell coffee and pre-made drinks in Chinese supermarkets.

Much has been written about the proliferation of cafes on the Chinese mainland. Starbucks plans to have 1,500 stores in China by 2015. Costa Coffee has stated that they will have 2,500 cafes in China by 2018. Even McDonalds has gotten in on the act, opening small coffee outlets on street corners across the country. All of these developments have been driven by surging demand for coffee in China – the Chinese coffee market has grown at rates of 15 percent annually in recent years and is expected to expand from its current size of 70 billion renminbi ($11.27 billion) to 1 trillion renminbi ($160.94 billion) over the course of the next ten years. [Read more...]

China and Cybersecurity: The Other Side of the Story

By on May 7, 2013 at 8:39 AM Leave a Comment

In recent months, many articles, including several authored by me, have focused on the threat that Chinese hackers pose to American organizations. Far fewer have shed light on the Chinese perspective on cybersecurity. Yet it’s important to note that the situation is far more nuanced than a simple case of aggressor (China) versus victim (the U.S.). This fact is particularly salient on a day like today, when the news is replete with stories highlighting the Pentagon’s accusation that the Chinese military is directly involved in attacks on American organizations. With this as a backdrop, the following post offers a look at some of the fundamental elements of China’s view on the cybersecurity issue.

Fear of American “Internet hegemony” and defense capabilities

China harbors a deep distrust of America’s use of the Internet, which itself originated from a U.S. Defense Department project. When the dispute between Google and China over censorship erupted in January of 2010, numerous articles in the Chinese media referred to American attempts to control the Internet and maintain an “Internet hegemony.” This term has experienced a healthy renaissance in recent months as the cybersecurity dispute between the U.S. and China has developed. In short, the Internet is an American creation of tremendous power, and a tool that PRC officials are worried the U.S. will use to undermine their country’s political stability. U.S. cyber espionage and cyber defense operations have also left the Chinese on edge. A recently released set of documents from the U.S. National Security Archives shows that American officials have been engaging in cyber espionage aimed at China since at least 1997, just a few years after the Internet was introduced to the PRC. More recently, several news publications revealed that U.S. Cyber Command is planning a more than 444 percent increase in its manpower, a development which undoubtedly further unsettled Chinese officials. [Read more...]

Will Alibaba-Weibo Deal Create a New Mobile Internet Competitor for WeChat?

By on May 6, 2013 at 4:24 PM Leave a Comment

The Chinese Twitter and the Chinese eBay are hoping to marry social networking with e-commerce.

Alibaba, the Chinese e-commerce giant, inked a $568 million deal last week to purchase an 18 percent stake in Sina’s Weibo microblogging platform. According to Sina, this alliance will create about $380 million in advertising and commerce services revenue for Sina Weibo over the next three years. Investors like the deal: Sina’s shares rallied 12 percent last week following the news.

Some benefits of the investment are readily apparent. Sina gains a partnership with Alibaba’s Taobao Marketplace, China’s largest consumer-oriented e-commerce site, and Alibaba.com, the nation’s largest business-to-business commerce platform. The benefit to Alibaba is also clear, as it gives the company a solid mobile Internet strategy ahead of its anticipated initial public offering. Morningstar analyst Dan Su called the deal “an endorsement from Alibaba … of the value of Sina’s Weibo platform.” According to Reuters, analysts had previously valued Weibo between $600 million and $2.5 billion. Now, this deal puts Weibo’s value at about $3.3 billion, roughly equivalent to Sina’s entire market value as of late, according to the New York Times Dealbook. [Read more...]

Scams, Snags Hit Fast-Growing EB-5 Immigrant Investor Visa Program

By on May 6, 2013 at 8:00 AM Leave a Comment

To see the impact of the EB-5 visa program in spurring Chinese investment in America, one needs to look no further than the Marriott Hotel that towers over Staples Center, home to the Los Angeles Lakers and the Clippers.

Featuring nearly 900 rooms and visible to anyone who travels into downtown Los Angeles, the three-year-old hotel, which anchors the $2.5 billion L.A. Live complex, was built with money provided by Chinese investors through the EB-5 program for immigrant investors. For nearly a quarter-century, this effort has provided conditional green cards to overseas residents making a $500,000 investment. The card becomes permanent if 10 jobs are created within two years.

In Southern California, that has meant 4,000 jobs created in the cities of Los Angeles and San Bernardino alone. In Seattle, the program is being used to help fund a $300 million development project in SoDo that includes affordable housing. [Read more...]

Green Leap Forward: the U.S. and China Get Serious about Combating Global Climate Change

By on May 5, 2013 at 12:00 PM Leave a Comment

Last month, the world’s two largest emitters of greenhouse gases took a groundbreaking move to sign the Joint U.S.-China Statement on Climate Change, a collaboration that calls for “forceful” actions to combat global climate change. The agreement comes at a critical time after the air-pocalypse in Beijing this winter flashed a red alert on the air quality and public health situation in the Chinese capital. The agreement bodes well for clean energy deployment in the two countries and paves the way for international negotiations that may translate into a U.N. agreement on climate change.

The signing of the joint statement April 13 means that climate change is now at the forefront of bilateral negotiations.  Historically, climate change—like environmental issues in general—has been marginalized and rarely treated as a top priority, though there have been collaborative efforts such as the launch of the U.S.-China Clean Energy Research Center (CERC) in 2009. During the annual U.S.-China Strategic and Economic Dialogue in 2010, it is rumored that the U.S.-China joint MoUs on climate change, energy and the environment were forced into the discussion agenda because the two sides could hardly agree on any other issue.  In 2012, climate change merely received a mention near the end of the talks. [Read more...]

Film Expert on China Market: Censored, Ironic, and Too Big to Ignore

By on May 3, 2013 at 3:03 PM Leave a Comment

Yomi Braester

From “Finding Mr. Right” (Beijing Meets Seattle) to “Iron Man 3,” Americans and Chinese are increasingly connected by film, as a number of recent contextChina stories have shown. To learn more about this new convergence, we asked award-winning China film expert Yomi Braester, a professor at the University of Washington, to share his views on the China market, Chinese films, directors, artistic expression, and his own favorite movies.

Besides teaching courses on directors and film in the digital age, Braester founded the UW Summer Program at the Beijing Film Academy, and authored the recent book “Painting the City Red: Chinese Cinema and the Urban Contract.”

Q: “Iron Man 3” opened on May 1 in China, two days before the U.S. But the Chinese viewers are seeing a different version, as Hollywood now increasingly incorporates Chinese elements in its movies. What’s your opinion about these efforts to offer a Chinese version of American movies for the China market? [Read more...]

Chinese Authorities Close to Approving Boeing’s 787 Dreamliner

By on May 3, 2013 at 8:33 AM Leave a Comment

Hainan Airlines 787

Chinese authorities are likely to clear Boeing’s 787 Dreamliner for use in the country sometime this month, according to a report by the Wall Street Journal. Approval of the Dreamliner would be a major victory for Boeing in a China market that it is counting on for much of its future sales. It would also be a win for those from the Northwest who frequently travel to China, as Hainan Airlines plans to deploy one of its first 787s on its Seattle to Beijing route.

Prior to the grounding of all 787s in mid-January, the Dreamliner had received approval from both the U.S. Federal Aviation Administration and the European Aviation Safety Agency, but not China’s Civil Aviation Administration (CAA). Indeed, the CAA was in the middle of testing the 787 when problems with the aircraft’s lithium-ion battery led it to be taken out of the skies. The 787 would remained grounded until last Saturday, when Ethiopian Airlines became the first carrier since January 16 to fly a Dreamliner on a commercial route. The flight followed the approval to modifications in Boeing’s battery design by U.S. and Japanese authorities earlier last week. [Read more...]

While Green Car Sales Languish in China, Chinese Company Builds Electric Buses in U.S.

By on May 2, 2013 at 8:23 AM Leave a Comment

In the midst of one environmental crisis after another, China’s government is searching for solutions to the country’s massive pollution problem, and expanding the use of electric and hybrid cars could go a long way toward reducing emissions. There’s just one problem: no one wants to buy them.

The government has stated that its goal is to have a half million new electric or hybrid vehicles (what it calls new energy vehicles or NEVs) on the road by 2015 and five million on the road by 2020, replacing many gas powered cars. Attaining those numbers will be like scaling Mount Everest, given the current figures. In 2012, Chinese citizens bought just 11,375 electric cars, a tiny fraction of the 19.3 million total cars sold in China the same year, according to this WSJ article. Yale Zhang, director of automotive consulting firm Automotive Foresight, estimates that there are currently 30,000 electric vehicles on the road in China, despite major incentives for purchasers. Hybrid sales were also tepid: Honda sold 542 in 2012, and Toyota sold approximately 17,000. Chinese company BYD (which became well-known after Warren Buffett bought a 9.9 percent stake in 2008), sold just 1,700 electric cars in 2012, according to the BBC. [Read more...]

Cloud Computing in China: An Insider’s Perspective on the Chinese Attempt to Catch-up to Amazon

By on May 1, 2013 at 8:00 AM Leave a Comment

Steve Mushero

Steve Mushero, co-founder and CEO of ChinaNetCloud, is a veteran of the both the Silicon Valley technology industry and one of China’s most successful Internet companies. When I told him that I was hoping to learn more about the cloud computing ecosystem in China and how it compared to that of the U.S., his response was eye-opening: when it comes to cloud computing, he noted, “the whole world is far behind Amazon and China is far behind the rest of the world.”

With that provocative teaser as inspiration, I spoke to Mushero recently about where he sees cloud computing going in China. Mushero moved to China in 2005 to serve as Chief Technical Officer of Tudou (土豆网), a wildly popular Chinese video sharing website that is often compared to YouTube. In 2008 he left Tudou to establish ChinaNetCloud, a global Internet server management company, and the first company in China to offer access to cloud computing services to the general public. ChinaNetCloud’s official corporate vision is to “manage all the world’s Internet servers.”

[Read more...]

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