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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.”

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

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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.

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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

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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

With Currency Manipulator Label, China Trade War Moves Into Unchartered Waters

Last week’s announcement by Trump of more tariffs coming for everything shipped to the U.S. from China and Monday’s move by Beijing to allow for a weaker yuan begins Act III in the trade war.

Here’s the plot twist:

Treasury just hit China with currency manipulator status after market hours on Monday. It came at a time when nothing was trading. Investors were stuck in the Twilight Zone. Tuesday morning is going to be a madhouse rush for “sell China” orders by the algos. Wait for it.

As one hedge fund manager told me, “we’ve just thrown gasoline on the fire.”

Currency manipulator status gives Beijing less wiggle room because if they weaken the yuan to make up for tariffs, tariffs will likely go up to compensate.

We are in unchartered waters. At risk is what amounts to sanctions on key U.S. commodities like soybeans and pork by the Chinese government, and political risk involving Hong Kong as civil unrest continues there, putting its special trade status in the crosshairs of a China-bashing American Congress.

President Trump told reporters last week that he figured China would depreciate the yuan in response to his plan to hike tariffs to 10% on the remaining balance of China imports by Sept 1.

In isolation, a 10% tariff on $300 billion in combination with a 10% yuan depreciation would be functionally equivalent to Chinese households writing a check for $30 billion to the U.S. Treasury. “Trump may not have gotten Mexico to pay for its border wall, but he is getting China to pay (the government) for its tariff wall,” says China bear Brian McCarthy, chief strategist for Macrolens, a big picture investment research firm.

Currency manipulator status makes the trade war worse for China.

Meaningful and enduring negative feedback about China will lead to extreme financial market volatility in Asia, especially in China’s mainland equity market where a gambler’s approach to trading by the dominant retailer investor class there might cash out. And why not? China’s mainland stock indexes are up over 20% this year and this may be seen as the time to take money off the table.

Short sellers shouldn’t discount the possibility of the People’s Bank of China pumping money into the A-shares this week.

It’s too early to start expecting widespread defaults on China’s corporate dollar-denominated debt (which some firms estimate to be around $800 billion). A default would deal a harsh blow to foreign investors who have been big buyers of Chinese bonds as that market opens up and joins the major indexes.

The transmission mechanism from yuan devaluation to global securities is expressed more obviously through Europe and other emerging markets, especially those heavily linked to China — such as South Korea and Brazil. Both currencies had an ugly looking chart on Monday.

Meanwhile, the Fed can potentially isolate the U.S. economy from any economic fallout by cutting rates. Though this opens up a whole other can of worms, namely rates sinking to zero in the event of a recession.

The yuan settled at 7.05 to the dollar today after the central bank set the daily rate at just over 6.9 to the dollar. The currency is allowed to trade within 4% of that daily fixed rate. The yuan is now at its weakest level in over 10 years.

“These moves represent a significant escalation in the trade war,” says Joseph Brusuelas, chief economist for RSM, a global financial advisory firm.

“There is a specific logic and order of operations with respect to the tit-for tat retaliation likely to play out that will not result in longer-term inflation, but will instead create conditions for deflation and negative nominal interest rates along the U.S. maturity spectrum if a longer-term trade compromise cannot be reached,” he says.

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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: With Currency Manipulator Label, China Trade War Moves Into Unchartered Waters

How China Could Ruin 2019 For Apple, Tesla, Boeing

Image result for china economy ruins america

It was 27 years ago when Deng Xiaoping observed that “Saudi Arabia has oil; China has rare earths.”

Talk about a prescient observation. In the early 1990s, China’s then-supreme leader had zero inkling of the iPhones, Tesla cars, drones, robots and high-tech fighter jets yet to come. Yet China’s dominance over these vital inputs is more relevant than ever as the trade war intensifies.

There is a pervasive view that President Xi Jinping’s government has less leverage over Donald Trump’s. Why, then, is Xi the one walking away from a truce? With Trump increasingly desperate for a win, any win, on the global stage, China could get off cheap.

Xi’s team could be misreading the moment. Or putting testosterone ahead of geopolitical peace. A more interesting reading: Beijing reckons it has more cards to play in this game than investors recognized.

In May, Xi made a pointedly-timed visit to a rare earth facility. Though not quite Saudi oil, China’s massive store of elements vital to myriad tech products gives Beijing considerable leverage over Silicon Valley.

It’s but one example of how China may have Trump over a barrel. What other cards are up Xi’s sleeve?

Louis Gave of Gavekal Research just put out one of the more intriguing lists of possibilities. On it: banning rare-earth exports; making life “impossible” for U.S. executives operating in China; devaluing the currency; dumping huge blocks of U.S. Treasury securities; engineering a plunge in global energy prices; sharp drops in orders of goods across the board.

There are a couple of other options. One, dissuading mainland consumers from visiting America. Two, pull a Huawei Technologies on pivotal U.S. companies. This latter step could wreak immediate havoc with the Dow Jones Industrial Average.

Imagine the blow if Xi’s government suddenly closed off Boeing’s access to Asia’s biggest economy. Or if General Motors found its cars parked at Chinese customs. Halting Apple Inc.’s sales would send its own shockwaves through corporate America. Curbing Chinese imports of American soybeans would do the same in agricultural circles.

So far, China has kept retaliatory moves to a minimum. Xi seems to be rolling the dice that Trump will get distracted or impatient and move on to another target—like Japan. His calculation also seems aimed at 2020. Why give away the store to Trump when Americans might elect a less erratic leader?

Weaponizing rate-earths minerals might be Xi’s first real shot across Corporate America’s bow. The U.S. has other sources, of course. If U.S. deposits don’t suffice, companies could turn to Australia, Myanmar, India, Brazil or Thailand. And Trump seems tight enough with Vladimir Putin to score some stock from Russia. But the supply chain disruptions would surely have top CEOs — who tend to be big campaign donors — calling Trump to register their dismay.

It could backfire, too. In 2019, Beijing deprived Tokyo of rare-earth metals and China’s market share has never been the same since. “Unfortunately,” Gave says, “this would give China a ‘feel-good’ boost, but be as productive as landing a mild blow on Mike Tyson’s nose. Such an export ban would undermine China’s long-term production capacity, for the simple reason that rare earths are not that rare.”

The dumping-dollar-debt option could be especially dangerous. Just like an “uncontrolled currency depreciation,” says Michael Hirson of Eurasia Group, selling huge blocks of U.S. Treasuries would “threaten blowback to China’s economy.”

Any surge in bond yields could devastate the American consumer. The shockwaves would quickly zoom from Wall Street to Shanghai. Xi might be hinting at such a move, though, as Beijing buys fewer and fewer Treasuries. At present, China has more than $1.1 trillion of U.S. government securities. Xi seems to think that’s more than enough.

Even so, markets may live in semi-constant fear of a massive bond route bearing Chinese fingerprints. Or any number of ways in which China would ratchet up tensions with Trump and vice versa.

“The path to a potential de-escalating deal is fraught with challenges as both sides dig in, and how markets react will likely help determine the outcome of talks,” say analysts at Fitch Ratings. “Over the longer term, we maintain our long-held view that protectionist trade policy led by the US is likely to persist in the years ahead, marked by cycles of escalation and de-escalation.”

Roughly a week after Xi’s rare-earths pilgrimage, he visited Jiangxi Province, the starting point of Mao Zedong-era 1934-1936 “Long March.” There, Xi called for a new one as Trump’s America does its worst to halt China’s march to the top of the economic rankings.

That hardly sounds like a Chinese leader who’s going to cave to Trump. More like one who’s in this trade battle for the long haul.

Chinese President Xi Jinping visits a memorial hall marking the departure of the Long March by the Central Red Army in Yudu County, Ganzhou City, during an inspection tour of east China's Jiangxi Province.

Chinese President Xi Jinping visits a memorial hall marking the departure of the Long March by the Central Red Army in Yudu County, Ganzhou City, during an inspection tour of east China’s Jiangxi Province.

Xinhua/Xie Huanchi

I am a Tokyo-based journalist, former columnist for Barron’s and Bloomberg and author of “Japanization: What the World Can Learn from Japan’s Lost Decades.”

Source: How China Could Ruin 2019 For Apple, Tesla, Boeing

Scary! Rising US-China Trade War Tensions Could Take 10% Off the S&P

Global markets continue to digest the impact of President Donald Trump’s Sunday evening tweetstorm. Meanwhile, analysts from some of the world’s biggest investment banks including UBS and Bank of America Merrill Lynch have detailed their forecasts for what a full-on trade war between the U.S. and China would look should the worst happen.

Among the many hair-raising projections is the prospect of the S&P 500 entering a correction by losing 10% of its value, which would almost certainly trigger a long-feared recession. That particular forecast was made by UBS analyst Keith Parker, according to CNBC. Parker specified that key European and American cyclical markets would bear the brunt of the declines.

S&P 500

| Source: Yahoo Finance

“FASTEN YOUR SEATBELT AND DON’T HOLD YOUR BREATH”

There is an old saying that when two elephants fight, it is the grass that suffers. In this case, both elephants will also sustain a significant amount of damage if Parker’s projections hold true. He predicts that a full-scale trade conflict between the world’s two biggest economies will see China shed anything from 1.2% to 1.5% of its GDP, which is equivalent to a drop of between $132 billion and $165 billion.

If China responds to Donald Trump’s threatened 25% tariff with a tariff increment of its own from 7% to 15% on approximately $60 billion worth of American imports, this could see the U.S. shed 0.1% of its GDP, or about $14 billion. In the ensuing scenario, Bank of America projects that China may hike tariffs on U.S.-made vehicles and reduce its soybean imports from the U.S. Meanwhile, Chinese imports of American soybeans have already fallen off a cliffsince 2017, dropping roughly 98% last year as China looks toward less antagonistic partners like Brazil.

According to a Bank of America report also cited by CNBC:

“Fasten your seatbelt and don’t hold your breath. The latest escalation of the trade war was completely unexpected, despite the strength of the economy and the markets. This is evident from the immediate negative reaction of U.S. equity futures to the news.”

As the two elephants knock heads, the amount they are erasing from each other’s economies is equivalent to the GDP of mid-sized nations. European and Asian economies will also feel some pain, according to UBS.

IS TRUMP BLUFFING?

According to the White House, the new 25% tariff regime that could potentially kick off this entire sequence of events will come into effect just after midnight on Friday. Expectedly, markets have been in virtual freefall since Monday, with the NASDAQ and S&P 500 both shedding close to 1% on Monday alone. The miserable market conditions continued through Tuesday, with little sign of respite as investors react with horror at the thought of a damaging 20th-century-style trade conflict between economic superpowers.

Dow

The Dow Jones Industrial Average continues to trend downward following Sunday evening’s shock announcement. | Source: Yahoo Finance

Not everyone believes that the panic is warranted, however. JPMorgan CEO Jamie Dimon, for example, believes that the shock announcement by Trump was nothing more than a way of cornering a formidable opponent and forcing them to negotiate. Speaking to CNN Money’s Poppy Harlow, Dimon stated that regardless of the market’s reaction, Trump will count it as a win because it has become the only successful way of getting the Chinese to the negotiating table on his terms.

Whether this is a considered masterstroke of strategy or simply a typical Trump action, it certainly appears to have done the trick. Chinese Vice Vice Premier Liu He will be part of a trade delegation to the U.S. later in the week, which at the very least is a sign that China is willing to give ground so as to avoid a damaging trade war.

Source: Scary! Rising US-China Trade War Tensions Could Take 10% Off the S&P

Rakuten Taps Chinese Blockchain Firm for $60 Billion Authenticity Market

In 2008, at least 54,000 Chinese babies suffered after ingesting formula that had been contaminated. Demand for safe products has grown year over year, every year, since then. Companies like blockchain-centric Techrock have capitalized on this market by finding unique solutions to the authenticity problem. Techrock uses the blockchain to track every step of a product’s lifecycle and rewards consumers for verifying it through their mobile phones.

Chinese Consumers Increasingly Willing to Pay a Premium for Authentic Imported Food

In China, it is reportedly difficult to get authentic products. Some researchers have found that more than 90% of the food sold in China is faked in one way or another.

For non-food products, this isn’t such a big deal; but there are some markets where it’s life and death – such as baby formula and other food products, which can have deadly side effects. According to Techrock, which spoke to CCN about their recent partnership with Rakuten, the situation has created a market for authentic goods as large as $60 billion per year.

Techrock uses blockchain technology in two aspects of its business. On the one hand, it offers a loyalty program for customers who use the service to purchase authentic products. On the other, it creates a permanent record of a product’s authenticity.

From Supply Chain to Reward Points, Blockchain’s Role

Every product in Techrock’s store has a digital representation on the blockchain. The company has developed a reputation for delivering high-quality, authentic goods, and it’s applying the same process to its Rakuten “zone.”

Their target market is less about authentic shoes or electronics and more about health supplements and other things which people prefer not to risk. The loyalty program helps them retain customers, and using the blockchain for it, the points have no expiration date. A side effect of Techrock’s Tael loyalty program is that it introduces many people to blockchain for the first time.

Techrock recently entered a partnership with Japanese retail giant Rakuten to get authentic Japanese goods to customers. Rakuten has long had an interest in blockchain companies, but it only touches the technology in a tertiary way here.

Rakuten is looking to expand its reach in China, where it is far from the leading retailer. By contrast, Alibaba is the boss in China – but Alibaba’s eBay-style product suffers a lot of knock-off problems that the rest of the Chinese market does.

Growing Year-Over-Year

Built on Hyperledger, Techrock’s labeling technology ensures that products are real. The customer can verify this with an app on their phone, and once they do so, they earn their reward points at the same time. The rewards can be used to purchase more goods in the store, which encourages customers to keep using Techrock.

Techrock’s partnership with Rakuten means that Chinese customers don’t have to worry about fakes, and they have streamlined access to authentic, safe products. Techrock Co-Founder Alexander Busarov told CCN:

“We already sell in over 220 or 230 cities where our consumers are located. It’s all sent by the local dealer companies. We think our business will grow as the demand grows.”

China is reportedly the largest market for both food and firms that verify the safety of food. Consumers have been driven online as they continually lose trust in local vendors. Regulations and other issues make it such that local companies, like Techrock, will ultimately supply the demand.

Techrock’s partnership with Rakuten is notable because they’re the third to secure such a partnership – JD.com being one of the first – and they are built entirely on blockchain.

Source: Rakuten Taps Chinese Blockchain Firm for $60 Billion Authenticity Market

Better Off in a Cave: Chinese Count Costs of Apartments In Anti-Poverty Campaign


May 11, 2018

By Joseph Campbell

LIN COUNTY, China (Reuters) – Seventy-year-old Chinese farmer Guo Jiaming has lived most of her life in a cave, shunning modernity for a home carved into a mountainside that keeps her cool in summer and warm in winter.

“A cave is convenient and it’s warmer,” said Guo, explaining why she preferred her home to alternatives such as a high-rise city apartment, despite the cold winters of China’s northern province of Shanxi.

“An apartment building is only heated when the central heating is turned on,” she said.

“Old people like me can’t stand this cold during the winter,” Guo added, pointing to a wood-burning heater that warms her cave and the bricks under her bed.

Local authorities want Guo and other cave-dwellers to swap their homes for apartments in a nationwide campaign to relocate 2.8 million people to new homes this year.

The drive is part of efforts to eliminate extreme poverty by the end of 2020 in China, where about 30 million people live on less than a dollar a day.

The relocations are voluntary, say residents of Lin county, but Guo sees no reason to abandon her cave house.

A form of shelter known as “yaodong” that dates back thousands of years, cave houses, which typically have several small rooms with earthen walls, are common in China’s hilly north, where they are carved out of slopes and cliffs.

“IT’S TERRIBLE”

Nationally, authorities say the relocations are going well.

“Our work has been proceeding smoothly,” Liu Yongfu, an official handling poverty alleviation and development efforts, told a news conference in Beijing in March. “The common folk are very supportive.”But authorities in Lin county declined to comment on their relocation plans when contacted by Reuters.

Cave dwellers who have moved say they regret shifting, because they found bare concrete walls with no plumbing or electricity in their new blocks, instead of the finished units they had been promised, including furniture and television sets.

Zhao Yugui, a 54-year-old farmer assigned to a family-sized apartment, said he now lived 10 km (6.2 miles) from his fields.

“I can only ride a motorbike back to work in my fields and take care of old people and my wife,” Zhao said, showing a visitor round his flat, where wires protruded from bare concrete.

Hua Xiaomo, 50, recently moved into a nine-storey building in a different neighborhood.

“It’s terrible,” she said, adding that when she lived in a cave, she never had to walk upstairs.

“Sometimes it’s really inconvenient. The lights aren’t bright either. It’s dark,” she said, describing the area around her apartment block.

The cost of living in the city also chafes elderly farmers, who earn a meager 500 to 800 yuan ($80 to $126) a year. They say the government should provide an allowance.

“Those who leave need to have money. Where does that money come from?” asked 68-year-old Li Congdai.

(Writing by Elias Glenn; Editing by Darren Schuettler and Clarence Fernandez)

Vía One America News Network https://ift.tt/2KQML1c

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