China Watch: Top Business News From the World's Second Largest Economy
Despite having officially apologized for its poor customer service, Apple
(NASDAQ:AAPL) continues to face problems with the Chinese media.
This week, the state-run People’s Daily
has published an article saying that China’s National Office Against Pornographic and Illegal Publications ordered Apple, along with 197 other websites, to remove obscene content that is allegedly found on its app store. No details about the material were provided.
However, according to a Xinhua
news article from late March, many of the best-selling e-books on China’s Apple app store contained lewd content. The pornographic content, Xinhua wrote, “has provoked public anger in China, with some parents calling for strengthened requirements for mobile applications.”
Chinese netizens have speculated that the government might have an agenda of compelling Apple to exit the Chinese market.
(NASDAQ:SINA) Weibo user, with the handle AGodot, wrote on the microblog, “[A]pologizing is not enough, you guys miscalculated, if [the government] wants you to go, it wants you to go,” noted the Wall Street Journal
Another user, Dao-Chu-Pao, said, “I sincerely ask [the People’s Daily
] about their Appstore porn search methods! It’s too hard to find! How did the People’s Daily
The silver lining for Apple, which has notoriously tough anti-obscenity policies on its app store, is that the People’s Daily
article did not focus on the company and was not featured prominently in the paper, thus reducing any possible negative publicity.
China Economic Growth to Slow in 2013
China’s economy grew 7.7% year-on-year in the first three months of the year, compared to 7.9% in the previous quarter.
The figure came under the consensus expectation of 8%, resulting in a slew of 2013 growth forecast cuts for the word’s second-largest economy.
JPMorgan lowered its projection for 2013 full-year China economic growth to 7.8% from 8.2%, while RBS cut its forecast to 7.8% from 8.4%. Nomura also lowered its expectations to 7.5%.
The International Monetary Fund, however, said that fears of a China slowdown may be overblown.
“I would be more cautious in reaching a conclusion because the first quarter of every year in China is complicated," Anoop Singh, director of the IMF's Asia and Pacific Department, told the Wall Street Journal
. "While GDP growth for the first quarter has come in slightly lower than expected, many of the more high-frequency and more disaggregated data have actually been quite strong. Exports have held up well, fixed-asset investment and retail sales have been strong, and credit growth has accelerated.”
The IMF trimmed its China projection to 8% earlier in the year, compared to an 8.2% estimate in October 2012.
Yahoo China Shuts Down Email Service
(NASDAQ:YHOO) will shutter its email service by August 19, with users being advised to register with Alibaba’s email service to retain their Yahoo email data. Yahoo’s only remaining business in China now is its Web portal.
The company, whose China operation is majority-owned by Alibaba, has seen its share of the Chinese email market shrink to 1.9% in the past year, thanks to the rise of local providers like Tencent
(HKG:0700) and NetEase
(NASDAQ:NTES), noted ZDNet
In 2005, Yahoo bought a 40% stake in China’s Alibaba for $1 billion. Last year, the latter agreed to pay $7.1 billion in cash to stock to buy back half of Yahoo’s stake, with the right also to buy out its remaining holdings.
Glencore’s Takeover of Xstrata Gets China Green Light
(LON:GLEN) $30 billion acquisition of miner Xstrata
(LON:XTA) was approved by China’s antitrust regulators after the commodities trader agreed to sell its stake in Xstrata’s $5.2 billion copper mining project in Peru to loosen its grip on the copper market.
"Them being willing to sell Las Bambas shows there are no sacred cows in the eyes of the Glencore management. It shows they think a little differently -- they've always shied away from greenfield projects," said Macquarie analyst Jeff Largey, according to Reuters
"If they can pull value forwards on Las Bambas by selling it -- rather than taking on all the operational and execution risk associated with building it (and) bringing it to production -- I think the market will reward them."
Glencore also agreed to an eight-year commitment to supply a minimum volume of copper, zinc, and lead to China.
China’s approval was the last regulatory hurdle Glencore had to clear. Earlier, it received the go-ahead from the European Union for its plans to buy Xstrata.
When merged, Glencore and Xstrata will account for some 7% of the world’s copper supply. According to analyst estimates, Glencore controls between 10% and 14% of China’s copper concentrate imports. This was why the mainland was concerned that the merger would result in higher commodity prices for local firms.
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