Yang Yuanqing, chairman and CEO of Lenovo.
Lenovo Group Ltd announced on Wednesday the establishment of a $500 million investment fund, seeking new growth points as the world's largest personal computer maker is wrestling with a declining global demand for PCs and a faltering smartphone business.
The fund, solely financed by Lenovo, will be used to finance startups in cloud computing, big data, artificial intelligence, robotics, Internet Plus and other emerging sectors.
Yang Yuanqing, chairman and CEO of Lenovo, said the new investment unit, Lenovo Capital and Incubator Group, will help the company find the biggest commercial opportunities in the next decade.
"We won't place a limit on the size of our investment in innovation as long as startups' products fit with Lenovo's broad strategies and really boast cutting-edge techs," Yang said.
According to Yang, Lenovo is also encouraging its employees to work on innovation projects, which can grow into independent firms, become the company's units and leverage capital from other investment firms to scale up.
He Zhiqiang, Lenovo's senior vice president in charge of the new investment unit, said the company will invest in 10 to 20 startups every year and help spin off at least 10 companies from Lenovo's internal incubation projects this year.
"We value quality over quantity, with focus on early-stage startups," He said, adding the company is also eyeing overseas investment opportunities.
Lenovo's intensified efforts to boost innovation came as the company is facing mounting pressure in the PC and smartphone businesses, two of its major revenue sources.
In the first quarter of 2016, Lenovo failed to make its way into global top five smartphone vendors for the first time, according to the research firm International Data Corp.
The company is having difficulty in reviving its appeal to consumers who are willing to buy more expensive handsets while its Chinese peers Oppo Electronics Corp and vivo Mobile Communication Technology Co Ltd leap forward.
In the same period, the global demand for PCs hit a nine-year low, despite that Lenovo maintained its leading position in terms of quarterly shipments.
Di Jin, a research manager at IDC China, said Lenovo's products are facing fierce competition, so it makes sense for the company to look beyond smartphones and PCs for new opportunities.
Frasers Hospitality, an international serviced apartments and hotel residences owner and operator, will continue to vigorously expand its portfolio in China as it remains confident in the country's rise as a global economic powerhouse.
The Singapore-headquartered company plans to open 10 more properties in China's key cities within the next couple of years, apart from its existing China network which currently stands at 14 properties.
The new launches will be located in Tianjin, Wuxi, Chengdu, Shanghai, Shenzhen, Nanchang, Dalian and Changsha, and will cover three of its brand offerings including Fraser serviced residences, Modena by Fraser serviced residences and Capri by Fraser hotel residence brand.
"With the exponential growth that we have witnessed over the last 11 years, there is no question that China is, and will continue to be an integral growth market for Frasers Hospitality," said Choe Peng Sum, chief executive officer of Frasers Hospitality. "Our growth strategy is very much parallel to that of China's plans to develop new infrastructure and master planned cities as they present tremendous growth opportunities."
The strengthening of Frasers Hospitality's portfolio in China, which is right on track to reach its goal of 30 properties with 7,000 units by 2019, is a significant contributor to the company's global expansion target of 30,000 units by 2019.
The company's portfolio worldwide, including those in the pipeline, stands at 139 properties, or 22,800 units, across more than 80 cities, according to the company.
Steel and iron ore futures in China steadied on Thursday, while other commodities fell as a key exchange stepped up measures to combat speculation behind a recent market surge.
Financial investors have charged into Chinese commodities futures this year, driving up contracts including iron ore, rebar, cotton and even eggs, leading many to warn of similarities with a boom in the country's stock markets, which reversed into a sharp crash last summer.
This week has seen a marked pullback as exchanges raised the cost of trading to avoid mirroring the outcome in stocks.
Coking coal futures were the hardest hit on Thursday, falling by the downside limit of 6 percent, after the Dalian Commodity Exchange imposed higher transaction fees for the fourth time in a week.
Dalian doubled the transaction fees on key steelmaking raw materials, coking coal and coke futures, from Thursday. It will also widen the trading limit for both contracts to 7 percent from 6 percent from Friday and increase the minimum margin to 9 percent from 8 percent
Steel rebar on the Shanghai Futures Exchange, the leader of last week's big spike, closed up 0.8 percent at 2,539 yuan ($391.8) a ton.
Cotton on the Zhengzhou Commodity Exchange fell 3.8 percent, Shanghai aluminum dropped 2.8 percent and Dalian soybeans fell 2.7 percent.
Tesla Model X attracts visitors at Auto China 2106 in Beijing, which runs through May 4. Smart and electric cars are becoming more popular in China as young customers favor greater connectivity in vehicles.
Move signals company's drive to take smart and electric car market by storm
Future Mobility Corp Ltd, a Chinese startup aspiring to make electric and smart cars and which has the backing of Tencent Holdings and Foxconn Technology Group, has hired two senior managers from Tesla Motors Inc in its latest hunt for global talent, according to sources familiar with the company's moves.
Marc Duchesne, director of Tesla's supply chain manufacturing and assembly engineering, will join the Hong Kong-registered company as vice-president of manufacturing, said the sources, who asked for anonymity.
Paul Thomas, Tesla's senior vehicle engineering manager, is moving to Future Mobility as vice-president of engineering, according to the sources.
A spokesperson from Tesla China declined to comment on the matter.
The two hires from Tesla come less than 10 days after Bloomberg reported that three managers from BMW's i brand joined Future Mobility as vice-presidents of software and connectivity, design, and marketing.
In addition to the three BMW managers, Future Mobility has hired Carsten Breitfeld, the former project manager for BMW's i8 electric sports car, as its chief executive officer. Daniel Kirchert, the former president of Infiniti China, also joined Future Mobility as chief operation officer.
Duchesne managed Toyota's production in Canada for more than two decades before he joined Tesla in September 2011. Thomas worked at Aston Martin for over 16 years before June 2014.
Future Mobility, launched in February, said it plans to create "a premium brand with roots in China and a global reach". Its other parent company is China Harmony New Energy Auto Holding Ltd, a major auto dealership group. Tencent is the largest internet firm in Asia and Foxconn is a major assembler of Apple Inc products such as iPhones and iPads.
Yale Zhang, managing director of consultancy Automotive Foresight (Shanghai), said Future Mobility, which he called a "new but ambitious entrant" will continue to seek more talents from established global carmakers.
"It appears more reliable than other electric and smart car startups because it could have strong backing from three shareholders in terms of capital, internet technologies and manufacturing know-how," Zhang said.
Marc Duchesne (left) and Paul Thomas.
Future Mobility plans to assemble cars in China. It will have its research and development base in Shenzhen, Guangdong province, but will also have research and development units in Europe and Silicon Valley to concentrate on powertrain and autonomous driving. It has yet to reveal details for its product plans.
COO Kirchert said on Wednesday through WeChat that "demand and experience for individual mobility will witness profound changes globally. Connectivity, autonomous driving and environmental friendliness will redefine the future of cars. We will combine internet thinking and solid car manufacturing quality. This is our unique advantage."
Popularity is growing in China for smart and electric cars as young customers favor more connectivity in vehicles and become more environmentally conscious. The government is also boosting innovation in the auto industry and sales of new-energy cars to help alleviate pollution.
The government is subsidizing buyers of new-energy cars, including fully-electric and plug-in hybrid models.
As a result, many startups are emerging to produce smart and electric cars in collaborations with traditional carmakers.
At the beginning of this month, NextEV Inc, backed by Tencent and Hillhouse Capital, sealed a 10 billion yuan ($1.54 billion) deal with Shanghai-listed JAC Motor to produce new-energy and smart cars. The first electric model will hit the market at the end of 2017.
In February, internet company LeEco, founded by entrepreneur Jia Yueting, set up a joint venture with Aston Martin to manufacture smart electric cars. The first model, the Rapide E, will be launched in 2018 with powertrain and connectivity technologies from LeEco.
LeEco also plans to produce smart and electric cars under its own LeSEE brand. It unveiled a LeSEE concept car during the ongoing Beijing auto show.
LeEco has recruited a slew of executives from traditional car companies since last year, such as Zhang Hailiang, former vice-president of SAIC Motor, China's top auto group. Zhang joined LeEco earlier this month as the company's president and COO in China.
Last year, sales of new-energy vehicles in China more than quadrupled to 331,000 units, according to the China Association of Automobile Manufacturers.
An advertisement for e-commerce retailer JD.com Inc in Shanghai.
China's second-largest e-commerce platform JD.com Inc has made its global bond market debut, securing a relatively low borrowing cost when raising $1 billion in debt.
The company secured a Baa3 rating from Moody's and BBB-from Standard & Poor's, the lowest rating in the investment-grade category. The five-year $500 million tranche was sold at 3.125 percent and the 10-year $500 million tranche at 3.875 percent.
The investment-grade ratings to a loss-making company are due to expectation that its profitability, remaining weak at the moment, would improve in the upcoming months, due to its expanding product offering through direct sales and the marketplace, rating agencies said.
S&P noted that JD's market share has climbed to 56.9 percent in terms of gross merchandise value, from 36.8 percent in 2011. The value of consumer electronics, which usually means low profitability, as a share of gross merchandise value has declined from 80 percent in 2011 to 51 percent in 2015.
However, a number of brokers argued that JD should be considered a high-yield credit because of its unprofitable status and the fact that it is more of a capital-intensive and hence inherently more volatile tech company.
The offering came following rising unease in the onshore bond market as a few default cases pushed yields high.
The vehicle market in China is expected to grow at about 7 percent this year and the low car penetration rate offers great potential, said Geoff Broderick, vice president and general manager of Asia-Pacific Automotive Operations at consultancy J.D. Power.
Compared with developed markets like the US, the car penetration rate is "tiny" in China, especially in lower-tier cities, so the consultancy is very "optimistic" about market growth, Broderick told the Global Times during an exclusive interview on Saturday.
The development of vehicle financing also offers potential, since only some 30 percent of Chinese consumers use financing, while in the US, "very few people buy cars for cash," he said.
Broderick noted that the strong momentum seen in the sport utility vehicle (SUV) sector will continue, as Chinese consumers generally prefer roomier cars. Low oil prices are supporting that trend.
First-quarter vehicle sales in China rose 5.98 percent year-on-year, with SUV sales surging 51.46 percent, data from the China Association of Automobile Manufacturers (CAAM) showed.
Broderick noted that as the base number gets bigger, it will be hard to maintain double-digit growth, so the consultancy views the current growth rate as "healthy."
He said that 2015 was a watershed year for the industry in China.
"Until recently, all car manufacturers could basically sell whatever they could produce [in China], but now there is much better alignment between supply and demand."
Last year, domestic brands accounted for about 41.32 percent of China's passenger car market, up 2.86 percentage points over 2014, CAAM data showed.
J.D. Power experts said these brands will continue to see strong growth, with improving quality.
"The quality of cars made by domestic auto brands is expected to be able to match that of joint venture automakers by about 2018," Wang Qinghua, research director at the Analytical Center of Excellence at J.D. Power, told the Global Times Saturday.
But Broderick noted that Chinese brands still need to build their brand images and improve customers' experience, where they still lag behind joint venture brands.
Broderick also see bright prospects for new-energy vehicles (NEV) in China.
"Chinese consumers are more open to embrace new things," thus the adoption rate for NEVs in China will be faster and domestic brands may take a leading role, Broderick said. "But the challenge is building infrastructure."
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