stock markets - Netcom prepares for IPO

One of the Chinese companies preparing for an IPO this year is telecom operator China Netcom. They might suffer wrongfully from the negative sentiment at the stock markets against any Chinese company. I believe they might be one of the more promising IPO's.
They do one thing better than any of the other state-owned giants: they talk to journalists. Most Chinese companies just have no clue how to deal with the media, and when that does not change, trouble might be much harder to deal with.
China Netcom is one of the peculiar products of the recent changes in the Chinese telecom industry, to prepare domestic playing for a global market, when China is opening up. The current China Netcom is the combination of a modern telecom provider, set up by Edward Tian, and the half of the former state-owned fixed line operator China Telecom. That giant has been split up geographically, one is still called China Telecom, the other China Netcom. We do not want things to be too easy to understand.

law - Government defends itself in court

The appearance of a senior government official in a lawsuit against his department was hailed by the state media as a breakthrough. Suing the government used to be unthinkable until even a year ago, but China's new government wants to show it is more accountable for its own acts.

air - KLM first to drop prices to Europe

Dutch airliner KLM is the first one to announce a price drop in its flights to Europe, the Shanghai Daily reports. And it was about time.
Compared to the US, flights from China to Europe have traditionally been very high because of the lack of competition. Now the KLM will drop its prices for return flights from over 8,200 rmb (US $ 1,000) to 6,888 Rmb (US $ 830). Return flights to the US would cost less than 500 US dollar, when booked on time.
Reason for European airlines to beep up capacity and competition is the anticipated flood of Chinese tourists that might his European countries when the EU and China reach a deal about returning illegal Chinese immigrants to China. Now there is only a MOU and there is still no sign on when a deal could be in place, as China refuses to take back Chinese who refuse to identify themselves.

The psychology of the shareholder - the WTO column

(Later this weekend at Chinabiz)

Shanghai - What never ceases to shock me is the herd mentality of the stock holders especially in their relationship with China. When I read the analysis of people who have a better understanding of the ‘buy’ and ‘sell’ options that reflect the shareholders’ limit choice to assess what they think about China, things are going downhill again.

It needed only the smell of what possibly could develop into a scandal surrounding China’s largest insurance company China Life earlier this week to turn around this volatile mood of the people who bet their savings on China.
Those people dumping their shares are the same ones who gave it US $ 3.5 billion in China Life listings at the New York and Hong Kong stock exchanges, an amount of money that even flabbergasted the China Life management and its investment bankers. Listings of any China-related venture were oversubscribed in a massive way until very recently.
That changed dramatically then the US Securities and Exchange Commission announced it would launch an investigation into possible irregularities during the IPO of China Life. Shareholders have also been after China Life with accusations of not disclosing all information during the IPO in December.
The Chinese government tried on Friday to soften the mood again of the investors but our manic-depressed investors who did not want to listen when they invested their money, seem to persist in shunning China-shares. There is not even a beginning of a proof that China Life actually did something wrong, but who cares, this is again about psychology, not about economy.

So, what is at stake? At least for this year IPO’s possibly worth of US$ 15 billion and more important: the future of some of China’s largest state-owned companies, including three of its four commercial banks. That explains why the Chinese minister of finance came out in support of China Life.
The problem is of course that those commercial banks alone, with their millions of transactions, tens of thousands of outlets are very hard to audit, even for the banks themselves. When the mood of the investors goes negative, there will always be incidents to support their mistrust. That cannot be changed by any regulatory changes to gain trust of the investors.
In the past week, the damage was already considerable. China Resources Peoples Telephone, a mobile-phone operator in Hong Kong resorting under the State-Council, lost 8.2 percent on its first day of trading and the supporting Swiss UBS investment bank had to buy their shares because they could not raise enough interest in the market.

The mood is down, not only among the investors, but probably also at the boardrooms of many state-owned companies, even those who have a solid founding. Now, that is a shame.

Fons Tuinstra

photo - Caught in the act

The Guangzhou no. 3 subway line collapsed on April 1 and it was no joke. Fortunately it was only under constructions.

media - That's is now very official

'That's' - a group of city magazines published in China's largest cities - has gotten a very official seal of approval with a report in the People's Daily on their first official publication, as part of the China City Series.
That's Shanghai, and later That's Beijing, has been the first city that was established at end end of the 1990s, became successful and withered resistance from local authorities. Technically illegal, they managed to survive and became the most popular foreign-language magazine in the big cities.
Intensive competition has been making the market not easier. For the time being: congratulations, Mark Kitto. I will buy you a beer very soon in exchange for the real story.

internet - "The internet is still freer than any other medium"

Andrea of T-Salon got a bunch of interesting quotes and links together on the internet in China.

internet - SF bloggers join Shanghai Bloggercon

A group of 24 webloggers and educators from San Francisco will join the Shanghai leg of the Bloggercon at Harvard Law School at 17 April. They are still looking for active educational bloggers in China, writes Patrick Delaney in his weblog.

culture - Shenzhen turns bribes into bonuses

The city of Shenzhen is treating rampant bribes in the possibly only sensible way: it turns them into bonuses, The Standard from Hong Kong reports. The government has allocated two million Renminbi (US$ 0.2 million) for the program.
Officials will receive the money only when they retire and have a clean record.

trade - War extending to crepe paper

The trade wars between the US and China are expanding, now from socks to crepe paper. The US International Trade Commission found that China was harming US producings by dumping cheap crepe paper and tissues on the US market. Duties could be imposed by the end of June.

wifi - Nothing goes smooth in China

A short update on my wireless adventures in Shanghai. Apart from good (=free) experiences in both Arch (Wukang Lu) and Sasha's, I have not been online elsewhere. My China Telecom account did not accept me yesterday outside my home and today it is raining, so it was not the right weather to go to a park. More news will follow.

media - Angry Bosco castigates China Daily

Professor Joseph Bosco castigates the China Daily for printing the giant full-color pictures of the gruesome murder on four foreign contractors in Iraq. "I cannot imagine what possessed the management of the state-owned press when they made the decision to put such horrific photographs on their front page."
I'm glad I do not get that paper delivered on my doormat every morning.
Bosco is teaching at the University of the Ministry of Foreign Affairs in Beijing.

internet - Shanghai Bloggercon gets going

First official announcement of a unique event, organized by the Shanghai Foreign Correspondents Club, Living in China, the China Herald and the weblogging community at large. More details will follow later.

stock market - China Life IPO under investigation

US authorities have started an investigation into the IPO of China Life, the Financial Times reports today.
The insurer raised in December last year US $ 3.4 billion in a listing at the New York and Hong Kong stock exchanges, the largest IPO last year by China's largest insurance company.
The Securities and Exchange Commission have started a first inquiry and might scare the enthusiastic investors off from buying more shares in Chinese companies. Plans for an estimated US $ 15 billion worth of IPO's has been announced by different companies.

international relations - Kerry ad annoys Kerry supporters in China

I could not see it myself, but fellow blogger Peking Duck sounds pretty pissed off when he describes a commercial supporting Democratic candidate John Kerry for the elections.
Peking Duck: "The ad begins by showing a group of factories that resemble what you'd find in America's Rust Belt. The announcer says something along the lines of, "During his administration, President Bush created more than 3 million new jobs." There's a brief pause, and the announcer continues, "In China." With that, the camera pans upward and pulls back to reveal huge signs over the factories, all in Chinese characters. The rest of the ad warns of the horrors of outsourcing and how Kerry will fight for US workers, whereas Bush caved in to big industry."
I find the US elections anyway pretty weird, where people end up have to choose between two candidates they both dislike. You can react here.

economy - Economic zones learns how to become competitive

This afternoon I will have some interesting discussion about the future of the special economic zones that started China's economic opening up at the beginning of the 1980s. One of them - with the turnover equal to the Belgium economy - wants some advice and help to improve their performance towards the foreign investors.
Last year I had a similar talk, but it did not lead anywhere, now they are coming back, because they hardly get any foreign investments in. Under the stricter regulations and the WTO-accession, the economic zones do not differ that much from each other, apart from their location. So, they will have to think about creative ways to get their message across.
Just see what happens.

WiFi - Ready to visit parks and Starbucks

Just got - after long delays - my WiFi connection in place. Have it in my appartment is not that much of a change, but now I can test the WiFi-connections city wide for 10 fen per minute, 6 Renminbi (US$ 0.7) per hour. The sun is shining.

international relations - Tighter visa regulations for US citizens

US citizens might find it harder to obtain visa for China, AP reports today, as the country retaliates for stricter entry measures for Chinese citizens into the US.
The measures were taken "due to the United States' failure to respond to the Chinese side's representations and its insistence that most of our people be fingerprinted when going to the United States," the ministry said in a statement posted on its Web site, writes AP. (I was unable to locate the message at the website of the ministry.)
The measures seem rather symbolic. US government officials and diplomats would have to obtain normal visas for personal visits to China, but indicate the measures by the US are taken rather seriously. Non-immigrant visa holders have to go through the new procedure, while citizens of about 27 countries get a waiver and do not need a visa.

Update: Xinhua reports that US citizens also cannot apply for the so-called two-day transit visa upon arrival in China, but have to apply for all visa before they arrive.

human rights - Conflicting directions

Why are three Tiananmen mothers being arrested only days before China wants to boost its human rights image by publishing a white paper on the issue?
The cynic in me first looked whether no high-level US visitor was due who could actually plead for the release of the three women, distracting his attention from other issues. But this time I could not find any visitor, but a connection with the White paper seems rather likely.
Policies in China are never going into one direction, and it looks like not everybody on the conservative side is happy with the current plans of the central government on human rights. They want to make a point, at least that is at this stage my analysis.

internet - False Trudeau blocking rumor still makes waves

The incorrect rumor of The Globe and Mail in Canada, continues to make waves, also at the China Digital News. Although it would destroy my own little business of checking out blocks against a modest fee, perhaps I should send them an email. It is so embarrassing.

economy - Shanghai car owners still find cheap license plates

I predicted the efforts of the Shanghai municipal government to stop the 'migration' of cheap license plates to Shanghai would fail. Wang Jianshuo proves I'm right.

internet - Bloggercon Shanghai follows 6x3 principles

The Shanghai leg of the famous Bloggercon conference at Harvards Law School is getting firmly in place and you can expect more announcements later in the week, or the beginning of next week. The meeting will have the webcast of three sessions of Bloggercon as its core event and is based on the firm Chinese tradition of 6x3: three organizations, three places, three events, three themes, three methods and three moderators. As it goes with Chinese traditions: everything is still open, apart from the 6x3 principles.
For those who are interested in the grey area between weblogs and journalism, love cutting edge discussions and interesting people: please keep Saturday 17 April open for an event at Sasha's in Shanghai with free wifi, free food and free discussion.

law - Shenzhen introduces new ID card

The introduction of new ID-cards in China started off with medical worker Luan Shaodong from Shenzhen figuring in some of the state-media. The new high-tech ID card would give the government a better grip on its populations than the current cards.
Still, with its large size, intensive migration and the rather unruly character of most Chinese it will be hard for the government to really expand its grip. Among family members and friends the exchange of ID-cards is rather common. When I incidently apply for telecom services with the ID-card of my girl friend (much less hassle than a foreign passport) nobody thinks it is strange the picture on the ID-card is of a Chinese woman, rather than a Dutch man.
Shenzhen hopes all its citizens will have the new ID card by the end of next year and nationwide introduction should start then.

internet - Virus messages beat spam

A new development in the daily increasing stream of useless messages in my mailboxes: I get more virus-related email today than spam. In total hundreds of them, although some of my ISP's told me they have installed anti-virus software to stop it. China Telecom still is good for most of the nuisance. You wonder why so much effort is being put in stopping useful messages and not in stopping this nonsense.

law - Court upholds verdict in BMW-case

A review of the so-called BMW-case did not lead to a change in the original verdict, writes the New York Times, based on reports in state media. In the case a rich BMW-driver killed a woman farmer who by accident hit her car.
The acquittal of the BMW-woman caused an uproar in the chatrooms and led to the review. According to the review there was no indication bribes were involved in the original verdict and said the woman was only a bid driver.

media - Life style magazines search for market access

International life style magazines, like men's magazine Maxim are trying to enter the Chinese media market, writes Reuters today. Maxim is not alone, I have heard a whole set of rumors of publishing houses who want to try the China market.
The Chinese editions will be similar to the U.S. version but likely "a little less racy," said Kerin O'Connor, international licensing director for Dennis Publishing, the magazine's publisher in the Reuters dispatch, and in that way the magazine might give away the only asset it has in the Chinese market.
The market is stuffed with life style magazines, both for men and women, and competing with the domestic market will be tough. Chinese magazines have become more daring in the past few years and only by staying a step ahead foreign magazines could gain perhaps a market. They might also get more trouble with the conservative side of China.

Update: The People's Daily has additional information. The Maxim magazine will be published in Hong Kong, in two editions, one for Hong Kong and one for the mainland, by a joint venture of the South China Morning Post. Ten years ago the South China Morning Post tried to establish itself as the quality news paper of Asia. Since then, as so many other media, it has gone for shareholders' value and racy magazines. They will have a hard time in China, because of the competition and because they are technically a foreign magazine with strict restrictions on distribution.

food - Dongbei cuisine new hit

The Dongbei cuisine - food from notheastern China - has put itself on the map this evening. I visited with friends a newly opened restaurant in the Dongbeiren chain who opened a few months ago at Shanxi Nanlu in Shanghai, just south of Yanan Lu, opposite the Moeller Villa.
Excellent food, like especially the sauerkraut dish, nice people from the region who sang local songs. Good atmosphere, nice decoration and affordable. For 50 renminbi we were done. I'm not going to review all 30,000 restaurants in Shanghai, but this was a good one.

taiwan - Half a million demonstrators

Elected president Chen said he would allow a recount of the votes, writes the Taipei Times. Impressive reports about de demonstration I heard yesterday here in Shanghai.

SFCC - Fourteen years at the Shanghai police force

The Shanghai Foreign Correspondents' Club will have on Friday evening historian Robert Bickers as a speaker on his fourteen years with the Shanghai Police Force. "Along with Shanghai policemen, Bickers has written about the Shanghai Municipal Orchestra, public parks in the city, and the wartime experiences of Britons in Shanghai. He is now researching the history of the Chinese Maritime Customs Service," the announcement says.

internet - Are there any Chinese RSS-readers around?

Rebecca MacKinnon is preparing her session at the 17 April Bloggercon meeting at Harvard's Law School and wonders whether there are any Chinese language RSS-readers around. I have never seen a pointer to them, but have seen Chinese weblogs with an RSS-feed on it. I can also receive Chinese feeds here through my RSS-readers, so there seems only a translations problem to be present, if any.
(Rebecca's website is having currently technical problem, that are located in Harvard, so no panic, it is not the Chinese censors :-))

economy: Car: prices down, costs up

The previously very lucrative car market in China took a downward trend in the first months of 2004, the People's Daily reports.
The 13 top-car companies in China - that would include the ventures of Volkswagen and GM - was a 13.4 percent drop in profitability 4.55 billion Reminbi (US$ 550 million) in January and February this year, compared to the same period last year.
Costs when up 7 percent, because of more expensive steel products. Dropping import rates under the WTO made the car market more competitive.

telecom - the WiFi on a practical level

I have been praising all these diligent engineers of China Telecom who every morning in the weekend at eight o'clock wake me up to tell me they are coming to install my wireless internet connections. They do come, and leave friendly making apologies for the fact the bloody thing does not work.
They point at the device, a locally made router, as the culprit, that does not comply with my wireless card. It must be their problem, since in many places where I switch on my computer, wireless access seems to be possible, although for the China Telecom services I first have to sign up. Nuisances.

internet - Debate on 'black protest' sparks emotions

"Foolish, empty but dangerous threats", the Longbow Papers qualifies the emotional call to arms by Andres Gentry, and is even more bothered by them than by the nuisance called the internet blocks.
I think it makes sense to find practical solutions that are readily available. The blocks are really not very effective, so why make such a big thing out of a small thing, especially if you are not part of it yourself. I think it is good to draw some attention, but there are bigger things going on that are worth our attention.