Archives September 2015

Yota joins hands with ZTE in next generation to make China debut


Vladislav Martynov, CEO of Yota Devices,delivers a speech during the signing ceremony of Yota Devices with X&F Technology and ZTESC on September 15, 2015 in Beijing.

Russian dual screen smartphone maker Yota Devices signed cooperation agreements with a domestic supply chain and original design manufacturer (ODM) to further compete in the Chinese market.

Shenzhen ZTE Supply Chain Co Ltd (ZTESC), an associate company of Chinese tech giant ZTE Corporation, and Shenzhen X&F Technology Co Ltd, an ODM that focuses on terminal products in the field of communications, singed the deal.

ZTESC, a company with 26 years’ experience of supply chain management, will provide integrated solutions of procurement, manufacture, logistics and distribution to Yota in the domestic market.

Another ZTE associated company – Shanghai based ZTE Health Technology Co Ltd, – will work with Yota to embed their elder care application in the new generation of YotaPhone that will be unveiled in China next year.

“YotaPhone is the lone ranger in the smartphone sector; it brings a brand new and distinctive experience to the Chinese customer. We look forward to the cooperation with Yota Devices and will closely work with the company to launch the next generation of YotaPhone,” said He Shiyou, president of ZTE Health Technology Co Ltd.

According to Vladislav Martynov, CEO of Yota Devices, the company has been working to choose its partners as the dual display design of the device required a reliable and mature ODM team possessing an innovative attitude.

“The next generation of Yota Phone will come with a high-end performance and a reasonable price,” said Martynov. He told chinadaily.com.cn that features such as larger screen and better camera are some of the functions to be improved in the next generation.

He claimed that the price will be slightly cheaper than the existing YotaPhone 2, which is 4,888 yuan ($799).

“YotaPhone 2, the world’s first dual screen smartphone with an always-on e-ink display, made its China debut on May 20 this year at the Embassy of the Russian Federation in Beijing. The product has received many positive users’ feedbacks in a very short period,” said Andrey Ivanovich Denisov, Russia’s ambassador to China.

Denisov said during the debut ceremony that YotaPhone represents a new level of technological cooperation between Russia and China.

In November 2014, Russian president Vladimir Putin presented the Russian-designed and Chinese-manufactured YotaPhone2 to President Xi Jinping as the symbol of cooperation between Russia and China in the field of the consumer electronics.

The phone features a quad-core 2.2 GHz Qualcomm Snapdragon 801 chip, a 5-inch, 1080P AMOLED screen and a 2GB random access memory.

Unlike other standard Android-based phones, flipping the phone over reveals the E-ink display which uses zero power unless it is refreshing to receive new information.

Tencent unit to handle intellectual property cases on online literature

Tencent Holdings Ltd is beefing up its efforts at tapping into a boom in online literature, opening a new company in Wuhan, the capital of Hubei province, to deal with any intellectual property issues arising from the sale and use of its original material.

The new firm, set up by Tencent’s literature unit China Reading Ltd, will manage the adaptations of popular books into mobile games, TV dramas and movies on behalf of Tencent’s best online writers.

The move comes after a book, The Journey of Flower, written by Jiang Chenzhou who is better known as “fresh Guoguo” online, generated 2 billion yuan ($314 million) in commercial revenue after its adaptation into a TV drama become a phenomenal hit in China.

“Our goal is to promote writers in the way we present movie stars,” said Zhu Jia, China Reading’s vice-president.

“The new company will function as an agent to take care of cooperation deals with publishing houses, movie companies, game developers and music enterprises.”

Online original literature is becoming one of the most valuable sources of intellectual property.

Online video site iQiyi.com recently launched its own e-commerce shop selling products such as books and T-shirts.

The Journey of Flower’s popularity also helped spawn a mobile game, which has since earned around 200 million yuan in monthly income.

China Reading also owns Shengda Literature, one of China’s largest online literature platforms.

It has built up a library of 10 million original books and 4 million online writers, the company said on its official website.

Li You, an official at Wuhan Shared Business Incubator, where the new company will be based, said: “This will attract more online writers and entertainment companies to Wuhan, which will help the city become a copyright trading center for original Web-based books.”

There are over 100 game companies and animation enterprises in the incubator.

To attract more Internet companies to the second-tier city, the local government has already said it is rolling out favorable policies such as cheaper office space and tax rebates.

Game startups, meanwhile, are also hopeful that the arrival of China Reading will benefit that market, said He Yunpeng, CEO of games firm Hubei Manzu Game Co Ltd.

“Intellectual property is like mining. A great deal of wealth can be dug out of entertainment, and there are huge commercial opportunities to come out of it,” said He.

Tencent joins rush to the silver screen

Chinese Internet company Tencent Holdings has expanded its entertainment business by launching a film company, joining its major rivals Alibaba Group Holding and Baidu Inc in the fast-expanding domestic movie market.

Tencent Penguin Pictures was launched in Beijing on Friday. The new firm will focus on film and drama production as well as acting as an agent for entertainment personalities.

Penguin Pictures plans to invest in the production of 10 to 15 movies every year and produce eight Internet dramas, Sun Zhonghuai, vice president of Tencent, told a press conference on Friday.

One of the Internet dramas will be adopted from the popular novel The Adventures of Three Tomb Raiders, and the investment is expected to be 5 million yuan ($784,500) per episode.

Before the launch of Penguin Pictures, Tencent had invested in several movies beginning in 2014, including the blockbuster Monster Hunt.

Monster Hunt, a domestic live-action animation, became the new champion in China’s film market with box-office revenue of 2.43 billion yuan, breaking the previous record set by Furious 7.

Tencent’s main rivals such as Alibaba, Baidu-backed video site iQiyi and Internet television company Youku Tudou Inc have already launched film divisions.

Alibaba Pictures made its debut in Hollywood this year by investing in the latest episode of blockbuster series Mission Impossible: Rogue Nation.

The film generated box-office revenue of 418 million yuan in five days after hitting Chinese screens on Tuesday.

Analysts said the Internet giants aim to take a stake in the country’s booming film industry.

China’s box-office revenue exceeded 30 billion yuan as of September 5, hitting a record high and surpassing the figure of 29.64 billion yuan for the whole year of 2014, the Xinhua News Agency reported Saturday, citing data from the State Administration of Press, Publication, Radio, Film and Television.

“China’s film industry is expected to grow 30 to 40 percent this year, far outpacing the rate of economic growth, as an increasing number of Chinese people go to the theater more frequently,” Chen Shaofeng, deputy dean of the Institute for Cultural Industries at Peking University, told the Global Times Sunday.

The development of online sales channels run by e-commerce giants and group-buying websites has also boosted box-office sales, Fu Yalong, an analyst with entertainment consultancy EntGroup Inc, said in a report published on September 2.

Movie ticket sales through Internet channels accounted for 64 percent of the total ticket sales in China during the summer holidays, according to EntGroup.

Nomura Securities estimated Friday that China is likely to surpass the US to become the world’s largest film market by 2017.

“Chinese Internet companies such as Tencent and Alibaba have abundant cash flows and large user bases,” said Chen.

He noted that their participation in the film industry will promote the rapid development of the sector.

“Meanwhile, they will bring more competition to conventional film production firms,” said the deputy dean.

Airbus steps up efforts to recruit talent in China

China is poised to become the world’s leading country for passenger air traffic, and the market has already become an important region for global aircraft manufacturers.

Consequently, recruiting talent in China has become crucial for them to make their businesses more sustainable.

Airbus Group, the France-based aircraft manufacturer, and Tsinghua University will launch the 2015 China Summer University event on Monday, as part of Airbus Group’s University Partnership Program.

The event is the first organized in China since the program’s launch in 2014.

“Closely cooperating with top-tier universities and building up a good partnership will ensure absorbing more and more talent for our industry in the future,” Philippe Pezet, Airbus Group China Vice President Human Resources, told the Global Times in an interview earlier in September.

Pezet made the remark ahead of the Beijing Air Show, which will open on Wednesday.

Recruitment

In July, Airbus signed a framework agreement to set up an A330 Completion and Delivery Center in Tianjin with its Chinese partners. The center will cover aircraft completion activities including reception, cabin installation, aircraft painting, engine runs and flight tests.

The plant is expected to create 250 to 300 jobs over the long term.

The jobs are part of the company’s expansion in China as Airbus said it has about 1,550 employees in the country, including those in Tianjin, Beijing and Harbin, Northeast China’s Heilongjiang Province.

“We have high standards. We want people who can speak English. We would like to have people with leadership capabilities, and we would like to have people with the potential to grow and to evolve,” Pezet said.

A few of the positions will be occupied by expatriates because a certain number of expatriates will be needed to train the new Chinese employees, Pezet said. Still, expatriates will make up less than 10 percent of the workers at the facility.

The average turnover rate at Airbus China was 6-7 percent in 2014, or about half the national average.

But Pezet remains unsatisfied with the figure, which is still far higher than Europe’s average turnover rate of 2.5 percent. He said a turnover rate of 5 percent “would be better.”

“We are not recruiting people to hold one position for only a few years. We invest in somebody. We will do our best to develop people, to train, to grow. In terms of selection, we are very cautious and very demanding,” Pezet said.

In the next two decades, the average annual growth rate for the domestic Chinese market will be 7.1 percent, though it will grow even faster over the next decade at 8.3 percent on average per year, according to a report released by Airbus in December.

The report also said domestic air traffic in China will become the world’s highest within a decade.

Mobility

Working for a multinational company means more opportunities to advance, and it is an important measure to keep the talent in the company.

Airbus usually first offers these opportunities to employees who have worked at the company for at least five years.

The overall goal is for 10 percent of the staff to change jobs every year. That could mean simply changing positions within a division or changing divisions within the group, or even changing the country where they work.

“We started at 1 percent, and last year, we did 6 percent. Our objective for 2015 in China is 8 percent,” Pezet said.

However, he said there are lots of obstacles to mobility in China, and accepting geographical mobility is a challenge here. Hukou can be one of constraints on mobility, which is something very specific to China. Europe doesn’t have the same constraints.

Challenges

Several years ago, multinationals were seen as desirable places for employees. Nowadays, things are different, as State-owned companies are getting more competitive, and those companies are also in the process of instituting a global management style and offering more and more international positions, which pose a challenge for multinationals in terms of recruitment.

“We face some departures, resignations from people who are willing to move to State-owned companies, so it’s complicated and more challenging for us,” Pezet said, though he remains confident the company can attract more people.

Still, Pezet worries that very experienced talent is still in short supply in China, as the country’s aerospace industry employment market is less mature than that in Europe.

“It’s kind of a war for getting experienced people due to the pressure and tension on the job market,” Pezet told the Global Times.

Motor sports tourism complex planned

The Jaguar Enthusiasts’ Club, the world’s largest Jaguar automobile association, joined hands with a real estate company on Wednesday on the sidelines of the ongoing Annual Meeting of the New Champions?also known as Summer Davos?in Dalian, Liaoning province.

“They will cooperate in the construction and operation of a 2.4-kilometer-long Formula 3 racetrack in the Dalian Huangyuankou Economic Zone,” said Shi Mingqiang, deputy director of the zone’s administration committee.

It will be the first Chinese project of the Jaguar club, which operates in more than 84 national and international regions.

“As a top global motor club, the JEC has the capacity to make the track a big success,” he said.

About $450 million will be invested for initial construction. Around the racetrack, there will be recreational and commercial facilities, such as a training school for car racing, a luxury seaside hotel, a theme park on motor sports and a shopping center.

“This will be the first high-end sports tourism complex in Dalian,” Shi said.

It was one of 13 project agreements Dalian’s government bodies and enterprises signed on Wednesday. Total investment reached $8.14 billion, of which $3.4 billion is foreign capital.

Maflow Components (Dalian) Co, a member of Boryszew Group of Poland, announced it will invest $8 million to expand its manufacturing capacity in the Dalian Free Trade Zone.

“Now, we have invested nearly $40 million in the Dalian factory,” said Wojciech Szymczyk, the plant manager.

The company provides pipes for air conditioners and other components for big automakers, including BMW and Volvo.

“The Chinese automotive market is huge and will surely keep growing. We will invest according to demand from customers,” he said.

More than 1,700 leaders in both public and private sectors from 90 countries and regions are gathering at the New Champions meeting, the ninth gathering, which runs from Wednesday to Friday in Dalian.

The event is a leading global gathering on innovation, entrepreneurship, science and technology. Since the first session in 2007, Dalian and Tianjin have hosted the event in alternate years.

Lu Lin, deputy mayor of Dalian, said the event is a good platform for the city to show itself to the world and to expand its international influence. It serves as a bridge that fosters closer relations between the city and global leading enterprises, Lu said.

Chengdu Hi-tech Zone to take lead in innovative development

Chengdu High-Tech Zone, known as one of China’s best, has begun construction as the first national innovation demonstration zone in western China, after gaining State Council approval in June.

The new development for the next decade aims to reach an annual GDP of 1.5 trillion yuan ($235.7 billion), gather together 20,000 technical companies, and build three to five new industrial clusters each with an annual output of 100 billion yuan by 2025, taking a lead in the high-end industries and acting as a magnet for the development of the western region.

Wan Gang, minister of Science and Technology of China, said the approval of Chengdu as a national innovation demonstration zone provides Sichuan province with new development opportunities.

He encouraged Sichuan province to take the chance to cultivate a group of innovative enterprises with global influence, and offer good examples and fresh experience for the development of western China.

Founded in 1988 as one of the country’s earliest, the zone has attracted more than 1,000 foreign companies, of which 104 are Fortune Global 500 ones. Multinationals including Intel, TI, Dell, Phillips and Siemens have all set up manufacturing bases there. Last year, it ranked third among national high-tech zones for innovation, according to the Ministry of Science and Technology.

Google set to log in again

Google Inc is in search of China business again, five years after its abrupt departure from the lucrative market.

The world’s largest Internet search provider is aiming to bring its online mobile application store Google Play to the Chinese mainland as soon as this month, multiple sources said.

If it succeeds, it will mark a return of sorts for Google to the mainland market after 2010.

The company, which owns the world’s most-used smartphone operating system Android, is working on a “special” version of Google Play in the country, and the app downloading platform will be available for Android devices for sale in China, according to technology news site the information.com.

A Beijing-based app developer on Monday confirmed the story with China Daily, saying the US company has been preparing a China launch for a while.

“It will be a tailored version, meaning the content of the apps will be subject to Chinese regulations and video products, such as movies, will not be available,” said the person, who asked not to disclose his name because the details are yet to be made public.

Another source, who also asked for anonymity, said Google is also likely to bring along a number of local companies to provide localization services while launching the app store.

Google refused to comment, when contacted for the story.

Earlier this year, Sundar Pichai, product chief at Google and the company’s next CEO, told Forbes magazine that China is important for the company and it will be “a privilege” to serve Chinese users.

Industry data show Google has already missed out the highs of the country’s smartphone market. Smartphone shipments in China ended a six-year growth streak in the first quarter, research firm International Data Corp said.

China’s smartphone sales are reaching a peak, as shipment growth is being powered by existing users buying new devices, rather than first-time buyers, the IDC said.

In the absence of Google Play, homegrown app stores dominated the market, with 11 stores taking a double-digit market share as of May, according to the Big Data Research Center at the Chengdu-based University of Electronic Science and Technology of China.

Baidu Inc, Qihoo 360 Technology Co and Tencent Holdings Ltd have all set up Android app stores targeting mainland users, with Xiaomi Corp, Lenovo Group Ltd and other hardware vendors following suit. The 360 store, the largest on the market, handles more than 160 million app downloads each day, according to the company.

But China’s demand for mobile apps is set to grow.

With China set to account for a huge chunk of app downloads and purchase payment in the near future, Google needs to include it in its own app store.

Although a good number of Google products, including its search engine and map services, are unavailable on the Chinese mainland, the 17-year-old company had never moved out of China completely. It has been promoting its online advertising business to Chinese companies which are looking to expand overseas.

Google representatives, including Chairman Eric Schmidt and lower-level employees such as the head of Google Doodle team, have visited China even in its lowest moment, visiting smartphone retail marketplaces and making public speeches on graphic design and company culture.

Industrial firms around Shanghai Disney scheduled for closure


An aerial view of Shanghai Disney Resort.

(ECNS) — A total of 153 industrial enterprises surrounding Shanghai Disney Resort are scheduled to be shut down by the end of next year, accompanied by industrial structure adjustment in the area, Jiefang Daily reports.

Most of these enterprises struggle with high-energy consumption, heavy environmental pollution, and low production efficiency.

The adjustment will involve an area of some 10 square kilometers. Following the move, ecological reclamation and public service facilities will become priority.

Shanghai has accelerated progress in industrial structure adjustment in several key areas this year. According to an unnamed director with the municipal Economic and Information Commission, when such adjustments end, some 2 square kilometers of land will be set aside and 40,000 tons of standard coal reduced annually.

Huawei edges close to Apple, Samsung


Richard Yu, head of consumer businesses at Huawei Technologies Co Ltd, presents its new smartphone, Mate S, ahead of the IFA electronics show in Berlin, September 2, 2015.

Company’s latest smartphone offering plans to take on competition with innovative features

Huawei Technologies Co Ltd has inched close to Apple Inc in the high-end smartphone market – at least in terms of pricing.

Huawei’s latest $780 flagship smartphone, Mate S, is the most expensive handset the Chinese tech giant has yet produced and is set to compete with the next-generation iPhone that Apple plans to reveal next week.

The company’s previous flagships were priced in the $500-$650 price range. The lowest retail price for the iPhone 6 Plus, also a pamphlet, is about $750.

Richard Yu, head of Huawei’s consumer businesses, said the Mate S deserves its price tag and will put pressure on Apple and Samsung Electronics Co Ltd.

“Samsung is facing great downward pressure and Apple seems to have hit a ceiling in innovation. It is the right time for Huawei to be on the offensive,” Yu said at a product launch event in Berlin on Thursday.

Huawei is increasingly becoming a threat to Apple and Samsung after it notched up the highest sales growth rate of 46.3 percent in the second quarter, thanks to strong overseas sales and 4G smartphone sales in China.

By June, Huawei was the largest local handset vendor in China, the world’s biggest smartphone market, according to research firm Gartner Inc.

But its 7.8 percent market share lags far behind Apple and Samsung, which took more than a third of the total shipments.

Huawei is striving to put on market more higher-end devices with fancy features so that it can edge out the two overseas giants someday.

In Mate S, the Shenzhen-based company has incorporated a 5.5-inch high-definition display, fingerprint security and the Force Touch display technology which allows the handset to tell the difference between a tap and a hard press on the screen.

Apple is also likely to use a similar technology for its new iPhone model, as the US company is in desperate need of innovative breakthroughs to boost sales. The model is expected to make an appearance during the company’s annual product release on Sept 9 in San Francisco.

“The phone redefines how we incorporate touch technology into our smartphones, taking a revolutionary approach to touch-screen control and ushering in a new era for human-machine interaction,” Yu said.

Xiang Ligang, an independent smartphone analyst and founder of telecom website cctime.com, said Huawei hopes more female buyers will be attracted by the new model’s elegant design and cool features.

“It is a good attempt for Huawei to bond technology with elegance and fashion as it walks into the premium market,” Xiang said.

The Mate S will be available on the Chinese market later this month, according to Huawei. The retail price in its home market could be slightly cheaper than in Europe and the United States, based on previous practice.

Factories and services in slowdown

The performance of China’s manufacturing and services firms weakened in August, with activity in state-owned industrial companies contracting for the first time in six months and that in private manufacturers falling to a 76-month low, according to surveys released yesterday.

The official Purchasing Managers’ Index, a comprehensive gauge of operating conditions in large state-owned industrial companies, landed at 49.7 last month, down from 50 in July and 50.2 in June, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing.

A reading above 50 is expansion, and below it contraction. The latest figure was the first contraction since February after marginal growth in the past six months.

The Caixin China Manufacturing Purchasing Managers’ Index, a similar indicator slanted toward private and export-oriented companies, landed at 47.3 for August, down from July’s 47.8 and the worst since March 2009.

The figure has been below 50 for the sixth straight month after a brief rebound in February.

Zhao Qinghe, an analyst at the bureau, said domestic demand remained weak and the manufacturing sector had insufficient growth impetus.

“The slowdown was in part related to China’s enhanced efforts on industrial upgrading,” Zhao said. “High energy-consuming companies reported faster deterioration in PMI, while the bad weather in summer, including those hot, rainy and windy days, hampered industrial production and exaggerated the weakness as well.”

The PMI’s component indexes showed industrial production lost 0.7 points from a month earlier to 51.7 in August, while new orders dropped by 0.2 points to 49.7, falling below 50 for the second consecutive month.

Liu Ligang, an economist at Australia & New Zealand Banking Group Co Ltd, said the readings reflected faltering sentiment amid sluggish economic growth and the stock market turmoil.

“China’s manufacturing activities remained weak … We now expect China’s growth to expand 6.4 percent year on year in the third quarter,” Liu said. “As more easing measures are expected, growth could rebound to 6.8 percent in the fourth quarter.”

China’s economic performance surprised the market with a 7 percent increase in the second quarter, compared with market expectations of a 6.8 percent rise.

But the data in the past two months, including trade, industrial production, retail sales and fixed-asset investment, all moderated.

China’s service firms also reported less vibrant activities. The official non-manufacturing PMI retreated to 53.4 in August from July’s 53.9, while the Caixin Services Business Activity Index posted 51.5 in August, down from 53.8 in July and signaled the slowest increase in the current 13-month sequence of expansion.

He Fan, chief economist at Caixin Insight Group, said the expansion of service activities was not strong enough to offset the contraction in manufacturing.

Earlier figures showed net earnings of manufacturing companies contracting for the second straight month in July.

“In the face of continued pressure on growth, macroeconomic stabilization policies must continue and fresh reform measures must be introduced,” He said.

“Fine-tuning should go hand in hand with speedier implementation of structural reform to release the full potential of growth and lead the market to confidence,” He said.