Category News of China

China’s electronics, IT manufacturing industry grows fast

The added value of China’s electronics and IT manufacturing industry rose by 10.8 percent year on year from January to November in 2015, according to the Ministry of Industry and Information Technology.

The statistics only covered the enterprises whose annual business revenue each exceeds 20 million yuan (3.09 million U.S. dollars).

The growth rate was 4.7 percentage points higher than the average level of the country’s entire industrial sector in the period.

According to the ministry, the electronics and IT manufacturing industry reported 8.89 trillion yuan in bulk business revenue in the first ten months of the year, up 8 percent from a year ago, with its net profits surging 14.4 percent to 403.7 billion yuan.

Internet Plus in full swing, welcomes foreign investments

Lin Nianxiu, deputy head of the National Development and Reform Commission, at a sub-forum of the ongoing World Internet Conference that runs through Friday.

China welcomes foreign companies to join the tide of the country’s Internet development to achieve win-win outcomes, as the sector is now in full swing under the Internet Plus strategy, said a senior official from the country’s top economic planner on Thursday. [Special coverage]

“The Internet Plus model is able to effectively bridge demand and supply, generating a market of trillions of yuan,” said Lin Nianxiu, deputy head of the National Development and Reform Commission, at a sub-forum of the ongoing World Internet Conference that runs through Friday.

Foreign investments are more than welcome in China to help boost the Internet Plus strategy with their complementary advantages, he added.

“Cooperation from home and abroad will generate win-win results”, as the country is seeking to streamline the new business format with improved regulations and mechanism, said Lin.

Earlier this year, the country put forward the Internet Plus strategy in a bid to connect isolated industries and upgrade traditional industries amid nationwide reconstructing and transformation.

China has witnessed a rapid development of its Internet industry over the past two decades. The Internet has profoundly affected almost every facet of Chinese people’s lives including communication, transportation, and entertainment.

As of July 2015, the number of Internet users had reached 668 million, the most in the world, according to official figures. All cities and towns, and 93.5 percent of administrative villages in China now have access to the Internet.

The thriving Internet industry and the gigantic market potential have also bred countless Internet companies, and some of them, such as Baidu, Tencent and Alibaba, have become international goliaths.

Chinese authorities have attached more importance to the Internet, pledging to transform China from a big Internet nation to a great one. The Internet, with better management, will be more open to the world.

AstraZeneca to invest in China

British-Swedish drugmaker AstraZeneca plans to invest more than $800 million in China in the next 10 years and strengthen cooperation with local partners, especially in the biologics sector.

AstraZeneca strengthened collaboration between its biologics unit MedImmune and local research organization Wuxi AppTec.

The UK company has an option to acquire WuXi AppTec’s biologics manufacturing capacity in Wuxi with an overall investment valued around $100 million.

“These initiatives will allow us to connect local untapped pharmaceutical needs with our global portfolio,” said Mark Mallon, executive vice president of International businesses at AstraZeneca.

The drugmaker will also invest $50 million to expand its development and launch facility on top of its existing manufacturing site in Wuxi to support both local and overseas markets.

Wuhan Iron & Steel ‘will cut jobs’

Wuhan Iron & Steel Co (Wugang) will lay off 6,196 people by the end of February 2016, news portal jiemian.com reported on Monday.

The workforce stood at 27,760 people based on the company’s 2014 financial report, so the job cut will cover more than 20 percent of its staff.

Wugang’s parent company, Wuhan Iron and Steel (Group) Corp (WISCO), will likely eliminate roughly 11,000 jobs, with a 20 percent pay cut to be imposed on all employees in 2016, the same report said, citing several anonymous sources at WISCO.

But Sun Jing, director of WISCO’s communication department, was quoted as saying in the report that there have been no layoffs or pay cuts. He also explained that according to company policy, an employee may face a pay cut of up to 20 percent only when he or she fails to complete the workload.

Smartphone makers set sights on iris scanning tech

While the year 2015 has witnessed fingerprint recognition scanner becoming a must-have feature in top of the line handsets, iris scanning technology is expected to be the center of attraction in high-end smartphones in the next few years.

Iris recognition, an automated method of biometric identification, enables you to unlock the phone as well as secure mobile payment by scanning your eyes instead of the tip of your fingers.

The new recognition method, which analysts said is widely regarded as becoming the next security standard, has found its way to mobile devices.

South Korean tech giant Samsung is rumored to be working on its next generation of Galaxy S7 smartphones, which will come with the iris scanning technology in 2016.

Another South Korean smartphone manufacturer, LG, which hadn’t originally even intended to integrate fingerprint scanner on its LG G4, is reportedly very likely to become a front-runner in smartphone technological breakthroughs. According to tech news portal techradar.com’s report in November, LG’s next generation LG G5, which is expected to be released early 2016, could sport an iris scanner.

Smaller smartphone makers, Guangdong-based Vivo and Japan’s Fujitsu, have already tried out this technology on their flagship smartphones, Vivo X5 Pro and Fujitsu ARROWS NX F-04G, respectively.

Fujitsu promoted its gizmo that can unlock a screen with a 0.6-second glance, and Vivo X5 Pro claimed it can secure almost all mobile applications. The two devices created quite a sensation among tech enthusiasts when they were launched in May, but their sales were reportedly not particularly high, as iris recognition doesn’t seem to be a feature ordinary consumers are looking for in the next generation of smartphones.

“I will not change or buy a smartphone only for the sake of enjoying the new technology, which is like a supplementary feature for passwords, not a necessary one,” Shang Xin, a 31-year-old Beijing resident, told the Global Times on Tuesday.

He added that it is slightly inconvenient to constantly have to lift the phone to your eyes, and the infrared light will also make the technology annoying and invasive if done regularly.

“I think fingerprint scanning technology is enough for my daily use with respect to security and speed,” he said.

Fingerprint recognition, another biometric identification method, was widely integrated into high-end smartphones this year.

“Technologically speaking, iris scanning will be more secure than other identification methods,” Zhu Dalin, an industry analyst with Beijing-based market consultancy Analysys International, told the Global Times on Tuesday.

“But this does not mean that fingerprint scanning technology will head out of the door in favor of iris scanning, especially when current iris scanning technology is not significantly faster,” said Zhu. “One of the reasons why fingerprint scanning caught on was thanks to Apple’s solution – Touch ID – which slightly edged out typing in passwords in terms of speed.”

Experts are concerned that the new technology may still carry some disadvantages for users who have eye-related disorders as well as those who are trying to unlock their phones without enough light present.

But consumers are likely to see the adoption of iris scanning technology in next year’s smart devices as a strong selling point as the global smartphone market continues to mature.

U.S. market consultancy International Data Corp (IDC) forecast on December 3 that 2015 will be the first full year of single-digit growth of 9.8 percent year-on-year in worldwide smartphone shipments, settling at a total of 1.43 billion units. IDC also predicted that the once red-hot smartphone market in China would grow by only 1.2 percent this year, down from 19.7 percent in 2014.

E-commerce creates more jobs for the disabled

Su Qianqian, who runs an online store for hand-drawn postcards, discusses her business with Luo Runfa, an e-commerce instructor, after a training class in Hangzhou, Zhejiang province, in September.

A newly released e-commerce report showed that the Internet has created more job opportunities for China’s disabled population.

As of June, 316,000 disabled people had opened online stores on Taobao, China’s biggest online shopping platform, with sales of 10.5 billion yuan ($1.63 billion) in 2014.

The report, prepared by the Ali Research Institute, was released on Thursday at the China Disabled Persons’ Federation in Beijing. It analyzed aspects of the store owners and customers on Taobao, one of Alibaba’s main online marketplaces.

It showed that disabled online store owners in eastern coastal cities had the best sales, with Zhejiang province on top, followed by Guangdong and Shanghai.

Male online store owners accounted for about 64 percent, while female owners accounted for 36 percent.

Nearly 25 percent of online stores owned by disabled owners sell clothing.

The report also said that nearly 80 percent of owners had no chance for a college education, and their highest degree for most was a high school diploma. About a quarter only finished elementary school.

The report also showed that 80 percent of the owners earned less than 30,000 yuan a year from the online stores, or about 2,500 yuan per month.

The research institute also studied disabled customers, finding that 2.69 million disabled clients shopped on Taobao as of June, spending 13 billion yuan in 2014.

Disabled clients spent more on electric cars, family health, online games and instruments and spent less on travel than other customers, the report found.

The Internet is a gateway for many disabled people to engage in society, said Zhang Haidi, chairwoman of the federation. The cooperation with Alibaba is a seed that encourages disabled people to work, she said.

“We are dedicated to cooperation with the China Disabled Person’s Federation and other organizations to establish an online ‘barrier-free’ ecology that allows disabled people to enjoy equal rights with others on the Internet,” said Alibaba’s President Jin Jianhang.

Alibaba will invest 300 million yuan over the next five years to provide 50,000 online jobs for disabled people and to train 100,000 online, Jin said.

China has more than 80 million disabled.

Zheng Ran, a former Paralympic Games basketball player, retired from the court and became a star online store owner in 2012 selling equipment for the disabled in 2012.

“Sports changed me, and the Internet business changed my life,” she said.

Top 10 products

What disabled online store owners sell on Taobao

· Clothing

· Shoes, suitcases and bags

· Furniture

· Online games

· Digital products

· Cosmetics

· Office supplies

· Food

· Sports equipment

· Jewelry and accessories

Source: Ali Research Institute

London property company Savills plans office in Wuhan

London-listed property services provider Savills Plc’s China operation will open a new office in Wuhan in central China’s Hubei province in 2016, expanding its business in the country as the company holds optimistic outlook for market demands, said Jeremy Helsby, Group CEO.

During his visit to Shanghai Tuesday evening, Helsby said he believes that China’s demand for property services will grow fast, making China one of the most active property markets in the next five years, and Savills continues to expand its business and investment in China.

Savills is still bullish about China economic growth despite GDP growth not as rapid as that of past years, he said.

“China is still a very important growth region. I am not worried about China’s growth, and I am still excited about it,” said Helsby.

Savills opened its 15th office in China’s mainland in Xi’an, west China’s Shaanxi province. The Xi’an office will serve increasing demands amid China’s Belt and Road Initiative rejuvenating westbound trading routes and further opening markets to investors.

Savills will also continue to assist its Chinese clients to develop business in overseas market as they expand their footprint globally in commercial and residential property sectors, including development of hotels to meet mounting demands of Chinese outbound tourists, said Helsby.

Didi Kuaidi plans car sales to diversify its business

Didi Kuaidi is planning to sell cars through its platform, as the ride-hailing major seeks to diversify its business mix to more segments and sectors.

The Beijing-based company said on Monday it will sell 200 new vehicles by Mercedes-Benz and Tianjin FAW Toyota Motor Co Ltd, on its platform on Saturday.

Consumers can pay 40,000 yuan ($6,200) less to buy two models of automobiles on Didi Kuaidi, whose market prices are about 300,000 yuan. Users can book appointments and pay a deposit on the car-hailing platform before picking up the cars at designated 4S stores.

The sales event targets consumers in six cities: Beijing, Shanghai, Hangzhou, Guangzhou, Shenzhen and Chengdu where Didi Kuaidi is offering test-drive services.

Zhu Lei, vice-president of Didi Kuaidi, said the campaign marks the company’s latest attempt to offer more targeted marketing services for automakers

“By offering test-drive services, we can accumulate data on what types of cars consumers like. Selling automobiles online offers a chance to turn such understanding of consumer preferences into precision marketing, which in turn will boost the proportion of consumers who actually buy cars,” he said.

In October, Didi Kuaidi launched test-drive services, a product it said “has a huge business potential”. Through its platform users can get hands-on driving experience of about 100 models.

Zhu said the company plans to expand the service to more than 30 cities within a year but more studies are necessary to make car sales a regular business.

Wang Xiaofeng, an analyst with market research firm Forrester Research Inc, said the move is part of Didi Kuaidi’s broad efforts to monetize its huge user traffic.

“I don’t think Didi Kuaidi wants to become an e-commerce site to sell cars, which demands large investments. Instead, it is in a better position to become a marketing platform. This is a low-cost strategy and the most efficient way to tap into its sizable user base,” she said.

Currently, Didi Kuaidi has 250 million registered users. With services available in 259 Chinese cities, the company dominates the country’s private-car hailing market with 83.2 percent in the third quarter of this year, according to Beijing-based Internet consultancy Analysys International.

Its arch rival Uber Technologies Inc is a distant second in China with a market share of 16.2 percent. The US-based technology company has also been offering its users on-demand test drives.

Jia Xinguang, a senior analyst with the China Automobile Dealers Association, said it is a well-calculated decision for ride-hailing platforms to offer test-drive services before selling cars, but automobiles can never be sold simply through online channels.

“Customers need to visit the dealerships in person to feel and check a car. Offline dealers are also needed to ensure deliveries and after-sales services. The online-to-offline car deals ultimately are still directed to offline dealers,” Jia said.

China likely to roll out de-stocking measures for property sector

It is expected that during an upcoming key economic meeting Chinese officials will introduce measures to cut housing inventories.

De-stocking the property market will likely be discussed at the upcoming Central Economic Working Conference, which sets economic targets for the coming year, a source told China Business News.

The measures are not expected to boost the real estate market nor set quantitative de-stocking targets for specific regions.

“The most important thing is to reactivate the property sector to help with its liquidity,” the source said.

The housing market experienced a downturn in 2014 due to weak demand and a supply glut. This continued into 2015, with both sales and prices falling, and investment slowing.

According to data from the National Bureau of Statistics, the unsold home inventory hit a record 686.3 million square meters by the end of October, up 17.8 percent from the previous year.

Officials have already showed resolve to address the country’s housing woes. Destocking the property market will be one of the government’s main tasks, President Xi Jinping told a meeting of the Central Leading Group for Financial and Economic Affairs in November.

Premier Li Keqiang also told a cabinet meeting that the government should overhaul China’s household registration system to encourage more rural residents to settle in cities and boost house sales.

Besides existing stimulus measures such as cutting interest rates and easing deposit requirements, measures such as transforming commercial housing into affordable housing are also expected next year, the source said.

Didi ties up to expand globally

Didi Kuaidi said yesterday that it has teamed up with three overseas counterparts as it continues to expand globally.

The Chinese ride-hailing company said it has sealed strategic partnerships with Lyft, GrabTaxi and Ola. Its tie-up with Lyft is an expansion of the global ride-sharing agreement the two firms formed in September.

The four parties will collaborate and leverage each other’s technology, local market knowledge and business resources. This will offer international travelers access to local on-demand rides by using the same application they use at home without shifting to a new software in a foreign language, according to a joint statement yesterday.

Each company will handle mapping, routing and payments via a secure app interface so that customers will experience a seamless ride in China, the United States, Southeast Asia and India.

“As Didi consolidates market leadership in China, we are now focused on leveraging our collective technology and expertise to further develop product innovation and enhance the user experience,” said Cheng Wei, CEO of Didi Kuaidi.

Didi Kuaidi is a merger of China’s two largest ride-hailing applications.