Recruiting in China

The less-than-stellar performance of Alibaba Group Holding Ltd's business and shares helped Wang Jianlin, chairman of Dalian Wanda Group Co, to beat Jack Ma to the title of the richest man on the Chinese mainland on the 2015 Forbes Billionaires List.

Recapturing top position from Ma this year, Wang saw his personal wealth rise to $24.2 billion from $15.1 billion a year earlier, according to the rich list released on Monday.

And it was the first time that Wang caught up with American financier George Soros to tie for the 29th position on the world's rich list,

That represents huge progress, considering Wang's 64th position on the same list in 2014.

Wanda Commercial Properties Co went public in Hong Kong at the end of last year, the largest initial public offering by a real estate development company. Wanda Cinema Line Co was listed in Shenzhen at the end of January this year.

As both shares rose, Wang saw his wealth increase accordingly as the largest shareholder.

According to Everbright Securities Co, Wanda Cinema Line has been successful with a large member system. Its performance will be further boosted by the increased number of new screens and the prospering industry.

Ma fell to second place with personal wealth of $22.7 billion, although that was up from $10 billion in 2014. His global ranking was 33rd this year.

Although Alibaba made a record IPO of $25 billion on the New York Stock Exchange in September, its share price sank at the beginning of this year due to disappointing fourth-quarter earnings in 2014 and a skirmish over counterfeit goods between Alibaba and the Chinese industry and commerce regulator.

Li Hejun, chairman of Hanergy Thin Film Power Group, overtook Robin Li of Baidu Inc and Pony Ma of Tencent Holdings Ltd this year to become the third-richest man on the Chinese mainland on the Forbes list with estimated wealth of $21.1 billion. He also saw his global ranking reach 38th this time around.

Hanergy, based in Yunnan province and listed in Hong Kong, saw its share price nearly double since the start of this year from HK$2.77 (35 cents) to HK$5.25. Its market value surged to $19 billion in a two-month period as of February.

After purchasing three Western thin-film solar businesses in 2013, Li added a fourth, Alta Devices from California, in 2014, and is benefiting from Beijing's incentives for the industry.

In all, 213 Chinese billionaires are on this year's Forbes rich list, 71 of whom made their debuts. The number of Chinese billionaires is now only second to that of the US.

Chinese online classifieds market 58.com Inc will buy 100 percent of Shanghai-based real estate Internet platform Anjuke Inc in stock and cash valued at US$267 million.

The deal also includes the issuance of nearly 5.1 million new ordinary shares of 58.com and US$160 million in cash, the company said yesterday.

Zhuang Jiandong, senior vice president of the company, will head the newly combined 58 Anjuke Real Estate Business Group, while Mike Liang, former CEO of Anjuke, is leaving to start a new business related to property.

"There is still very robust demand for real estate in China and the opportunity for the best online real estate platform remains massive," Yao Jinbo, CEO of 58.com, said yesterday.

"After the deal, we hopefully will be the biggest information provider of real estate market by users and revenue." Yao added.

Before the deal, Anjuke had raised US$72 million in four rounds of funding.

Visitors look at a Dongfeng electric car. Industry insiders warn against Chinese new energy carmakers falling into the "same trap" of allowing foreign automakers to dominate the Chinese market.

Fresh outlook, policies and subsidies key to hit goals and harness opportunities

The Chinese government is considering new preferential policies for the emerging new energy car industry.

The Ministry of Science and Technology issued a draft of the government's plan to support research and development of new energy vehicles to gain public opinion on Feb 16.

Beijing authorities also announced that the city would be friendlier to new energy car owners, by allowing them to pay less in parking fees and highway tolls by the end of March.

In 2012, the State Council set a goal of getting 5 million new energy vehicles on the road by 2020.

To meet this target the government plans to establish a research and development system and industrial chains for electric cars by 2020.

According to the China Association of Automobile Manufacturers, the output and sales of new energy vehicles in China were 78,499 and 74,763 in 2014, 3.5 and 3.2 times the figure in 2013.

Despite the growth, there is still a way to go to reach the central government's goal to have 500,000 new energy cars on the road by the end of this year.

Compared with sales of more than 23 million cars in China last year, the sales of new energy vehicles only accounted for a small proportion.

Dong Yang, secretary-general of the automobile manufacturers association, said he did not think the government would hit its new energy car goals unless it offered new preferential policies, as projected sales this year are about 150,000 to 200,000.

Ambition

The draft plan said electrification of power, lightweight structure and vehicle intelligence were the core technologies for the future development of new energy cars.

The next five to 10 years will be a period of strategic importance for the reorganization, transformation and upgrading of the global automobile industry.

According to the Ministry of Science and Technology, the Chinese automobile industry faces three challenges: the transition from a global sales leader to a leading manufacturing power, pollution control of car exhausts and energy security and national development at a low carbon level.

The government wants to achieve three goals through developing the country's new energy automobile market: upgrading the automobile industry, protecting the environment and using less fuel.

Several industry insiders believe that with the huge domestic market, electric cars will offer China new opportunities to grow. However, they warned that the Chinese automobile industry should not fall into the "same old trap" where foreign carmakers take the main share of the market.

The government has different attitudes towards electric cars and hybrid electric cars. It offers financial backing for technology research and development, as well as high subsidies for electric car buyers. For hybrid electric vehicles, the government only financially supports technology and promotion.

Big State-owned automobile enterprises' position in the two markets may be the reason why the government acts differently.

In the past 50 years, many Chinese automobile companies established joint ventures with foreign car manufacturers to learn advanced techniques. The result was that foreign players now dominate the Chinese auto market.

The government policies mean that electric cars from foreign companies are not eligible for subsidies, but those from joint venture companies are.

As a result, foreign companies tend to produce electric cars with local joint ventures, which is the "same route" as the development of fuel cars in China.

Industry insiders question whether Chinese companies will learn techniques through the electric vehicle joint venture process to help themselves grow competitively.

So far, the performance of Chinese automobile giants in the new energy industry has fallen flat. FAW's plug-in hybrid car Hongqi is still a concept and Dongfeng Motor Corporation has kept a low profile on new energy vehicles.

Private carmaker BYD is the only real "early bird" in the field.

"With central and local governments' strong support, China now has embraced the best environment for the growth of the new energy vehicle industry," said Hu Xiaoqing, PR and marketing director of Shenzhen BYD Daimler New Technology Co.

Emerging force

With State-owned big names showing lackluster performance in big- and medium-size cities, smaller brands have potential to enter the market, especially in small cities, townships and villages.

Most smaller brands offer low-speed electric cars, which run at speeds of less than 80 kilometers per hour and are sold for between 25,000 yuan ($3,997) to 50,000 yuan. Many electric motorcycle producers can also manufacture the cars.

Public security departments in many places do not issue plates to low-speed electric cars, as they do not consider them "real" vehicles.

However this could change after the government recognized low-speed electric cars as "normal" electric vehicles, in a draft standard for the industry in November.

Unlike big cities, small cities, townships and villages have plenty of land to build charging posts, which is an important foundation for the niche market ignored by many big enterprises.

Jia Xinguang, a Beijing-based independent industry analyst, said the government should focus more on promoting the sale and use of new energy automobiles in medium- and small-sized cities. "The subsidies in the smaller places are much lower than Beijing and Shanghai. They need more battery-charging stations and better after-sales service facilities," he said.

Learn from Germany

The German government's policies for new energy cars could provide inspiration for the Chinese government.

The German authority believes the development of electric cars should be a systemic plan that includes not only vehicles but also intelligent transportation and smart grids.

With this in mind it plans to create a new energy car environment, which will involve vehicles, city planning and an energy and industry chain.

Instead of subsidizing electric cars buyers, the German government financially backs companies in fields such as automobile manufacturing, energy and electric power to develop related products.

An outlet of Amway Corp in Yichang, Hubei province. The company's revenues fell 8 precent to $10.8 billion in 2014.

Amway Corp, the world's largest direct sales company, announced its revenues fell 8 percent to $10.8 billion in 2014 due to a dip in Chinese mainland sales and fluctuations in currency exchange rates.

A survey by China Knowledge Economy's Direct Selling magazine found that Amway's revenue in the Chinese mainland decreased from 29.3 billion yuan ($4.72 billion) in 2013 to 28.7 billion yuan last year, but the Chinese mainland still remained the company's biggest market.

It is the first decline for the Amway in the Chinese mainland after growth rates hit 27 percent over the previous five years and 45 percent for the decade, according to company reports.

"Sales in 2014 reflect the significant efforts by Amway business owners and employees who continue to do well around the world despite challenging operating environments found in several nations that are major markets," said Amway Chairman Steve Van Andel.

"We continue to see great strength globally as select markets hit record sales numbers and others show resilience that point to strong results in 2015," he said.

Some of the company's most-mature markets, including South Korea and Taiwan, registered strong growth in 2014. Sales in Brazil, Mexico, Argentina, Costa Rica, Guatemala, Chile, Panama, Italy and Spain saw double-digit growth, while markets influenced by political unrest and economic slowdowns?Russia, Thailand and Ukraine?showed resilience and produced solid results, according to the company.

Amway's top 10 markets in 2014 were the Chinese mainland, South Korea, Japan, the United States, Thailand, Russia, Taiwan, India, Malaysia and Ukraine.

The company's sales were concentrated in nutrition, beauty, durables and home care, with nutrition products continuing to lead the way, accounting for 43 percent of direct sales revenue.

Beauty products contributed 25 percent, followed by durable products at 19 percent and home care products at 8 percent.

Amway President Doug DeVos said the company is optimistic and well-positioned for growth in 2015 and beyond as it opens five new manufacturing facilities, many new Amway experience centers and improves the online experience.

According to Direct Selling magazine's survey at the end of January, 49 companies had direct sales permits on the Chinese mainland and 46 were operational. Together they generated 159.91 billion yuan in total sales, a 24.3 percent increase over 2013.

The increase shows steady progress in the direct sales industry in the country, said the survey, as domestic companies catch up with foreign peers.

Following Amway, Malaysia-based Perfect China Co Ltd ranked No 2 in China with 28 percent growth in sales to 22.3 billion yuan last year. Herbal health product maker Infinitus China Co Ltd soared 37.5 percent on sales of 16.5 billion yuan. Revenues for skin care and nutrition product maker Nu Skin declined from 6.4 billion yuan in 2013 to 4.4 billion last year.

Shanghai-listed property developer Gemdale Corp announced over the weekend its sales volume fell by 19.8 percent year-on-year in January, making it the latest of a long list of developers which reported declining sales performance in the first month of 2015.

Gemdale Corp said Friday in a statement posted on the Shanghai Stock Exchange that its transaction area fell by 8.6 percent in January from a year earlier, while sales revenue also decreased by 19.8 percent year-on-year.

The announcement came after statistics showed that the total sales revenue of China's 10 leading property developers, including Vanke Co and Poly Real Estate Group Co, fell by 5 percent year-on-year in January and decreased by 58.4 percent from the previous month, according to a report from news portal caixin.com released on Thursday.

Vanke Co, the country's second-biggest developer by sales, registered sales revenue of 23.2 billion yuan ($3.7 billion) in January, falling by 16.1 percent year-on-year.

The slump in transaction areas and sales revenue in January is due to strong purchases from consumers in December under preferential home prices, which reduced the demand for housing in January, Liu Yuan, a senior research director at real estate consultancy Centaline Group in Shanghai, told the Global Times on Sunday.

Most of China's property developers experienced a hard time last year amid a slowing economy and offered price concessions in December in order to reduce the inventory pressure facing their companies, Liu said.

"According to our statistics, transaction areas in 40 major Chinese cities dropped nearly 30 percent in January from a month earlier, but the slump is temporary," Liu said.

The transaction areas and sales revenue are both expected to rebound slightly this year following a raft of forecasted loosening measures such as a potential interest rate cut, which will help to reduce the financing costs of housing loans, Zhang Xu, an analyst with Homelink Real Estate Agency in Beijing, told the Global Times on Sunday.

Xiaomi Corp will initially start small by selling products like smart wristbands and mobile power chargers when it opens an online store in the United States, the Beijing-based company said yesterday.

The store marks the first step for the start-up Chinese smartphone vendor to penetrate the US market, and key products like smartphones and tablets won't be sold initially, said Xiaomi.

The new US online store, called Mi.com, will sell products such as bands, chargers and headphones, Xiaomi said at its first press conference in the US yesterday.

"We will bring more exciting software and hardware products to more consumers in overseas markets," Lin Bin, Xiaomi's president, said in a statement.

Xiaomi currently sells its products in China and seven other markets, including Singapore and India.

By the third quarter of last year, it ranked the No. 1 smartphone vendor in the Chinese market, the world's biggest.

Xiaomi yesterday also said that a total of 100 million users globally are using its MIUI operating system.

Xiaomi expects to sell 100 million phones this year after it sold 61.1 million units last year, a 227 percent jump from 2013, beating its annual target of 60 million units.

In 2014, Xiaomi's revenue surged 135 percent to 74.3 billion yuan (US$11.91 billion).

After the firm raised US$1.1 billion in December, privately-owned Xiaomi is said to be valued at US$45 billion.