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China: Apple Skips China in iTunes Asia Expansion; Bloomberg Blocked After Publishing Unflattering Story of Top Politician

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Also, new regulations threaten smartphone growth in the mainland.

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MINYANVILLE ORIGINAL Xi Jinping is widely tipped to become the next president of China, and as such, protecting his image is of top priority to the Chinese Communist Party. This might explain why today, after Bloomberg News published an investigative article detailing the assets owned by his relatives, the government seems to have blocked access to the Bloomberg website from China.

It was revealed in the report that Xi's extended family has stakes in minerals, real estate, and mobile-phone equipment sectors with total assets are worth $376 million. None of it, however, can be traced back to Xi.

Nonetheless, after the very public downfall of former Chongqing Communist party secretary Bo Xilai, the Chinese government is extremely sensitive to any stories that might raise concerns about the close ties between China's political and economic elites.

There appears to be a loophole in the Chinese firewall though. The government has blocked Bloomberg.com, but Chinese netizens can still access the story on Bloomberg's Businessweek site.

Here are this week's top business stories:
Apple (AAPL): The big Apple news this week was the launch of iTunes stores in 12 Asian markets like Singapore, Taiwan. Notably, however, India and China were left out in this latest roll-out. Hong Kong will be getting its own iTunes store, but analysts believe that China was left out because of regulatory and intellectual property issues. According to the International Federation of the Phonographic Industry, or IFPI, China's piracy rate is an astounding 99%.

Meanwhile, Chinese regulatory bodies have put forward for public comment a new set of laws for the growing mobile-apps market, which have raised the concerns of industry lobby groups representing companies like Apple and Google (GOOG). The groups are worried that the laws -- which could compel smartphone makers to censor apps and cooperate with the Chinese government to track users -- would drive costs up and slow sales growth.

"We've seen a lot more overstretch in the current climate of crackdown and control. [China regulators] are trying to get away with more right now," Duncan Clark, chairman of consulting firm BDA China, told the Wall Street Journal. "They just keep ratcheting up."

Jiaflix: With movie piracy also rampant in China, one Chinese company is planning to introduce a movie streaming service similar to that of Netflix (NFLX) to China. Jiaflix Enterprises is joining with a subsidiary of the state-owned China Movie Channel to provide the new service, which goes live in the fall with films from Viacom's (VIA) Paramount Pictures. More Hollywood studios are expected to come on board next year.

The Jiaflix and China Movie Channel joint venture comes at a time when China has become an increasingly important source of box office revenue for Hollywood. It will be hard to convince the Chinese, who are used to watching pirated digital copies of Hollywood movies, to pay money for legal streams, but Jiaflix co-founder, Sid Ganis, who is a movie producer and former president of the Academy of Motion Picture Arts and Sciences, says that the new service's price will be "affordable."

Sinopec (SNP): Sinopec, or China Petroleum & Chemical Corp., is reportedly working out a deal to buy billions of dollars worth of Chesapeake Energy's (CHP) assets. The state-owned Chinese energy company is hoping that by going for a big portion of Chesapeake assets instead of outright acquiring the company, it will be able to escape the political troubles that pressured the China National Offshore Oil Corporation, or CNOOC, to give up on its takeover attempt on Unocal, now a part of Chevron (CVX), in 2005.

China has plenty of unconventional shale gas and liquids reserves, but lacks hydrofracking operational experience, which explains Sinopec's desire for Chesapeake's assets. Traditionally focused on downstream sectors such as oil refining, petrochemicals, and distribution, Sinopec is also seeking to transition to upstream oil and gas production, which are higher margin ventures.

Chesapeake, on the other hand, is seeking to deleverage and cut down on its debt, especially given recent natural gas price decreases and a softening of the oil market.

Twitter: @sterlingwong
No positions in stocks mentioned.
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