economy - Virtual Xiangyang market closed again

Even before the real market has been closed, Shanghai authorities moved to close its virtual counterpart, AP reports, because it was selling fake products. Well, this could all be expected.

internet - Looking for e-government projects

Yesterday I was en route in the Netherlands and met a wide variation of people and went through some suggestions on possible projects. One concerns e-government in China: a thinktank might be interested in setting up a trip for European municipal officials looking for good examples of e-government projects in China they can use for their own practise.
I have some ideas myself on the field of online tax-collection, complaint systems for citizens and financial networks, but perhaps my readers have some suggestions too. For logistical reasons it would be nice if it is in the Yangtze delta, but do not hold back if you have some good examples.

media - Is banning an illegal magazine bad?

What happens when you do something illegal in China, like publishing a magazine without the legally required permission? You might get banned, as happened to the Rolling Stone magazine that was - after being sold out anyway - removed from the newsagents on the order of the authorities in charge.
The correspondent of the Independent calls it a legal technicality. Well, you might not agree with the licensing system, but that does not reduce it to a legal technicality. When you want to bring out a high-profile magazine like Rolling Stone you better cover your back - and there are enough ways to do that.

economy - Belgium travel agency signs up with Ctrip

The Belgium travel agency WDR Travel and the largest Chinese online travel organisation Ctrip are going to cooperate, writes HLN.be. They signed a contract on Wednesday in Shanghai. WDR Travel will organize trips for Chinese tourists coming to Europe.
Ctrip is a very successful travel organization because of its competitive prices, good service and informative website, where tourists exchange information about their favorite destinations.
The number of tourists might initially be limited, not because of lack of enthusiasm on the Chinese side, but because European governments are rather reluctant to admit larger numbers of Chinese tourists to their countries.

telecom - State Council moving on 3G

Interfax reports on the latest press conference of the State Council regarding 3G (I have added news searches on TD-SCDMA to my RSS-reader in case you might wonder about the latest upsurge on 3G-related news).

Deng, a senior advisor to the Chinese government, told Interfax that the main challenges in China's 3G operations are telecom carrier investment and expectations on the returns of China's homegrown 3G standard, TD-SCDMA.

Dow Jones had a piece a bit earlier with different bits of information.

"The current dominance of China Mobile and China Unicom is not suitable for market economy. It is better to award a TD-SCDMA license to a fixed-line operator, allowing it to enter into the mobile business," Deng said according to Interfax.

The internal struggle is in full swing.

Christopher Bachran

labor - Foreign hotel-boss ousted at Jinjiang group

Mr. Christopher Bachran left his job as the president of the Jinjiang group after his contract was not renewed, the official state newswire Xinhua announced. Bachran was the first foreigner ever to head a major Chinese state-owned enterprise. In his two-year stint the profit of the group increased eightfold, Bloomberg writes.

"He seems a bit isolated from the Chinese management team," said Zhao Xueqin, an analyst who covers hotel stocks at Haitong Securities in Shanghai. "Jinjiang is likely to appoint another foreign president. The company is trying to create an international image."

economy - "Everybody is waiting for the China Wage Indicator"

A short phone conference with Paulien Osse, the director of the international Wage Indicator. "Everybody is waiting for the China Wage Indicator to take off," she said, just before she takes off to Brazil where another wage indicator will get going. "The ILO, MSN, all our partners look forward to get China in."
It is going to happen, just a few pushes more.

telecom - Who is going to operate the TD-SCDMA?

Dow Jones has today an interesting piece in the puzzle that will amount to the upcoming 3G-network in China, the third generation mobile phone. In an interview a leading telecom officials spells out the criteria for the domestic telecom company that will be operating that network:

The operator must be internationally competitive, have long-term experience in telecommunications operations and shouldn't currently possess a mobile license, said Deng, who was speaking at a seminar on the mobile phone industry.

Now, that would exclude China Mobile (GSM) and China Unicom (GSM and CDMA). That leaves China Telecom and China Netcom, since the other possible players seem too small, are not interenationally competitive or have no long-term experience. It suggests that the authorities ("The decision is being made at the highest level") will allow the three systems to compete. Not sure about that.

media - How booming is the online ad market?

Optimistic noises from - this time - VNU net that sees a booming online ad market. Even when the figures are correct - and there are many reasons to have serious doubts about that - the 120 million (US?) dollar market seems tiny: about one dollar per internet user and 0.1 dollar per Chinese consumer.
Then, the question is how reliable are the few research companies in this field. VNU Net quotes Analysys International from Beijing, who recently announced that China had 30 million weblogs and half of the white collar workers would be bloggers. Even when you are very optimistic about blogging, that seemed a very unbelievable figure.
Their competitor Iresearch from Shanghai is not preceived to be more trustworthy. the official CNNIC is doing better, but since they are government-funded, you cannot really call them independent.
Western search engine representatives complained about the lack of independent third party research into the market. The problem is of course that too few players want to pay for this kind of research, putting the research companies in a Catch-22 situation.
Those problems of underfunding are not only a problem in internet-research. Also the TV-ratings in China of a renowned company like AC Nielsen came under fire last year. They only use 300 households to cover their ratings, a very low number according to any standard for a country with 1.3 billion people.

Conquering a market, part 3 - the WTO column

later also at Chinabiz, part 1 and part two are here)

It was already many months after once upon a time the brothers Micro, Yahoo and Google had entered the woods of the Middle Kingdom to find new ways to please the dragons in the woods and start their forestry business.

Micro had the biggest operation in the woods, although he was still far away from making money. Yahoo had last year sold his business to Jack Ma, the chieftain of a gang called Alibaba, hoping Ma could do the business better. And Google had now firmly decided to go into the bonsai-business, employing up to eight hundred little dragons.

The three brothers did not like each other and were trying to compete with each other, they did not seem to get anywhere. So at one of their family gatherings, where they tried to avoid to talk about business, they decided to get the forestry industry together. Together they could put a bit more pressure on the major dragons, they thought. “But we need to get Baidu also in,” said Google. Yahoo and Micro nodded. Baidu was their biggest competitor in the woods, a dragon himself, and surprisingly enough able to generate a small profit. “When the four of us get together, the market will boom,” enthused Yahoo.

So, where should we get together, wondered Micro. “Anywhere apart from Hangzhou,” said Yahoo. Yahoo has just paid last year one billion US dollar to Chieftain Ma in return for actually very little and he certainly did not want to have a home game for Ma again.

So, unfortunately, when the three brothers got together in Nanjing, Baidu did not show up. The three brothers kept a brave face towards the other guests. “We were just too late in inviting them,” said Micro. From afar the Baidu-dragon spat smoke. “This is not the way we do business in China,” he said.

Who had come – they had to invite him – was chieftain Ma, who cheerfully jelled that he would only speak Chinese, a language the three brothers still had not mastered. “You have to get used to that in the woods of the Middle Kingdom.” While the dragons stamped their feed enthusiastically and caused a minor earthquake, the three brothers hardly had a clue what was going to happen.

First, Ma acknowledged that he had spent already 750 million US dollar of the money he got from Yahoo. “Look at it from the bight side,” he said to Yahoo. “There is still 250 million US dollar to spend.” Then he looked at Micro and Google. “It is now about time you start to teach us how to cut our woods,” he said. “If you do not hand over your technology, there is absolute now way you are going to get anyway.”

That evening Google threw a dance party. Since none of the larger dragons had bothered to make an appearance, only a few smaller dragons tried to find the food in the darkened hall. Dragons come to parties for two reasons, for the food, wine and of course to talk business. Talking is one of their favorite activities, since they are pretty social beings. But at the Google Dance party the unfamiliar music was so loud, so the little dragon quietly left the room and had their own talking-party in a more silent place.

“Only peanuts and beer,” snored one of the dragons. “What a party. They really have to learn how to do business here.”

In the dance hall, also Yahoo, Micro and Google looked at each other. Slowly they started to realize that they had a long, long way to go.

Fons Tuinstra