The Simpsons Now In Mandarin

“Woo hoo! Now we can reveal Springfield is actually in Guangdong.” That was how The Simpsons’ executive producer greeted news that the hit US show will air for the first time in China. The long-running hit starring the doughnut and beer obsessed Homer Simpson and his irreverent son Bart will be streamed online in China by Sohu Video, reports Variety. The latest season (there are 26 in total, in case you wondered) will be shown with subtitles in Mandarin, in a deal done with the show’s maker Fox.

“The introduction of The Simpsons, a household name in the US, will further enrich our users’ choice of the best American content when they come to our platform. This deal once again demonstrated our commitment in bringing the best experience to our users and tireless efforts to enhance our competitive edge in the industry,” said Charles Zhang, Sohu’s boss. The timing of the deal will strike some as noteworthy, given Beijing has recently banned some US shows from airing on online video streaming platforms . (Week in China)

Going Gaga Over Alibaba

What do Midland Railway and IBM have in common? The answer is they were the largest companies by market capitalisation in the UK and the US when each country reached the apex of its economic dominance in 1914 and 1967 respectively.

Both firms were emblematic of their era. Midland Railway was the biggest coal hauler in the country that had ushered in the industrial revolution. IBM was the leading hardware manufacturer at the dawn of the computer age when American consumers were the envy of the world.But the two examples also highlight how fleeting global hegemony can be.

Few now remember the railway firm, which lost its independence after the First World War thanks to the Railways Act. IBM may still be a colossus, but it no longer ranks in the top 20 global companies in market cap terms.

In fact, when the New York Stock Exchange opens later today, IBM is also likely to be eclipsed by Alibaba, the company now best symbolising China’s ascendance on the world stage. The e-commerce giant priced its IPO in New York last night at $68 per share to the thunderous applause of global investors.

How gigantic is the deal?
Should the greenshoe be exercised, Alibaba’s flotation will raise $25 billion and rank as the world’s largest, beating Agricultural Bank of China’s $22.1 billion debut in 2010. When founder Jack Ma rings the opening bell, Alibaba’s market cap will be $177.5 billion, similar in size to Samsung Electronics. However, the stock price is expected to be much higher by closing on its first day, fuelled by newspaper hype and insistent demand from investors. Enthusiasm for the deal has been overwhelming, notwithstanding the fact that many investors have placed inflated orders to try to get some kind of allocation. The frustrated purchasing power of unallocated institutions, combined with the mass of retail investors who were unable to get into the IPO at all, could easily push the stock up into the stratosphere over the coming few days.
...
How is it likely to perform?
What happens to Alibaba after the initial fanfare dies down depends on what investors believe about its prospects for growth. Shareholders are unlikely to reap the same upside as investors in rivals Tencent and Baidu, which both listed a decade ago when they were less than five years old. Tencent has risen 150-fold since its June 2004 IPO, for example.

Alibaba is now 15 years old, so can we expect similar growth? There are numerous jumbo IPOs of companies with relatively mature business models which have still done well for investors. The most famous is Visa, which listed in March 2008 and still ranks as the largest IPO on record by a US firm. It rose 28% on its first day of trading and has quintupled since then.
...
A century of upside?
Jack Ma has no such qualms about Alibaba’s future. In the company’s pre-roadshow filing, he wrote a letter to prospective investors explaining how the company is only at the beginning of a 102-year journey, that will span three separate centuries from its inception in 1999.

Alibaba is not a mature business, its management says. Rather, its digital ecosystem will disrupt and transform all that it touches to the benefit of its Chinese customers and, increasingly, its global ones too.

A few years ago, Alibaba identified three pillar industries. In many respects it has only made inroads into the first one – e-commerce.
...
And outside China?
For many Chinese companies, their hallmark of success comes from going global. Alibaba has not really spent too much energy overseas yet, although it has made a number of smaller acquisitions. This is likely to change.

As Jack Ma put it in his recent investor letter: “In the past decade, we measured ourselves by how much we changed China. In the future, we will be judged by how much progress we bring to the world.”

Sohu Finance says one upshot of the IPO is the way it is shaping new perceptions of China’s internet firms. It notes that past listings tended to reinforce the view on Wall Street that China’s online giants were copycats of business models born in Silicon Valley. Thus Baidu was referred to as China’s Google, Renren as China’s Facebook and Sina Weibo as China’s Twitter.

“Of course, there are still many people calling Alibaba China’s Amazon,” writes Sohu Finance. “But this time there are a growing number of Wall Street investors realising that this title is not accurate.” In fact, many have given up trying to apply a simile to Ma’s creation.
 ...
Oh yes, so why didn’t it list domestically?
Some wonder why Alibaba didn’t list in Shanghai – where enthusiasm for buying into the IPO would have been intense.

But Doug Young, who writes the Young China Biz blog, says that this was never a realistic option since Alibaba is incorporated outside China (a common practice among Chinese venture-backed tech firms).

“Such overseas incorporation has not only barred internet giants like Tencent and Baidu from listing in China, but has also locked out other major names like China Mobile and Lenovo, which are also technically incorporated outside China for historical reasons,” he notes. Read more detalied report at Week in China.

Putting the Knife In

Lesson number one in how not to win friends abroad: deface an ancient Egyptian temple with your autograph. This was the mistake made by Nanjing teenager Ding Jinhao on a family holiday to Luxor. The graffiti was spotted by another Chinese tourist and posted online with a message about how Ding had brought shame on the nation. Even Vice Premier Wang Yang piped up, worrying how China’s new breed of tourists were sullying its reputation abroad: “They speak loudly in public, carve characters on tourist attractions, cross roads when traffic lights are red, spit anywhere and indulge in other uncivilised behaviour. It damages the image of the Chinese people and has a very bad impact,” he lamented.

Well, it seems lesson number two in how to besmirch China’s national prestige comes courtesy of a boorish tour group visiting Southeast Asia. According to the Qianjiang Evening News, 30 tourists caused havoc on a Singapore Airlines flight when they refused to give back the stainless steel cutlery. This posed an unexpected dilemma for the flight crew as they tried to retrieve the knives, forks and spoons. The incident was only resolved when the furious tour guide screamed at them: “Stop hurting the reputation of Chinese people!”

Read more at Week in China.

The Birth of Korean Cool

In 1985, a 12-year-old Euny Hong moved with her family from suburban Chicago to Seoul, South Korea. Not just any place in Seoul, South Korea, but a neighborhood known as Apgujeong — the wealthiest, most exclusive cluster of addresses in the Gangnam district. The Hongs, in short, went “Gangnam Style” 27 years before it was a thing. And when it comes to South Korean history — as with meme superstardom — three decades is a long time.

Hong’s new book, “The Birth of Korean Cool: How One Nation Is Conquering the World Through Pop Culture,” loosely follows South Korea’s growth from the mid-60s, when the country’s per capita G.D.P. was less than Ghana’s, to now. Today, South Korea is the 15th-largest economy in the world. From Psy’s “Gangnam Style” video to the chips that Samsung furnishes for Apple’s iPhones, the book explores the confluence of factors that make for Korea’s pop-­cultural perfect storm.

Korea’s vitality lies in hallyu — a wave of cool so pervasive that President Obama name-checked it in a speech. Hong asserts that Korea’s rise is attributable to what the Harvard political scientist Joseph Nye calls “soft power”; the country wields influence not through military might but “by peddling a desirable image.” Korea’s government has earmarked a billion-dollar investment fund dedicated to fostering popular culture, and for Koreans raised abroad during the ’70s and early ’80s like Hong and myself, the notion that Seoul has become this fashionable is startling and deeply fascinating. After all, Korea was nicknamed the Hermit Kingdom by 19th-century Western explorers for its reluctance to play with others.

“Korean Cool” chronicles the author’s period of trying to fit in. She recalls toilets that don’t flush, corporal punishment and a Confucian catechism so entrenched that defying your parents results in agonizing shame. Just as Western kids feared the boogeyman, Korean children abroad lived under the constant threat of being “sent back to Korea” for delinquent behavior like smoking cigarettes or getting a C. The chapter on academic pressure rightfully dovetails into harrowing statistics of suicide, “the most common cause of death for Koreans under the age of 40.”

Hong views all of this through the slightly skewed perspective of a tween navigating a new curriculum and a disorienting national identity. Much of the awkward self-consciousness is compounded by noonchi — the Korean art of accurately gauging the infinitesimal cues of any situation in order to avoid social blunders. Missteps betray your standing as a tourist in the motherland, which results in a great deal of scorn and attendant humiliation.

Read the whole review at nytimes.

Food from China under attack in testimony before US Congress

Food imported from China. (Shutterstock / Robert Kneschke )

Mark Kastel, co-director and senior farm policy analyst with the Cornucopia Institute stated during his testimony that: “…many in this country, for good reason, based on history, do not trust the Chinese to supply ingredients for our dog and cat food. Why should we trust Chinese exporters for the food that we are feeding our children and families?”

He added that, despite some food from China being labelled as organic by the USDA, it does not necessarily meet the standards of US organic food, as certifiers are unable to personally inspect Chinese farms. He also added that many Chinese food producers have been caught using fraudulent organic certificates, far more than any other country.

He further decried the fact that so little of the food imported into the US is actually inspected, and yet despite the low inspection rates, issues with food imported from China are commonplace.

“USDA and FDA inspectors are only examining 1%-2% of all the food that reaches U.S. ports. And what are they finding? A disproportionate number of serious problems with exports from China including adulteration with unapproved chemicals, dyes, pesticides, and outright fraud (fake food).”
Patty Lovera, Assistant Director of Food & Water Watch was equally harsh in her criticism of Chinese-produced food before the committee. She stated that “China’s food manufacturers (have) often (been) found to cut corners and substitute dangerous ingredients to boost sales.”

She also referenced a recent report by a food industry analyst, saying that “the report cited 32 pesticides found in laboratory testing of Chinese foods, mostly in produce, fruit, and spices and noted that ‘economically motivated adulteration’ is a persistent issue in food production in China.”


The testimony before congress came just weeks before Chinese meat processor Shuanghui International Holdings agreed to purchase the top pork producer in the world, America’s Smithfield Foods, for US$4.7 billion late last month. If approved, the deal would be the largest ever acquisition of an American company by a Chinese firm.

That deal is now under review by the Committee on Foreign Investment in the United States (CFIUS), a committee comprised of members from nine different US governmental agencies, including the Justice Department and the Department of Homeland Security. The committee reviews foreign investment deals that could have an impact on US national security. While the committee itself does not have the power to block deals, it can recommend to the US president that he do so.

Despite the existence of some angst over Chinese influence becoming more prevalent in the American food industry, some experts don’t expect the CFIUS to raise any red flags over the deal, citing the fact that the food industry isn’t necessarily an industry of high national security concerns, like a technology or military-related takeover.

"I think they'll clear it," Paul Marquardt of Cleary Gottlieb Steen & Hamilton told USA Today. "I would be very surprised if this raised the kind of issues that CFIUS was concerned about."

Others disagree however, and see the safety of the US food supply as being very much an issue of national security. Read the whole story...

State Grid Rolls Out Expansion in Europe

From Tianjin to Tuscany

Winston Churchill memorably described Russia as “a riddle, wrapped in a mystery, inside an enigma”. In WiC’s view the same quote might equally be applied to China’s electricity behemoth, the State Grid.

Not surprisingly, State Grid invokes strong feelings among Chinese decisionmakers. Reformers see it as an overly-powerful beast that controls 90% of China’s power distribution, monopolistically supplying electricity to 1.1 billion people. On the other hand, corporatist types – who have favoured an alternative ideology known as ‘state-led capitalism’ – view the company as a national champion.

The ‘enigma’ for WiC is the often contradictory messages that come from the corridors of power as to which wing is in the ascendant – and is therefore shaping the influential company’s future. In May the statists seemed to score a landmark victory when the firm finally (after much delay and many arguments) got the go ahead to begin work on 10 UHV lines at a cost of Rmb381.5 billion . This set in motion what is likely to be one of the world’s biggest infrastructure investments, with analysts reckoning State Grid would now get its way on a national rollout of UHV at cost of $250 billion by 2020. That looked a defeat for reformers, who’d argued against the controversial plan, citing technological concerns and worries it would lead to State Grid exercising an even greater control over the power industry
.
On the other hand, massive graft purges in the electricity sector – starting at the Three Gorges Dam in late March – seemed to be sending a message that the reformers had the upper hand and were readying to pare back the overmighty company’s influence. Indeed in June, the State Grid even made market-friendly noises for the first time, suggesting it would welcome private capital to help build a national vehicle-charging network for electric cars – thereby sharing the fruits of this growing business with entrepreneurs. It also said it would allow private-sector operators to feed new energy power sources (such as solar) into its nationwide system. CBN called both moves “an icebreaker”.

More recently the political pendulum looks to have swung the other way again, with State Grid expanding aggressively abroad. Back in the ‘national champion’ mode it has now unveiled a bold European strategy. Last month it bought a 35% stake in Italy’s grid operator, which is the sixth biggest in the world, according to the People’s Daily. That $2.8 billion deal may swiftly be followed by another. State Grid has joined a consortium with the Belgian grid operator Elia to bid for a 66% stake in the Greek electricity transmission firm ADMIE.

A top executive at State Grid told the Chinese press that it would make further investments in Europe, bringing its UHV and smart grid technologies to the continent.

Its timing is savvy. People’s Daily also comments that the EU is concerned that its target of linking member states with a ‘Eurogrid’ by 2015 is lagging – with many local governments and indebted firms unable to make good on grid commitments in the aftermath of the euro crisis. An EU energy commissioner has even told reporters that the EU welcomes State Grid’s participation in grid construction – so long as it abides by the relevant laws.

Read the whole story at Week in China.