China Watch: Top Business News From the World's Second Largest
Struggling electronics retailer
) officially pulled out of Europe this week after selling its
holdings in a European joint venture at a loss. Now analysts want
the company to do the same in China, where it has been bleeding
market share to Chinese firms
Best Buy's China operation has also been without a leader since
Nicholas Wang, the former CEO of Best Buy's Five Star unit,
departed in March.
Many Wall Street analysts
spoke to agreed that it would be a wise move for Best Buy to get
out of the mainland.
A Best Buy-owned Five Star Appliance outlet in China. Source: China
"There are no strategic benefits to them being in China," said
BB&T Capital Markets analyst Anthony Chukumba.
"China has never been particularly profitable for them, and if they
feel they can't make that happen, then of course it would be better
to try to monetize that holding rather than for them to continue to
lose money," added Jerry Bruni, portfolio manager of JV Bruni &
Foreign retailers have found the going tough in China. European
firm Media Markt and US giant
) both pulled out from the mainland in the past year due to tough
Iron Man 3
Breaks China Box Office Record
Iron Man 3
set a new opening day box office record of 130 million yuan ($21
million) in China this week, surpassing the previous opening day
record of 110 million yuan ($17 million), set by
Transformers: Dark of the Moon
China surpassed Japan to become the world's second largest movie
market last year, so Disney spared no efforts to sell its comic
book movie to the local audience. Besides the usual promotional
efforts, the company edited a special version of the movie for
China that includes four extra minutes of footage featuring
high-profile Chinese actors Wang Xueqi and Fan Bingbing.
Iron Man 3
is the latest in a series of Hollywood movies that studios have
customized for China. Last year's action film Red Dawn had its
central antagonist altered from the Chinese military to the North
Korean army to appease Chinese censors.
"The American studios are desperate to get into China," Gitesh
Pandya, editor of BoxOfficeGuru.com, told
. "And they're looking for new ways to profit from this growing
market. The population of just the middle class alone is much
bigger than the entire United States population, so there's
tremendous potential there."
Alibaba Acquires Stake in Sina's Weibo
China e-commerce giant
(HKG:1688) announced on Monday that it would buy an 18% stake in
) popular microblogging service, Weibo, for $586 million. It also
reserved the right to up its stake to 30% in the future.
There has been heavy speculation in the past year that Alibaba
would make such a move. The company's chief weakness is in social,
which explains its investment in Weibo.
"While [its e-commerce platforms] Taobao and Tmall are already
firmly established in the nation, when it comes to bridging the gap
between a tweet and a purchase, Alibaba and its subsidiaries have
room to catch up," explains Josh Horwitz at
The Next Web
. "At the moment, there aren't many ways for buyers to interact
with others, except for, well, buying stuff. Enhancing the 'social
glue' is one way to increase the likelihood of a purchase and spark
greater levels of engagement."
Sina and Alibaba say that they expect their partnership to yield
some $380 million in advertising revenue for Weibo over the next
"We believe that the cooperation of our two robust platforms will
bring unique and valuable services to Weibo users, as well as
making the mobile Internet a core part of Alibaba's strategy," said
Jack Ma, founder and chairman of Alibaba.
Stephen Schwarzman Launches Rhodes-of-the-East
(BX) CEO Stephen Schwarzman is launching a new scholarship for
students around the world to study at Beijing's Tsinghua University
for a year to improve understanding between the US and China.
The Schwarzman Scholars program will be modeled after the Rhodes
Scholarship at the University of Oxford, which was established to
create a deeper mutual understanding between the US and Europe.
"[China] is a completely different system than the one we have in
the West. Each one of those two systems has some benefits and has
some [shortfalls]. And it's important to understand how something
else works rather than just assume it works a certain way," said
Schwarzman, according to
Schwarzman is raising $300 million for the Schwarzman Scholars
program. He is contributing $100 million of his personal wealth to
the scholarship, and he has also received sponsorship commitments
totaling $100 million thus far from the likes of
Bank of America