IN BRIEF (Page 18)

Alibaba buys 20% stake in Suning

Alibaba Group Holding Ltd said on Aug 10 that it will spend 28.3 billion yuan ($4.56 billion) for a 20-percent stake in Suning Commerce Group Co Ltd in a deal that allies the e-commerce giant with the leading electronics retailer.

Consequent to the deal, Alibaba will be Suning's second-largest shareholder with a 19.99-percent stake. As a further sign of the two firms integrating their online and store-based shopping businesses, Suning said it would invest 14 billion yuan to acquire a 1.1-percent stake in Alibaba.

In a joint statement released by the two companies, they said the alliance will allow them to combine Alibaba's online strength with Suning's offline resources and enable consumers to have better shopping experiences.

Rising bad debts raise alarm bells for banks

A rapid growth in bad loans and the deteriorating quality of assets have raised concerns for commercial banks in the second half of the year.

Outstanding nonperforming loans increased by 249.3 billion yuan ($39 billion) in the first half of this year, said the China Banking Regulatory Commission, practically on a par with the growth of 250.5 billion yuan in outstanding NPLs recorded during the whole of 2014.

Chairman Shang Fulin told a recent meeting of the CBRC that, as companies face more operating difficulties, rising NPLs and NPL ratios at banks are likely to continue.

Internet boom helpsreshape jobs market

The Internet boom is reshaping China's employment market by creating abundant opportunities and more self-employed workers, a report said on Aug 13.

The study by Boston Consulting Group said the Internet created 1.7 million Chinese jobs in 2014, 88 percent of them in small and medium-sized enterprises with revenue less than 2 billion yuan ($316 million).

It forecasts that 3.5 million Internet-based job opportunities will be created by 2020, as the Web penetrates more traditional industries.

"The numbers are eye-catching given that China is wrestling with slower economic growth," said Li Shu, managing director at BCG and the report's author.

Vehicle sales fall to a 17-month low

Chinese consumers bought the fewest passenger vehicles in 17 months in July, extending a slump in the world's largest auto market as deeper discounts failed to revive demand.

Retail deliveries declined 2.5 percent to 1.3 million units, the lowest level since February 2014, according to the China Passenger Car Association. Sedan sales tumbled 14 percent, while sport utility vehicle deliveries climbed 39 percent.

Dealerships are offering incentives at an unprecedented scale to move cars off their lots, according to the China Automobile Dealers Association.

Yellow metal loses shine with investors

Yellow metal producers in China may see further profit erosions as gold prices are set to decline in the coming years, amid expectations of an interest rate hike by the US Federal Reserve and a strong dollar, industry experts said.

Song Xin, president of the China Gold Association, said on Aug 10 that international gold prices are seeing a down trend after the sharp drop in 2013, and it is likely to become a "new normal" for the next couple of years.

Profits of the country's 10 listed major gold miners such as Zijin Mining Group Co Ltd and Shandong Gold Group Co Ltd dropped by 12.9 percent to 6.8 billion yuan ($1.1 billion) in 2014, according to the association.

Rare earth mining firms slip into the red

About 90 percent of China's rare earth mining companies are incurring losses as rare earth prices continue to plummet due to overcapacity and illegal mining, industry officials said on Aug 8.

Chen Zhanheng, deputy secretary-general of the Association of China Rare Earth Industry, said that most of the rare earth companies have been consistently losing money, with many even facing the probability of unit closures this year.

The average prices for rare metals have been declining in China since 2011 and have continued to drop in recent months, despite the government controls and crackdown on smuggling and black market trade.

Xiaomi starts phone production in India

Xiaomi Corp is putting a "Made in India" label on its smartphones. The Beijing-based handset maker said on Aug 10 it is selling a low-end device to India manufactured in that country. It is Xiaomi's first overseas manufacturing program.

The company said it has partnered with Foxconn Technology Group to manufacture the product. The factory is located in Sri City in Andhra Pradesh's Chittoor district, Xiaomi said.

The factory is making Redmi 2 Prime, a device to be sold at 6,999 rupees ($110). The price tag for Xiaomi's flagship device is above $480.

Hugo Barra, vice-president and head of Xiaomi's global marketing, said the move will bring Xiaomi devices closer to Indian customers.

Wanda to continue shift focus from property

Dalian Wanda Group, China's largest commercial property developer, is continuing to shift its business focus to e-commerce, finance, tourism and movies, founder and chairman Wang Jianlin said on Aug 10.

"In 10 years, there will be no pure Internet companies or pure offline business entities," Wang said.

Wanda has plans to create its own tourism unit - Wanda Cultural Industry Group - to overtake Disney and become the world's largest tourism enterprise by scale of visitors in five years, he said.

A report last year by World Leisure Organization had Disney with nearly 130 million visitors in 2014, but it expected Wanda to achieve 200 million visitors, bringing in more than 100 billion yuan ($16.13 billion) in annual tourism revenue by 2020.

Consumer spending remains bullish

Consumer confidence rose by 1 percentage point during the second quarter of 2015, fueled by surging demand in rural areas, an industry measure said.

The Nielsen consumer confidence index, released by private sector information and measurement company Nielsen NV, climbed to 107, up from 106 in the first quarter, but remained at the same level compared with the last quarter of 2014.

"With a change of only 1 percentage point, we're seeing a 'new normal' for Chinese consumer sentiment, but a steady one," said Oliver Rust, managing director of Nielsen China.

The growth, he said, was driven by a willingness to spend by 47 percent of the respondents, a 10-percentage-point rise from the first quarter, particularly in rural parts of the country.

Youku invests $1.6bin streaming technology

Youku Tudou Inc, the Chinese online streaming site, is investing 10 billion yuan ($1.6 billion) into being able to stream more and better user-generated content over the next three years.

As technological advancements empower more users to produce videos, the Beijing-based company's CEO, Gu Yongqiang, said the future of the entertainment industry will center on what he called "we media", meaning that most content will come from users rather than established organizations.

To tap into this growing trend, Gu said the company will roll out plans to help grow 100 "we media" brands, each valued at more than 100 million yuan, and 10,000 others whose monthly revenues will exceed 10,000 yuan.

(China Daily European Weekly 08/14/2015 page18)