COVID-19 Cases: The Pandemic’s Future Hangs In Suspense

An illustration of coronavirus cases and hospitalizations overlaid on a photograph of a medical professional looking out a window.

COVID-19 cases dropped about 5 percent this week, while testing rose 12 percent as backlogs in reported tests—always a little slower to recover than reported cases—rolled in following disruptive mid-February storms. The number of people hospitalized with COVID-19 dropped almost 16 percent week over week, making this the seventh straight week of sharp declines in hospitalizations. States and territories reported 12,927 deaths this week, including a substantial backlog from the Commonwealth of Virginia.

4 bar charts showing weekly COVID-19 metrics for the US. Cases fell nearly 5% this week while testing was up over 12%. Deaths continued to drop week over week.

The decline in cases has been a point of confusion in the past week, as daily reports briefly jogged up after a large drop following the long Presidents’ Day weekend and disruptive winter storms in mid-February. A look at percentage change in reported cases since November 1 helps illustrate the dips and rises in reported cases seen around Thanksgiving, Christmas, New Year’s Day, and—more recently—the winter storms in mid-February. (On November 8, California did not report data in time to be included in our daily compilation.) Cases may plateau or rise at any point, and a close watch of the numbers is essential as vaccinations roll out alongside the spread of SARS-CoV-2 variants. But we would urge data watchers to be wary of conflating reporting artifacts with real changes in the state of the pandemic.

Bar chart from Nov 1, 2020 - Mar 3, 2021 showing the daily percent change in the 7-day cases average. The 7-day avg rose for a few days a week ago, but this was likely due to storm reporting impacts.

Although it seems unlikely, based on current figures, that a new surge is showing up in the case numbers, it is quite possible that case declines are beginning to slow. With reported tests up 12 percent this week—likely also because of a storm-related dip and rise—it’s impossible to be certain whether the case decline is slowing because of an increase in testing, or because disease prevalence itself is declining, albeit more slowly. We can look to other metrics, however, to help us interpret the past two weeks of case numbers.

One way to confirm that a change in reported cases—especially one preceded by a disruptive event like a holiday or a major storm—reflects reality is to look at new hospital admissions. This metric, which is available in the federal hospitalization data set, has tracked very closely with cases since the hospitalization data set stabilized last fall, but has not shown the same vulnerability to reporting disruptions produced by holidays or severe weather. Charting federal case data against new-admissions data shows that the decline in new admissions continues, though slightly more slowly than the decline in cases.

Two line charts showing federal COVID-19 data: 7-day average cases over time and 7-day average hospital admissions over time. Admissions are dropping in recent days while cases hit a small plateau due to reporting artifacts.

This signal helps confirm that the brief rise in daily reported cases in the past week was very unlikely to signal a new surge in cases—though, again, cases may not be dropping as quickly as they were in late January and early February. It’s nevertheless important to note that cases remain extremely high, and have only this week dipped below the peak of the summer’s case surge. (Though we’re almost certainly detecting a larger percentage of cases now than we were in the summer, as our testing capacity in the U.S. has increased.) The sustained decline in cases and hospitalizations is very encouraging, but with multiple variants of SARS-CoV-2 gaining footholds in U.S. cities, it remains vitally important to further reduce the virus’s spread via masking, social distancing, and avoiding indoor gatherings.

Although it may seem that the decline in hospitalizations is slowing down in recent weeks, the percentage decrease remains robust.

Bar chart showing daily percent change in the total number of patients currently hospitalized with COVID-19 in the US. This figure has been falling by a consistent percentage in recent weeks (around 2.4 percent)

Reported COVID-19 deaths, too, continue to decline. The particularly sharp drop in the week beginning February 11, which included Presidents’ Day and the beginning of the winter storms that affected data reporting in many states, was balanced by a smaller drop in the week of February 18. This week, deaths dropped by an encouraging 11 percent.

2 bar charts one on top of the other - the first showing the percentage change in weekly COVID-19 deaths in the US, the second showing just those weekly deaths. Deaths fell 11% from last week

It’s important to note that many states have recently added large numbers of COVID-19 deaths from previous months to their totals. In Virginia, cases and hospitalizations have been dropping for weeks, but after reporting fewer than 100 deaths a day for the entirety of the pandemic up to this week, the Commonwealth is now reporting hundreds of deaths every day—most of which occurred in December and January.

4 daily bar charts with 7-day lines overlaid showing key COVID-19 metrics for Virginia since the beginning of 2021. Deaths have spiked drastically in recent days - however, these deaths are reconciled from older dates and do not reflect the true state of COVID-19 fatalities in VA at the moment.

The addition of these backlogged deaths—like the 4,000 deaths from previous months recently reported by Ohio—obscures the reality of rapidly declining recent deaths. It also underlines the fact that deaths at the peak of the winter surge were actually much higher than the already-devastating numbers reported in December and January.

For the week ending February 25, COVID-19 deaths in long-term-care facilities have continued to decline as a share of all COVID-19 deaths in the U.S. (As we did in last week’s analysis, we have excluded from this chart all data for four states—Indiana, Missouri, New York, and Ohio—that recently added large numbers of undated deaths from previous months to their totals. The addition of these historical death figures to recent weeks made it impossible to follow recent trends at the national level without this exclusion.)

Bar chart showing the share of weekly COVID-19 deaths occurring in LTC facilities. The percentage is down to 13% in the most recent week after being over 30% for months.

It’s our final week of compiling and interpreting data here at the COVID Tracking Project, and we’ve spent much of the past few weeks explaining how to use data from the federal government in place of our patchwork data set. We’ve packaged up everything we’ve learned about federal case numbers, death numbers, hospitalization data, and testing data, as well as long-term-care-facility data. For more casual data users, we’ve also written a short primer on how to find easy-to-use charts and metrics from the CDC. It’s even possible to replicate three-quarters of our daily four-up top-line chart using data from the CDC, although the data are one day behind the state-reported data we compile.

4 charts showing key COVID-19 metrics over time from the CDC: Cases, Hospitalized, Hospital Admissions, and Deaths. All 4 charts show a declining trend.

In this version, new hospital admissions are included instead of tests—test data are available from the federal government, but are not in a date-of-report arrangement that matches the other top-line metrics. (We’ll be publishing a separate post showing how to produce this visual within the next few days.)

Long-term-care data wrap-up: Tonight marks our final compilation of data at the Long-Term-Care COVID Tracker, and we’ve just published a look at the subset of long-term-care-facility data available in the Centers for Medicare and Medicaid Services Nursing Home data set. This federal data set includes only nursing homes and accounts for about 27 percent of all COVID-19 deaths in the U.S. to date. The long-term-care data set we stitched together from state reports, by contrast, includes assisted-living facilities where states report them, and accounts for at least 35 percent of all U.S. COVID-19 deaths.

Race and ethnicity data wrap-up: For 11 months, we have shown that the COVID-19 race and ethnicity data published by U.S. states are patchy and incomplete—and that they nevertheless have indicated major inequities in the pandemic’s effects. Both of these things are true of the demographic data available from the CDC: Many data are missing, and what data are reported show ongoing disparities. Our introduction to the federal data will be posted later this week, and we’ll be publishing deeper analyses in the coming weeks.

As we wind down our compilation efforts, the United States is at a crucial moment in the pandemic: Decisive action now is our best chance at preventing a fourth surge in cases and outpacing the variants, which may be more transmissible than the original virus according to preliminary (preprint) data. Over the weekend, the FDA issued a third Emergency Use Authorization for a COVID-19 vaccine, this time for Janssen/Johnson & Johnson’s adenovirus vector vaccine, which showed impressive safety and efficacy results in its global clinical trials. The Biden administration announced Tuesday that the U.S. should have enough COVID-19 vaccine doses for every adult by the end of May—a dramatic acceleration from previous timelines.

Meanwhile, concerns over an uptick in variant cases are growing in Florida after researchers noted that 25 percent of analyzed samples from Miami-Dade County’s Jackson Health public hospital were cases of B.1.1.7. Although partnerships between the CDC and other labs have increased the number of specimens sequenced from about 750 a week in January to 7,000–10,000 a week in late February, this still allows for the sequencing of less than 3 percent of all cases in the United States.

Bar chart with genomic sequencing volume from the CDC. Sequenced specimens peaked at 7,000-10,000 per week in February
Genomic sequencing volume chart from the CDC

New York City has promised to quadruple the number of samples it sequences during the month of March, from 2,000 to 8,000 a week, which is more than the entire country’s labs sequenced in the week ending February 27.

Today’s weekly update is our 39th and last. We began writing them back in June 2020 as a way of offering a deeper interpretation of data points that was less jittery than those in the daily tweets. As we puzzled through the data and watched for indications of changing trends, we’ve tried to help people understand what has happened to us as the pandemic has ebbed and surged.

Although our data compilation will come to an end on Sunday, March 7, our work at the COVID Tracking Project will continue in other forms for another few months, as our teams complete their long-term analyses and wrap up documentation and archiving efforts. We’ll continue to post our work on the CTP site and link to it on Twitter until we finally close up shop in late spring.

Throughout the year that we’ve compiled this data, we’ve tried to explain not only what we think the data mean, but how we came to our conclusions—and how we tested and challenged our own analyses. We hope that one result of our doing this work in public is that our readers feel better prepared to do the same for themselves and their communities.

The federal government is now publishing more and better COVID-19 data than ever before. Some gaps remain, but far fewer than at any previous moment in the pandemic. To those of you who have relied on our work this year, thank you for your trust. We’ve tried very hard to deserve it, and we believe that we’re leaving you in good hands.


Mandy Brown, Artis Curiskis, Alice Goldfarb, Erin Kissane, Alexis C. Madrigal, Kara Oehler, Jessica Malaty Rivera, and Peter Walker contributed to this report.

The COVID Tracking Project is a volunteer organization launched from The Atlantic and dedicated to collecting and publishing the data required to understand the COVID-19 outbreak in the United States.

Source: COVID-19 Cases: The Pandemic’s Future Hangs in Suspense – The Atlantic

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With Russia’s Help, China Becomes Plastics Making Power In Pandemic

After giving up on recycling — American recycling that is — China is still in love with the plastics biz. In fact. their companies are becoming dominant in all things plastic, one of the most important supply chains in the world.

In other words, it will be yet another segment in global business that the world will need Chinese companies to get supply.

The pandemic has helped the petrochemicals industry make up for losses in oil and gas demand. Plastics are tied to the fossil fuels industry. Stay-at-home orders throughout the U.S. and Europe has led to more take-out food orders and a lot of that is being placed in plastic containers.

I’d like to highlight one thing though: China’s Sinopec is the behemoth in this space, and although you can buy into Sinopec on the U.S. stock market, if the incoming Biden Administration makes good on a Trump order to delist Chinese companies that are not compliant with the financial audit rules under the Sarbanes-Oxley Act of 2002, then Sinopec will probably leave the NYSE.

According to industry consultant Wood Mackenzie, petrochemicals will account for more than a third of global oil demand growth to 2030 and nearly half through 2050.

The growth in both plastics consumption and production is mostly coming from Asia where economies are catching up with the western levels of plastics consumption, and becoming a source for plastics exports to the U.S. and Europe.

Within Asia of course, China is the powerhouse. Last year Exxon Mobil XOM -4.8% began constructing its $10 billion petrochemical complex in Huizhou, China.

Russia Joins China, Wants To Be ‘Indispensible’

Russia’s petrochemical giant Sibur is also locked into China, mainly through a Sinopec partnership. The two companies began work on one of the world’s largest polymer plants for plastics making last August, spending $11 billion on the Amur Gas Chemical Complex in Russia.

The two sides are intimately connected in the global plastics biz.

“Amur is a milestone in the cooperation between Sinopec and Sibur,” Zhang Yuzhuo, chairman of Sinopec, says in a press statement, calling it a “model for Sino-Russian energy cooperation.”

The entire industry, while not exactly the sexy and green industry the Davos crowd is promoting heavily in the Western world, is seen by China and still-emerging markets like Russia — as a development tool for regions far away from the big city hubs of Moscow or Shanghai. This is as much about job creation as it is pumping out plastic molds and the ethylene needed to make it.

Russia recently introduced negative excise tax on LPG and ethane used in petrochemicals which was a meaty financial bone thrown to Sinopec and Sibur’s Amur project, among others in the Russian far east. 

The Sibur Russia angle has gained momentum recently due to the ramp up in production from the new ZapSib Siberian facility last year. They make polyethylene and 500 thousand tons of polypropylene there; all must-have ingredients for plastics manufacturers.

Their relationship with Chinese investors, buyers and counterparties was one of the main reasons to even build that manufacturing plant in the first place, and is something the Moscow market likes to give as one of the best reasons to be bullish about a rumored initial public offering for Sibur.

Sibur has said in press statements that they expect “another jump in scale” of plastics chemicals output with the addition of the Sinopec project, Amur.

“Sibur has long built relationships with Chinese clients, partners, and investors and Sinopec has been our strategic partner since 2013,” says Dmitry Konov, Chairman of the Management Board for Sibur. Konov told Reuters recently that there was no timeline for any IPO in the Moscow Exchange. Moscow was home to one of the top four largest IPOs last year, shipping firm Sovcomflot.

Konov said their logistical advantages in the far east, near China, and competitive pricing for its polymers means they will “scale up these relationships to further expand the delivery of high-quality petrochemicals from Siberia to China.”

VTB Capital, a Russian investment bank, says those projects would allow Russia to become one of the world’s top four producers of ethylene by 2030. Russia wants to position itself as the indispensable partner to China in this space, much in the way that China has positioned itself as the key source for numerous key inputs, whether its cobalt used in electric vehicle car batteries, or solar panels now expected to criss-cross the U.S. in the Biden Administration.

Due to the pandemic, China has been focused on industries of the future alongside those needed to get itself, and its trading partners, out of the pandemic rut — those polypropylene Olive Garden to go containers might not come from China, but the plastics that made it sure might.

China remains the place for growth in this space, too. Plastics-use patterns and penetration are rising. Figure the Asians are a good 10 to 20 years behind the U.S. in terms of plastics use. They’re gaining fast.

China As Plastics Demand Driver

Plastics aren’t made from tree bark, that’s for sure. It comes from fossil fuels and non-organic chemical compounds that make the stuff designed to last hundreds of years.

And China now accounts for roughly 40% of the demand for the chemicals used in making it, an increase of just 20% in 2005. 

China’s ethylene demand grew by 8.6% between 2014-17 while global demand grew by only half that. 

Looking out five years, Deutsche Bank industry analysts said in a November 25 report that China will account for over half of global consumption growth for ethylene (to which Sibur and Russia are happy as their go-to for now). 

China has 50% self-sufficiency in ethylene and derivative products – the domestic desire to expand capacities and increase self-sufficiency remains high. Russia is a solution. But Sinopec will invest domestically, as will the big Western multinationals who are frowned upon doing similar work back home. Exxon is case in point.

China was a relatively late entrant to the global petrochemical industry, but that does not mean much. They ramp up, and rev up fast due to state subsidies and state-owned companies’ ability to obtain raw materials and pass them along downstream for pennies on the dollar. These are loss leaders, but China doesn’t care about that stuff. They are looking to produce plastics for the locals, and for the export markets, especially U.S. and Europe, which are increasingly disinterested in anything fossil fuels related, at least on paper. 

In the 1990s, the Chinese petrochemical industry was significantly smaller than the U.S. In 1995, China’s ethylene capacity totaled 3% of global capacity. In comparison, Japan had 9% of global ethylene capacity and Korea had 5% of global capacity. Ethylene is naturally occurring.

During the 2000s, China’s petrochemical industry grew substantially driven by government support and strong demand from government-directed infrastructure spending, a burgeoning middle class with rising disposable incomes, expanding residential construction and exports of course.

Between 2004 and 2012, China’s ethylene capacity — the flammable gas used to make ethanol for cars, fruit ripeners, and — more importantly, plastics — doubled to 11 million tons per year. Within 25 years, China’s capacity has moved from 3% of global to 16% of global. Who thinks they’re going to slow that down? Need plastic? China will have it. For now, Russia has the chemicals. China might just gain on that next. Follow me on Twitter or LinkedIn

Kenneth Rapoza

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.

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China Stocks Face Increased Scrutiny After TAL Education And Luckin Coffee Reveal Inflated Sales

Staff wear protective masks at a Luckin Coffee shop

Chinese companies seeking financing in the U.S. are coming up against increased scrutiny after accounting scandals emerged from two high-profile firms, casting doubts over plans for new listings and other financing plans.

TAL Education, a New York-listed education firm run by Chinese billionaire Zhang Bangxin, revealed on Tuesday that an employee is suspected of conspiring with outside vendors to inflate sales. The news sent shares of TAL down almost 9% as of Thursday, wiping out $878 million from Zhang’s fortune.

TAL said the employee in question was taken into police custody, and the affected business unit, called Light Class, accounted for 3% to 4% of its annual revenue.

The announcement came less than a week after Luckin Coffee, a Xiamen-based chain that once positioned itself as a challenger to Starbucks, admitted that more than $300 million of last year’s sales had been fabricated. Analysts say the scandals will undermine investors’ confidence in Chinese firms, adding to the challenges of raising capital in an already difficult market.

“There is no denying that investors are now doubting Chinese companies, especially those touting high growth and new business models,” says Zhu Ning, deputy dean at Shanghai Advanced Institute of Finance at Shanghai Jiao Tong University.

Data provider Dealogic says there are currently 15 Chinese companies planning to each raise between $10 million to $125 million in the U.S.

Zhu says it’s likely that regulatory scrutiny will step up, and the new listings might not reach their desired valuations or attract much interest from institutional investors. He says the risk extends to all forms of financing including issuing debt, meaning companies will need to offer higher returns to appeal to potential lenders.

Luckin’s market cap, which had been as high as $10 billion in early March, had fallen to $1.1 billion before the company’s shares were suspended from trading on April 6. The Nasdaq is seeking additional information from Luckin.

Brock Silvers, managing director of Hong Kong-based Adamas Asset Management, points to wider accounting problems in China, where the COVID-19 pandemic has taken such a heavy toll on so much of the economy.

“It is extremely unlikely that Luckin and TAL are the only two fish in the sea,” he wrote in an emailed note. “The underlying problem is that in recent years China investment has outstripped China profitability. That creates massive pressure, both corporate and personal, to produce unachievable results.”

Another Chinese company was defending itself against similar allegations of false accounting on Wednesday. Shares of Nasdaq-listed video streaming site iQiyi initially dropped 4.6% but recovered loss the following day after it was accused by Wolfpack Research of inflating 2019 results and user numbers. iQiyi denied the allegations, saying the report contains “numerous errors, unsubstantiated statements and misleading conclusions and interpretations.”

Still, lawmakers in the U.S. are likely to seize on recent accounting scandals, and there will be renewed pressure for tighter oversight of China-based auditing firms, says Drew Bernstein, co-chairman of New York-based accounting firm MarcumBP. Citing national security reasons, Beijing has long resisted inspections of the China-based offices of the Big Four accounting firms by the Public Company Accounting Oversight Board (PCAOB), which oversees accounting professionals who provide audit reports of U.S.-traded public companies.

To push for compliance, lawmakers from both parties introduced last June a bill to force U.S.-listed Chinese companies to submit audit reports to U.S. regulators, or face delisting. In response to the Luckin scandal, China’s securities regulator, the China Securities Regulatory Commission, says it condemns this behavior and would crack down on securities fraud in line with international laws.

“While delisting of Chinese stocks remains as a “nuclear option,” I see that as a low probability,” Bernstein says. “If we see cross-border cooperation emerge among regulators, that would be a very positive outcome from this.”

Send me a secure tip.

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 Stocks Face Increased Scrutiny After TAL Education And Luckin Coffee Reveal Inflated Sales

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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.

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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

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

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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

Chinese E-Commerce Giants Report Booming Singles Day Sales

A big screen shows the online sales for e-commerce giant Alibaba surpassed RMB 100 billion or US14 billion at 01:03:59 after the Nov. 11 Tmall Shopping Festival started midnight in Shanghai, China Monday, Nov. 11, 2019. (Chinatopix Via AP)

(BEIJING) — Chinese e-commerce giants Alibaba and JD.com reported a total of more than $50 billion in sales on Monday in the first half of Singles Day, an annual marketing event that is the world’s busiest online shopping day.

Singles Day began as a joke holiday created by university students in the 1990s as an alternative to Valentine’s Day for people without romantic partners. It falls on Nov. 11 because the date is written with four singles — “11 11.”

Alibaba, the world’s biggest e-commerce brand by total sales volume, adopted the day as a sales tool a decade ago. Rivals including JD.com and Suning joined in, offering discounts on goods from smartphones to travel packages.

E-commerce has grown rapidly in China due to a lack of traditional retailing networks and government efforts to promote internet use. Alibaba, JD.com, Baidu and other internet giants have expanded into consumer finance, entertainment and offline retailing.

On Monday, online retailers offered discounts on goods from craft beer to TV sets to health care packages.

Alibaba said sales by merchants on its platforms totaled 188.8 billion yuan ($27 billion) between midnight and noon. JD.com, the biggest Chinese online direct retailer, said sales reached 165.8 billion yuan ($23.8 billion) by 9 a.m.

Electronics retailer Suning said sales passed 1 billion yuan ($160 million) in the first minute after midnight. Dangdang, an online book retailer, said it sold 6.8 million copies in the first hour.

Alibaba kicked off the event with a concert Sunday night by Taylor Swift at a Shanghai stadium.

Chinese online spending is growing faster than retail overall but is weakening as economic growth slows and consumers, jittery about Beijing’s tariff war with Washington and possible losses, put off big purchases.

Online sales of goods rose 16.8% over a year earlier in the first nine months of 2019 to 5.8 trillion yuan ($825 billion), according to government data. That accounted for 19.5% of total consumer spending. Growth was down from an annual average of about 30% in recent years.

By JOE McDONALD

Source: Chinese E-Commerce Giants Report Booming Singles Day Sales

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Nov.11 was Singles’ Day in China, the country’s busiest online shopping day of the year. More than 35 billion RMB was spent on two online platforms, Tmall.com and Taobao.com, which are owned by China’s e-commerce giant Alibaba. A total of 170 million transactions were made during the day.
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