Advertisements
WhatsApp +989123496187 arminhamidian@aol.com

Category: China Economy/Study

An Unexpected Coronavirus Effect: Cheap Lobster (Lower Meat Prices, Too)

marketingscoopsLeave a Comment on An Unexpected Coronavirus Effect: Cheap Lobster (Lower Meat Prices, Too)

Topline: As the coronavirus outbreak has limited shipments into China, the price of U.S. exports like lobster — and, to a lesser extent, pork, chicken and beef — has dropped for U.S. consumers (but don’t expect that to last).

  • Lobster has fallen to its lowest price in four years after charter flights from North American to Asia came to a standstill during the onset of the coronavirus outbreak.
  • As a result, thousands of pounds of surplus lobster have drowned markets in North America and pushed prices down.
  • According to Bloomberg, the price for a 1.5 pound lobster from New England has fallen by 17% since January to $8.10, in a time of year when prices typically rise to somewhere around $9.85.
  • Seafood companies in Australia and New Zealand have also seen a drop in business from China’s slowdown.

Key background: As China’s middle class grew and developed a taste for luxury, the U.S. came to be the top supplier of lobster for the country—until 2018, when the tariff war between Washington and Beijing had Chinese favoring Canada as a supplier. Before coronavirus, Canada alone sent about 1.5 million pounds of lobster on nine charter flights per week to Asia, Bloomberg reported. But lobster isn’t the only industry hurting because of coronavirus. The meat price index has taken a 2% hit as imports to China slowed, Reuters reported. On Thursday, U.S. live cattle futures began to fall as markets worried that the virus would hurt global demand for beef. On Friday futures set a low, down 16% from their peak. With exports slowed, U.S. cold storage facilities have seen the number of chicken breasts, thigh meat and drumsticks rise by 12% over January to a total of 957.5 million pounds, The Wall Street Journal reported.

Crucial quote: “Prices [for meat] have gone down. It’s a combination of general reduction in commerce [in China], people eating in more and eating out less, the ports are backed up and exports are not getting in,” says Adam Stout, a risk management consultant at INTL FCStone.

According to Stout, there was already a meat deficit because of the African swine fever China has been battling since 2018. The U.S. pork industry has become increasingly dependent on the export demand in China, more than the beef and poultry industries.  However, Stout is optimistic that there’s a light at the end of the tunnel.

What to watch for: “If you were to look at China specifically, you would see things are starting to improve, getting the economy up and moving and reducing congestion at ports. I think that will continue to improve,” Stout said. “We will need to experience similar improvements in other places—South Korea is increasingly important to us.”

Tangent: At least one country will see more food exports to China: according to The Bangkok Post, Thailand’s food exports to China are likely to double next quarter once food stocks are consumed.

Send me a secure tip.

Carlie Porterfield

Carlie Porterfield

I am a Texas native interning at the Forbes office in London, and have previously been published in London and Austin newspapers. I am an alum of City, University of London and Texas State University.

Source: An Unexpected Coronavirus Effect: Cheap Lobster (Lower Meat Prices, Too)

Please follow my instagram: http://instagram.com/arminhamidian67

In 2010, China accounted for just about one percent of exports of American lobsters by value. Six years later, that figure had risen to 15 percent, and stayed that way for a while. That was until 2018 when President Donald Trump launched his trade war with China, complete with new levies on billions of dollars in goods. The Chinese government retaliated with a 25 percent tariff on U.S. lobster imports in July 2018, with an additional 10 percent added from September 1 this year.  Subscribe to us on YouTube: https://goo.gl/lP12gA Download our APP on Apple Store (iOS): https://itunes.apple.com/us/app/cctvn… Download our APP on Google Play (Android): https://play.google.com/store/apps/de… Follow us on: Website: https://www.cgtn.com/ Facebook: https://www.facebook.com/ChinaGlobalT… Instagram: https://www.instagram.com/cgtn/?hl=zh-cn Twitter: https://twitter.com/CGTNOfficial Pinterest: https://www.pinterest.com/CGTNOfficial/ Tumblr: http://cctvnews.tumblr.com/ Weibo: http://weibo.com/cctvnewsbeijing Tiktok: https://m.tiktok.com/h5/share/usr/659… Douyin: https://www.youtube.com/redirect?q=ht…

Coronavirus Could Be The End Of China As A Global Manufacturing Hub

marketingscoopsLeave a Comment on Coronavirus Could Be The End Of China As A Global Manufacturing Hub

The new coronavirus Covid-19 will end up being the final curtain on China’s nearly 30 year role as the world’s leading manufacturer.

“Using China as a hub…that model died this week, I think,” says Vladimir Signorelli, head of Bretton Woods Research, a macro investment research firm.

China’s economy is getting hit much harder by the coronavirus outbreak than markets currently recognize. Wall Street appeared to be the last to realize this last week. The S&P 500 fell over 8%, the worst performing market of all the big coronavirus infected nations. Even Italy, which has over a thousand cases now, did better last week than the U.S.

China On Hold

On January 23, Beijing ordered the extension of the Lunar New Year holiday, postponing a return to work. The coronavirus was spreading fast in the epicenter province of Hubei and the last thing China wanted was for that to be repeated elsewhere. Travel restrictions and quarantines of nearly 60 million people drove business activity to a standstill.

The most frightening aspect of this crisis is not the short-term economic damage it is causing, but the potential long-lasting disruption to supply chains, Shehzad H. Qazi, the managing director of China Beige Book, wrote in Barron’s on Friday.

Chinese auto manufacturers and chemical plants have reported more closures than other sectors, Qazi wrote. IT workers have not returned to most firms as of last week. Shipping and logistics companies have reported higher closure rates than the national average. “The ripple effects of this severe disruption will be felt through the global auto parts, electronics, and pharmaceutical supply chains for months to come,” he wrote.

That China is losing its prowess as the only game in town for whatever widget one wants to make was already under way. It was moving at a panda bear’s pace, though, and mostly because companies were doing what they always do – search the world with the lowest costs of production. Maybe that meant labor costs. Maybe it meant regulations of some kind or another. They were already doing that as China moves up the ladder in terms of wages and environmental regulations.

Under President Trump, that slow moving panda moved a little faster. Companies didn’t like the uncertainty of tariffs. They sourced elsewhere. Their China partners moved to Vietnam, Bangladesh and throughout southeast Asia.

Enter the mysterious coronavirus, believed to have come from a species of bat in Wuhan, and anyone who wanted to wait out Trump is now forced to reconsider their decade long dependence on China.

Retail pharmacies in parts of Europe reported that couldn’t get surgical masks because they’re all made in China. Can’t Albania make these things for you? Seems their labor costs are even lower than China’s, and they are closer.

The coronavirus is China’s swan song. There is no way it can be the low-cost, world manufacturer anymore. Those days are coming to an end. If Trump wins re-election, it will only speed up this process as companies will fear what happens if the phase two trade deal fails.

Picking a new country, or countries, is not easy. No country has the logistic set up like China has. Few big countries have the tax rates that China has. Brazil surely doesn’t. India does. But it has terrible logistics.

Then came the newly signed U.S. Mexico Canada Agreement, signed by Trump into law last year. Mexico is the biggest beneficiary.

It’s Mexico’s Turn?

Yes. It is Mexico’s turn.

Mexico and the U.S. get a long. They are neighbors. Their president Andres Manuel Lopez Obrador wants to oversee a blue collar boom in his country. Trump would like to see that too, especially if it means less Central Americans coming into the U.S. and depressing wages for American blue collar workers.

According to 160 executives who participated in Foley & Lardner LLP’s 2020 International Trade and Trends in Mexico survey, released on February 25, respondents from the manufacturing, automotive and technology sectors said they intended to move business to Mexico from other countries – and they plan on doing so within the next one to five years.

“Our survey shows that a large majority of executives are moving or have moved portions of their operations from another country to Mexico,” says Christopher Swift, Foley partner and litigator in the firm’s Government Enforcement Defense & Investigations Practice.

Swift says the move is due to the trade war and the passing of the USMCA.

The phase one China trade deal is a positive, but the coronavirus – while likely temporary — shows how an over-reliance on China is bad for business.

There will be fallout, likely in the form of foreign direct investment being redirected south of the Rio Grande.

“Our estimates of possible FDI to be redirected to Mexico from the U.S., China and Europe range from $12 billion to $19 billion a year,” says Sebastian Miralles, managing partner at Tempest Capital in Mexico City.

“After a ramp-up period, the multiplier effect of manufacturing FDI on GDP could lead Mexico to grow at a rate of 4.7% per year,” he says.

Mexico is the best positioned to take advantage of the long term geopolitical rift between the U.S. and China. It is the only low cost border country with a free trade deal with the United States, so there you have it.

Thanks to over 25 years of Nafta, Mexico has become a top exporter and producer of trucks, cars, electronics, televisions, and computers. Shipping a container from Mexico to New York takes five days. It takes 40 days from Shanghai.

They manufacture complex items like airplane engines and micro semiconductors. Mexico is the rank the 8th country in terms of engineering degrees.

Multinational companies are all there. General Electric is there. Boeing is there. Kia is there.

The trade war is yet to be decided, but the damage that has already been done will not be undone. Room for a new key commercial ally is open.

– from “The U.S.-China Divorce: Rise of the Mexican Decade”, by Tempest Capital.

Safety remains a top issue for foreign businesses in Mexico who have to worry about kidnappings, drug cartels, and personal protection rackets. If Mexico was half as safe as China, it would be a boon for the economy. If it was as safe, Mexico would be the best country in Latin America.

“The repercussions of the trade war are already being felt in Mexico,” says Miralles.

Mexico replaced China as the U.S. leading trading partner. China overtook Mexico only for a short while.

According to Foley’s 19 page survey report, more than half of the companies that responded have manufacturing outside of the U.S. and 80% who do make in Mexico also have manufacturing elsewhere. Forty-one percent of those operating in Mexico are also in China.

When respondents were asked about whether global trade tensions were causing them to move operations from another country to Mexico, two-thirds said they already had or were planning to do so within a few years. A quarter of those surveyed had already moved operations from another country to Mexico on account of the trade war.

For those considering moving operations, 80% said they will do so within the next two years. They are “doubling down on Mexico”, according to Foley’s report.

Of the companies that recently moved their supply chain, or are planning to do so, some 64% of them said they are moving it to Mexico.

Follow me on Twitter or LinkedIn.

Kenneth Rapoza

I’ve spent 20 years as a reporter for the best in the business, including as a Brazil-based staffer for WSJ. Since 2011, I focus on business and investing in the big emerging markets exclusively for Forbes. My work has appeared in The Boston Globe, The Nation, Salon and USA Today. Occasional BBC guest. Former holder of the FINRA Series 7 and 66. Doesn’t follow the herd.

Source: Coronavirus Could Be The End Of China As A Global Manufacturing Hub

Subscribe to our YouTube channel for free here: https://sc.mp/subscribe-youtube China’s manufacturing industry has been hit hard by the coronavirus epidemic. Many factories are unable to resume production because of a shortage of workers, disrupted supply chains and sluggish demand, leaving manufacturers facing huge losses in sales as they struggle to ramp up production. Follow us on: Website: https://scmp.com Facebook: https://facebook.com/scmp Twitter: https://twitter.com/scmpnews Instagram: https://instagram.com/scmpnews Linkedin: https://www.linkedin.com/company/sout…

 

North Korea’s Coronavirus Quarantine: More Effective Than Sanctions

marketingscoopsLeave a Comment on North Korea’s Coronavirus Quarantine: More Effective Than Sanctions

North Korea’s leadership has declared prevention of the spread of coronavirus a matter of “national survival” and moved rapidly to close its borders to halt the spread of the virus. Indeed, coronavirus could prove an existential threat to North Korea, given the manifest vulnerabilities of the country’s public health system to transmission of infectious diseases. But, is North Korea more endangered by self-imposed quarantine measures or by integration with the outside world?

North Korea’s situation has dramatically changed from the famine of the 1990s, when its isolation and stovepiped distribution channels led to an absolute food shortage and hundreds of thousands of fatalities. At that time, citizen dependency on the public distribution system magnified the rate of fatalities, forcing average citizens to turn to self-help rather than government-reliance. Today, North Koreans rely on internal markets that in turn benefit from dependence on international supply chains, so quarantines may entail more risk than benefit to average North Koreans, and eventually to the regime.

International sanctions are designed to impose economic isolation on North Korea through the U.S.-led “maximum pressure” campaign, which punishes North Korea’s flouting of UN Security Council resolutions on its nuclear and missile development. Sanctions deny North Korea access to international trade in sensitive goods and raise the cost of North Korean procurement of energy resources and other goods. Yet U.S.-led sanctions may prove much less effective than the unanticipated consequences of a self-imposed quarantine for North Korea’s supply chain.

The quarantine will likely fail to stop the spread of coronavirus into North Korea, if it hasn’t already. Swine flu from China has infected North Korean boar stocks and leaked into South Korea for months across the demilitarized zone dividing the two countries. There is a low likelihood that January flight cancelations were put in place early or effectively enough to prevent Chinese tourist or North Koreans returning from overseas from bringing the coronavirus into the country.

North Korea’s newfound vulnerabilities–whether in the public health sector or in the country’s susceptibility to international sanctions pressures–result from connections of North Korea to the international community rather than from isolation. The real question is whether the leadership can manage North Korea’s economic integration and its unintended political consequences.

In response to past crises like SARS and Ebola, North Korea has utilized quarantine measures to reduce exposure to international public health threats, but those diseases did not pose a near or direct threat to North Korea. In the event that coronavirus spreads to North Korea, there will be a disproportionately high number of fatalities, and North Korea will be forced to make international appeals for assistance in the form of protective masks and advanced medical detection equipment. At moments of vulnerability, North Korean leadership has shown temporary flexibility and accepted help from the outside. But once the crisis fades, temporary concessions to the outside world are quickly reversed.

Both the inability to-date of sanctions to reverse North Korea’s nuclear program and the likely inability of North Korea’s leadership to isolate itself from the negative public health effects of coronavirus feed into an ongoing debate: is it better to promote North Korea’s isolation or integration to achieve peace and denuclearization?

This debate has served as a periodic source of division between Moon administration pro-engagement advocates and Washington-based sanctions hawks. Pro-Moon engagers believe engagement will promote North Korea’s integration and give the leadership something to lose, hopefully curbing radical and destructive North Korean behavior. Washington-based sanctions supporters see them as a means of punishing, isolating, and forcing the North Korean leadership to make a choice between prosperity and denuclearization.

All too often, this debate occurs without sufficient attention to or understanding of the unintended consequences of sanctions, or the North Korean leadership’s ability to blunt the effects of externally imposed isolation or coopt the impact of greater interdependence or integration. Framing the debate in those terms assumes that external actors have the power to shape North Korea’s choices. Factors within North Korea that influence its leadership’s impulse to maintain control over the population are more likely to impact North Korea’s future course than external circumstances designed to force North Korean policy choices.

All too often, this debate occurs without sufficient attention to or understanding of the unintended consequences of sanctions, or the North Korean leadership’s ability to blunt the effects of externally imposed isolation or coopt the impact of greater interdependence or integration. Framing the debate in those terms assumes that external actors have the power to shape North Korea’s choices. Factors within North Korea that influence its leadership’s impulse to maintain control over the population are more likely to impact North Korea’s future course than external circumstances designed to force North Korean policy choices.

If the North Korean regime is primarily focused on controlling the pace of internal change, external parties should evaluate sanctions and engagement measures based on whether they reduce or enhance the ability of the regime to control the pace of change inside North Korea. Sanctions properly applied using this metric will serve as a scalpel that applies pressure to specific constituencies within North Korea’s elite, rather than as a sledgehammer that crushes North Korea. Inducements should wean the North Korean people from political loyalty to North Korea’s rulers, not provide the leadership with tools to enhance control over the lives of the people.

Coronavirus will likely be far more effective than sanctions in inducing internal changes in North Korea. North Korea’s leadership has imposed quarantine measures in an attempt to regain control over the situation, but the quarantine’s inevitable failure will ultimately diminish the regime’s control at the same time that a failure to control the virus could undermine the regime’s legitimacy. Plus, because a virus does not discriminate by nationality, it cannot be blamed for having a “hostile policy.” Unlike the most carefully assembled sanctions regime, viruses can exploit the preexisting failed conditions of a public health system that itself is a manifestation of North Korea’s failed regime.

Scott Snyder is Senior Fellow for Korea Studies at the Council on Foreign Relations and author of South Korea at the Crossroads: Autonomy and Alliance in an Era of Rival Powers.

I am senior fellow for Korea studies and director of the program on U.S.-Korea Policy at the Council on Foreign Relations (CFR). I focus on South Korea’s efforts to contribute on the international stage; its potential influence and contributions as a middle power in East Asia; and the peninsular, regional, and global implications of North Korean instability. I also serve on the advisory council of the National Committee on North Korea and Global Resource Services. Prior to joining CFR, I was a senior associate in the international relations program of The Asia Foundation, where I founded and directed the Center for U.S.-Korea Policy and served as The Asia Foundation’s representative in Korea.

Source: North Korea’s Coronavirus Quarantine: More Effective Than Sanctions

북한 “코로나 격리기간 30일… 바이러스 3주 후 나타날 수 있어” North Korea is reportedly imposing a 30-day quarantine on people who’ve traveled to other countries. Still, for now, North Korea has not reported a single case of the coronavirus. Oh Jung-hee reports. Closing the border, suspending tours… and a strict quarantine of 30 days. These are the steps North Korea is taking to fight off a coronavirus outbreak. Speaking to Reuters on Wednesday, North Korea’s ambassador to UN organizations in Geneva, Han Tae-song, said the regime is putting its nationals and foreign travelers who’ve visited other countries into a 30-day quarantine. That’s double the virus’ 14-day incubation period. He explained… that scientific studies show the virus can break out even three weeks after infection… and preventing the virus is much cheaper than trying to cure it. He added… the North has seen no confirmed cases yet. According to the World Health Organization, North Korea has reported it checked nearly 7,300 people entering the country for a six-week period through February 9th. 141 travelers with fevers were tested, but all turned out to be negative. The WHO also says it’s not dealing with any coronavirus cases in North Korea. But it’s offering the North the necessary testing supplies and protective equipment like goggles, gloves, masks and gowns. Meanwhile, North Korean and WHO officials were due to meet in Geneva on Wednesday. But results of the meeting are not yet known. Oh Jung-hee, Arirang News. #COVID19 #coronavirus #NorthKorea

Why Your Index Fund Is Built To Survive The Coronavirus Outbreak

marketingscoopsLeave a Comment on Why Your Index Fund Is Built To Survive The Coronavirus Outbreak

With The market already down more than 10%, the coronavirus-triggered plunge may turn into one of the fastest bear markets to hit U.S. stocks ever. But, believe it or not, a passive investment in the S&P 500 may be the best way to ride out and ultimately profit from the storm.

As coronavirus spreads, the problems at these companies will worsen and cyclical sectors that track closely with global gross domestic product growth will also suffer. This morning, the industrial and materials sectors went into the red, posting negative returns for the past 12 months. They joined energy, down 30% over the year, as the only sectors to lose money. The S&P 500 is still ahead 7% year-over-year.

Here’s the good news: Your index fund already predicted all of this.

Even before the coronavirus became a global crisis, the S&P 500 was under-weighted in the types of stocks that were most vulnerable to the outbreak and it was heavily over-weighted in the software, internet, online retail and social media companies that are likely to either weather the storm, or thrive.

The Coronavirus Plunge

Coronavirus caused the quickest 10% market correction since the 2008 financial crisis.

                           

Almost a quarter of the S&P 500 index is comprised of the ten biggest companies in America by market capitalization: Microsoft, Apple, Amazon, Facebook, Berkshire Hathaway, Alphabet (Google), JPMorgan Chase, Johnson & Johnson, Visa and Wal-Mart.

These companies have pristine balance sheets and strong long-term growth prospects to manage through the outbreak. Some may also see increased sales as people stockpile food and health safety products, or benefit from people staying at home. About half of the overall S&P 500 is in information technology, healthcare and communications stocks —all unlikely to see major long-term disruptions due to the outbreak.

On the other hand, the types of businesses that are in free-fall, such as energy and retail, hardly make a dent as a weighting in the S&P 500. For instance, the entire energy sector entered 2020 at about the same weight as Apple alone. Thus energy’s 20% plunge over the past month is causing relatively minor pain. Retailers like Macy’s, Gap and Nordstrom that may struggle further are also minor weightings, in addition to small-sized drillers like Cimarex Energy, Helmerich & Payne, Cabot Oil & Gas and Devon Energy.

While holders of the S&P have sidestepped the worst stock implosions since the outbreak, they’re also big holders of potential beneficiaries.

Johnson & Johnson, United Health Group and Procter & Gamble are about 1% index weightings and they could see an uptick in sales as people all the world prepare for the virus’s spread. If more people begin to work from home, companies like Microsoft will benefit as demand spikes for its suite of cloud products including email and remote working services. Wireless carriers like Verizon and cell tower giants SBA Communications and American Tower will benefit from rising smartphone and internet activity.

Any surge in online sales will help ecommerce companies like Amazon and logistics warehouse operator Prologis as well as another S&P 500 member Equinix, one of the largest data center real estate investment trusts. Streaming services like Netflix and internet giants like Google and Facebook will also see a boost in eyeballs from masses of homebound Americans.

You guessed it. Each of these companies has high weightings in the S&P 500.

Your Index Fund Picks Winners

The biggest weights in the S&P 500 are also the largest and most successful companies in America.

                        

The index is well-prepared for the coronavirus because it is designed to track changes in the economy, which may actually be accelerated by the outbreak. The S&P 500 weights companies by market capitalization, meaning it increases exposure to companies with improving business prospects and rising stock prices, and it decreases exposures to those with worsening fates.

Already, people have been avoiding department stores and brick and mortar retailers, and driving more efficient vehicles, cutting back on oil and gas consumption. Movie theaters are being made obsolete by streaming media services. By design, the S&P has done a near-perfect job keeping up with these changing economic trends and consumer habits.

Investors, meanwhile, have spent the past decade bidding up the stock values of cash-generating software and internet companies, and have been abandoning stocks in companies with heavy debts and large pension obligations, or those exposed to economic cycles. Here again, the S&P 500’s algorithm has been trimming holdings in burdensome industrial companies and auto manufacturers. Information technology, the most heavily weighted in the index has fallen about 5% over the past month, but is still up 23%-plus over the past year.

In 2007, at the outset of the financial crisis, Berkshire Hathaway’s Warren Buffett famously predicted an ordinary investor in an S&P 500 index fund would beat just about any hedge fund on Wall Street. Buffett offered a $1 million bet—payable to charity—to anyone who thought they could pick hedge funds that would beat the index over the ensuing decade.

A hedge fund investor named Ted Seides took up Buffett’s wager. It wasn’t even close. Seides conceded a loss in 2015, waving a white flag of defeat before the decade was over. The S&P returned 8.5% annually over that ten-year stretch, while the average hedge fund failed to deliver half that return.

The reality is as follows: Market corrections like the current one are frightening. But sometimes, the smartest play is also the easiest. With an investment in the S&P 500, the house is on your side.

Follow me on Twitter. Send me a secure tip.

Antoine Gara

I’m a staff writer at Forbes, where I cover finance and investing. My beat includes hedge funds, private equity, fintech, mutual funds, M&A and banks. I’m a graduate of Middlebury College and the Columbia University Graduate School of Journalism, and I’ve worked at TheStreet and Businessweek. Before becoming a financial scribe, I was a part of the fateful 2008 analyst class at Lehman Brothers. Email thoughts and tips to agara@forbes.com. Follow me on Twitter at @antoinegara

Source: Why Your Index Fund Is Built To Survive The Coronavirus Outbreak

Multistreaming with https://restream.io/?ref=JQjEP Snoop Dogg is worth $124M, but doesn’t have a will

Markets Slide As Europe Scrambles To Contain The Coronavirus

marketingscoopsLeave a Comment on Markets Slide As Europe Scrambles To Contain The Coronavirus

Topline: The growing outbreak of the coronavirus in Italy has been linked with new cases of the pneumonia-like virus in three neighboring European countries, and in Brazil, the first time Covid-19 has been detected in Latin America.

  • The 108-room Grand Hotel Europa in the Austrian ski town of Innsbruck is on lockdown after an Italian couple contracted the virus when they visited Italy’s Lombardy region, which is at the centre of the Italian outbreak. The woman works as a receptionist at the hotel.
  • In Switzerland, a man in his 70s was placed in isolation after testing positive for the illness in Lugano, the southern, Italian-speaking part of Switzerland. He is believed to have contracted the virus during an event in Milan earlier this month.
  • Croatia is the first Balkan country to report a case, after a man who recently travelled from Milan showed milder symptoms of the illness, the country’s health minister said.
  • European stocks slid further on Wednesday, with the continent’s Stoxx 600 down 2% on Wednesday morning. Germany’s Dax 30, France’s CAC 40 and London’s FTSE 100 are also down.
  • Coronavirus has now jumped to Latin America and Africa with two people who recently travelled from Italy to Brazil and Algeria testing positive for the coronavirus.
  • The U.S. military has also reported its first case, a 23-year-old man based in South Korea who had recently travelled to a military camp in Daegu, the Korean city at the centre of the country’s outbreak. The U.S has around 28,500 troops garrisoned in South Korea and the risk level remains high, the New York Times reports.

Crucial comment: Oliver Baete, CEO of Europe biggest insurer Allianz, has said the markets overreacting to coronavirus is unwarranted. “It’s not like the world will end tomorrow,” he told Bloomberg.

Elsewhere around the world: Spain – 1,000 guests at a hotel in Spain’s canary islands has been on lockdown since Monday, with four people now testing positive for the virus, while the first case on the Spanish mainland was confirmed in Catalonia earlier this week.

Italy – At least 325 cases and 11 deaths have been recorded, while northern regions of Lombardy and Veneto remain on lockdown and new cases have now been reported in Rome. Prime Minister Giuseppe Conte said: “We need to stop the panic.”

South Korea – More than 900 cases have now been reported in the largest cluster of cases outside mainland China, with more than half of cases linked to a Christian church sect.

China – Some 78,000 people have been infected and 2,700 people have died in the country at the centre of the outbreak.

U.K. – Thirteen people have tested positive for the virus, some of which were aboard the Diamond Princess.

France – Fourteen people are infected, while one has died and 11 have recovered.

Additional fact: Hong Kong has handed $1,280 to every adult permanent resident in a bid to stimulate its flagging economy which has been weighed down by months of protests, and the coronavirus.

Key background:The coronavirus crisis has now entered a new global phase after attempts to contain the outbreak in China failed despite unprecedented quarantine measures and travel restrictions that severely impacted the world’s second largest economy. More than 80,000 people worldwide, mostly in China, have been infected with the pneumonia-like virus and businesses around the world are taking stock of the prospect of further disruption in major economies like Italy and South Korea, or a global pandemic. Airlines, travel and luxury stocks have been some of the most impacted by this week’s sell-off as investors pivot to safe-haven assets. Scientists are scrambling to find a vaccine, with the the World Health Organization coordinating the efforts. The illness has also impacted Japan’s corporate culture, with thousands of employees being asked to work from home there.

Tangent: Some 300 workers at the Chevron offices in London’s Canary Wharf financial district were told to work from home after a worker presented with flu-like symptoms and is being tested for coronavirus.

Further reading: Here’s Every State And Country With A Confirmed Coronavirus Case (Lisette Voytko)

Follow me on Twitter. Send me a secure tip.

Isabel Togoh

I am a breaking news reporter for Forbes in London, covering Europe and the U.S. Previously I was a news reporter for HuffPost UK, the Press Association and a night reporter at the Guardian. I studied Social Anthropology at the London School of Economics, where I was a writer and editor for one of the university’s global affairs magazines, the London Globalist. That led me to Goldsmiths, University of London, where I completed my M.A. in Journalism. Got a story? Get in touch at isabel.togoh@forbes.com, or follow me on Twitter @bissieness. I look forward to hearing from you.

Source: Markets Slide As Europe Scrambles To Contain The Coronavirus

Authorities across Europe are trying to contain the spread of coronavirus by hunting down those who came into contact with infected people.… READ MORE : https://www.euronews.com/2020/02/09/a… Subscribe to our channel: https://www.youtube.com/c/euronews?su… Watch our LIVE here: https://www.youtube.com/c/euronews/live #Coronavirus #CoronavirusOutbreakEurope

Cruise Ship Stranded At Sea Over Coronavirus Fears To Dock In Cambodia

marketingscoopsLeave a Comment on Cruise Ship Stranded At Sea Over Coronavirus Fears To Dock In Cambodia

Topline: A cruise ship that was turned away from several ports in Asia over coronavirus fears—despite no cases onboard—will now dock in Cambodia after days of uncertainty and mounting anxiety among passengers.

  • The Holland America Line’s MS Westerdam was banned from docking by Thailand earlier this week, over concerns about coronavirus on the ship. Holland America Line, which is owned by Carnival Cruise, says nobody onboard has reported symptoms.
  • It will now dock in Sihanoukville in Cambodia on Thursday, where passengers will disembark over a few day and will be transported to the capital, Phnom Penh, and flown home. Holland America Line says it will pay for the flight sand refund passengers their entire trip.
  • The MS Westerdam had planned to disembark its passengers in Thailand after Japan, The Philippines and Guam turned away the cruise ship. The Thai government on Tuesday offered fuel, food, and medicine to the cruise ship.
  • Stephen Hansen and his wife are two of the 1,500 passengers stuck on the vessel, which sailed from Hong Kong on February 1st and had been scheduled to end its cruise in Japan on February 15.
  • Hansen told Forbes: “While I can understand that countries want to protect their own citizens first before helping us their decisions to turn us away are based more on misinformation and fear than facts.”
  • Holland America said in a statement on Wednesday: “All approvals have been received and we are extremely grateful to the Cambodian authorities for their support…All guests on board are healthy and despite erroneous reports there are no known or suspected cases of coronavirus on board, nor have their ever been.”
  • Passengers had been calling for political intervention, with Hansen saying that the countries’ decision to reject the vessel was down to “misinformation and fear,” rather than facts.

Key background: Cruise ships have become an unlikely flashpoint in the battle to stop the international spread of the coronavirus. The British-owned Diamond Princess cruise was quarantined in Tokyo last Monday, with 174 out of the 3,700 passengers on board now ill with the pneumonia-like illness. Around 3,600 passengers and crew were held aboard the World Dream cruise ship for four days in Hong Kong over concerns the ship staff had contracted the virus from infected passengers on an earlier cruise. Cruise Lines International Association, the industry’s trade organization, announced last week its members would bar passengers who had visited China, Hong Kong, or Macau, 14 days before their cruise, from boarding.

News peg: Coronavirus, this week renamed Covid-19, has now killed more than 1,000 people and infected at least 42,000 more. The outbreak is concentrated in mainland China, after the virus was first detected in patients who are thought to have visited a Wuhan market in December. Airlines have also been badly disrupted, with some international carriers suspended their flights to and from China, and a number of international companies and manufacturers have been impacted by the Chinese government’s move to extend the Lunar new year holiday in a bid to restrict the spread of the virus. Tens of millions were placed under lockdown by Chinese health authorities in cities like Wuhan that have seen the highest number of reported cases.

Further reading: Thailand Turns Away Cruise Ship Rejected By Three Nations Over Coronavirus Fears

Crew Members Plead For Rescue As Coronavirus Outbreak On Cruise Ship Grows To 135 Cases (Rachel Sandler)

Follow me on Twitter. Send me a secure tip.

Isabel Togoh

I am a breaking news reporter for Forbes in London, covering Europe and the U.S. Previously I was a news reporter for HuffPost UK, the Press Association and a night reporter at the Guardian. I studied Social Anthropology at the London School of Economics, where I was a writer and editor for one of the university’s global affairs magazines, the London Globalist. That led me to Goldsmiths, University of London, where I completed my M.A. in Journalism. Got a story? Get in touch at isabel.togoh@forbes.com, or follow me on Twitter @bissieness. I look forward to hearing from you.

Source: Cruise Ship Stranded At Sea Over Coronavirus Fears To Dock In Cambodia

CNA
A luxury liner has been stranded for days after been denied entry in the Philippines and Japan. The Westerdam, owned by Holland America Line, has not reported any cases of coronavirus among the 2,200 passengers and crew. Subscribe to our channel here: https://cna.asia/youtubesub Subscribe to our news service on Telegram: https://cna.asia/telegram Follow us: CNA: https://cna.asia CNA Lifestyle: http://www.cnalifestyle.com Facebook: https://www.facebook.com/channelnewsasia Instagram: https://www.instagram.com/channelnews… Twitter: https://www.twitter.com/channelnewsasia

No Customers, Closed Stores: Chinese Entrepreneurs Brace For The Worst Amid Coronavirus Outbreak

marketingscoopsLeave a Comment on No Customers, Closed Stores: Chinese Entrepreneurs Brace For The Worst Amid Coronavirus Outbreak

Zhou Yuxiang was not in the mood for festivities during China’s Lunar New Year holiday this year. The 30-year-old CEO of Shanghai-based software startup Black Lake Technologies had to figure out how to manage his company amid the country’s deadly coronavirus outbreak. Working from home to comply with local quarantine rules has lowered productivity, while expenses remained high as he still needs to pay rent even when no one is using the office.

What’s more, Zhou says, clients are slower to take on new contracts as factories remain shut and production is delayed, hurting his otherwise fast growth.

“This epidemic caused production suspension for a considerable number of factory clients,” he says, who counts 300 factory owners as customers of his cloud-based management software. “Unpredictability on when factories could resume production has increased uncertainty for our first quarter growth.”

As the deadly virus, temporarily called 2019-nCoV, shows no sign of slowing, China’s vast business scene is taking a hit. While some companies, including Zhou’s, hope to recoup any losses before the year’s end, others are suffering a much more devastating blow.

This is because the epidemic’s economic damage is far and wide. It is believed to be more contagious than the 2003 Severe Acute Respiratory Syndrome (SARS) epidemic, causing the Chinese government to impose nationwide mall closures, movie cancellations and factory shutdowns to prevent the disease’s further spread. As manufacturing and business activities cease, first quarter GDP growth will plummet to 3.8%—which equals to $62 billion in lost growth—and drag full-year GDP growth below 6% to 5.4%, according to UBS economist Wang Tao.

Sectors that are hardest hit include catering, entertainment, hospitality, retail and transportation. These businesses tend to have heavy inventory or a lot of expenses, but they can’t generate any meaningful revenue when people stay indoors.

Jia Guolong, founder of popular restaurant chain Xi Bei, told local media this week that his company only had enough cash for the next three months. He still needs to pay rent and salary to more than 20,000 employees, even when his restaurants are largely empty. To preserve cash, Hong Kong’s flag carrier, Cathay Pacific has asked its 27,000 employees to take three weeks of unpaid leave, warning that the condition is as grave as the 2009 global financial crisis. And fast-food operator Yum China is expecting negative impact on 2020 full-year sales and profit, after temporarily shutting down 30% of its stores in China.

While these larger businesses may eventually have the resources to weather through, smaller startups could experience a life-and-death moment. Zhang Yi, founder of Guangzhou-based consultancy iiMedia Research, says he won’t be surprised if a wave of bankruptcies occur. And Wang Ran, founder of Beijing-based investment firm CEC Capital, urged startups to do whatever they can to survive.

“Downsize if you need to, relocate if you need to and lay off people if you need to,” Wang wrote in a recent blog post. “Only those who lived through this can see spring, and have a future.”

Beijing has put out rescue measures. The country’s central bank, the People’s Bank of China, announced on February 2 that it would pump $174 billion worth of liquidity into the markets to help cushion the impact. Local governments have called for rent deductions and more flexible salary arrangements, with the Shanghai municipal government promising tax and insurance refunds to employers who don’t engage in layoffs.

But analysts say business survival may ultimately depend on whether the virus can be contained. Since originating in the central Chinese city of Wuhan in December, it has spread across the country, infecting more than 28,000 people and killing over 500. There are now coronavirus cases around the world, including Japan, Thailand, Germany, the United States and the United Arab Emirates. The World Health Organization declared the outbreak a global health emergency and dozens of nations, including Italy, Singapore and the U.S., have placed travel restrictions from China.

“The longer this drags on, the bigger the damage,” iiMedia Research’s Zhang says. “If it lasts for another month, then it would be unbearable for any business.”

Startups are doing what they can to minimize damage. Black Lake’s Zhou is offering discounted services, especially to clients who are based in the most affected areas. Zhou Wenyu (not related to Zhou Yuxiang), founder of Shaoxing-based software startup Youshupai, is slowing down marketing activities and transferring its first quarter sales goal to the second quarter. And Joanne Tang, founder of travel and marketing agency Infinite Luxury, says she is diversifying to other Asian markets while reminding overseas-based clients not to reduce efforts in China.

“For sure, we are in a challenging time,” Tang says. “We have to monitor how it goes, but we won’t be standing still and just wait until this is over.”

Yue Wang

I am a Beijing-based writer covering China’s technology sector. I contribute to Forbes, and previously I freelanced for SCMP and Nikkei. Prior to Beijing, I spent six months as an intern at TIME magazine’s Hong Kong office. I am a graduate of the Medill School of Journalism, Northwestern University. Email: ywywyuewang@gmail.com Twitter: @yueyueyuewang

Source: No Customers, Closed Stores: Chinese Entrepreneurs Brace For The Worst Amid Coronavirus Outbreak

CNBC’s Eunice Yoon reports on how the coronavirus outbreak is expected to take a serious toll on China’s economy. Expect supply disruptions as China takes measures to contain an ongoing coronavirus outbreak, says REYL Singapore’s Daryl Liew. “The sharp action taken by the Chinese government to basically delay workers going back to work is definitely going to cause some supply disruptions,” Liew, who is chief investment officer at REYL Singapore, told CNBC’s “Street Signs” on Thursday. With the virus infecting at least 7,700 and killing 170 in China, authorities have taken measures to curb the disease’s spread. At least three provinces have declared that businesses, other than some essential industries, are barred from resuming work before Feb. 10. In Hubei province, where the majority of cases have been found, resumption of local business has been delayed till at least Feb. 14. A “big question mark” remains over how long the disruptions could last, Liew said, as it depends on whether the situation can be contained. That comes as manufacturing numbers were showing “some normalization,” he added. “It’s a bit of a lagging indicator but the December ISM numbers have all been broadly positive, especially for Asian economies … which suggest essentially that global trade is normalizing. It’s not bouncing back significantly but it is rebounding,” Liew said, adding that that has translated to better manufacturing numbers. “The current virus … and the extended shutdown in China will definitely put a crimp to that,” Liew said. Potential impact on US businesses The outbreak has sent tremors across markets in Asia and beyond in recent days, as investor concerns about the potential economic impact grow. “We’re concerned that there could start to be … some overall impact on the Chinese economy which could lend itself, from a sentiment perspective, to greater concerns … for the global economy,” Shannon Saccocia, chief investment officer at Boston Private, told CNBC on Thursday. That could spillover into the performance of U.S. businesses at a time when the “strain of lower production” is being felt stateside, Saccocia said. “If we start to see that upended by the fact that factories aren’t opening and … we’re not able to get the components that we need from the Chinese economy, you know, that could … certainly slow any sort of manufacturing reacceleration that we were hoping for in the first two quarters of 2020,” she said. The Chinese city of Wuhan, the capital of Hubei province, is the epicenter of the outbreak, and authorities have placed multiple cities in the province under partial or complete lockdown. Wuhan and the surrounding region of Hefei and Jiangsu are major manufacturing hubs that work with American firms. But they have also been shut down due to the virus outbreak. “As an investor, you need to understand … where the supply chain starts and ends and factor in to your expectations … for those companies,” Saccocia said, though she acknowledged that it’s “a little early” to “paint the picture that half of the year is going to be meaningfully lower from a growth standpoint due to this virus.” For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://www.cnbc.com/pro/?__source=yo… » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide. Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC #CNBC #CNBC TV

Stock Markets Failed To Rally On China Trade Deal, Here’s Why

marketingscoopsLeave a Comment on Stock Markets Failed To Rally On China Trade Deal, Here’s Why

Topline: Although the U.S. and China have finally agreed on an initial deal that’s expected to defuse the 19-month-long trade war and result in a rollback of both existing and scheduled tariffs, the stock market didn’t surge on the news. Instead, markets ended the day largely flat: The S&P 500 finished the day up by less than 0.008%, while the Dow Jones Industrial Average rose 0.012%.

Here’s why stocks didn’t make headway on Friday’s trade news, according to market experts:

  • The market may have already priced in expectations for an agreement prior to Friday: “Stocks already ran up 7% in just the past two months alone on the belief that a deal would be signed,” notes Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.
  • Some experts remain wary: “The devil remains in the details,” points out Bankrate senior economic analyst Mark Hamrick. “We await further word on purported aspects of the agreement including purchases of U.S. farm goods, intellectual property protections, technology transfers and access to China’s financial sector.”
  • “Investors are right to be skeptical,” says Joseph Brusuelas, RSM chief economist. “There’s a limited framework to the deal, since both sides just wanted to agree and avoid the looming tariff deadline on December 15th.”
  • “Contrary to what many believed—and were told in news stories—there is no immediate tariff relief, just an agreement to eventually rollback tariffs later as phase two negotiations progress,” Zaccarelli points out.
  • “I’m still suspicious of a major rollback on existing tariffs,” Nicholas Sargen, economic consultant at Fort Washington Investment Advisors, similarly argues. “Don’t rule out a selective rollback, since Trump needs to maintain bargaining power—he has to keep his powder dry.”
                                   
                                   

Crucial quote: “Is this deal enough to give the US economy an added lift? I doubt it because to get that added lift we need businesses to ramp up capital spending—and they’re going to stay on the sidelines until there’s greater clarity and less uncertainty,” Sargen says. “If trade uncertainty was behind us, we’d have gotten a bigger pop in the market.”

What to watch for: “Both sides need to figure out translation and legal framework first—and if they don’t come to an agreement on that this deal could fall apart very quickly,” Brusuelas says. “We’ll have to see if it survives the weekend and into next week.”

Key background: Officials from both sides have been working tirelessly to hammer out a deal ahead of the looming December 15 tariff deadline. Reports came in on Thursday that negotiators had agreed to terms, and President Trump signed off on them later in the day. Wall Street cheered the good news, sending the stock market to new record highs, though the market’s reaction was notably more tempered on Friday, despite further confirmations that an agreement had been reached.

Follow me on Twitter or LinkedIn. Send me a secure tip.

Sergei Klebnikov

I am a New York—based reporter for Forbes, covering breaking news—with a focus on financial topics. Previously, I’ve reported at Money Magazine, The Villager NYC, and The East Hampton Star. I graduated from the University of St Andrews in 2018, majoring in International Relations and Modern History. Follow me on Twitter @skleb1234 or email me at sklebnikov@forbes.com

Source: Stock Markets Failed To Rally On China Trade Deal, Here’s Why

105K subscribers
Hodges Funds’ Eric Marshall discusses opportunities in the stock market amid the US-China trade war with L Catterton Managing Partner Michael J. Farello and Yahoo Finance’s Adam Shapiro, Scott Gamm and Julie Hyman. Subscribe to Yahoo Finance: https://yhoo.it/2fGu5Bb About Yahoo Finance: At Yahoo Finance, you get free stock quotes, up-to-date news, portfolio management resources, international market data, social interaction and mortgage rates that help you manage your financial life. Connect with Yahoo Finance: Get the latest news: https://yhoo.it/2fGu5Bb Find Yahoo Finance on Facebook: http://bit.ly/2A9u5Zq Follow Yahoo Finance on Twitter: http://bit.ly/2LMgloP Follow Yahoo Finance on Instagram: http://bit.ly/2LOpNYz

Category

News & Politics

China’s Richest 2019: King Of Beverages Zong Qinghou Aims To Revitalize Wahaha

marketingscoopsLeave a Comment on China’s Richest 2019: King Of Beverages Zong Qinghou Aims To Revitalize Wahaha

When Zong Qinghou travels abroad, he likes to visit local supermarkets. The 74-year-old founder of China’s largest privately held beverage company Hangzhou Wahaha Group isn’t shopping for himself, but doing a little firsthand market research. For example, when Zong visited Singapore in October, he bought boxes of fruit-flavored beer. Staff back in China then study these samples to see if they could be imported into China, or adapted to local tastes.

“Every new product can be used as a reference,” says Zong in an exclusive interview with Forbes Asia on the sidelines of the Forbes Global CEO conference last month in Singapore. Zong, who is chairman of Wahaha, is now under pressure to come up with fresh product ideas to rekindle consumer interest in his company, that he’s spent more than three decades running.

Today In: Asia

uncaptioned

The tycoon, who was China’s richest man in 2010, 2012 and 2013, saw Wahaha’s sales slide from 78 billion yuan ($11 billion) in 2013 to 46 billion yuan in 2017 before rebounding slightly to 47 billion yuan last year. His ownership of the company still gives him a fortune of $8.2 billion, but he is no longer No. 1, ranking instead as China’s 31st richest person.

One of the main reasons for the decline, say analysts, is that Wahaha hasn’t kept pace with changing consumer tastes in China. Unlike their parents’ generation who grew up drinking Wahaha’s cheap but tasty products such as bottled water and milk drinks costing less than 2 yuan, shoppers today want to spend more for something innovative and new. “Wahaha is still very price-focused, and hasn’t captured the trading-up trend as well as it could have,” says Mark Tanner, founder of Shanghai-based consultancy China Skinny.

A Chinese worker checks bottles of Wahaha purified water on the assembly line at a factory in... [+] Yichang city, central China's Hubei province.

Aly Song/Reuters/Newscom

Zong is unfazed. He vows to lift sales by at least 50% next year, to 70 billion yuan. While he concedes that Wahaha’s products was once perceived as cheap and old-fashioned, he says he’s working to modernize his products. The company, whose name is meant to mimic the sound of a child’s laugh, has recently started a major upgrade. Packaging has gotten a makeover to use brighter and more stylish colors, while ingredients like nuts and quinoa have been added to new yogurt lines to appeal to healthier lifestyles. Wahaha has also expanded into nutritional tablets and meal replacement biscuits, which Zong says are in line with dieting trends. He also plans to increase the current number of 6,000 distributors to 10,000 by year end, to ensure better distribution to every corner of China.

Yet perhaps the most notable change is Zong’s willingness to experiment with social media and e-commerce. In 2014, he famously pronounced at a conference that e-commerce was disrupting China’s “real economy.” The company as a result did not have much of an online presence, even as e-commerce exploded across China. “I don’t think traditional sales channels will change much,” Zong says. “People need to enjoy life, and to enjoy life, they need to go outside instead of staying at home hooked on their smartphones.”

Zong, in fact, still expects most sales to take place in traditional brick-and-mortar stores. That said, Wahaha has started to experiment with digital marketing for its products. A series of videos on the popular app TikTok app shows users posting 15-second clips of themselves pronouncing Wahaha in various humorous ways. The clips have been viewed almost one million times.

Some analysts hope Wahaha can do more of such efforts. Jason Yu, a Shanghai-based general manager at research firm Kantar Worldpanel says, “It is very hard to get consumer attention today, and if you want to do that, you have to engage and interact with them nonstop.”

For example, Wahaha’s competitor in bottled water, Nongfu Spring, has gained market share in part because of innovative advertising. One was a campaign where each bottle of Nongfu Spring water gave the buyer the right to cast one vote online for their favorite candidate in a popular TV talent competition show. Nongfu Spring was number one in China’s bottled water market in 2018, with an 11% share versus Wahaha’s 4% share, according to Euromonitor.

Zong’s ambitions, however, reach beyond China. He wants to start producing and selling Wahaha-branded yogurt and milk beverages overseas, after noticing that some Wahaha products are being exported by third-party traders. In the last few years, Zong has visited Southeast Asia, and identified Indonesia and Vietnam as two locations for factories to produce for local markets. Zong says, however, he wants to find the right local partner first before he moves forward with any overseas expansion.

China, he says, will always be Wahaha’s biggest market. Consumption will continue to grow, he says, as the middle class expands and spends on everything from education to travel. “If we can firmly establish ourselves in this market of 1.4 billion people, we can grow very big,” he says.

Don’t discount Zong. He has overcome many challenges in his long career. The entrepreneur didn’t venture into business until 1987, when he was already in his 40s. He started by selling snacks out of a canteen inside a local school in his native Hangzhou, then start producing and distributing milk. In 1988, Zong launched a nutritional drink for children, which became a national hit. Three years later, he acquired a state-owned factory, with sales reaching 400 million yuan the following year.

One of his biggest challenges was a tumultuous partnership started in 1996 with France’s food and beverage giant Danone. After initial success, the two had a falling out, and Zong eventually agreed in 2009 to buy out Danone’s 51% stake in their various ventures for an undisclosed price, although one media outlet put it at roughly $380 million. “Only cooperation based on mutual benefits and mutual respect can last,” he says of the former partnership.

Then in September 2013, he faced another challenge when he was attacked by a knife-wielding man, disgruntled after Zong turned him down for a job. The attacker managed to cut the tendons and muscle on two of Zong’s fingers, but he was back at work just a few days later.

Another big challenge is succession. Zong’s management style is famously budget-conscious and detail-oriented. He often eats at the company canteen with staff, and is known to fly economy class. He personally approves the purchase of all new company cars.

Naturally, Zong has long been looking at his only child, daughter Kelly Zong, to replace him. She’s had plenty of experience, working at Wahaha since 2004. Now 37, the younger Zong has also tried her hand at entrepreneurship, launching a juice brand, KellyOne, three years ago. In 2017, she attempted to acquire the Hong Kong-listed candy firm China Candy, but was unable to acquire 50% of the company’s voting rights. Kelly said in a social media post at the time that the unsuccessful bid had been a “positive and constructive exploration.”

Kelly Zong Fuli, daughter of Wahaha Groups Chairman Zong Qinghou.

Imagine China/Newscom

Zong says he will hand over the reins to Kelly if she wants them. If not, he will groom professional management. “A lot of young people have studied abroad and have a broader vision, and they may not want to manage their parent’s business,” he says. “My daughter is overseeing some factories. Does she want to take on more? That I don’t know.” His move to do digital marketing, led by younger talent, was seen as a positive step towards a new generation having a greater role in the company.

Zong says there is still time to find good professional managers if Kelly wants to follow her own path. He says Wahaha is considering several for future leadership, without going into detail. He is also not ruling out an IPO, a move that would be a major move for the company down the path of diversifying management.

Whatever path he takes, Zong is clearly thinking about laying the foundations of sustainable success for Wahaha.

This story is part of Forbes’ coverage of China’s Richest 2019. See the full list here

Yue Wang

I am a Beijing-based writer covering China’s technology sector. I contribute to Forbes, and previously I freelanced for SCMP and Nikkei. Prior to Beijing, I spent six months as an intern at TIME magazine’s Hong Kong office. I am a graduate of the Medill School of Journalism, Northwestern University. Email: ywywyuewang@gmail.com Twitter: @yueyueyuewang

Source: China’s Richest 2019: King Of Beverages Zong Qinghou Aims To Revitalize Wahaha

994K subscribers
Zong Qinghou is the founder and chairman of Hangzhou Wahaha Group which is the leading beverage company in China. Zong was listed as China’s richest man in 2012. As an NPC deputy, Zong has submitted one motion and 12 suggestions this year. He said deputies have the responsibility to represent the ordinary people. CCTVNEWS reporter Su Yuting spoke with Zong to hear his opinion on China’s economic development. Subscribe us on Youtube: https://www.youtube.com/user/CCTVNEWS… Download for IOS: https://itunes.apple.com/us/app/cctvn… Download for Android: https://play.google.com/store/apps/de… Follow us on: Facebook: https://www.facebook.com/cctvnewschina Twitter: https://twitter.com/CCTVNEWS Google+: https://plus.google.com/+CCTVNEWSbeijing Tumblr: http://cctvnews.tumblr.com/ Weibo: http://weibo.com/cctvnewsbeijing

Category

News & Politics

%d bloggers like this:
Skip to toolbar