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     Cynical PCAOB release


 

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Feb. 20, 2017

7 Things I Learned from Lunch with Warren Buffett

LinkedIn / Last week I took twenty Peking University students to Omaha to spend a day at Berkshire Hathaway. The trip included 3 company visits, a 2.5 hour Q&A with Warren Buffett, and then a steak lunch with him. I’m writing up the whole experience and will post it shortly (including the Q&A).


Feb. 24, 2017

How much is enough? 'We can't really say'

China Daily / Too much in foreign exchange reserves may actually be harmful, academic says. Michael Pettis believes China has probably double the minimum foreign exchange reserves it needs. The professor of finance at Peking University's Guanghua School of Management also insists that January's fall in the level to below $3 trillion is a non-event.
"What is the right amount of reserves for China? You know, there is no real science to it so we can't really say but I doubt it is much above $1.2, $1.3 or $1.4 trillion, so they now probably already have twice as much as the minimum amount they need."


Feb. 20, 2017

7 Things I Learned from Lunch with Warren Buffett


LinkedIn / Last week I took twenty Peking University students to Omaha to spend a day at Berkshire Hathaway. The trip included 3 company visits, a 2.5 hour Q&A with Warren Buffett, and then a steak lunch with him. I’m writing up the whole experience and will post it shortly (including the Q&A).


Feb. 13, 2017

My Visit to Oriental DreamWorks - And Why Animation is Booming in China

LinkedIn / Of the 19 million students in Chinese universities in 2009, over 1 million were studying art and design. Think about that number for a moment. One million students studying painting, design and other creative arts. That is larger than the student populations studying chemistry, law, or economics.


Feb. 10, 2017

Gearing up

China Daily / As Trump calls on manufacturers to return to the US, what are the prospects for China's industrial strategy?Where next for manufacturing? The geographic location of factories and production has become one of the more hotly debated issues in recent months.At an executive meeting of the Chinese State Council, chaired by Premier Li Keqiang on Dec 28, a guideline was issued to encourage more foreign investment in high-end manufacturing in China.


Feb. 6, 2017

My 5 Predictions for Chinese Consumers in 2017

LinkedIn / In the past 2 years, Chinese consumers have arrived as a global economic force. And this is really just the beginning. We are going to see an increasing impact by these consumers on business going-forward. So here are 5 predictions for Chinese consumers for the coming year.



Jan. 30, 2017

How Trump's Fight with Mexico and NAFTA Could Help China

LinkedIn / When it comes to the USA, Chinese and Mexican manufacturers have long been rivals. Both groups export fairly similar types of goods. Both have advantages in lower cost labor. And they are now the No 1 and No 2 exporters to the US. But while Chinese manufacturers have become dominant in most product categories, Mexican manufacturers have been more successful in a few key sectors, especially in cars and autoparts. And this has a lot to do with NAFTA (the North American Free Trade Agreement).


Jan. 27, 2017

Mexico's losses could be China's gains

China Daily / Trump's recent pronouncements about auto imports and NAFTA may knock out nation's biggest competition. When it comes to the United States market, Chinese and Mexican manufacturers have long been rivals. Both groups export fairly similar types of goods. Both have advantages in lower labor costs. And they are now the No 1 and No 2 exporters to the US. In most sectors, whether it is toys or laptops, Chinese manufacturers have become dominant.
 


Jan. 24, 2017

My Favorite China Articles for January 2017

LinkedIn / I send out a monthly reading list with the best China articles (and books) I have come across. If you would like to be on this list, you can sign up at www.jeffreytowson.com. Also, if you come across any really great articles, please send them to me. Here's my list for January 2017.


Jan. 19, 2017

Debate: Can China survive Trump?

The Korea Herald / This week, President Xi Jinping attends the Davos forum for the first time -- a sign of how concerned China is about a possible retreat from globalization. Till now, easy access to world markets has underpinned the country’s remarkable expansion. How badly Chinese growth could be hurt by new trade barriers may be the most pressing question facing the world economy.



Jan. 19, 2017

3 Options for Bringing Private Health Insurance to China (Part 2 of 2)

LinkedIn / In Part 1 (located here), I argued that there is a growing supply-demand gap at the center of Chinese healthcare. And that private health insurance in the likely the lynchpin in solving this problem.In this article, I lay out three models for launching real private health insurance in China. All three have worked in other locations and require only incremental  regulatory changes.



Jan. 17, 2017

The Growing Supply-Demand Gap at the Center of Chinese Healthcare (Part 1 of 2)

LinkedIn / Private health insurance is arguably both the biggest and the most vexing opportunity in China today. The need is clear. Increasingly wealthy Chinese consumers are growing increasingly frustrated with the public healthcare system. And still nascent private hospitals are struggling to find larger and more stable revenue flows.


Jan. 16, 2017

How to bring private healthcare insurance to China


Nikkei Asia / Private health insurance is arguably both the biggest and the most vexing opportunity in China today. The need is clear: Wealthy Chinese consumers are growing increasingly frustrated with the public healthcare system, and upstart private hospitals are struggling to find larger and more stable revenue flows.



Jan. 11, 2017

Après Uber, McDonald's cède à son tour ses activités en Chine


Libération / Le géant du burger a annoncé qu’il comptait céder 80% de son business dans le pays à un trio d’investisseurs dominé par un énorme conglomérat chinois.



Jan. 11, 2017

Chinese focus turns abroad as domestic market stalls


The National / China is rewiring its business relations with the West in an attempt to boost growth in the midst of a sluggish economy at home. On Tuesday, the Chinese private equity firm, Fosun International, announced it will nearly double its stake in a leading Portuguese bank, Banco Comercial Portuges (BCP), to as much as 30 per cent.


Jan. 9, 2017

The Sale of McDonalds China Should Scare KFC (i.e., Yum! China)


LinkedIn / So McDonalds China is being 80% sold (franchised really) to the Carlyle Group, Citic Capital and Citic Group. This sale is being compared with the recent spin-off of Yum! China (i.e., KFC and Pizza Hut).


Jan. 9, 2017

China Lets Yuan Drop Before Uncertainties of Trump Era


VOA / The Chinese yuan fell against the dollar Monday, following losses Friday. The decline underlines the foreign exchange management challenges for Beijing, which is worried about U.S. President-elect Donald Trump's threat to declare China a currency manipulator. The slide came after the the People's Bank of China (PBOC), the central bank, reset the trading range lower to save the yuan from a market thrashing and a possible currency crisis, analysts said.


Jan. 4, 2017

Welcome to the US-China Platform Wars (Part 1)


LinkedIn / In the past year, we have seen increasing collisions between leading Chinese and Western platform businesses.


Jan. 4, 2017

What Airbnb Should Do Differently Than Uber in China


LinkedIn / This is really Part 2 in a series of articles of how Chinese and Western platform businesses are increasingly competing. In Part 1, I laid out some basic theory for this (you can read here). Based on this thinking, I think Airbnb should do 6 things differently than Uber in China, says Towson.


 


Dec. 31, 2016

Cynical PCAOB release


China Accounting Blog / On December 30, 2016, The Public Company Accounting Oversight Board (PCAOB) issued Staff Questions and Answers (Q&A) about the audits of mainland China issuers by registered firms outside of mainland China. The Q&A is not an official PCAOB position, but is intended to guide PCAOB staff when dealing with the relevant issues.


Dec. 30, 2016

China Sells Off Stock of US Treasury Securities to Protect Yuan

VOA / China recently lost its position as the biggest holder of U.S. Treasury securities to Japan. Chinese authorities sacrificed the coveted position, which has significant financial and diplomatic value, because they are engaged in the bigger battle of protecting the value of the yuan from falling rapidly.

 


Dec. 21, 2016

How I Failed as a Writer for 5 Years Before Becoming a LinkedIn Top Voice


LinkedIn / Last week, I got the welcome news that I am one of LinkedIn's Top Voices for 2016. And it was for Finance and Economy, which was especially gratifying because I have been struggling in that writing genre for over 5 years, says Prof. Towson.


Dec. 19, 2016

Why Airbnb Thinks It's The Silicon Valley Firm That Will Finally Crack China

Forbes / Airbnb, the online alternative to hotels, has moved to scale up its presence in China, just months after another of Silicon Valley’s most rapacious startups, Uber, sold up and reversed in the opposite direction.
But it’s far from certain if the world’s most populous nation will take a shine to the home-stay service it offers in 190 countries around the world - at least not in the next few years.



Dec. 7, 2016

How I Got 300,000 LinkedIn Followers in 18 Months

LinkedIn / I posted my first article on LinkedIn on May 22, 2015. I labored over it for about a week and then finally hit "Publish". And basically nothing happened.
Over the next several days, it eventually got about 50-100 reads. My Followers inched up from 500 (my connections) to like 505. But it was a pretty frustrating beginning overall, says Prof. Towson.


Dec. 2, 2016

Big Data Reveals the Real Picture of China’s Economy, but Can It Survive?

Bloomberg / Wu Haishan was at Princeton studying how schools of fish swim together when the crowd behavior of a much bigger group grabbed his attention: his 1.35 billion fellow Chinese.


Dec. 1, 2016

How Oriental DreamWorks Caught the China Wave


AmCham China / Of the 19 million students in Chinese universities in 2009, over 1 million were studying art and design. That was more than were studying chemistry, law, or economics. As these students have continued to enter the workforce, we are seeing a huge creative class emerge. There are now literally millions of designers, animators, and other creative professionals in Mainland China. They are the vanguard of something fundamentally new: A “Creative China.”



Dec. 1, 2016

Chinese Business Schools:  Where Managers Are Developed

Les Echos / Chinese business schools are part of China's transition towards a new business model. Very well equipped, they strive for world-class status and attract high quality professors-compensating them past European standards.




Nov. 30, 2016

China’s Global Shopping Spree Sparks Opposition at Home, Too

Bloomberg / After facing opposition around the world to its recent dealmaking spree, even China itself is turning against it.Concerns are mounting in Beijing over a surge in outflows that’s causing further devaluation pressure on the yuan and fears that overeager companies may risk biting off more than they can chew.




Nov. 30, 2016

Didi's Cheng Wei Is Forbes Asia's 2016 Businessman Of The Year

Forbes / At first Cheng Wei seems the antithesis of Travis Kalanick, who is known for his forward manner as the CEO of Uber Technologies. Cheng, the founder of Chinese ride-service Didi Chuxing, Uber's counterpart, is bespectacled and cherubic. With his humble demeanor, the 33-year-old can easily pass as a fresh college graduate.



November 27, 2016

Hollywood's Golden Age In China Is Coming To An End

LinkedIn/ Hollywood studios have been coming to grips with the fact that China will soon be the world’s largest market for entertainment. Movies increasingly are co-produced by cash-rich Chinese moguls. Chinese stars are cast in supporting roles. Praise for Chinese culture is being randomly stuck into scripts. In some cases, such ploys have paid off: 2015’s “Furious 7” grossed even more in China ($390 million) than in the United States ($353 million), says Prof. Towson.



November 25, 2016

Realities of risk


China Daily / Debt levels in China have become a major focus for policymakers, but experts don't always agree. Is China facing a debt bubble? Housing prices have soared by more than 30 percent in many of the country's tier-one cities, such as Beijing and Shanghai this year alone. Research by the National Institution for Finance & Development, one of China's national-level think tanks and part of the Chinese Academy of Social Sciences, put China's debt at 249 percent of GDP in 2015.



November 23, 2016

Why Doesn’t Starbucks Have A Serious Competitor in China?

LinkedIn / Chinese Wanda is openly challenging Disney. Uber spent $2B fighting with Didi Chuxing. Adidas has been fighting Li-Ning and Anda for decades. And Apple is now struggling against multiple rising Chinese competitors,(Xiaomi, Huawei, Oppo, etc.). One thing you can almost always count on in China: A successful international company will inspire serious domestic competition.



November 17, 2016

Ctrip Appoints Jane Jie Sun As CEO, James Liang Remains Executive Chairman


China Money Network / Ctrip.com International, Ltd. has appointed Jane Jie Sun (pictured) as chief executive officer, as James Jianzhang Liang resigns his CEO post and remains as executive chairman of the board, the firm announced today. Sun will also become a member of the board of directors. The appointments are effective immediately.


November 14, 2016

Should You Do Part (or All) of an MBA in China? A Peking Univ Professor's Opinion

LinkedIn / I've just finished up my fifth year of teaching at Peking University's Guanghua School of Management in Beijing. I've now seen thousands of MBAs come and go. Some do a semester or a year. Some do their entire MBA in China.


November 11, 2016

China's household debt a growing risk to economy

Thomson Reuters /  Single-mother Li Ying helps explain why household debt in China may be a bigger risk to the giant economy than previously thought. Faced with expensive medical bills to treat breast cancer, the 38-year-old nurse from Heilongjiang in northern China is struggling to repay her mortgage and relies on financial support from her wider family to pay for her healthcare.


November 11, 2016

China’s accounting market update

China Accounting Blog / For the past four years (2011, 2012, 2013, 2014) I have reported on changes in the rankings of China’s largest accounting firms based on the CICPA’s annual rankings, says Prof. Gillis.


November 10, 2016

China goes local

China Accounting Blog / The struggle between local Chinese and the Big Four accounting firms has been going on since the return of public accounting to China in the early 1980s. China let the Big Eight firms set up representative offices beginning in 1980, and in 1992 allowed the Big Six to enter joint ventures with state controlled firms. 



November 8, 2016

How Oriental DreamWorks and "Creative China" Are Disrupting Hollywood

LinkedIn / China is inching closer to becoming the world's largest entertainment market and Hollywood studios are struggling to adapt. Cameos by Chinese film stars are jammed, often nonsensically, into Western movies. Studio executives are flying in to meet with cash-rich Chinese moguls. And praise for China in Hollywood films has become commonplace. This is often described as self-censorship. I tend to use the word "slobbering", says Prof. Towson.


Oct. 28, 2016

Forbes / Earlier this week, China released statistics showing the economy grew by 6.7% in the third quarter of this year. Analysts have expressed doubt that the growth has naturally arisen from productive sources, and some believe the figures would not be possible without government stimulus. As a result, we have to ask whether there really is still profit to be had in China, or whether its downturn signals the end of an era.


October 26, 2016

Why Bike-Sharing (Ofo, MoBike) Is Nothing Like Didi and Uber (i.e., Ride-Sharing)
 

LinkedIn / Prof. Towson: There has been a lot of talk about Chinese bicycle-sharing recently. Tencent, Warburg Pincus and Sequoia participated in a $100M round for Shanghai-based Mobike. Xiaomi, Citic PE and Coatue participated in a $130M round for Beijing-based Ofo. And Didi Chuxing is reported to have invested in Ofo as well.

October 3, 2016

Baseball Is Copying the NBA's Strategy in China. It's Smart and Could Work

LinkedIn / These are boom times for sports in China. An increased national focus on health and fitness is coinciding with a big increase in entertainment consumption, says Prof. Towson.

September 30, 2016

The impact in China and abroad of slowing growth

China Financial Markets / What does a rebalancing China mean for the world? While the chances of a disruptive adjustment – including a financial crisis – are clearly rising, for now Pettis assumes that China is able to pull off a non-disruptive rebalancing.

September 28, 2016

2016: The Year Chinese Consumers Went Crazy for Sports (Great for Adidas. KFC Not So Much.)

LinkedIn / 2016 is the year that Chinese consumers went sports-crazy. You can see it everywhere. In a city with few gyms and tons of smokers, there is apparently an enormous amount of secret exercising going on, says Prof. Towson.

September 21, 2016

What To Do When You Fail in China (Pt 3): Morgan Stanley and Expedia

LinkedIn / This is the third in a series of articles on companies that have failed in China, often spectacularly. However, in many cases, they later came back and won, also often spectacularly, says Prof. Towson.

September 20, 2016

My impaired Mobike

Sputnik / Mobike offers bike rentals, something I can use to avoid Beijing’s heavy traffic. Mobike’s app opens to a map that shows me the nearest bikes to me, usually only hundred meters or so away, says Prof. Gillis.

September 19, 2016

Reason Why China Benefits From Global Hegemony of Dollar

Sputnik / Many analysts believe that dollar hegemony in the global financial system serves the interests of the United States and China will soon change the situation. In fact, Beijing will continue to maintain the system because of significant benefits, economist Michael Pettis wrote.

September 9, 2016

Hangzhou confirms G20's global role

China Daily / The issues addressed by the final G20 communique underlines its growing importance. They include green finance, corruption, infrastructure, refugees, trade, climate change, etc., said Prof. Chance.

August 27, 2016

Regulatory reform in Hong Kong

China Accounting Blog / There is a turf battle between the Securities and Futures Commission (SFC) in Hong Kong and Hong Kong Exchanges and Clearing (HKEx) over who should regulate new listings in Hong Kong, said Prof. Gillis.

August 18, 2016

U.S. May Finally Get a Peek at the Books of Alibaba, Baidu

Wall Street Journal / A long-running dispute between the U.S. and China over the ability to vet auditors of Chinese companies listed on American exchanges is edging toward a possible breakthrough.

August 9, 2016

Jeffrey Towson -- Uber shows how to win in China

Nikkei Asia Review / Uber invested 18 months and about $2 billion in China. They walked away with 17% of Didi, and therefore 17% of the world's largest on-demand transportation market.

August 8, 2016

Alibaba, Baidu to Be Audited by US’s Public Company Accounting Oversight Board

Yibada / The two companies are currently preparing for the audit and aim to respond to concerns on China's accounting standards and auditing practices.

August 4, 2016

Z-Park reports growth with two-billion-yuan revenue

ChinaDaily / The Zhongguancun (Z-Park) listed companies association held a press conference on August 3 to publish the 2016 Z-Park listed companies competitiveness report.

July 29, 2016

Protecting peace as a nation rises

ChinaDaily / The South China Sea dispute is about defining terms on which China reemerges into the global community as a major power, says Prof. Giles Chance.

July 27, 2016

What Can Yahoo Do With Its Alibaba Stake?

Forbes / Yahoo can either “bite the bullet and pay the taxes” or continue to trade like a closed-end mutual fund representing both Alibaba and Yahoo Japan, says Paul Gillis, a professor of accounting at Peking University’s Guanghua School of Management.

July 27, 2016

Jeffrey Towson - Why Chinese healthcare apps are struggling

Nikkei Asian Review / More than a thousand Chinese healthcare apps have been launched over the past five years. These startups, targeting the intersecting trends of the smartphone boom and healthcare modernization, were supposed to be the next big thing.

July 22, 2016

Global logistics firms battle for air superiority

ChinaDaily / Global logistics companies are battling in China's skies alongside the booming air express industries. And, the growing demand for speedier delivery is driving logistics development across China, including its smaller and more far-flung towns and cities.

June 14, 2016

Jeffrey Towson -- Apple's Achilles' heel in China is services

Nikkei Asian Review / Apple's success in China has been spectacular. But while the "Apple in China" story is usually told in terms of the rise and now leveling off of iPhone sales, it has been just as big a success in terms of building a brand and capturing customers.

July 12, 2016

China Wants To Rate People's Credit With Online Data, But Misuse By Companies Is Rampant

Forbes / “The whole thing is strange,” says Jeffrey Towson, a professor of investment at Peking University’s Guanghua School of Management.

July 4, 2016

Apple's Lawsuit With Media Regulator Points To Broader China Woes

Forbes / “The whole thing is strange,” says Jeffrey Towson, a professor of investment at Peking University’s Guanghua School of Management.

July 8, 2016

Brexit effect yet to be determined

ChinaDaily / Damage may be limited or aggravated by the terms of the exit, and Britain's success in trade ties with countries such as China, says Prof. Chance.

June 23, 2016

Jeffrey Towson: Why time isn't on Disney's side

Nikkei Asian Review / The opening of Shanghai Disneyland raises the question of whether Disney can actually win in China. Can it match its U.S. success as an entertainment company that combines beloved children's movies and real estate?

June 17, 2016

Didi In 'Valuation Fantasy Land' With New $7 Bln Funding

Forbes / “To get 50% of their revenue internationally they are going to do what they did in China in the rest of the world. But where do you find opportunities that big?” says Jeffrey Towson, a professor of investment at Peking University’s Guanghua School of Management.

April 26, 2016

Selfie Absorbed: How China's Beauty Obsession Made Meitu Into A Billion-Dollar Photo-Editing App

Forbes / Founded in 2008 by serial entrepreneur Cai Wensheng, Meitu rules selfie-editing apps in China. Its photo and video touch-up functions can make one look fairer, taller and slimmer with a few clicks.

April 14, 2016

Alibaba's International Ambition Circles Back To Chinese Consumers

Forbes / “To get 50% of their revenue internationally they are going to do what they did in China in the rest of the world. But where do you find opportunities that big?” says Jeffrey Towson, a professor of investment at Peking University’s Guanghua School of Management.