Thursday, March 31, 2005

Globalization and the rise of Asia (part 4) - Long-term gains likely for India

From MarketWatch: Globalization and the rise of Asia (part 4) - Long-term gains likely for India

"It is not unlikely that continuing population growth, and the development of a modern economy propelled by very advanced technology will push India's GDP past that of China, and well beyond that of the United States by the middle of the century."

"In many ways, India's prospects in the 21st century are superior to those of China. The institutional framework in the two countries could hardly stand in greater contrast.
India is a full-fledged democracy, with a parliament in New Delhi that is the equal to that in London or Ottawa. China remains a Communist state, under one-party governance.
India enjoys all the advantages for person and property provided by the British rule of law, again in stark contrast to China whose legal system is murky at best where both property and certainly person is concerned."

"Yet, as the Financial Times recently suggested in an article entitled "India's opportunities lost amid China obsession," coverage of investment opportunities in India is virtually non-existent in American business publications, which concentrate almost exclusively on touting Chinese financial products."

Read more

Ebay Aims to Conquer China but Homegrown Rival Taobao Tries to Repel the American Invasion

From Standing Up to Ebay

"Ebay has conquered online auctioning, racking up $778 million in profit last year on a transaction volume of $34 billion. But Ebay won't stay on top unless it also conquers what eventually will be the world's largest market for online goods:China."

"Ma (Jack Ma, CEO of Alibaba) runs the Taobao consumer auction site, the biggest homegrown rival to Ebay in China. Though it didn't start up until a year after Ebay arrived, Taobao quickly has gobbled up 41% of online auction sales, compared with Ebay's 53%; it has 4 million registered users, gaining on Ebay's claim of 10 million customers in the country."

"Ma also runs Alibaba, which claims to be the world's largest global business-to-business auction site. Six million members use the main site, devoted to in-China trade, and a second site for trade with companies in the rest of the world. Alibaba and Taobao, which are controlled by Ma's Alibaba Holdings, aim to fence out Ebay, setting themselves up for expansion beyond China's borders. If JackMa has his way, Taobao--not Ebay--will end up conquering the online world."

Read more

Wednesday, March 30, 2005

China's Fantasy Craze - Online Games Blamed for Thefts, Suicides and Murders

From Guardian Unlimited: Harsh reality of China's fantasy craze

"When Qiu Chengwei reported the theft of his "dragon sabre" he was laughed out of the police station. So the 41-year-old online games player decided to take matters into his own hands.
Swapping virtual weapons for a real knife, he tracked down the man who had robbed him of his prized fantasy possession and stabbed him to death."

"A spate of suicides, deaths by exhaustion and legal disputes about virtual possessions have been blamed on internet role-play games, which are estimated to have more than 40 million players in China."

"Shanda Networking, the biggest online game company with at least 2 million users at any given time of the day, more than doubled profits last year.
The national leadership said recently that the country's biggest skill shortage was of internet game developers.
The information ministry estimates that China needs 600,000 online game technicians to fight off foreign competition."

"But there is also growing alarm about the social consequences. ... Newspapers are filled with reports of internet-game related crimes and tragedies, such as the suicide in January of a boy of 13 who left notes saying he was so addicted to online games that he had difficulty distinguishing between reality and virtual reality. "

Read more

Globalization and the rise of Asia (part 3) - China's Growth is Only the Beginning

From MarketWatch: Globalization and the rise of Asia (part 3) - China's growth is only the beginning

"How soon will Asia -- meaning China and India -- begin to represent a major challenge to American economic and financial hegemony?
The National Intelligence Council, the research facility operating under the auspices of the Central Intelligence Agency, recently attempted to provide an answer to this question. It predicts the emergence of these two countries as full-fledged global economic powers in the year 2020. It suggests that by the year 2042 China's GDP will exceed that of the United States."

"The presence of this new 800 pound gorilla is bound to affect the world in ways that are not all for the good. For one thing, it has to be fed. More precisely, it has to be fueled. And the fuel it needs is mostly taking the form of oil and its derivatives. To put this into a historical context, between 1984 and 2002 American consumption of crude oil increased 16 percent. During the same period, China's consumption increased 192 percent.
Today, even with a maturing economy, crude oil consumption in China continues to increase by 25 percent a year. The result is that China has already overtaken Japan as the second largest consumer of petroleum in the world, after the United States."

Read more

PCCW lands back in profit

From Herald Tribune: At PCCW, first profit in 3 years

"PCCW, the largest phone company in Hong Kong, on Wednesday reported its first annual net profit in three years after completing a write-off of an unprofitable cable venture.
Net profit in 2004 was 1.64 billion Hong Kong dollars, or $210 million, which compared with a loss of 6.1 billion dollars in 2003, PCCW said in a statement. Sales rose to 22.9 billion dollars from 22.6 billion dollars.
The company is relying on broadband television services, apartment sales, and a joint venture with China Network Communications Group to make up for loss of market share in Hong Kong." Read more

PCCW -- Video Interviews with Deputy Chairman and CFO (free to view - need to register)

Chinese Search Engine Zhongsou To Get US$6M From IDG And Legend Capital

From ChinaTechNews: Zhongsou Searches And Finds US$6 Million Investment

"IDG Technology Investment Fund 's Li Jianguang has disclosed to local media that IDG will work with Lenovo Investment Company to make a joint investment of US$6 million in search engine Zhongsou, an affiliate of Huicong International. IDG and Lenovo Investment Company will each contribute US$ 3 million to the investment. The companies chose Zhongsou was because of the search company's strength in desktop search."

China Net Investor: is a major player in the Chinese Search market providing search engine services to well-known websites such as Sina. Zhongsou launched the latest version of its desktop search software i-pig 3.0 on March 9 and claims to be ahead of all competitors. Other important players in the Chinese search market are Baidu, Sohu (Sogou), Yahoo China, Yisou and Google China. (Read more: Chinese Search Market to Consolidate)

Tuesday, March 29, 2005

Globalization and the rise of Asia

From MarketWatch: Globalization and the rise of Asia
By Paul Erdman

The groundwork for trade (part 1)

"The rise of Asia -- specifically China and India -- as the major challengers to American global dominance is no longer a matter of "if" but rather one of "when."

"The Anglo Saxon world took the lead in endorsing the free trade philosophy as expounded in the late 18th and early 19th centuries by such scholars as Adam Smith and especially David Ricardo. On foreign trade, it was Ricardo who developed the theory of comparative advantage. ... All this remains as true today as it did two centuries ago." Read more

So far the U.S. has benefited (part 2)

"As suggested in the first article in this series, we now stand at a new crossroad as we move towards total globalization with all the new problems and opportunities it entails.
They range from fears of growing domestic unemployment as a result of outsourcing to such nations as China and India, to worries concerning our dependence on foreign capital to finance both our trade and budgetary deficits."

"Not only that, but this process has also not resulted in the mass exportation of jobs, as many would have us believe. Despite the fact that imports are at all-time highs, our unemployment rate is only 5.4 percent. Furthermore, this absence of globalization exerting any major negative effect on employment in the United States is not likely to change in the future."

"Their conclusion: The biggest threat to U.S. hegemony stems not from the sentiment of foreign investors, but from protectionism and isolationism at home." Read more

China's Largest Telecommunications Manufacturer ZTE Reaches Top Five As Global DSLAM Equipment Supplier

From webitpr: ZTE Reaches Top Five As Global DSLAM Equipment Supplier

"ZTE Corporation, China's largest telecommunications manufacturer, has joined companies such as Siemens, Alcatel and NEC as a leading worldwide supplier of DSLAM (Digital Subscriber Line Access Multiplexer) equipment. According to a new report from highly respected Gartner Dataquest, shipments of DSLAM increased more than eight per cent in the third quarter of 2004 – from 13.3 million ports to 14.4 million – and DSLAM port revenue increased 2.3 percent in the third quarter of 2004 to $895.3 million from $875 million in the second quarter of 2004.
ZTE's position confirms its growing significance in the world market. To date, ZTE has deployed over 10 million DSL products in over 30 countries and regions around the world. "

Read more

Bright Future for Chinese Online Advertising and E-Commerce

From CHINAdaily: Online ad sector sees steady growth

"Wallace Cheung, an Internet analyst with DBS Vickers Securities in Hong Kong, said in a research report that, among the three major Internet sectors - wireless value-added services, online games and online advertising, the latter is the smallest and has displayed steady, rather than exponential, growth in recent years.
The steady pace of this growth is thanks to higher advertising rates, increased recognition of the importance of the Internet as a channel for publicity, and a boost from the Athens Olympic Games."

"Sina Corp, China's biggest online advertising company, reported a 59 per cent year-on-year rise in its online advertising revenues to US$65.4 million in 2004.
Sina's arch-rival Sohu notched up an even more impressive 89 per cent growth in its online advertising revenue in 2004, hitting US$55.7 million.
NetEase, the other one of China's top three Internet portals, saw its online advertising revenue almost double from 86.18 million yuan (US$10.41 million) in 2003 to 171.05 million yuan (US$20.66 million) last year."

"Jim Sun, an analyst with London-headquartered Evolution Securities, predicted that online advertising - including the use of search engines - should become one of the biggest sources of revenue pools for the Internet industry, alongside e-commerce.
While advertising and e-commerce currently only account for about 20 per cent of the Internet's industry's total revenues, that figure will be a massive 80 per cent by 2008. "

Read more

Monday, March 28, 2005

China urged to roll out 3G strategies soon

From CHINAdaily: China urged to roll out 3G strategies soon

"The Chinese Government should roll out its third generation (3G) of wireless telecommunications strategies as soon as possible to keep up with 3G development worldwide, according to Gao Yan, president of Mobile Networks with Siemens (China) Communications Group."

"It is widely projected that the government will release 3G licences later this year. "I have no clear timeframe, but it has become very clear that 3G should be kicked off soon if China is to keep pace with the development of 3G worldwide," Gao said."

"Analysts believe that the immaturity of Chinese standard TD-SCDMA (Time Division Synchronous Code Division Multiple Access), compared to WCDMA (wideband CDMA) and CDMA 2000, which have been put into commercial use in the global market, is a major reason for the delayed decision-making process."

Read more

Saturday, March 26, 2005

The Struggle to Control Technology Transfer to China

From Newsweek: To Stop a Tech Deal - Taiwan shows how hard it is to control sales to China.

"... China's rapid rise from a sweatshop economy to one built on high technology rests, in good part, on the strategy of acquiring the most advanced and sensitive technologies from eager foreign-investment partners. Governments the world over are struggling with ways to control technology transfer to China, without undermining their commercial interests. The record of Taiwan, one of the largest investors in China, shows how poorly those safeguard measures work in practice."

"Over the last decade, China's IT manufacturing base has grown from infancy to surpass Taiwan's in size; it's now the world's third largest. Its semiconductor foundries are considered only a generation or less behind Taiwan's—a gap measured in months, not years. All of China's top chipmakers are believed to have received technology, seed money or senior managers from across the Taiwan Strait."

Read more

Friday, March 25, 2005

Shanda and Baidu Forge Strategic Partnership

From PR Newswire: Shanda and Baidu Forge Strategic Partnership

"Shanda InteractiveEntertainment Limited, the largest operator of online games inChina, today announced a strategic partnership with, Inc., developerand operator of the world's largest Chinese language search engine. Pursuantto a memorandum of understanding, Baidu will leverage its search platform tohelp introduce Shanda's extended interactive entertainment content offeringsto a broad audience base, and Shanda will have Baidu's search tools embeddedin Shanda's user platform, further strengthening Baidu's leadership positionin the search market. In addition, the two companies will explore crossmarketing opportunities on each other's platform."

Read more

Huawei Dampens North American Partnerships Talk

From LightReading: Huawei Dampens Deal Talk

"Huawei Technologies Co. Ltd. is now distancing itself from reports in the Chinese press that it was pursuing North American partnerships with Lucent Technologies Inc. and Nortel Networks Ltd.. The article published in China Daily, contained several misinterpretations," says Susan Etlinger, a spokeswoman for Huawei, in a statement emailed to Light Reading on Thursday.However, the company won't say what exactly was misinterpreted, leaving it anyone's guess. Maybe a company executive just said too much. Maybe Huawei's words were lost in translation."

Read more

China's Videogame Market Forecasted to Become $2.0 Billion by 2009

From Videogame Market In China Explodes Despite Piracy

"Niko Partners, a leading market research firm, today announced that the videogame market in China is experiencing rapid growth, particularly in the online games segment. According to a new report released by the company, online games revenue is forecast to reach $2.0 billion by 2009. Additionally, China had 28.8 million gamers in 2004 and Niko Partners projects that number to grow to 55.5 million gamers by 2009."

"Online games are emerging as the preferred platform for gamers and publishers," said Lisa Cosmas Hanson, managing partner, Niko Partners. "The online game platform is an excellent solution for the Chinese market, meeting the consumer demands for social interaction, entertainment, and intellectual stimulation. It also meets the needs of publishers because revenue is earned from fees gamers pay to play games, rather than from purchases of game software units that have long been the victim of piracy in China."

"Niko Partners projects that the online games market will rise at a compound annual growth rate of 33.8% from $467.8 million in 2004, to $2.0 billion in 2009."
Read more

China's Telecom Market: 344.1 million mobile phone and 319.7 million fixed-line phone users

From DigiTimes: China's market: 344.1 million mobile phone and 319.7 million fixed-line phone users by end of February

"China had 344.1 million mobile phone subscribers and 319.7 million fixed-line telephone subscribers as of the end of last month, translating into a user density of 25.9 and 24.9, respectively, per 100 people, according to statistics published by China’s Ministry of Information Industry (MII) on its Chinese-language web site
For Internet-access services, China had 27.14 million broadband subscribers, of which 18.71 million or 68.9% by xDSL modes, as well as 44.76 million dial-up users and about 67,000 dedicated-line users at the end of February."

Read more

State of the China Game Industry - Collapse, Death And Re-Birth

From ChinaTechNews: Collapse, Death And Re-Birth In The Chinese Online Game Market
By Frank Yu

"China’s market still needs to undergo that cycle of a thinning of the herd of weak and diseased companies to ensure that the quality and experience of the industry in general continues to increase. Yes, there is money to be made in China’s online game market in the future but the question is if any of the companies that can be invested in now will still be around to give you a return on your investment."

Read more

China Telecom Giant Huawei Targets North American Market

From Electronics Supply&Manufacturing: China telecom giant targets North American market

"Chinese telecommunications equipment giant Huawei Technologies Co. Ltd. is seeking to move into the North American market through alliances with North American vendors, possibly including Lucent and Nortel, according to a report in the Beijing-based China Daily.
The newspaper quoted Huawei executive vice president Zheng Baoyong as saying that the company is more inclined to strengthen its position in North America through strategic partnerships than "fighting it out on our own."
Moreover, Zheng identified who those partners might be: "We are talking with telecom equipment makers such as Lucent and Nortel Networks this year to further our partnerships so as to better position ourselves," he told China Daily. "

Read more

Wednesday, March 23, 2005

Yahoo to acquire Sina and Shanda? More details...

From People's Daily Online: Yahoo! gears up China biz

"Senior executives of Yahoo!, the world's leading Internet portal operator, have arrived in Beijing intent on gearing up its e-commerce and search engine business in the Chinese market.

Led by Daniel Rosensweig, chief operating officer, and Jeff Weiner, senior vice-president for search and marketplace, the team yesterday pledged to enlarge Yahoo!'s investment in China and introduce new products.

The visit came amid widespread market rumour that Yahoo! is pondering acquiring NASDAQ-listed Sina, the leading domestic Internet portal operator, and Shanda, the largest Chinese online games operator. "

Read more

Americans are buying into Lenovo

From The Inquirer: Texans buy into Lenovo

"AMERICANS ARE BUYING into Lenovo, the Chinese PC maker which just bought IBM PC. Texas Pacific Group are among three investors pumping $350 million into the part Chinese government owned company. "

Read more

Users urged to block

From China Daily: Watchdog urges users to block

"An international anti-spam watchdog recommended e-mail users worldwide to block, China's largest Internet portal, because it allegedly allows its 100 million subscribers to send unsolicited messages. "

"The advice was sent to companies, universities, government offices and military installations, with a total of 260 million Internet users. "

Read more

Tuesday, March 22, 2005

Censor storm on Lenovo's acquisition

From China Economic Net: Censor storm on Lenovo's acquisition of IBM's business revealing US wariness

"IBM and the Chinese Lenovo Group declared a news release on March 9 that as the Committee on Foreign Investment in the United States ("CFIUS"), which is responsible for the censorship on whether the M&A of US enterprises by foreign companies will endanger the national security of the US, had completed its censorship on Lenovo's M&A of IBM's PC business ahead of time, the two parties will conduct the integration as planned. Finally, the storm once making rumors fly came to an end."

"It should be remembered that IBM is the No.1 of the US computer industry, the nation's heavyweight blue chip, and to some extent, a symbol of the US. Just like salvaging Ford in early days, it (to keep IBM) symbolizes the maintenance of the US’s image and status in the world. But this time, if it is successfully sold out, it is clear that the US have no remedy to save IBM but to sell to foreign funds. Also, the most important is that the acquirer is a company from a socialist country and the largest socialist company ever existing in the world, which means that the "knockout" product of the US capitalism is diluted by socialism. This is very difficult for the US citizens to accept emotionally. If it appeared ten years ago, it would be estimated that it is absolutely impossible for such a transaction to get passed."

Read more

Saturday, March 19, 2005

Outlook for China broadband market remains bright in 2005

From DigiTimes: Outlook for China broadband market remains bright in 2005

"The broadband Internet access market in China has achieved vigorous growth in recent years, enabling the nation to emerge as a broadband superpower, with more than 20 million subscribers at the end of 2004. iSuppli forecasts that the market will continue expanding in 2005, generating greater opportunities for service providers, equipment manufacturers and semiconductor suppliers."

China broadband subscribers 2003-2008 forecast (million subscribers):
2003:10.8 2004:23.1 2005f:35.7 2006f:50 2007f:62.8 2008f:77.4
Source: iSuppli, compiled by DigiTimes, March 2005.
Read more

Friday, March 18, 2005

Chinese telecoms think ahead: China Telecom and Netcom invest in next-generation networks

From Red Herring: Chinese telecoms think ahead

"Chinese telecommunications carriers have started investing in network upgrades to soft-switched next-generation networks (NGN) in earnest. ... According to new estimates by Beijing-based telecommunications consultancy Norson, operator investments in NGN equipment for 2005 will total only $120 million in 2005, doubling in 2006 and reaching $400 million in 2007."

"That’s good news for China’s leading IP-switching equipment vendors, including homegrown heavyweights Huawei and ZTE, who have been competing with success in mature markets ... "
"For carriers, these networks represent more than just a new technology, said Ms. Cai: they will entail an entirely new business model. “Content provision will be very different, with essentially three networks—television, broadband Internet, and telecommunications—all in one,” she said." Read more

Henry Blodget's China Expedition Begins

From I Go East - My China expedition finally begins.
By Henry Blodget

"A Slate reader named Ross O'Brien had been kind enough to invite me to lunch ... O'Brien has lived in Hong Kong for seven years, where he runs a research and consulting firm called Intercedent Asia. ... O'Brien hasn't struck it rich here, but he's doing fine, and he and his partners are besieged with—and bewildered by—laowai (literally, "old foreigners," with a hint of "buffoon") who imagine that China is still a green field of opportunity. ... He believes that doing business in China is more a necessity than an opportunity and that companies that don't won't be able to compete globally. He regards much of the whining about the reverse engineering and copying of American technology products—telecom switches, for example—as, just that, whining, and observes that American companies often do the same thing." Read more

China Net Investor:
Henry Blodget was a Merrill Lynch equity analyst and poster-boy for the Internet bubble. The Securities and Exchange Commission permanently barred him from the securities industry in the aftermath of investigations into Wall Street corruption. Blodget is now a columnist for the online magazine Slate and writes a series on the China gold rush.

Thursday, March 17, 2005

Interview with Safa Rashtchy: Net company takeover possibilities in China

From MarketWatch: Rashtchy: Net company takeover possibilities in China (video 7 min.)

Safa Rashtchy, senior technology analyst with Piper Jaffray, tells Bambi Francisco which Internet companies are likely to be takeover candidates in China and which companies will be buying.

Wednesday, March 16, 2005

Soon end of Chinese Miracle? Interview with Pan Yue

From Spiegel online: "The Chinese Miracle Will End Soon"

"The world has been dazzled in recent years by the economic strides being made by China. But it has come at a huge cost to the country's environment. Pollution is a serious and costly problem. Pan Yue of the ministry of the environment says these problems will soon overwhelm the country and will create millions of "environmental refugees.""

"SPIEGEL: But the economic growth fanatics in Beijing will still likely carry on just as before.

Pan: They're still playing the lead role -- for now. For them, the gross domestic product is the only yardstick by which to gauge the government's performance. But we are also making another mistake: We are convinced that a prospering economy automatically goes hand in hand with political stability. And I think that's a major blunder. The faster the economy grows, the more quickly we will run the risk of a political crisis if the political reforms cannot keep pace. If the gap between the poor and the rich widens, then regions within China and the society as a whole will become unstable. If our democracy and our legal system lag behind the overall economic development, various groups in the population won't be able to protect their own interests. And there's yet another mistake in this thinking....."

Read more

Tuesday, March 15, 2005

Lenovo in Germany from May onwards

From Heise online: Lenovo to be available in Germany from May onwards

"The Chinese PC manufacturer Lenovo is preparing to hit the ground running in the German market. "According to the current state of affairs we can take off on May 1. Germany would thus be among the first countries worldwide," Marc Fischer, head of IBM´s PC operations in Germany, told the Financial Times Deutschland. The project planning was very ambitious, he added. In March the US authorities had approved the sale of IBM´s PC Division to Lenovo. "

Read more

Huawai gaining attention of North American carriers

From Unstrung: Huawei Converges on America

"Chinese infrastructure provider Huawei Technologies Co. Ltd. is hoping to break into the U.S. market with a third-generation CDMA system aimed at dramatically reducing operating costs for mobile carriers (see Huawei Details 3G Deployments and Huawei Adds CDMA2000 Switch)."

"In addition to having a core-to-access product portfolio in the wireline world, the company is quickly gaining the attention of North American carriers, even though it has only just dipped its toe into the market (see Huawei Gains Ground in HR Survey, Huawei Goes Hard Core, and Huawei Unveils Newish IP DSLAM)."

Read more

Holland Subsidiary for Haier

From Pacific Epoch: Haier To Set Up Holland Subsidiary

"Haier will establish a subsidiary in Holland on April 1 to explore overseas IT markets, reports China Business News."

Read more

Monday, March 14, 2005

Chinese Net stocks recaptured some losses

From Chinese net shares rally

"With an estimated 100 million Internet users in the country and a roughly 12 percent penetration in online shopping compared with nearly 1 out of three Americans shopping in the U.S., it's a largely untapped market. "

"After a week of declines, Chinese Net stocks recaptured some losses. "

"The interest from U.S. Internet companies to tap the Chinese market is one reason many of the Chinese Net stocks look attractive. "

Read more

Friday, March 11, 2005

China Heads the DSL League Table With 17m Lines

From The Register: Global DSL tops 100m

"More than 35m new DSL lines were wired up around the world during 2004 as demand for broadband continued to soar. By the end of 2004 there were 97m DSL lines around the world - an increase of 60 per cent on the year, according to research from PointTopic.

China heads the DSL league table with 17m lines - up 4.4m on the year. The US has 13.7m DSL lines. Demand for DSL continues to be strong in Europe with France, UK, Germany and Italy all adding more than 1m lines each over the year."

China’s telecom hardware maker ZTE On A Roll

From TelecomWeb: China’s ZTE On A Roll: Wins ADSL Deal At France Telecom

"Chinese telecom hardware maker ZTE has snagged a global ADSL supply deal from France Telecom, the latest in a string of victories outside of China for the fast-growing company. The France Telecom deal, whose estimated value was not disclosed, most recently follows R&D deals with Portugal Telecom and Intel and an OEM agreement with Alcatel covering ZTE’s CDMA radio access products, all announced since the beginning of this year."

"According to ZTE president Ying Yimin international sales at ZTE, have soared over the past year and in 2004 accounted for 40% of the company’s revenue, up 169.5 per cent from 2003. “This year we will continue our globalization strategy and introduce more of our products and services to international markets,” Yimin said." Read more

Thursday, March 10, 2005

Asia’s International Patents Boom

From Red Herring: Asia’s IP boom

"Asian countries, often derided as technology thieves and copycats, are filing international patents in record numbers, according to figures released Wednesday by the U.N.’s World Intellectual Property Organization in Geneva."

"The United States still tops the list of countries putting in new patents, but South Korea and China are gaining ground. Chinese inventors filed 1,782 of the 120,000 patents of 2004, a 38 percent increase over the year before. South Korea boosted its patent count by 20 percent over 2003 with 3,521 applications."

"South Korea’s Samsung filed more patent applications with the organization in 2004 than Cisco and Microsoft combined. Huawei Technologies topped the list in China with 177 patents." Read more

Baidu gets ready to IPO

From Red Herring: Baidu gets ready to IPO

"Baidu, China’s most popular search engine, has retained an underwriter and entered its silent period in preparation for an initial public offering on Nasdaq this fall, according to several industry insiders in China.

The IPO, which would be the first for a stand-alone search engine in China, is one of the most anticipated for a Chinese company and could represent the beginning of a “fifth wave” of Nasdaq listings for Chinese Internet/technology plays, following the Internet major portals (Sina, Sohu, and Netease), the wireless value-added service providers (Linktone and Kongzhong), the travel booking web sites (C-Trip and eLong), and the job search sites (51job, with likely to follow)." Read more

Pacific Epoch World of Warcraft (WoW) Survey

From Pacific Epoch: WoW Survey (free; registration required)

"World of Warcraft (WoW) is the world's hottest online game, and has broken sales records in North America, Europe, Korea, and every other country where it has been launched. WoW was one of the most anticipated games in China in 2004. Industry analysts and competitors expect the game to be a success when it launches in China soon. Pacific Epoch decided to conduct a small study of the market for World of Warcraft in China. We spoke with 64 gamers in Shanghai and discussed WoW's future."

Conclusion of the study:
"Pacific Epoch's study indicates that World of Warcraft will be popular, but will not have the amazing initial success that many people expect. WoW will not create a large amount of new MMORPG gamers. Rather, it will cannibalize gamers from other MMORPGs, notably Sina's Lineage II. WoW will not record historic peak concurrent user numbers due to the lack of hardware. After the initial surge in users, WoW's user growth will depend on new PC sales." Read more

Wednesday, March 09, 2005

Rumor: Baidu IPO in August 2005?

From Pacific Epoch: Rumor: Baidu Getting Ready For IPO

"The Beijing News is quoting an unnamed source saying that Chinese search service provider Baidu has named Goldman Sachs as its underwriter and will list on Nasdaq between August and October of 2005."

Read more

IBM, Lenovo PC Deal Passes U.S. Review

From Extreme Tech: IBM, Lenovo PC Deal Passes U.S. Review

"China's Lenovo Group Ltd. won clearance from a U.S. national security oversight committee to acquire IBM's personal computer business, the companies said on Wednesday, overcoming resistance from some U.S. lawmakers.
An IBM executive said the high-level U.S. committee had given the deal its unanimous consent— the final external approval needed— putting the $1.25 billion PC sale on track to close in the second quarter as originally planned."

The merger of Lenovo and IBM's personal computer business will create the world's third largest PC maker.

"The deal met unexpected resistance when some U.S. lawmakers began decrying the loss of a U.S.-based PC maker to China, and officials whispered that Chinese nationals working for Lenovo in the United States might act as industrial spies."

"Rival PC makers such as Dell Inc. and Hewlett-Packard Co. have been seeking to woo corporate PC customers away from IBM by citing the regulatory overhang as well as uncertainty over Lenovo's future PC product strategy. "

Read more

Optibase in China: IPTV using codec MPEG-4

From Yahoo Finance news: Optibase Enables Commercial IPTV Services in China

"Optibase, Ltd. (Nasdaq:OBAS - News) a leading provider of advanced digital video solutions today announced that the Company's MPEG MovieMaker 400 encoders are enabling TV over IP to the home streaming services in the Tangshan metropolitan area in China."

This area serves over 50,000 ADSL, Cable and optical LAN subscribers.

"The video head-end solution, which will enable triple play services (Voice, High-speed Internet and Video), will deliver dozens of live video channels and video-on-demand over an IP network designed to reach all of Tangshan's metropolitan subscribers."

Read more

Tuesday, March 08, 2005

Baido & Google: Chinese desktop search tools released

From China Daily: Google, Baidu release Chinese desktop search tools

Baidu and Google Inc. have released new Chinese-language programs to search the labyrinthine hard drives of computers for users who accumulate so much data that they cannot find those data themselves.

"The free, downloadable service from Baidu can trawl personal computer hard drives for documents, art, MP3s and executable files with more depth than search functions that come with operating systems, said Cynthia He, a Baidu spokeswoman."

"Baidu, which has 75 million page views daily, spent half a year to develop the software..."

"On Monday, Google's new Chinese-language desktop search service also became available, according to Chinese media."

Google bought a minority share in Baidu last year to enter the China market.

Read more

Three risks for Lenovo

From People's Daily: Three risks in acquiring IBM PC sector: Lenovo Chairman

"Deputy to the National People's Congress of China and the Chairman of the Lenovo Group Liu Chuanzhi said he is confident to turn the loss-making IBM PC sector to profits."

According to Liu there are three risks for the prospect of profit making with the IBM deal:

1.) "The old customers of IBM will probably not buy Lenovo's products."
2.) "Employees may leave the companies due to change of shareholder."
3.) "Friction may occur between the two sides."

Read more

China close to collapse in 2015? Read this report

From U.S. Newswire: China's Economic Bubble about to Collapse, Experts Warn

According to Strategic Forecasting Inc. (STRATFOR) "China's furious economic growth in recent years has created a bubble economy that is on the verge of collapse (...) with an estimated $500 billion in bad debts threatening its banking system, rapidly rising unemployment, rampant government corruption and mismanagement, and foreign investment dwindling. "

For the period till 2015 STRATFOR expects an "increase in internal tensions, social upheaval and violence, which the central government in Beijing may be unable to control after 2008."

Read more

Monday, March 07, 2005

China has no brands in any real sense...?

From English, People's Daily Online: "I never said that Haier and Lenovo are not brands"

"As Chairman and CEO of Ogilvy & Mather Worldwide based in New York, Shelly (Lazarus) has long been touted by Chinese media as a female who knows brands best in the world than anyone else."
"Unfortunately everything changed all of a sudden after November 8, 2004. According to a news story on that day, American Business Week correspondent did an interview with Shelly in Beijing. During the interview, Shelly was quoted as saying "Lenovo and Haier are not brands at all and so far China has no brands in any real sense". The remarks made by Shelly have drew widespread attention in China. Some passionate and patriotic newspapers attacked her assertions as nonsense."

In order to find out it Shelly Lazarus really thinks brand building of Chinese companies a futile effort, People's Daily Washington-based correspondent Yong Tang conducted an exclusive interview with her.

Some interesting statements out of this interview:
"I never said that Haier and Lenovo are not brands. They are brands. They are brands with huge potential. They are just not yet as fully developed as brands can be. "

"Yong Tang: Can you name a few Chinese enterprises which could hopefully become global brands in the future?
Shelly Lazarus: There are already some Chinese companies, such as Haier and Lenovo that are well on their way to becoming global brands."

Shelly Lazarus about Ogilvy:
"Ogilvy China is one of the leading marketing communications groups in the country, both in terms of revenues and people. The company is the only network able to offer a genuine 360 degree offering of marketing disciplines. In each area - advertising, direct marketing and public relations, Ogilvy is the unmatched leader.
It has a list of blue-chip Chinese and multinational clients who are deeply committed to brand building in China. Our Chinese clients include: China Mobile, Great Wall Wine, Bright Dairy, Haier, TCL, Tsingtao Beer. Our multinational clients include: Coca-Cola (Sprite), Cisco, GSK, IBM, Kodak, Motorola, SAP, Unilever. "

Read more


Saturday, March 05, 2005

BBC-radio China week

From Highlights of the BBC-radio China week

"The BBC-radio will dedicate next week fully to China and gives here an overview of the highlights. (In China you might need a proxy.)"

ChinaHerald is a "Weblog with daily updates of the news on the emerging civil society in China, from the quirky perspective of Shanghai-based journalist Fons Tuinstra". Visit to his blog highly recommended.

Lenovo Takes On Dell

From Lenovo Takes On Dell

"Lenovo is poised to turn up the heat in the market-share war against Dell and Hewlett-Packard by bringing a new value line of PCs to the U.S. market."

"Lenovo plans to spend $200 million in marketing funds to help drive sales through the channel, Ward ( IBM veteran, who will become CEO of the combined IBM-Lenovo venture) said."

"The new line of Lenovo PCs will be priced aggressively against competitors such as Dell, while existing IBM systems will be positioned as offerings that sport additional features at prices that slightly undercut rival offerings, Ward said. "It's a misnomer that Dell is the low price leader. But this will make us a lot more competitive to Dell." Read more

Chinese Search Market to Consolidate

From Xinhua: Search market to consolidate

"Search engine service providers launched a new round of attacks in the fiercely competing market yesterday - moves which could close the final stage of consolidations., the country's biggest search engine service provider, on Thursday held a Most Searched Brand and Entreprenuer award with Rupert Hoogewerf, CEO of EuroMoney China, trying to boost its influence among business leaders and young people., another major player in the market, also released its desktop search software NetPig 3.0 version on Thursday.

The Chinese Internet portal also upgraded its search engine website on February 25 - and vowed to become the leading search engine service provider in the country.

The US giant Yahoo!'s Chinese operation also said it would aim to become the biggest player in two years.

Henry Yang, president of the Internet industry research company Shanghai iResearch Co Ltd, believed the moves and remarks of companies like Baidu, Zhongsou, Sohu, and Yahoo! China reflect the intensity of the competition in the search engine market, which is almost fully consolidated. ... Baidu, Google and search services by Yahoo! China were the top three most popular search engines in 2004 with almost 85 per cent of the usage.... Yang pointed out that the technical barriers to the business are already quite high and the positions of a few major players are quite established, so small and medium players are facing mounting difficulties." Read more

Shanda-Sina Deal: Cash to burn, scores to settle

From Weekend Standard: Cash to burn, scores to settle

"``Fresh from raising US$300 million Shanda has, in the space of a few short months, decided to spend most of the money on a marginally related company. This is truly remarkable and could even be a world record,'' Chinese technology commentator Perry Wu said. ``This is a classic case of [Shanda] executives making decisions based on how the stock market is currently viewing a company's stock price, not on what is in the long-term interests of the company.''

"For now, Sina seems to be unhappily caught in the eye of the hurricane. Shanda and its crusading boss are unlikely to give up at 19.5 percent. Having tasted blood, they want more.
``This is being viewed by both companies as a takeover,'' said one individual with knowledge of the deal. ... ``A 19.5 percent stake is not going to benefit Shanda significantly. A full combination is the more favorable option for Shanda,'' said one Hong Kong-based analyst."

"Whatever happens, though, any final agreement may be weeks or even months away. China's newspapers, Web sites and radio stations, awash with rumor and counter-rumor about the winners and losers, have much talking yet to do." Read more

Thursday, March 03, 2005

New Lenovo takes shape

From ZDNet: New Lenovo takes shape

The nouveau Lenovo wants to shake up the PC market's status quo.

"Lenovo Group, China's top PC maker, is moving ahead with its plans to acquire and incorporate IBM's PC business, despite the deal being the subject of an ongoing review by the Committee on Foreign Investment in the United States, a federal interagency panel chaired by the secretary of the Treasury.

"The new Lenovo, as its executives have referred to it, aims to combine its own business in China with IBM's in the rest of the world, creating a PC giant that can compete globally with Dell and Hewlett-Packard. Lenovo is set to become the world's third-largest PC maker, after Dell and HP, when the multibillion-dollar deal, announced last December, is completed."

"The company also aims to bring Lenovo PCs, now available only in China, to the rest of the world. These machines have some attractive features; several of Lenovo's machines, such as the Tian Jino A desktop, which includes a built-in voice over Internet Protocol telephone, look more like they might have been built by Apple Computer, rather than a company like IBM." Read more

Sohu Aiming to Take Industry Lead

From CHINAdaily: Sohu aiming to take industry lead

""Our new goal is to become the biggest online media platform and search engine provider in China," said Zhang (CEO of the Chinese Internet company in an interview in Beijing, adding that he has no intention of selling his firm in the face of stiffening competition from its market rival."

"Sina is the biggest Chinese Internet portal and online advertising company, but the possible acquisition of Sina by Shanghai-based Shanda may be the incentive Sohu needs to achieve its goal. ... He believed the acquisition would bring more opportunities than threats, as Sina's management is consumed with the potential merger and formulating defences."

"The company recently released a new version of its search engine - Sogou 2.0 - to the market, in an attempt to lure more users through faster and more accurate search results." Read more

Wednesday, March 02, 2005

Chinese Online Recruitment Market Booming:,, 51job

From Online recruitment market booming

"As people wondered which international big name would be the next to come to the world’s second-largest market in terms of the number of netizens, US online job search giant Monster Worldwide Inc announced on February 2 that it had acquired a 40 per cent stake in the Beijing-headquartered counterpart Holdings Ltd for US$50 million, thus becoming the first leading Internet firm to enter the Chinese market in 2005. Monster’s move makes sense, as the online job recruitment business has become a new bright spot in China’s Internet industry since last year, following search engines, online travel services, online shopping, and instant messaging."

"Shanghai iResearch Co Ltd, a professional Internet industry research house, estimated that revenue from the online recruitment market in 2004 reached 550 million yuan (US$66.43 million), a year-on-year increase of 77.4 per cent."

"Like many other emerging businesses, the fast growth of online job recruitment is also accompanied by another characteristic - many players and no dominant leaders. According to iResearch, the top three firms in the market - Shanghai-based 51job, ChinaHR and Zhaopin, only took 46 per cent of the entire pie, with a further 1,000 firms competing for the rest." Read more

Tuesday, March 01, 2005

Shanda-Sina Deal: Chen Tianquiao's "lightning plan"

From The Guardian: China's player looks to the big game

"After Sina's 2003 attempt to buy Shanda, Chen first tried to turn the tables last October with a friendly takeover offer. The Sina board, led by the politically influential French-educated chief executive Wang Yan, reportedly refused to meet him.
Chen retaliated with a secret strategy that became known inside Shanda as the "lightning plan". According to the 21st Century business newspaper, Shanda registered four companies in the British Virgin islands which helped to make the purchases without setting off alarm bells. To minimise the risk of discovery, the bulk of the acquisitions were made on the Nasdaq stock exchange in New York on February 7 and 8 - either side of the Chinese new year, when Sina's top executives were on holiday."

"The Chinese government, which is used to state central planning, may also find it difficult to ignore the positive aspects of this capitalist raid on international markets. Shanda's move could pre-empt an often-predicted takeover of Sina by Yahoo, which would swallow it up into a larger American-owned empire.
Instead, a tie-up linking China's leading generators of internet games, advertising and messaging revenues could be a step towards the creation of a global player." Read more

Wave of No-Name, Low-Cost Consumer Devices Hits U.S. Shores: TCL, Haier, X2, Norcent, Chi Mei

From ElectronicBUSINESSonline: The clone wars - A wave of no-name, low-cost consumer devices hits U.S. shores

"There's a virtual stampede into the U.S. market by Asian companies that are capitalizing on the fact that most consumer electronics devices are now built with standard digital components. Some of the largest manufacturers in China, such as TCL and Haier, are preparing to enter the U.S. consumer market in a big way and are forming strategic relationships with key chip suppliers. At the same time, other, lesser-known but nonetheless powerful Asian companies (X2, Norcent, Chi Mei) are forming partnerships and testing various supply chain and retail marketing strategies, in search of the magic mix of low cost, good quality and brand-name recognition that will entice U.S. consumers to buy their CE "clones."

"Although these new companies all have similar cost advantages, they also face similar barriers to the U.S. market. For one thing, they have little credibility and brand recognition with American consumers." Read more

China Forecasts 120 Mln Internet Users by Year End

From Reuters: China Forecasts 120 Mln Internet Users by Year End

"China's Internet user base is expected to grow 28 percent this year to 120 million, according to the official Xinhua news agency, which cited an official with China's Ministry of Information Industry (MII)."

"China is the world's No. 2 PC market, with nearly 16 mln units shipped last year and the number expected to grow another 13 percent in 2005, according to International Data Corp."

"It is also the world's largest telecoms market by subscribers, with 316 mln fixed-line users and 340 mln mobile users at the end of January, ... . Experts predict that China will have 402 million mobile subscribers by the end of this year, with fixed-line subscribers expected to reach 360 million, according to Xinhua."

Rumor: Tom Online To Acquire Alibaba (Taobao)

From Rumor: Tom Online To Acquire Alibaba

"The Internet is rife with rumors that Tom Online (TOMO) will acquire, a B2B service provider. ... Tom Online's stock has not shot up dramatically after doing its initial public offering and it has been weak in competing with other portals. The company is in need of finding a new service to help itself both on the stock and revenue fronts."

"Neither company has publicly confirmed or denied these rumors."

China Net Investor: is a rapidly expanding online merchant serving small and medium-sized businesses in mainland China. Its consumer online auction unit,, is one of the most popular online auction sites in the country. Competitors are (Sina/Yahoo) and EbayEachnet.

Linktone Year-End 2004 Results

From Linktone Ltd. Press Release: Linktone Reports Year-End 2004 Results

"Linktone Ltd. (Nasdaq: LTON - News), a leading provider of interactive entertainment products and services to consumers in China, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2004"

* Fourth Quarter 2004
-- Gross revenues: $15.5 million, growth of 17% quarter-over-quarter and 135% year-over-year
-- Net income: $3.3 million, growth of 18% quarter-over-quarter and 106% year-over-year
-- GAAP fully diluted earnings per ADS: $0.12 vs. $0.10 for the third quarter of 2004
-- Adjusted fully diluted earnings per ADS (excluding the effects of certain one-time and non-cash expenses): $0.15 vs. $0.13 for the third quarter of 2004

* Fiscal Year 2004
-- Gross revenues: $50.3 million, growth of 203% year-over-year
-- Net income: $12.5 million, growth of 247% year-over-year
-- GAAP fully diluted earnings per ADS: $0.47 vs. $0.16 for 2003
-- Adjusted fully diluted earnings per ADS (excluding the effects of certain one-time and non-cash expenses): $0.56 vs. $0.21 for 2003 Read more