New 10-year visa for Chinese visitors in the U.S.A

A new visa extension for US and Chinese citizens is expected to boost US tourism and is being looked upon as a positive step in relations between the two super powers.
US President Barack Obama announced on Monday in Beijing that the US and China had agreed to a reciprocal 10-year visa policy for tourists and businessmen. Speaking during the Asia-Pacific Economic Cooperation (APEC) summit, Obama said the move would “benefit everyone”.
It will allow citizens of each country to travel between the two countries for up to 10 years on a single visa, putting China on level footing with other major trade partners like Brazil and several European countries. Travelers and students can currently receive one-year visas. Students will also now be able to obtain five-year visas. The visa extensions will start on Wednesday.
The change is expected to be a boon for the US economy, creating up to 440,000 American jobs by 2021 because increased tourism and business spurred by visits from more than 7 million Chinese would generate nearly $85 billion in revenue, according to a White House estimate.
Last year 1.8 million Chinese travelers visited the US, contributing $21.1 billion to the economy and supporting more than 109,000 American jobs, according to a White House estimate.
The tourism industry accounted for 2.8 percent of US GDP and nearly 70 million international tourists spent $166 billion in the US in 2012, according to the US Commerce Department’s International Trade Administration.
“Where this will make the most impact is on the repeat traveler to the US from China,” said Evan Saunders, CEO of Attract China, a Boston and Beijing consultant that helps US businesses attract Chinese tourists.
He said many Chinese visitors who want to make multiple visits to the US won’t have to go through what can be a time-consuming process of renewing a visa every year.
“By 2018, Chinese tourists are expected to be the top overseas traveler to the US,” Saunders told China Daily.
What do US businesses have to do to take advantage of the projected influx of tourists?
“US businesses need to utilize the Internet and social media to engage the Chinese consumer,” said Saunders. “And they need to do it about six months before the Chinese tourist departs for the US.”
In 2012, Obama issued an executive order to ease the issuance of visas to visiting Chinese and to speed up the visa request process at China’s US consulates.
“This convinced hundreds of thousands of Chinese visitors to choose the US as a leisure and shopping destination and knowing that an average Chinese visitor to the US spends an average of $7,000 per trip, the impact on the US economy could be measured in additional billions,” said Pierre Gervois, CEO and publisher of China Elite Focus Magazines.
The visa extension will bring explosive growth to the tourism industry, said Ralph Zhu, marketing director of US International Trip, a California-based travel agency which expects 300,000 customers from China this year.
“The biggest growth may come from Chinese students studying in the US,” he said, “A student may spend three or four years in the United States. Under the new visa policy, their family and friends won’t worry about renewing their visas and therefore are more likely to visit them every year.”
The Chinese account for about 28 percent of the foreign students studying in the US according to the Institute of International Education’s Open Door report.
The basic visa processing fee will remain the same, according to the US State Department.
Obama arrived in Beijing earlier for a week-long trip to the region and the APEC summit. Later he is scheduled for a state visit with Xi.
“The fact that President Obama announced these changes with what he termed the strong approval of Chinese President Xi Jinping at a major multi-lateral event like the APEC summit is a positive step,” Kenneth Lieberthal, senior fellow in foreign policy at the Washington-based Brookings Institution,told China Daily.
However, Lieberthal said the agreement’s effect on the relationship between the two super powers will probably be muted.
“It’s a huge and complicated relationship. Still it does suggest that both sides want to accomplish some positive things. The new visa requirements will provide a boost to travel and it will increase interaction between the two countries. That is always a good thing,” he said.
Lu Huiquan in New York contributed to this report.
Article by PAUL WELITZKIN, China Daily USA, New York
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Alibaba, lenders team up for SME financing

Alibaba Group Holding Ltd teamed up with seven banks on Tuesday, jointly offering loans of up to 10 million yuan ($1.6 million) to China’s small and medium-sized enterprises as the e-commerce conglomerate looks to further build a credit rating system based on online transaction histories.

The cooperation involves Bank of China Ltd, China Construction Bank Corp, Ping An Bank Co Ltd, China Merchants Bank Co Ltd, Bank of Shanghai Co Ltd, Postal Savings Bank of China Co Ltd and Industrial Bank Co Ltd.

According to the Hangzhou-based e-commerce giant, companies that had export transactions of more than $100,000 through Alibaba’s online platforms over the past six months can apply for such loans. They can get 1 yuan worth of bank credit for every $1 in exports.

The online transaction record is the only thing required for the loan.

Wu Minzhi, vice-president of Alibaba Group, said that about 89 percent of SMEs in China find it difficult to get loans because they can not satisfy banks’ requirements.

“As an e-commerce company with lots of transaction data on our platforms, we want to make it easy for all of the export-focused companies to do business,” Wu said.

By narrowing the credit gap between SMEs and banks, Alibaba is looking at the bigger picture of building an environment based on big data that can facilitate every aspect of trade, from information to data and logistics, he said.

Wei Qiang, general manager of Shenzhen One Touch Business Services Co Ltd, Alibaba’s export service subsidiary, said that more than half of the export-focused companies are expected to move their brick-and-mortar trade business to online platforms in the next 10 years.

“That will create a trade service market that is estimated to be as big as 10 trillion yuan,” he said.

As they cope with rising production costs in China, many Chinese exporters are keen to get financing services. He Guodong, manager of Shenzhen Xingjisheng Electronics Co Ltd, said he secured a loan of 5 million yuan from China Construction Bank through the financing service offered by Alibaba.

“My company had an export volume of 260 million yuan in 2013. In the past, banks rarely lent to us, because they didn’t trust the financial data we offered,” he said. He said transaction records provided by Alibaba are very convincing, as it acts as the third party for such transactions.

Li Ye, an analyst at the Internet consultancy Analysys International, said traditional banks can actually benefit from the financing service provided by Alibaba.

“The costs for banks to do due diligence in order to grant loans to SMEs are very high. There are so many SMEs and the amounts they want to borrow aren’t much compared with big enterprises. So big data can be used as an important way for banks to control credit risks without making heavy investments,” she said.

Tmall.com, the business-to-consumer platform owned by Alibaba Group Holding Ltd, rolled out a financing service on Wednesday to help car purchasers in China get unsecured loans of up to 60,000 yuan ($9,606).

The new service underscored the Hangzhou-based e-commerce conglomerate’s strong ambition to conquer a new sector – the online car market.

Tmall has gained fame mainly through the sales of clothes and shoes online.

“China is the world’s largest car market with a total sales of more than 20 million units last year. The number of cars sold through online platforms is quite small compared with the giant size of the market,” said Wang Licheng, a senior executive of Tmall, which allows brands to sell directly to customers.

Vehicle shoppers can apply for interest-free loans that allow them to pay off their balances over as long as 18 months, depending on their shopping records and creditworthiness on Tmall and Taobao, Alibaba’s online marketplace.

Participating automakers include Shanghai General Motors, which operates Tmall.com flagship stores for the Chevrolet and Buickbrands,andSAICMotorCorpLtd,formerlyShanghaiAutomotiveIndustryCorp.

The program is the latest move by Alibaba to leverage its strengths in data and finance to tap into new markets. On Tuesday, Alibaba introduced a program that provides loans to small and medium-sized enterprises in China.

The car loan program is run by the Small and Micro Financial Services Group, a company spun out of Alibaba Group that includes Alipay. It operates the popular Yu’ebao money market fund. Rather than funding the loans itself, Small and Micro Financial Services acts as an intermediary to verify the creditworthiness of loan applicants.

During a promotion from July 25 to Aug 11 last year, 17 vehicle brands with Tmall.com storefronts sold 3,400 cars valued at 80 million yuan through the website.

However, most of the online vehicle transactions do not really qualify as pure e-commerce, because the buyers generally make down payments online, then go to physical locations to make the remaining payments, said Pan Wei, analyst with the Beijing-based Internet consultancy Analysys International.

There are many online platforms that aim to build automobile e-commerce “empires”, but most merely serve as online media outlets that feed vehicle-related information to potential buyers, said Pan.

Autohome Inc, a leading online portal for vehicle information, formed a strategic partnership with JD.com, Alibaba’s largest competitor in China, in June to develop automobile e-commerce and to facilitate real transactions online.

Pan said that Alibaba enjoys a strong advantage in automobile e-commerce as it has integrated financing service on its online platform.

“But the move doesn’t guarantee a promising future as most people still aren’t used to buying high-priced items such as cars online,” he said, adding that it will take a lot of time for consumers to form this habit and for online retailers to create new methods to increase user loyalty.

Alipay gets regulator nod for Tianhong deal

Chinese regulators have given the go-ahead to Alibaba Group Holding’s online payment affiliate Alipay to take control of fast-growing fund firm Tianhong Asset Management Co as the e-commerce giant bulks up its push into online finance.

The China Securities Regulatory Commission (CSRC) approved Zhejiang Alibaba E-Commerce Co, the parent company of online payment company Alipay, to purchase 51 percent of Tianhong, according to a filing from Tianhong shareholder Inner Mongolia Junzheng Energy & Chemical Industry Co on Thursday.

 

Alipay gets regulator nod for Tianhong dealAlibaba files for $1 billion IPO in US
Alipay gets regulator nod for Tianhong dealAlibaba helps make China’s largest fund

Alibaba is gearing up for what could be the world’s biggest tech IPO, and online finance has become another battleground for the firm. Though the business unit will be largely kept separate from the offering, it could play an important role in the entire company’s future growth.

Tianhong has gone from near obscurity to running China’s biggest money market fund by assets under management (AUM) in just months after it launched fund platform Yu’e Bao, or “leftover treasure”, with Alipay in June last year.

Yu’e Bao’s one-year interest rates are higher than a bank’s regulator-restricted rates for one-year deposits, and are an incentive to deposit money with the platform.

Yu’e Bao, which people can run from their smartphones, is also linked to China’s biggest online payment platform Alipay, similar to PayPal. Users can dip directly into Yu’e Bao to buy products on Alibaba’s huge online shopping websites and anywhere else that takes Alipay.

Alipay’s investment, valued previously at 1.18 billion yuan ($189.11 million), will see the firm inject 262 million yuan in registered capital into the fund, according to the filing.

Tianhong had 554 billion yuan in AUM in the first quarter of 2014, from just 10.5 billion yuan a year earlier, according to Z-Ben Advisors, a Shanghai-based investment management consultancy.

5 Sites Chinese Consumers Spend the Most Time On

digital internet China

One of the findings from the newly released BCG report on Chinese consumers is that they visit very few websites despite spending a lot of time online.

The Chinese online landscape has become increasingly crowded and knowing where these consumers are spending their time is important.

BCG found that most of the respondents spend 50 to 80 percent of their time online making repeat visits to a few websites that are their personal favorites. According to BCG research, ”more than 40 percent of their collective online activities were spent on the following top five sites: Youku, a local video-streaming website; Sina.com, a news portal; QQ, an instant messaging service; Taobao, an e-commerce site; and Baidu, a search engine.”

Here are some details on these top five sites:

Site Type Online Activity
Sina News portal website 40 million IP visitors daily
QQ News portal website 51 million IP visitor daily
Baidu Search Engine over 80 million IP visitors daily
Taobao and Tmall Online mall and C2C ecommerce over 67 million IP visitors daily (combined); over 1 trillion RMB sales in 2012
Youku and Tudou (companies merged) video sharing and viewing including TV shows youku: over 10 million IP visitors daily tudou:over 1.26 million IP visitors daily
source: danwei

China’s Super Rich to Rise By 80% in Next Decade

china wealthy

According to a report by Knight Frank LLP, the number of Chinese super-wealthy, those who own more than US$30 million in assets (excluding their main residence), will grow by 80 percent over the next decade , Global Times reports.

China will have over 14,200 ultra-wealthy individuals by 2024, which will rank China 13th in the world in terms of the number of multi-millionaires. This would place Hong Kong, Shanghai, and Beijing as third, fifth, and sixth, respectively, as the cities with the most ultra-wealthy people.

According to Thomas Lam, the head of research and consultancy at Knight Frank, “The Chinese mainland will have a growing presence on the list. And Hong Kong will enjoy the advantage of being the unofficial bridge that connects the Chinese mainland and the rest of the world in the next decade.”

The rise of the super-wealthy in China is also driving up the prices of luxury real estate both in China and abroad. In fact, high-end residences in Beijing increased in price 17 percent in 2013 to reach US$17,100 per square foot after only a 2 percent gain in 2012.

The high-end real estate boom has also carried over into international markets. According to Knight Frank, China’s super-rich contributed 13 percent of the United States’ and 30 percent of Australia’s inbound capital to each country’s property development markets in 2013.

“The economic meltdown in 2008 and 2009 dealt a hard blow to high-end residential and commercial properties in North America and the UK,” said Thomas Lam. “While a buyer needs to pay 70,000 yuan to 80,000 yuan per square meter for prime office space in Beijing, he only has to pay 30,000 yuan to 40,000 for a similar property in the US or Europe. That motivates multi-millionaires to buy abroad.”

So far, the Chinese real estate investments are concentrated in second-tier foreign cities such as Houston, Texas and Birmingham, England. The only thing holding back these investors is a lack of understanding of local property markets and laws, and many of these Chinese investors are looking for foreign partners for assistance in these areas.

Why E-Commerce Is Growing Faster in China Than Anywhere Else in the World 夏威夷房地产 – 美国夏威夷豪宅

china ecommerce digital

Retailers in China are racing to expand in an e-commerce sector that is growing faster than anywhere else in the world, including the United States.

What’s driving this speedy development? In the late 1980s, China began its transition to a market economy, giving its state-run retailers little time to acquire marketing skills before the Internet began to dominate consumer consciousness a decade later.

“In the U.S., where retailing has long been an established industry for more than 100 years, e-commerce is the icing on the cake. But in China, where retailing as a market is still relatively new, online retailing is the cake,” Export Now CEO Frank Lavin explained in an interview with Internet Retailer. Lavin’s company assists foreign companies in selling their products online in China.

Various analysts have described the competition in the now booming market as “ferociously competitive,” “cutthroat,” and “a street fight,” as e-retailers increasingly resort to price cuts to nab sales, even at the cost of losing profits. And according to Teresa Lam, an e-commerce analyst and vice president at Fung Business Intelligence Centre, it is only expected to intensify.

“Most Chinese online retailers seek to grasp market share by adopting a low-price strategy despite low or even negative profit margins, and this has led to unhealthy market competition,” Lam said. “We expect price wars to continue to break out and amplify in 2014.”

To keep up with the race, companies are making fast delivery a priority, building fulfillment centers so that shoppers can acquire their purchases sooner. They are also offering a wider selection of products, with many “inviting other merchants to sell on their sites so that they can better compete with the giant Taobao and Tmall marketplaces.” Businesses are also rethinking web design, adding attractive new features to their websites and finding new ways to grab consumer attention. A focused marketing plan has also proven profitable for companies like VIP Holdings Ltd., the No. 8 e-retailer on Internet Retailer’s China 500 list.

The Guangzhou-based VIP is a publicly traded online apparel retailer whose success rests on “offering consumers name-brand clothing, focusing on profitability and building a bigger e-commerce base,” according to Donghao Yang, the company’s chief financial officer. VIP has managed its marketing costs more efficiently by using social media to attract new consumers, and has also focused on negotiating more reasonable deals with suppliers.

Although expansion is important, a large part of the company’s success can be attributed to catering to a niche market. Fifty-five percent of VIP’s core demographic — women aged 20 to 40 — live outside of tier-one cities like Beijing, Guangzhou, and Shanghai, in areas where access to the latest fashions is often limited. While other online retailers target urbanites, VIP has made a considerable profit in offering exclusive items to shoppers in smaller cities and rural areas, increasing its brand offerings from 410 in 2010 to over 3,000 in 2013. To increase shipping speed and efficiency for its customers, VIP also plans to spend $200 million over the next three years to build new distribution centers. The company’s order volume continues to grow, having increased by over 10 million orders shipped per quarter since 2010.

All of these measures have proven more than successful for VIP, which reported its first-ever profits last year. The company reported a net income of $12 million on revenue of $383.7 million for the third quarter ended September 30, 2013, compared with a $1.45 million net loss on sales of $155.94 million a year earlier.

“We have increased our profitability,” Donghao says. “We are better at controlling costs and achieving operating efficiency.”