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  • Biz advice: Don’t stay stationary

    When Chen Huxiong left his hometown in Guangdong Province and set up a stationery factory in Shanghai in 1997, he made a conscious decision not to rely on imports from overseas. His company, M&G Stationery, has prospered ever since, and Chen credits the business environment in the city for his success.“Setting up business in Shanghai means we have better access to overseas resources and also enjoy a favorable geographic location,” Chen explained. The company listed on the Shanghai Stock Exchange in 2015 and the shares have been a lucrative investment for shareholders. M&G’s current market capitalization is about 46 billion yuan (US$6.7 billion). Last year, turnover was 8.54 billion yuan. The stock has been trading near its record high of 51.90 yuan in 2019, with about 80 percent increase in the past twelve months.Its factory in Fengxian District produces more than 5 billion ballpoint pens a year, becoming one of Asia’s biggest stationery makers. Since its market debut, M&G has been expanding beyond paper and pens, with an affiliate selling creative cultural products.Government entities have helped the company prosper. The Fengxian District Court, for example, has cracked down on patent infringement and counterfeit issues related to M&G products, and the Customs administration has streamlined the process whereby companies like M&G can export products. “It’s a fully competitive and open market here,” Chen said. “Choosing Shanghai was a smart choice, looking back on the decision, and the local government has taken a lot of steps to improve the business environment in recent years.” In tune with the city’s campaign encouraging companies to think creatively and upgrade production, M&G has continued to invest in new technology and product innovation. The company has filed for dozens of patents and linked up with research and educational institutions. A collaboration with Tongji University professors produced new designs to improve pen-holding positions for students. The product has received a positive response from consumers.M&G is one example of how the right business environment attracts investment, talent and innovation. For French beauty-products maker L’Oréal, simplified import procedures for cosmetics with no medicinal properties introduced in the Pudong New Area matters.L’Oréal said import processing has been reduced to five working days from three months, helping the French firm hasten the introduction of new products into China. China is already L’Oréal’s second-largest market, and the company is expanding its footprint here. Its research and development site in Shanghai, the company’s third-largest globally, serves the local market and also processes research samples from overseas.Shanghai Customs has set up a green channel to expedite the import of research samples, helping L’Oréal expand that service. A single-window service for trade management has been set up by Shanghai Customs to allow goods declaration to be handled online and to connect port and logistics data to seamless transportation of imports and exports.

    Posted: by Shanghai Daily

  • Hong Kong tops global list of most expensive housing market again as protests make little dent

    Hong Kong has been ranked yet again as the world’s least affordable housing market with social unrest failing to make any meaningful dent on home prices for most of 2019. That dubious honour is for the 10th straight year and is unlikely to be toppled in near future.A family in the city would need to save up for 20.8 years to afford a home in the city, according to the annual Demographia International Housing Affordability Study, which ranks 92 major markets across the world based on median…

    Posted: by South China Morning Post

  • Meituan Dianping co-founder Wang Huiwen to retire amid management revamp

    One of the co-founders of Meituan Dianping, Wang Huiwen, is expected to retire this year, as China’s largest on-demand services provider conducts a revamp of its senior management.Wang, who has served as senior vice-president at Meituan since 2010, will step away from his daily duties by December, but will remain as a board member and serve as a consultant, according to a company statement on Monday.“Carrying on our mission of ‘eat better and live better’ over the coming decade would require…

    Posted: by South China Morning Post

  • Moody’s downgrades Hong Kong’s ratings, saying its ability to govern effectively has been eroded by protests

    Moody’s Investors Service has downgraded Hong Kong’s rating, citing concerns over the government’s lack of tangible plans to resolve the political and economic issues arising from the more than seven months of protests, dealing another blow to the city’s reputation as a business hub.The rating agency lowered the long-term issuer and senior unsecured ratings of the Hong Kong government by one notch to Aa3 from Aa2, becoming the second agency to lower the city’s credit rating. In September, Fitch…

    Posted: by South China Morning Post

  • Once dingy wet markets clean up their act to woo back customers

    For generations, fresh vegetables, meat and seafood bought daily in neighborhood wet markets have been the basis of good home cooking. But those markets have come under threat from online markets such as Tmall and Hema that deliver fresh vegetables to the door and from a time-strapped generation that prefers takeaways to cooking.To survive, wet markets have had to adopt to changing times. They are shedding their past image of dingy, unhygienic places by overhauling environments to create airy, clean spaces with foodstuffs artfully displayed. Food courts selling snacks are also being added.In Shanghai, Julu Co reconstructed its Yongnian, Taikang, Jiangnan, Haishangmengyuan and Mengxi markets. Hanli Business Management Co relaunched its Zhenru-Gaoling Market late last month and will renovate up to 18 more this year. Li’an Market, a quarter-century-old market in Minhang District, reopened last May after reconstruction.The Mengxi vegetable market in Huangpu District revamped its décor, using wild bamboo strips as an ornamental hedge, and displays its vegetables in arrays designed to whet the appetite. At Taikang Market, seafood containers no longer spill water and create muddy footpaths. Three cleaners work from 6am to 8pm sweeping the market floors and picking up refuse. Julu management caters to its vendors as well as customers. Each of its markets provides a room where vendors can microwave meals and eat in privacy. The emphasis on hygiene is especially important after the recent outbreak of a respiratory illness that has killed three people and infected nearly 200 in the city of Wuhan. It is believed to have started in a seafood wet market. Officials in Shanghai say a similar outbreak is unlikely in its wet markets, which are subject to tight scrutiny.“Every morning at 8am, supervisors in each market randomly take sample vegetables and immediately test them for pesticide residues and quality,” said Tang Jinlin, a manager at the Taikang Market.Improved market environments and management come at a price. Stallholders are facing higher rents. A vendor surnamed Xu at Taikang Market told Shanghai Daily the higher rent is reasonable because it’s still cheaper than renting a shop. Since the market’s reconstruction, rents have risen a few hundred yuan to 3,000 yuan (US$433) a month. The lease on a shop could cost tens of thousands of yuan. However, other vendors are uncertain whether their sales will keep pace with increased rents. “The peak season has yet to come, so I don’t know how this market will fare,” said a vendor surnamed Liu at the Zhenru-Gaoling Market in Putuo District. “If traffic in March maintains the current pace, then maybe this market will be successful.”ChallengesVendors seem to understand the challenge they face: Fewer people coming to buy vegetables, pressure to raise prices and uncertainty whether market facelifts will give them a longstanding boost in trade.“I think customers are willing to pay more money if the quality of vegetables is high and a market is clean,” said vendor Xu. “At the end of a day, unsold vegetables are disposed of instead of putting them back up for sale the next day,” said vendor Liu. “Even if I wanted to put them back the next day, they wouldn’t sell because customers are discerning and could see other stall offerings that are fresh on the day.”Wet market shopper Wang, buying cabbage at Taikang Market, told Shanghai Daily that the price is actually cheaper now than before the market was overhauled.That perception is supported by a Shanghai municipal policy. Every day, markets provide five vegetable varieties with prices lower than average, and the list of those vegetables is hung above the stalls. The government pays up to 300 yuan a day as a subsidy to vendors selling cheaper vegetables and meat.Zhenru-Gaoling Market has introduced some well-established snacks to its food court, including popular brands such as Xiaoshaoxing, Dahuchun and Gongdelin.“Business is doing well here,” said Yao Yunfeng, manager of Dahuchun. “Even people living afar drive here to eat.”Grandma Geng Yulin, who lives close to Zhengru-Gaoling Market, said, “The prices are higher indeed, but this is the nearest market for me, so I don’t mind paying more. And there are lots of Shanghai traditional snacks here, so I come every day to try different snacks. It’s quite fun.”Location is a deciding factor in the success of a market. For example, Yongnian Market suffers from its proximity to a wholesale vegetable area on Shunchang Road, where vendors in grubbier and less-regulated quarters sell at cheaper prices. By contrast, Mengxi Market is still bustling, even during the usually slack lunchtime period. One reason: Mengxi is surrounded by a cluster of modern communities and there are no similar markets in the vicinity. The long-term health of what have come to be dubbed “new vegetable markets” is uncertain. Market managers who want to stay on top of the game need to constantly assess the needs of consumers and vendors if they hope to succeed.

    Posted: by Shanghai Daily

  • Shall we dance? Tesla in tune with city policies

    The new Tesla factory in Shanghai has become a “poster child” in the city’s campaign to embrace foreign investment as part of its ambition to become a global hub of technology ingenuity and environmental protection.The US electric car company recently rolled its first cars off the assembly line, just a year after groundbreaking for the site.At an event marking the milestone on January 7, Founder and Chief Executive Officer Elon Musk danced onto the stage as Model 3 sedans were driven, one by one, for presentation to 10 customers. The images went worldwide.Musk has plenty to dance about as the company rachets up its presence in the world’s largest auto market. The company plans to ramp up production to 500,000 cars a year in two or three years. Its current capacity at the Shanghai plant is over 3,000 Model 3s a week.The starting price of the Shanghai-made Model 3 sedan is about 323,800 yuan (US$46,650). Government subsidies for clean-energy cars and the company’s pledge to source more local components could reduce that cost further.Tesla’s US$2 billion Gigafactory, its first outside the US, is located in the Lingang Special Area of the China (Shanghai) Pilot Free Trade Zone. It is the largest foreign-invested manufacturing project in Shanghai.The 357 days between ground-breaking and production marked a new record for global automakers in China.At the event, Tesla announced that its Shanghai team will start work on Model Y prototypes in 2020, while also tooling the Shanghai plant for production of mid-size electric sports-utility vehicles.“Without the support of Chinese governments at all levels, especially Shanghai, we wouldn’t have been able to show this progress,” said Musk. “Together, we have made history.”Tesla’s success story is testament to Shanghai’s relentless pursuit of a better business environment and to China’s determination to accelerate the opening of its markets to foreigners.Those were focus issue as Shanghai’s Party Committee and municipal officials held their first conference of 2020.Party Secretary Li Qiang reiterated that Shanghai will make every effort to create a more internationally competitive environment for investment and development. He indicated that mission remains a priority for the government. “Departments at all levels in Shanghai have undergone a fundamental change in the way they think and operate in the past few years,” he said. “Efficiency of services has become ingrained in what they do.”Among the goals on deck are the promotion of a one-stop online platform for government services, improvement of the city’s performance in the World Bank’s “Doing Business” assessment and implementation of policies protecting and stimulating the vitality of market entities.Shanghai will take Hong Kong and Singapore as benchmarks in the development of its business model, learning from their ideas and experience in offering government services, said Ma Chunlei, the city government’s deputy secretary-general and director of the Development and Reform Commission. Take the processing of construction permits as one example. Shanghai will try to emulate Hong Kong’s “one-stop center” mode, providing services that span the whole process of application, approval, inspection and acceptance checks through a single window.To address problems faced by foreign companies, including cumbersome approval procedures and long waiting times for employee work permits, the city will create single-window services to cut down times to as little as seven working days.“In addition to the World Bank’s rankings, we should attach no less importance to catering to the individual needs of companies,” Secretary Li said.The city’s goal to increase foreign investment appears to be paying off. Last year, 6,800 new foreign-investment projects were launched in the city, up 21.5 percent year on year. Contracted foreign investment rose about 7 percent to US$50.25 billion, while paid-in investment rose 10 percent to US$19.05 billion, according to the Shanghai Commission of Commerce. Meanwhile, Tesla isn’t looking in the rear-view mirror. Musk said the company plans to open a “super cool” design center in China to create an “original car” for sale in markets around the world. “Ultimately, the Model Y will have more demand than probably all of the other cars of Tesla combined,” he said.All these plans add up to increased investment in China, he said.The company does face challenges, amid slowing auto sales and a crowded field of companies seeking to mass produce electric cars.

    Posted: by Shanghai Daily

  • Specialized parks promote new ideas

    IBM, Microsoft, Infineon and Alibaba are among several dozen overseas and domestic information technology giants that have set up regional headquarters or major research centers in the Zhangjiang AIsland.It’s a new technology hub for artificial intelligence that opened last year in Shanghai. Though it is small — only 66,000 square meters — compared with other industrial parks in Shanghai, its ambitions are big. AIsland park is among more than 20 new “themed” industrial parks in Shanghai, set up to create unique opportunities for industrial applications of cutting-edge technologies. They mainly focus on integrated circuits, biomedicine, artificial intelligence, aerospace, new materials and smart manufacturing. The specialty parks are structured to attract investment environment and professional talent, strengthening the base of research and development. Many are establishing their own complete ecosystems.“China’s AI industry is rising and has unlimited development potential,” said Chen Liming, chairman of IBM China. “This partnership with Zhangjiang allows IBM to bring our cloud and AI technologies and our industry expertise to industry and innovative startups.” Opened in October, the company’s Watson Build AI Innovation Center, jointly set up by IBM and Zhangjiang, aims to provide a world-class collaborative platform to explore artificial intelligence applications and create an ecosystem based on IBM’s leading cloud and cognitive technologies.The AIsland park now serves more than 500 firms in artificial intelligence and other high-tech sectors. Related services are provided, including patent bureaus and support for overseas professional talent working in Shanghai, local officials said.Tesla Chief Executive Elon Musk is another example of how Shanghai’s business and investment environment is contributing to progress in advanced fields.Amazing performanceThe entrepreneur danced and gave out high-fives on a stage in Shanghai two weeks ago to mark the first delivered vehicles from the new US$2 billion Tesla electric-car factory here.“The most amazing thing really is the incredible progress that has been made by the Tesla Shanghai team,” Musk said. “Several industrial parks contribute, directly or indirectly, to the Tesla factory, which requires a complicated industrial chain.In Shanghai, automotive industrial parks in Lingang, Jiading and Jinqiao have attracted thousands of partners and suppliers working on connected and new-energy cars.Other industrial parks provide integrated circuitry, navigation equipment and new materials used in cars and in a host of consumer electronics and industrial devices.China’s biggest integrated circuit industrial park is in Zhangjiang, covering chip design, manufacture, assembly and testing.By 2025, revenue from Zhangjiang’s integrated circuit industry is forecast to 100 billion yuan (US$14.55 million), employing 100,000 people.

    Posted: by Shanghai Daily

  • Why China’s currency reserve managers must pay attention to the euro in 2020

    The euro has been one of the currency market’s favourite punching bags for quite some time but maybe not for much longer. In the past few years, the prospect of Brexit, signs of weakness in the global economy, Germany’s near run-in with recession and the euro-zone’s negative interest rates have all put the single currency on the ropes.This could all change very soon though, and euro bears should be on the alert for a quick turnaround in the currency’s fortunes this year. The euro could be one…

    Posted: by South China Morning Post

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