News roundup: Dirty business in China
Dirty business in China
Two business stories are well worth your attention today. The first is a Bloomberg piece about Yum! Brands, the company that owns KFC, Pizza Hut and Taco Bell. Yesterday, trading began in New York in shares of Yum China, a spin-off entity that controls Yum's American brands as well as Little Sheep, a popular hotpot restaurant chain. The separation follows "a tumultuous stretch for the company's Asia operations" and is intended to revitalize the company's business in China by allowing localized control. Mickey Pant, the CEO of Yum China, also said the company intends to expand Little Sheep hotpot outlets globally, adding to its existing 40 outlets in North America.
The second story is a detailed narrative of the dirty business behind the GlaxoSmithKline corruption case in China, including new information on the sex tape sent to executives at the global drug company, the arrest and detention of a private investigator working for them, and the whistleblower who reported bribery and malfeasance to the government.
Other stories to watch from China are below.
MORE IN BUSINESS:
- Alibaba earnings show it again defying China's slowdown / NYT
- Fast-growing China provinces can't quit investment addiction / Bloomberg
- China starts credit-default swap trading as bond failures spread / Bloomberg
- Why China's latest 'financial innovation' might not work / Bloomberg
- Worried about yuan drop, Chinese foreign buying binge gives authorities a headache / Reuters
- China cautions Germany over Aixtron deal halt / WSJ
- Chinese cities struggle to agree on rules for booming car-hailing app services / SCMP
Alibaba reported a second-quarter increase in sales of 55 percent compared with the same period a year earlier, though the total value of goods sold on its online platforms shows signs of a plateau.
"In the five fastest-growing provinces, total fixed-asset investment exceeded the sum of their gross domestic product in the first three quarters of this year, according to new data from 29 of 31 provincial governments."
"Trading began Monday, according to a statement on the website of the National Association of Financial Market Institutional Investors, a unit under the nation’s central bank."
Although credit-default swaps "provide lenders with a tool to hedge their credit exposures by purchasing CDS protection, it is unclear who will be the seller of the protection, and if the sellers are other financial institutions, the credit risks are merely transferred to other parts of the financial sector," notes Goldman Sachs analyst Kenneth Ho.
Chinese individuals and financial firms have found workarounds to move money overseas despite government measures to restrict capital outflows.
A Chinese Commerce Ministry spokesperson said that a change in Germany's policy toward Chinese takeovers “would be detrimental to the healthy development of bilateral investment and economic cooperation between China and Germany."
“Only two cities have formalized guidelines amid complaints from the industry that proposed restrictions will force many drivers out of work.”
MORE IN POLITICS:
- Xi Jinping may be 'core leader' of China, but he's still really nervous / NYT
- Xi at the core at least means clarity for local Chinese officials / Politics from the Provinces
- For China's leaders, age cap is but a moving number / WSJ
- Philippines' deal with China pokes a hole in U.S. strategy / NYT
- Duterte's deal with China seen by satellite: Fishing allowed but no change in control of disputed shoal / Washington Post
- Beijing 'strongly dissatisfied' after South Korean coast guard fires machine guns at Chinese trawlers / SCMP
- Malaysia reaches 'significant' defense deal with China, takes shot at West / CNN
- China's spy chief set to step down to take on senior role on Hong Kong and Taiwan affairs advisory panel / SCMP
"Above all, Mr. Xi worries about obstacles that could prevent China from shifting toward slower but more sustainable growth, and from turning his anti-corruption crackdown into lasting improvements in government, several experts said."
"What the designation does mean is that Xi needs lower-level cadres to recognize that it's his programs — not anyone else's, such as Premier Li Keqiang's — that are to be studied and implemented, and the title of 'core' gets him that."
"The past three turnovers in the inner circle of China's Communist Party leadership have come with an age guideline for retirement: Those 67 years old or younger could stay; those 68 or older had to go. Now, comments from a senior party functionary are adding fuel to speculation that President Xi Jinping may break with the norm at a once-every-five-years party congress late next year."
"American efforts to contain Chinese ambitions in the South China Sea depend on a ring of allies, but the region's united front may be crumbling."
Images of Philippine fishing boats around Scarborough Shoal suggest some sort of deal was reached, but its significance is disputed by analysts.
"Initial machine gun bursts were fired into the air, but the crew were later ordered to fire on the bows of the Chinese boats that were sailing directly at the coastguard vessels."
The two countries signed agreements Tuesday on energy, defense coordination and other issues, according to Chinese state media.
"Geng Huichang, who has reached the retirement age of 65, has been head of the state security ministry since 2007."
MORE IN SOCIETY:
- Meet the Oprah of China, who happens to be transgender / The Hollywood Reporter
- Sony Pictures launches film writers initiative in China / The Hollywood Reporter
- Shanghai's new Good Samaritan law finally goes into effect, but how much will it help? / Shanghaiist
- Chinese mine confirms 33 dead after Jinshangou blast / BBC
- China initiates country's first centimeter-level positioning system / China Daily
- China is building a magnetic levitation train that can go an insane 373 mph / The Verge
- China bans looted antiques from going under hammer at mainland auction houses / SCMP
- China mayor probed after 'minority women use witchcraft to ensnare men' comments / The Telegraph
“Jin Xing, a former male ballet star and army colonel, draws 100 million viewers a week and was the first person, publicly, to undergo gender reassignment surgery in her country."
"The program is designed to foster storytelling collaboration between the world's two largest film markets, the U.S. and China."
"Shanghai's long-awaited Good Samaritan law went into effect yesterday, providing a bit of much-needed legal protection to residents who want to help a stranger in need, but also want to avoid getting sued."
State media reported that all 33 miners trapped by a coal mine explosion in the southwest region of Chongqing were found dead.
"China has launched its first centimeter-level positioning system, which can significantly improve the accuracy of its domestic navigation satellite system. Kuilong, the new positioning system, is a crucial part of the country's BeiDou Navigation Satellite System (BDS)."
New regulations aim to prevent cultural relics that were stolen, illegally unearthed or smuggled out of China from being auctioned in the country, and will give the government priority in purchasing antiques.
Gong Qing, acting mayor of Wenshan in Yunnan Province, sparked an outcry over his comments about the Miao minority group and is reportedly under investigation for his remarks.