Monday, December 31, 2012
Complete Genomics Gets Security Clearance On Deal With Chinese Company
Silicon Valley / San Jose Business Journal by Lisa Ward
Web contributor Date: Monday, December 31, 2012, 4:52 am PST
Photo: Vicki Thompson
Complete Genomics, founded by current CEO Clifford Reid (pictured) in 2005, got national security clearance to sell to Chinese company BGI-Shenzhen.
Photo: Vicki Thompson
Complete Genomics, founded by current CEO Clifford Reid (pictured) in 2005, got national security clearance to sell to Chinese company BGI-Shenzhen.
The $117 million sale of Complete Genomics to Chinese company BGI-Shenzhen has gotten approval from the federal Committee on Foreign Investment in the United States and now just needs antitrust clearance to be able to close.
According to the New York Times, the committee reviews "national security implications of foreign takeovers of American companies," and the sale is controversial because some consider it a "threat to American competitiveness in DNA sequencing."
The deal was announced in September and values the company at $3.15 per share. It will keep Complete Genomics operations in Mountain View, where it will continue to operate as a separate company.
According to the New York Times, the committee reviews "national security implications of foreign takeovers of American companies," and the sale is controversial because some consider it a "threat to American competitiveness in DNA sequencing."
The deal was announced in September and values the company at $3.15 per share. It will keep Complete Genomics operations in Mountain View, where it will continue to operate as a separate company.
Hon Hai to Keep Some Apple Production Lines Running During Chinese New Year
Chuck Jones, Forbes Contributor. Posted: 12/31/2012 @ 8:14 AM
Hon Hai to Keep Some Apple Production Lines Running During Chinese New Year
Image via CrunchBase
Another indication that demand for Apple’s iPhone 5 and iPad Mini is strong comes from a report by BrightWire translating a Taiwanese United Daily News article that Hon Hai (also known as Foxconn) and at least one other company, PCB supplier Flexium Interconnect, will not shut down during the Chinese New Year. The Chinese New Year is the longest and most important festival in China. It lasts for fifteen days and starts on February 10 in 2013.
Typically manufacturing comes pretty much to a standstill during a large portion of the Chinese New Year as workers travel back home to celebrate and visit family. It is also a huge gift giving holiday. While it does not appear a large number of manufacturing plants will be operating having some production running five months after the iPhone 5 was launched and four months after the iPad Mini was made available shows that Apple believes the March quarter could still have strong demand for these products. I do not believe that this is due to manufacturing issues.
Disclosure: My family [Chuck Jones] and I own Apple shares.
12/31/2012 @ 8:14AM
Can China Save Silicon Valley's Struggling Solar Technology?
Todd Woody, Forbes
It’s a loss of Solyndra proportions.
MiaSolé, the Silicon solar startup that raised close to half a billion dollars from top venture capitalists to develop advanced photovoltaic technology, is being sold to Chinese renewable energy conglomerate Hanergy for $30 million.
The fire sale, first reported by David Baker of the San Francisco Chronicle, shows that even as the Chinese solar industry struggles with its own severe financial problems China is poised to scoop up U.S. technology on the cheap.
A MiaSolé spokeswoman, Christina Stenson, declined to comment on the deal.
Over the past decade, Silicon Valley venture capitalists and other investors have poured billions of dollars into MiaSolé, Nanosolar and other startups developing thin-film photovoltaic cells with a material called copper indium gallium selenide, or CIGS.
While less efficient at converting sunlight into electricity than conventional silicon-based photovoltaic panels, the great promise was that CIGS cells could be produced cheaper and deposited on glass, flexible metal or other materials.
But as I wrote in an October 2010 New York Times article:
...producing CIGS cells on a mass scale has turned out to be a formidable technological challenge, requiring the invention of specialized manufacturing equipment.
While Silicon Valley companies were working on the problem, silicon prices fell and Chinese companies like JA Solar, Suntech and Yingli Green Energy rapidly expanded production of conventional solar panels, supported by tens of billions of dollars in inexpensive credit from the Chinese government as well as other subsidies like cheap land.
The then-chief executive of MiaSolé, Joseph Laia, told me at the time that, “The solar market has changed so much it’s almost enough to make you want to cry. We have spent a lot more time and energy focusing on costs a year or two before we thought we had to.”
More change was to come. The headline on the story read, “Silicon Valley’s Solar Innovators Retool to Catch Up to China,” but as it turns out China has caught CIGS bug.
While the deal effectively wipes out the investments made in MiaSolé by such A-list VC firms as Kleiner Perkins Caufield & Byers and VantagePoint Capital Partners, the acquisition is good news for the nascent CIGS industry, according to Martin Simonek, a solar analyst with Bloomberg New Energy Finance in London.
“Hanergy has deep pockets and this is what CIGS technology needs to get to scale,” he told me Monday.
“The problem in the whole of solar is that it’s very difficult to raise any money or fund any expansion,” he added. “It’s too risky so you need strong backup and if it’s coming from China, so be it.”
He pointed out that Japanese CIGS company Solar Frontier, one of the more successful CIGS companies, is backed by energy giant Shell Showa. (Solar Frontier supplies its photovoltaic panels to General Electric, for instance.)
Ironically, Suntech, Yingli and the other Chinese manufacturers of conventional solar panels that helped drive MiaSolé into Hanergy’s arms are now struggling to survive crushing debt accumulated as they expanded production and drove down prices.If some of those companies fail or the industry consolidates as is widely expected, that could create an opening for CIGS technology.
A privately held company, Hanergy has focused on wind and hydro power and has entered the CIGS solar market only recently, acquiring in June Solibro, the CIGS subsidiary of Q-Cells, the bankrupt German solar manufacturer.
Hanergy maintains its U.S. headquarters in Burlingame, Calif., not far from MiaSolé’s manufacturing plant in Silicon Valley.
Simonek says the acquisition will make it hard for remaining Silicon Valley CIGS startups like Nanosolar to remain independent.
“It’s going to be very difficult,” he says. “This is a capital intensive industry. In the end there likely will be just a handful of players.”
published 10/01/2012 @ 1:04PM
http://www.forbes.com/sites/toddwoody/2012/10/01/can-china-save-silicon-valleys-struggling-solar-technology/2/
It’s a loss of Solyndra proportions.
MiaSolé, the Silicon solar startup that raised close to half a billion dollars from top venture capitalists to develop advanced photovoltaic technology, is being sold to Chinese renewable energy conglomerate Hanergy for $30 million.
The fire sale, first reported by David Baker of the San Francisco Chronicle, shows that even as the Chinese solar industry struggles with its own severe financial problems China is poised to scoop up U.S. technology on the cheap.
A MiaSolé spokeswoman, Christina Stenson, declined to comment on the deal.
Over the past decade, Silicon Valley venture capitalists and other investors have poured billions of dollars into MiaSolé, Nanosolar and other startups developing thin-film photovoltaic cells with a material called copper indium gallium selenide, or CIGS.
While less efficient at converting sunlight into electricity than conventional silicon-based photovoltaic panels, the great promise was that CIGS cells could be produced cheaper and deposited on glass, flexible metal or other materials.
But as I wrote in an October 2010 New York Times article:
...producing CIGS cells on a mass scale has turned out to be a formidable technological challenge, requiring the invention of specialized manufacturing equipment.
While Silicon Valley companies were working on the problem, silicon prices fell and Chinese companies like JA Solar, Suntech and Yingli Green Energy rapidly expanded production of conventional solar panels, supported by tens of billions of dollars in inexpensive credit from the Chinese government as well as other subsidies like cheap land.
The then-chief executive of MiaSolé, Joseph Laia, told me at the time that, “The solar market has changed so much it’s almost enough to make you want to cry. We have spent a lot more time and energy focusing on costs a year or two before we thought we had to.”
More change was to come. The headline on the story read, “Silicon Valley’s Solar Innovators Retool to Catch Up to China,” but as it turns out China has caught CIGS bug.
While the deal effectively wipes out the investments made in MiaSolé by such A-list VC firms as Kleiner Perkins Caufield & Byers and VantagePoint Capital Partners, the acquisition is good news for the nascent CIGS industry, according to Martin Simonek, a solar analyst with Bloomberg New Energy Finance in London.
“Hanergy has deep pockets and this is what CIGS technology needs to get to scale,” he told me Monday.
“The problem in the whole of solar is that it’s very difficult to raise any money or fund any expansion,” he added. “It’s too risky so you need strong backup and if it’s coming from China, so be it.”
He pointed out that Japanese CIGS company Solar Frontier, one of the more successful CIGS companies, is backed by energy giant Shell Showa. (Solar Frontier supplies its photovoltaic panels to General Electric, for instance.)
Ironically, Suntech, Yingli and the other Chinese manufacturers of conventional solar panels that helped drive MiaSolé into Hanergy’s arms are now struggling to survive crushing debt accumulated as they expanded production and drove down prices.If some of those companies fail or the industry consolidates as is widely expected, that could create an opening for CIGS technology.
A privately held company, Hanergy has focused on wind and hydro power and has entered the CIGS solar market only recently, acquiring in June Solibro, the CIGS subsidiary of Q-Cells, the bankrupt German solar manufacturer.
Hanergy maintains its U.S. headquarters in Burlingame, Calif., not far from MiaSolé’s manufacturing plant in Silicon Valley.
Simonek says the acquisition will make it hard for remaining Silicon Valley CIGS startups like Nanosolar to remain independent.
“It’s going to be very difficult,” he says. “This is a capital intensive industry. In the end there likely will be just a handful of players.”
published 10/01/2012 @ 1:04PM
http://www.forbes.com/sites/toddwoody/2012/10/01/can-china-save-silicon-valleys-struggling-solar-technology/2/
Sunday, December 30, 2012
China's Beidou Navigation Satellite System Starts service in Asian-Pacific
BEIJING, Dec. 27 (Xinhua) -- China's indigenous Beidou Navigation Satellite System (BDS) on Thursday began providing services to users in the Asian-Pacific region, according to a spokesman of the system.
Ran Chengqi, the spokesman for the BeiDou Navigation Satellite System (BDS), introduces the symbol of BDS during a press conference in Beijing, capital of China, Dec. 27, 2012. Ran announced that the BDS, China's domestically-produced navigation system, began providing positioning, navigation, timing and short message services to civilian users in China and surrounding areas in the Asia-Pacific region on Thursday. (Xinhua/He Junchang)
The services include positioning, navigation, timing and short messages for China and surrounding areas, said spokesman Ran Chengqi, also director of the China Satellite Navigation Office.
Ran further specified that the open service will be provided with positioning accuracy of 10 meters, velocity accuracy of 0.2 meters per second and one-way timing accuracy of 50 nanoseconds.
(Xinhua/He Junchang)
Gold Buyers Reminded Of The Price Spike of 1980
If one looks at a technical chart of gold prices for the last twenty years, gold clearly shows itself to be a robust investment vehicle, as well as a safe store of value.
by Michael Moore of GoldPrice.org
In January 1980 gold hit a record 850 US dollars an ounce. After reaching those dizzy heights it then plummeted down and remained steady in the 300-400 dollar range for some years before starting to climb again to new levels.
Now gold has broken through the 900 dollars an ounce gold barrier and some investors and analysts are wondering, is this going to be a repeat of the 1980 gold spike?
In fact, there are many differences between the 1980 spike in the gold price and the current rise in gold value, not the least of which is the longer term trend currently occurring. In 1980 gold basically shot up like a bullet out of a gun and then, like a bullet, slowed down and returned to earth.
History
In January 1980 gold was fixed at a record 850 USD an ounce while high inflation, strong oil prices , Soviet intervention in Afghanistan as well as the impact of the Iranian revolution prompted investors to heavily buy the metal.
Adjusting for inflation, meant the 1980 record high price was actually $2,079 an ounce at 2006 prices, while, according to precious metals consultancy GFMS, the real average price in 1980 was calculated at $1,503.
As a result of the removal of the gold standard by Nixon in1971, what little life was left in the Bretton Woods, built during the devastation of World War II to help Europe recover its faith in credit and currencies agreement was killed off. The result?
"Inflation in most countries at the end of 1979 was running in double digits," writes Peter Bernstein in his classic The Power of Gold. Pointing to the OPEC-led spike in oil prices, he also notes that "political conditions were perhaps even more frightening."
"Iranian radicals in Nov. 1979 took over the US embassy in Tehran…At the same time, the Russians were building up their strength in southern Yemen near Saudi Arabia, near Afghanistan’s border with Iran, and near Bulgaria’s border with Yugoslavia."
Key Dates in Gold History
Here are some key dates in gold's trading history covering the period from the early 1970s through to January 2008 including that period when gold rose, fell and, like the phoenix, has risen again.
In August 1971, took the dollar off the gold standard. With some minor variations this had been in place since the Bretton Woods Agreement of 1944 and fixed the conversion rate for one Troy ounce of gold at $35.
In August 1972, United States devalued dollar to $38 per ounce of gold.
In March 1973, Most of the major countries adopted a floating exchange rate system.
Then in May 1973, the United States devalued dollar again, to $42.22 per ounce.
January 1980. Gold hits record high at $850 per ounce. High inflation because of strong oil prices, Soviet intervention in Afghanistan and the impact of the Iranian revolution, which prompted investors to move into the metal.
In August 1999, gold fell to an all-time low at $251.70 on concerns about central banks reducing gold bullion reserves while, at the same time mining companies were selling gold in forward markets to protect against falling prices.
In October 1999, gold reached a two-year high at $338 after an agreement by 15 European central banks to limit the gold sales.
During February 2003, gold reached 4-1/2-year high on safe-haven buying in the run-up to conflict with Iraq.
Then in December 2003 to January 2004, gold broke above $400, reaching levels last traded in 1988. Investors started to increasingly buy gold as risk insurance for portfolios.
In November 2005, the spot gold rises above $500 for the first time since December 1987, when the spot hit $502.97.
April 11, 2006, and gold prices then surpass the next big level of 600 US dollars an ounce, the highest since December 1980, with funds and investors pouring money into commodities on a weak dollar, firm oil prices and geopolitical worries.
May 12, 2006, saw gold prices peak at 730 US dollars an ounce This was the highest level since January 1980, with funds and investors pouring money into commodities on a weak dollar, firm oil prices and political tensions over Iran's nuclear ambitions.
June 14, 2006 gold falls 26 percent to $543 from its 26-year peak after investors and speculators went on a flurry of profit taking.
Nov 7, 2007, spot gold peaks at a 28-year high of $845.40 an ounce.
Jan 2, 2008, gold breaks above $850 for the first time since 1980.
Jan 8, 2008, gold hits record $875.80. (Sources: GFMS, World Gold Council, Commodity Research Bureau and Reuters database).
Jan 12, 2008, Now gold has breached 900 dollars an ounce and looks set to reach the magical 1000 US dollars per ounce.
Why Gold?
Some similarities can be found between the two highest evers but there is a marked difference between the two that show this latest high is not a spike but a continuing trend.
In James Turk's "2008 Gold Should Glitter", he comments
"Although gold’s previous record high of $850 reached in January 1980 gets attention, rarely do people consider that a 1980-dollar had substantially more purchasing power than a 2007-dollar. Adjusting for 27 years of inflation, it takes $2,208 today to equal the purchasing power of $850 in January 1980. So by this measure, gold is still far from a true record high."He follows this on with:
"Another useful measure to determine gold’s relative value can be made by comparing gold to the Dow Jones Industrial Average. Gold is overvalued when it takes only one ounce to buy the DJIA. For example in the 1930s, one ounce of gold at $35 bought the DJIA, and it did so again in 1980 when an ounce of gold was $850 and the DJIA was 800. Though this ratio has fallen from more than 40 ounces in 2000, it still takes 16 ounces of gold to buy the DJIA, meaning that gold continues to be a relatively good value while the DJIA is relatively expensive …."So gold is still relatively, undervalued, or "cheap" as it were, and there is still a long way to go for it to catch up to inflation.
The current rise is being helped of course by the current situation in the US and the increased level in oil price but these are really contributory rather than causative.
What is causative is the general trend of investors having less faith in fiscal currency. Two component parts of the current economy is the passion by governments for printing more money to handle debt and debt crisis. And the other is the banking fractional system which allows banks to 'creatively create money for the purposes of debt. Both these forces oppose each other creating, in their wake, a rising tide of inflation and recession.
This is perhaps, unconsciously, understood by most people as not a good thing. They see this in their pockets with prices rising, less money available, and more restrictive practices surrounding their control of finances.
All this despite hot mint printing presses actively at work printing more money while banks offering more debt yet at the same time struggling with the debt they have.
This is likely to be the biggest cause of the investors, and even the man in the street's attention being turned to gold. And this is not something that is going to go away anytime soon.
Golds Future:
Many analysis are predicting further increases in gold. Of course there will always be the inevitable "correction" as it is called. This is where those investors, in for the short term, decide to take a profit and the price then drops for a while. But with gold currently undervalued and with the prime economies on what could be called a long term unsteady footing, there is plenty of room for gold to continue its steady rise to, some say, over the 2000 dollars an ounce mark.
So it seems the value of gold has a lot of catching up to do.
Author's Profile
Michael Moore is a prolific author specializing in books and articles about gold coins, gold bullion, diamonds and other gems as well as diamonds other gems and precious metals. He has prior extensive experience in the gold industry, written several articles and books on a range of topics.
Michael Moore also administers a philosophical association and publishes a quarterly philosophic journal.
To look further back, however, we find that there have been periods marked with significant volatility. Here is an interesting article by Michael Moore of GoldPrice.Org that addresses a dramatic price spike that occurred in 1980.
(image: http://en.wikipedia.org/wiki/File:Gold_price_in_USD.png)
Reasons For Spike In Gold Price In 1980
In January 1980 gold hit a record 850 US dollars an ounce. After reaching those dizzy heights it then plummeted down and remained steady in the 300-400 dollar range for some years before starting to climb again to new levels.
Now gold has broken through the 900 dollars an ounce gold barrier and some investors and analysts are wondering, is this going to be a repeat of the 1980 gold spike?
In fact, there are many differences between the 1980 spike in the gold price and the current rise in gold value, not the least of which is the longer term trend currently occurring. In 1980 gold basically shot up like a bullet out of a gun and then, like a bullet, slowed down and returned to earth.
History
In January 1980 gold was fixed at a record 850 USD an ounce while high inflation, strong oil prices , Soviet intervention in Afghanistan as well as the impact of the Iranian revolution prompted investors to heavily buy the metal.
Adjusting for inflation, meant the 1980 record high price was actually $2,079 an ounce at 2006 prices, while, according to precious metals consultancy GFMS, the real average price in 1980 was calculated at $1,503.
As a result of the removal of the gold standard by Nixon in1971, what little life was left in the Bretton Woods, built during the devastation of World War II to help Europe recover its faith in credit and currencies agreement was killed off. The result?
"Inflation in most countries at the end of 1979 was running in double digits," writes Peter Bernstein in his classic The Power of Gold. Pointing to the OPEC-led spike in oil prices, he also notes that "political conditions were perhaps even more frightening."
"Iranian radicals in Nov. 1979 took over the US embassy in Tehran…At the same time, the Russians were building up their strength in southern Yemen near Saudi Arabia, near Afghanistan’s border with Iran, and near Bulgaria’s border with Yugoslavia."
Key Dates in Gold History
Here are some key dates in gold's trading history covering the period from the early 1970s through to January 2008 including that period when gold rose, fell and, like the phoenix, has risen again.
In August 1971, took the dollar off the gold standard. With some minor variations this had been in place since the Bretton Woods Agreement of 1944 and fixed the conversion rate for one Troy ounce of gold at $35.
In August 1972, United States devalued dollar to $38 per ounce of gold.
In March 1973, Most of the major countries adopted a floating exchange rate system.
Then in May 1973, the United States devalued dollar again, to $42.22 per ounce.
January 1980. Gold hits record high at $850 per ounce. High inflation because of strong oil prices, Soviet intervention in Afghanistan and the impact of the Iranian revolution, which prompted investors to move into the metal.
In August 1999, gold fell to an all-time low at $251.70 on concerns about central banks reducing gold bullion reserves while, at the same time mining companies were selling gold in forward markets to protect against falling prices.
In October 1999, gold reached a two-year high at $338 after an agreement by 15 European central banks to limit the gold sales.
During February 2003, gold reached 4-1/2-year high on safe-haven buying in the run-up to conflict with Iraq.
Then in December 2003 to January 2004, gold broke above $400, reaching levels last traded in 1988. Investors started to increasingly buy gold as risk insurance for portfolios.
In November 2005, the spot gold rises above $500 for the first time since December 1987, when the spot hit $502.97.
April 11, 2006, and gold prices then surpass the next big level of 600 US dollars an ounce, the highest since December 1980, with funds and investors pouring money into commodities on a weak dollar, firm oil prices and geopolitical worries.
May 12, 2006, saw gold prices peak at 730 US dollars an ounce This was the highest level since January 1980, with funds and investors pouring money into commodities on a weak dollar, firm oil prices and political tensions over Iran's nuclear ambitions.
June 14, 2006 gold falls 26 percent to $543 from its 26-year peak after investors and speculators went on a flurry of profit taking.
Nov 7, 2007, spot gold peaks at a 28-year high of $845.40 an ounce.
Jan 2, 2008, gold breaks above $850 for the first time since 1980.
Jan 8, 2008, gold hits record $875.80. (Sources: GFMS, World Gold Council, Commodity Research Bureau and Reuters database).
Jan 12, 2008, Now gold has breached 900 dollars an ounce and looks set to reach the magical 1000 US dollars per ounce.
Why Gold?
Some similarities can be found between the two highest evers but there is a marked difference between the two that show this latest high is not a spike but a continuing trend.
In James Turk's "2008 Gold Should Glitter", he comments
"Although gold’s previous record high of $850 reached in January 1980 gets attention, rarely do people consider that a 1980-dollar had substantially more purchasing power than a 2007-dollar. Adjusting for 27 years of inflation, it takes $2,208 today to equal the purchasing power of $850 in January 1980. So by this measure, gold is still far from a true record high."He follows this on with:
"Another useful measure to determine gold’s relative value can be made by comparing gold to the Dow Jones Industrial Average. Gold is overvalued when it takes only one ounce to buy the DJIA. For example in the 1930s, one ounce of gold at $35 bought the DJIA, and it did so again in 1980 when an ounce of gold was $850 and the DJIA was 800. Though this ratio has fallen from more than 40 ounces in 2000, it still takes 16 ounces of gold to buy the DJIA, meaning that gold continues to be a relatively good value while the DJIA is relatively expensive …."So gold is still relatively, undervalued, or "cheap" as it were, and there is still a long way to go for it to catch up to inflation.
The current rise is being helped of course by the current situation in the US and the increased level in oil price but these are really contributory rather than causative.
What is causative is the general trend of investors having less faith in fiscal currency. Two component parts of the current economy is the passion by governments for printing more money to handle debt and debt crisis. And the other is the banking fractional system which allows banks to 'creatively create money for the purposes of debt. Both these forces oppose each other creating, in their wake, a rising tide of inflation and recession.
This is perhaps, unconsciously, understood by most people as not a good thing. They see this in their pockets with prices rising, less money available, and more restrictive practices surrounding their control of finances.
All this despite hot mint printing presses actively at work printing more money while banks offering more debt yet at the same time struggling with the debt they have.
This is likely to be the biggest cause of the investors, and even the man in the street's attention being turned to gold. And this is not something that is going to go away anytime soon.
Golds Future:
Many analysis are predicting further increases in gold. Of course there will always be the inevitable "correction" as it is called. This is where those investors, in for the short term, decide to take a profit and the price then drops for a while. But with gold currently undervalued and with the prime economies on what could be called a long term unsteady footing, there is plenty of room for gold to continue its steady rise to, some say, over the 2000 dollars an ounce mark.
So it seems the value of gold has a lot of catching up to do.
Michael Moore is a prolific author specializing in books and articles about gold coins, gold bullion, diamonds and other gems as well as diamonds other gems and precious metals. He has prior extensive experience in the gold industry, written several articles and books on a range of topics.
Michael Moore also administers a philosophical association and publishes a quarterly philosophic journal.
Bloomberg Businessweek: Forecasts From Around the World
Posted on December 20, 2012
Central Bankers
“We face a broader challenge—to defend the market economy amongst so many who suffered during the financial crisis. This was expressed memorably by William McChesney Martin when he spoke to the Economic Club of New York in 1957. He said, ‘Men begin to question whether the merriment was worth the misery, especially when the misery was worse among the millions who had never got in on the merrymaking in the first place.’ ” —Mervyn King, governor, Bank of England
Africa
“Africa remains on course to double its GDP every decade. This will be the decade of infrastructure investment.” —Charles Robertson, chief economist, Renaissance Capital
“What matters for Indonesia now is China and Chinese domestic spending.” —Timothy Condon, chief economist, Asia, ING Investment Management in Singapore
Russia’s Energy Squeeze
“Russia is OK for now but their system gets shaky two to three years down the road. They’ve been riding a decade of high energy prices, but with all the new oil and gas coming from everywhere, prices will fall. That’ll wipe out Gazprom’s profits. They’re worried about U.S. natural gas exports to Europe. Russia’s days as Europe’s main energy supplier are numbered.” —Anders Aslund, senior fellow, Peterson Institute for International Economics
Beijing understands that it needs to rebalance away from investment toward household consumption. Next year will be a crucial step toward that, causing growth to slow in the second half. Most importantly, it needs to tighten up credit. That’s going to be hard on the state-owned enterprises that’ve become so dependent on what has essentially been free capital. But China has reached a point where the growth of investment and credit is no longer wealth creating, it’s wealth destroying.” —Michael Pettis, finance professor, Peking University
U.S. Employment
“So much depends on how quickly people continue to fade from the labor force out of frustration. That could actually bring down the unemployment rate rather quickly without a strong recovery in job growth. A stronger economy might actually hold up that rate longer than a weak one, because people will … jump back in and look for work. But remember, the unemployment rate is murky as a signal for the strength of the economy.” —James Galbraith, economist, University of Texas
Chinese Reform
“Xi has signaled he intends to change things. And there are people watching with a billion cell phones.” —Robert Lawrence Kuhn, author of How China’s Leaders Think
Temporary Hiring
“I’m beginning to see U.S. companies spend more and make a few more gambles. Give me all the IT, engineers, scientists, trained technicians, machinists you have. In Europe a lack of certainty has caused a halting of behavior. There’s downward pressure in Mexico, Brazil, and China. By no means do I see 2013 as a rock ‘n’ roll year.” —Carl Camden, CEO, Kelly Services
Japan-China Tension
“China’s intention to topple the status quo by use of coercion is clear. Does China want to see the Japan-China relations pass the point of no return?” —Japan Foreign Ministry statement
U.S. Housing
“We turned bullish on housing in the summer of 2011. Demand is greater than supply. It’s that simple. We, unlike other mature countries, still have people fall in love and get married and have babies. The big driver of demand is adult children moving out of the home. New home inventory is at a record low. [Credit is] more widely available than perceived. We are not complacent. I am a worrier beyond worrier. But it’s exciting right now.” —Ivy Zelman, Zelman & Associates
U.K. Economic Forecast
“Growth in the coming year will be just about zero.” —Michael Saunders, economist at Citi Research in London
India
“The budget deficit target will be missed. You have slower growth, revenues are weaker, and you still have a high level of subsidies in energy items that cost government money. There is an election that has to be called by May 2014, so there is always a risk you will get populist-type spending measures that could inflate the budget deficit.” —Art Woo, director of sovereigns, Fitch Ratings in Hong Kong
U.S. Capital Spending
“There is a lot of pent-up demand for investment spending that we think will get unleashed next year. Businesses have delayed capital projects in anticipation of the fiscal cliff. Capital spending has been notably weak in the last six months, much weaker than during the rest of the recovery. So a political deal, or even just some clarity about the future, could result in a nice bounceback in capital spending after the beginning of the year.” —Jan Hatzius, chief economist, Goldman Sachs
Italian Politics
“When people need me, I don’t abstain from acting.” —Silvio Berlusconi, former Italian Prime Minister, on why he’ll be a candidate in the 2013 elections
French Tax Rates
“I am leaving, because you consider that success, creativity, talent, anything different, should be sanctioned. I leave after paying, in 2012, an 85 percent tax rate on my income.” —Gérard Depardieu, French actor, on why he’s moving to Belgium.
Federal Reserve
“Businesses that went right to the brink during the crisis are focused on survival and liquidity. Hopefully, that’s just a matter of healing and time. It’s one reason the Fed wants to be very consistent. If you put together a real consistent year of growth, that might cause companies to invest more.” —Julia Coronado, chief economist for North America, BNP Paribas
Data: International Monetary Fund, Fitch, Federal Reserve
http://www.businessweek.com/articles/2012-12-20/2013-forecasts-from-around-the-world
Central Bankers
“We face a broader challenge—to defend the market economy amongst so many who suffered during the financial crisis. This was expressed memorably by William McChesney Martin when he spoke to the Economic Club of New York in 1957. He said, ‘Men begin to question whether the merriment was worth the misery, especially when the misery was worse among the millions who had never got in on the merrymaking in the first place.’ ” —Mervyn King, governor, Bank of England
Africa
“Africa remains on course to double its GDP every decade. This will be the decade of infrastructure investment.” —Charles Robertson, chief economist, Renaissance Capital
Indonesia
“What matters for Indonesia now is China and Chinese domestic spending.” —Timothy Condon, chief economist, Asia, ING Investment Management in Singapore
Russia’s Energy Squeeze
“Russia is OK for now but their system gets shaky two to three years down the road. They’ve been riding a decade of high energy prices, but with all the new oil and gas coming from everywhere, prices will fall. That’ll wipe out Gazprom’s profits. They’re worried about U.S. natural gas exports to Europe. Russia’s days as Europe’s main energy supplier are numbered.” —Anders Aslund, senior fellow, Peterson Institute for International Economics
Argentina
“Investors have been burned before, but I think Argentina’s worst days are behind them. Basically, I don’t think they can mess up any further than they already have.” —Walter Molano, chief economist, BCP Securities
“Investors have been burned before, but I think Argentina’s worst days are behind them. Basically, I don’t think they can mess up any further than they already have.” —Walter Molano, chief economist, BCP Securities
China
Beijing understands that it needs to rebalance away from investment toward household consumption. Next year will be a crucial step toward that, causing growth to slow in the second half. Most importantly, it needs to tighten up credit. That’s going to be hard on the state-owned enterprises that’ve become so dependent on what has essentially been free capital. But China has reached a point where the growth of investment and credit is no longer wealth creating, it’s wealth destroying.” —Michael Pettis, finance professor, Peking University
Oil Prices
“Look for more demand weakness and rising supply. In the U.S., we’ve had six straight quarters where GDP rises and petroleum demand falls. We’re finally becoming more energy efficient. On the flip side, we continue to see crude production rising. The latest data has the U.S. producing 6.9 million barrels per day, up 16 percent from 2011. That rate’s not slowing down.” —Tim Evans, energy analyst, Citi Futures Perspective
Bullish on East Asia
“We expect quarter four also to be good, and that then feeds into a very strong next year.” —Bert Hofman, World Bank chief economist for East Asia
Japan Prime Minister Shinzo Abe
“Abe is going to hit the ground running. He can get broad agreement on a 10 trillion yen ($120 billion) stimulus package with infrastructure spending to jolt the economy out of recession. That will add to Japan’s pile of debt, but after you [top 200 percent] of GDP, what’s another 10 trillion yen? —Jeff Kingston, director of Asian Studies, Temple University
“Look for more demand weakness and rising supply. In the U.S., we’ve had six straight quarters where GDP rises and petroleum demand falls. We’re finally becoming more energy efficient. On the flip side, we continue to see crude production rising. The latest data has the U.S. producing 6.9 million barrels per day, up 16 percent from 2011. That rate’s not slowing down.” —Tim Evans, energy analyst, Citi Futures Perspective
Bullish on East Asia
“We expect quarter four also to be good, and that then feeds into a very strong next year.” —Bert Hofman, World Bank chief economist for East Asia
Japan Prime Minister Shinzo Abe
“Abe is going to hit the ground running. He can get broad agreement on a 10 trillion yen ($120 billion) stimulus package with infrastructure spending to jolt the economy out of recession. That will add to Japan’s pile of debt, but after you [top 200 percent] of GDP, what’s another 10 trillion yen? —Jeff Kingston, director of Asian Studies, Temple University
U.S. Employment
“So much depends on how quickly people continue to fade from the labor force out of frustration. That could actually bring down the unemployment rate rather quickly without a strong recovery in job growth. A stronger economy might actually hold up that rate longer than a weak one, because people will … jump back in and look for work. But remember, the unemployment rate is murky as a signal for the strength of the economy.” —James Galbraith, economist, University of Texas
Chinese Reform
“Xi has signaled he intends to change things. And there are people watching with a billion cell phones.” —Robert Lawrence Kuhn, author of How China’s Leaders Think
Temporary Hiring
“I’m beginning to see U.S. companies spend more and make a few more gambles. Give me all the IT, engineers, scientists, trained technicians, machinists you have. In Europe a lack of certainty has caused a halting of behavior. There’s downward pressure in Mexico, Brazil, and China. By no means do I see 2013 as a rock ‘n’ roll year.” —Carl Camden, CEO, Kelly Services
Japan-China Tension
“China’s intention to topple the status quo by use of coercion is clear. Does China want to see the Japan-China relations pass the point of no return?” —Japan Foreign Ministry statement
U.S. Housing
“We turned bullish on housing in the summer of 2011. Demand is greater than supply. It’s that simple. We, unlike other mature countries, still have people fall in love and get married and have babies. The big driver of demand is adult children moving out of the home. New home inventory is at a record low. [Credit is] more widely available than perceived. We are not complacent. I am a worrier beyond worrier. But it’s exciting right now.” —Ivy Zelman, Zelman & Associates
U.K. Economic Forecast
“Growth in the coming year will be just about zero.” —Michael Saunders, economist at Citi Research in London
India
“The budget deficit target will be missed. You have slower growth, revenues are weaker, and you still have a high level of subsidies in energy items that cost government money. There is an election that has to be called by May 2014, so there is always a risk you will get populist-type spending measures that could inflate the budget deficit.” —Art Woo, director of sovereigns, Fitch Ratings in Hong Kong
U.S. Capital Spending
“There is a lot of pent-up demand for investment spending that we think will get unleashed next year. Businesses have delayed capital projects in anticipation of the fiscal cliff. Capital spending has been notably weak in the last six months, much weaker than during the rest of the recovery. So a political deal, or even just some clarity about the future, could result in a nice bounceback in capital spending after the beginning of the year.” —Jan Hatzius, chief economist, Goldman Sachs
Italian Politics
“When people need me, I don’t abstain from acting.” —Silvio Berlusconi, former Italian Prime Minister, on why he’ll be a candidate in the 2013 elections
French Tax Rates
“I am leaving, because you consider that success, creativity, talent, anything different, should be sanctioned. I leave after paying, in 2012, an 85 percent tax rate on my income.” —Gérard Depardieu, French actor, on why he’s moving to Belgium.
Federal Reserve
“Businesses that went right to the brink during the crisis are focused on survival and liquidity. Hopefully, that’s just a matter of healing and time. It’s one reason the Fed wants to be very consistent. If you put together a real consistent year of growth, that might cause companies to invest more.” —Julia Coronado, chief economist for North America, BNP Paribas
Data: International Monetary Fund, Fitch, Federal Reserve
http://www.businessweek.com/articles/2012-12-20/2013-forecasts-from-around-the-world
Silicon Valley Firms Seek a Bigger Piece of China's Technology Pie
By Tom Brennan All Articles
The Asian Lawyer
http://www.americanlawyer.com/asian_lawyer/index.jsp
In Silicon Valley, Wilson Sonsini Goodrich & Rosati and Cooley are well known as go-to firms for rising tech companies. In China, it’s been a different story so far.
There, New York firms like Simpson Thacher & Bartlett; Davis Polk & Wardwell; and Skadden, Arps, Slate, Meagher & Flom have built a commanding lead advising Chinese technology start-ups. Many of those companies choose to have U.S. initial public offerings because of the larger community in America of tech-savvy investors and analysts, as well as the fact that the New York Stock Exchange and Nasdaq, unlike the major exchanges in China or Hong Kong, do not require listing companies to have a multi-year track record of profitability.
Of the 41 U.S. IPOs by Chinese companies in 2010, Simpson alone advised the issuers or the underwriters on 18 of them. Skadden was on 17. Wilson Sonsini, which launched a Shanghai office in 2007, managed just one.
There were 12 such IPOs in 2011. But that market has, of course, been in a deep freeze for the past year, with just one U.S. IPO for a Chinese company so far in 2012: the March New York Stock Exchange listing of Skadden client Vipshop Holdings Ltd., a Guangzhou-based online retailer which raised almost 40 percent less than the $118 million it had sought. Beset by investor concerns over the quality of their financial disclosures, many U.S. listed Chinese companies have seen their share prices plummet. Several have been the targets of shareholder class actions.
But Silicon Valley firms are maneuvering now to try to make sure they get a bigger piece of the action when the market bounces back. Cooley opened its first overseas office in Shanghai last December, with partners Bradley Peck and Patrick Loofbourrow relocated from San Diego. Another Silicon Valley firm, Gunderson Dettmer, is currently awaiting approval from Chinese authorities to open its first international office in Beijing.
Bradley Peck, Cooley’s managing partner in Shanghai, says the same strategy that has succeeded for the firm back home—working with companies from start-up to IPO—will also work in China, especially given the firm’s long track record in the tech sector. Tech companies that Cooley has advised from the very beginning include mobile chip maker Qualcomm Inc., graphics giant Nvidia, and Internet review portal Yelp Inc.
“I do think that history, that experience, and all the knowledge that comes with that, is an advantage,” he says. “You want someone who’s been there, done that.”
But the New York firms say that, in China, they are the ones who have been there and done that.
“You have to remember that firms like Davis Polk and our peer firms have been out here since the 1990s,” says Davis Polk Hong Kong partner James Lin, whose firm advised seven Chinese companies on U.S. listings in 2010. “So we’ve established ourselves in the U.S. capital markets space well before the peak years for IPOs [in 2010 and 2011]. I think that’s given us an advantage.”
Certain partners have become highly identified with China’s tech sector. Skadden’s Julie Gao has represented leading search engine Baidu.com, video site Youku.com, and retailer e-commerce China Dangdang in IPOs. She is also now acting for social media site YY.com on a planned IPO. Simpson Thacher’s Leiming Chen and Kirkland & Ellis’s David Zhang have also garnered long lists of deals in the space.
Lin notes that the leading Wall Street firms have substantial Silicon Valley practices and relationships with venture capital firms of their own to leverage in China. And he doesn’t think it’s just Silicon Valley firms that work with early-stage companies. “We do that, too,” says Lin.
Former Wilson Sonsini associate Brent Irvin, now general counsel for Chinese Internet portal and messaging giant Tencent Holdings Ltd., says New York and London firms are definitely the market leaders in the region. But he thinks there are areas where Silicon Valley firms will be competitive, such as technology and intellectual property licensing.
Tencent turned to Wilson Sonsini this summer when it struck a deal to bring to China a licensed online version of Activision Blizzard Inc.’s popular Call of Duty videogame series. Irvin says the company has also used Wilson Sonsini and other Silicon Valley firms on angel investments it has made in U.S. tech start-ups.
“For venture capital–type investments, licensing, IP deals, we definitely have California firms on our short list,” he says.
But Wilson Sonsini, the best known of the Silicon Valley firms and the earliest of them to move into China, is now taking a very different path from its West Coast peers. Its China practice partners are now almost all former lawyers with Wall Street firms.
Weiheng Chen, the Hong Kong–based head of the China practice for Wilson Sonsini, joined the firm two years ago from Milbank, Tweed, Hadley & McCloy, where he was a counsel. He also previously worked at Sullivan & Cromwell. Last year the firm brought on board Shanghai partner Kefei Li, a former Skadden counsel. Earlier this year, Davis Polk counsel Zhan Chen also came aboard as a Wilson Sonsini Shanghai partner.
Chen says the firm is also looking at a broad range of industries in China, such as consumer goods and health care. "The growth sectors in the U.S. in the past decades have been associated with tech-related sectors, but that is not the case in China," he says.
Before Chen came on board, Wilson Sonsini’s China efforts had been led by partner Carmen Chang, who worked primarily in the firm's Palo Alto headquarters. Chang left the firm in February to divide her time between the Silicon Valley office of Washington, D.C.’s Covington & Burling, where she became a senior counsel, and venture capital firm New Enterprise Associates, where she joined as a senior adviser. Two other China partners, Michelle Edwards and Eva Wang, also moved from Wilson Sonsini to Covington.
Chang, who is largely retiring from active law practice, says Chinese clients had been receptive to Wilson Sonsini's Silicon Valley-style practice, which focused on having ongoing relationships with companies and advising them on their day-to-day operations as well as major transactions. She still thinks this approach can work for firms like Cooley. But she says the earlier investment in China by Wall Street firms has given them an advantage in the market; they have great lawyers but also more of them.
"In the first five years or so, we never had more than four or five lawyers on the ground in all of China," she says. During the same time, many of the New York firms had dozens in the region and most have even more now. Chang says there were times when Wilson Sonsini had to hand off major deals to the Wall Street firms because they lacked the capacity.
At the same time, she also thinks there is a generational shift in the legal market towards Chinese-born, Western-trained lawyers with ties to bankers and entrepreneurs with similar profiles. She thinks Chen is a perfect example of that new breed of young, aggressive lawyer, and she thinks he will serve Wilson Sonsini well. "I hired Weiheng because I knew I was leaving and I felt it was very important for the law firm to have people with that background," she says.
Where the China technology market is going is, of course, still a big question mark, and the current capital markets downturn has given all the law firms competing in China’s tech space some unwelcome breathing room.
“The focus right now isn’t really on competition [from new firms] but when the market is going to come back,” says Skadden’s Gao.
But Chen thinks that market may never come back to what it was. He thinks China and Hong Kong have more of their own sophisticated tech investors now, including some relocated from outside the region. Moreover, Chinese companies now realize that U.S. IPOs aren’t just easy money but also carry high compliance costs and considerable litigation risk.
“I am not saying that the Chinese companies will stop considering U.S. IPOs,” he says, “but I don't see that U.S. IPOs will be the mainstream going forward.”
Instead, he thinks more competition in the future will focus on Hong Kong listings. Wilson Sonsini, like most of the Wall Street firms, has recently launched a Hong Kong law practice with the addition in September of partner Khoon Jin Tan, who most recently was a managing director in the China investment banking group of Macquarie Capital.
Cooley’s Peck notes, however, that all markets are cyclical, and Chinese companies’ concerns about the U.S. may eventually be replaced by those about Hong Kong as the region goes through its own ups and downs. As a result, U.S. IPOs may return in popularity again.
“People love to predict,” he says. “We just finished a [U.S.] election cycle where a lot of people ended up with egg on their faces because of their predictions.”
Email: tbrennan@alm.com.
Update, 11/28/12: Beginning in the 20th paragraph of this story, comments from an anonymous source have been replaced with comments from an additional interview with Carmen Chang.
Update, 11/19/12 2:30 EST: Comments from Carmen Chang have been added to the 22nd paragraph of this story.
Originally Posted November 19, 2012
http://www.americanlawyer.com/PubArticleAL.jsp?id=1202578781078&Silicon_Valley_Firms_Seek_a_Bigger_Piece_of_Chinas_Technology_Pie&slreturn=20121130135717
The Asian Lawyer
http://www.americanlawyer.com/asian_lawyer/index.jsp
In Silicon Valley, Wilson Sonsini Goodrich & Rosati and Cooley are well known as go-to firms for rising tech companies. In China, it’s been a different story so far.
There, New York firms like Simpson Thacher & Bartlett; Davis Polk & Wardwell; and Skadden, Arps, Slate, Meagher & Flom have built a commanding lead advising Chinese technology start-ups. Many of those companies choose to have U.S. initial public offerings because of the larger community in America of tech-savvy investors and analysts, as well as the fact that the New York Stock Exchange and Nasdaq, unlike the major exchanges in China or Hong Kong, do not require listing companies to have a multi-year track record of profitability.
Of the 41 U.S. IPOs by Chinese companies in 2010, Simpson alone advised the issuers or the underwriters on 18 of them. Skadden was on 17. Wilson Sonsini, which launched a Shanghai office in 2007, managed just one.
There were 12 such IPOs in 2011. But that market has, of course, been in a deep freeze for the past year, with just one U.S. IPO for a Chinese company so far in 2012: the March New York Stock Exchange listing of Skadden client Vipshop Holdings Ltd., a Guangzhou-based online retailer which raised almost 40 percent less than the $118 million it had sought. Beset by investor concerns over the quality of their financial disclosures, many U.S. listed Chinese companies have seen their share prices plummet. Several have been the targets of shareholder class actions.
But Silicon Valley firms are maneuvering now to try to make sure they get a bigger piece of the action when the market bounces back. Cooley opened its first overseas office in Shanghai last December, with partners Bradley Peck and Patrick Loofbourrow relocated from San Diego. Another Silicon Valley firm, Gunderson Dettmer, is currently awaiting approval from Chinese authorities to open its first international office in Beijing.
Bradley Peck, Cooley’s managing partner in Shanghai, says the same strategy that has succeeded for the firm back home—working with companies from start-up to IPO—will also work in China, especially given the firm’s long track record in the tech sector. Tech companies that Cooley has advised from the very beginning include mobile chip maker Qualcomm Inc., graphics giant Nvidia, and Internet review portal Yelp Inc.
“I do think that history, that experience, and all the knowledge that comes with that, is an advantage,” he says. “You want someone who’s been there, done that.”
But the New York firms say that, in China, they are the ones who have been there and done that.
“You have to remember that firms like Davis Polk and our peer firms have been out here since the 1990s,” says Davis Polk Hong Kong partner James Lin, whose firm advised seven Chinese companies on U.S. listings in 2010. “So we’ve established ourselves in the U.S. capital markets space well before the peak years for IPOs [in 2010 and 2011]. I think that’s given us an advantage.”
Certain partners have become highly identified with China’s tech sector. Skadden’s Julie Gao has represented leading search engine Baidu.com, video site Youku.com, and retailer e-commerce China Dangdang in IPOs. She is also now acting for social media site YY.com on a planned IPO. Simpson Thacher’s Leiming Chen and Kirkland & Ellis’s David Zhang have also garnered long lists of deals in the space.
Lin notes that the leading Wall Street firms have substantial Silicon Valley practices and relationships with venture capital firms of their own to leverage in China. And he doesn’t think it’s just Silicon Valley firms that work with early-stage companies. “We do that, too,” says Lin.
Former Wilson Sonsini associate Brent Irvin, now general counsel for Chinese Internet portal and messaging giant Tencent Holdings Ltd., says New York and London firms are definitely the market leaders in the region. But he thinks there are areas where Silicon Valley firms will be competitive, such as technology and intellectual property licensing.
Tencent turned to Wilson Sonsini this summer when it struck a deal to bring to China a licensed online version of Activision Blizzard Inc.’s popular Call of Duty videogame series. Irvin says the company has also used Wilson Sonsini and other Silicon Valley firms on angel investments it has made in U.S. tech start-ups.
“For venture capital–type investments, licensing, IP deals, we definitely have California firms on our short list,” he says.
But Wilson Sonsini, the best known of the Silicon Valley firms and the earliest of them to move into China, is now taking a very different path from its West Coast peers. Its China practice partners are now almost all former lawyers with Wall Street firms.
Weiheng Chen, the Hong Kong–based head of the China practice for Wilson Sonsini, joined the firm two years ago from Milbank, Tweed, Hadley & McCloy, where he was a counsel. He also previously worked at Sullivan & Cromwell. Last year the firm brought on board Shanghai partner Kefei Li, a former Skadden counsel. Earlier this year, Davis Polk counsel Zhan Chen also came aboard as a Wilson Sonsini Shanghai partner.
Chen says the firm is also looking at a broad range of industries in China, such as consumer goods and health care. "The growth sectors in the U.S. in the past decades have been associated with tech-related sectors, but that is not the case in China," he says.
Before Chen came on board, Wilson Sonsini’s China efforts had been led by partner Carmen Chang, who worked primarily in the firm's Palo Alto headquarters. Chang left the firm in February to divide her time between the Silicon Valley office of Washington, D.C.’s Covington & Burling, where she became a senior counsel, and venture capital firm New Enterprise Associates, where she joined as a senior adviser. Two other China partners, Michelle Edwards and Eva Wang, also moved from Wilson Sonsini to Covington.
Chang, who is largely retiring from active law practice, says Chinese clients had been receptive to Wilson Sonsini's Silicon Valley-style practice, which focused on having ongoing relationships with companies and advising them on their day-to-day operations as well as major transactions. She still thinks this approach can work for firms like Cooley. But she says the earlier investment in China by Wall Street firms has given them an advantage in the market; they have great lawyers but also more of them.
"In the first five years or so, we never had more than four or five lawyers on the ground in all of China," she says. During the same time, many of the New York firms had dozens in the region and most have even more now. Chang says there were times when Wilson Sonsini had to hand off major deals to the Wall Street firms because they lacked the capacity.
At the same time, she also thinks there is a generational shift in the legal market towards Chinese-born, Western-trained lawyers with ties to bankers and entrepreneurs with similar profiles. She thinks Chen is a perfect example of that new breed of young, aggressive lawyer, and she thinks he will serve Wilson Sonsini well. "I hired Weiheng because I knew I was leaving and I felt it was very important for the law firm to have people with that background," she says.
Where the China technology market is going is, of course, still a big question mark, and the current capital markets downturn has given all the law firms competing in China’s tech space some unwelcome breathing room.
“The focus right now isn’t really on competition [from new firms] but when the market is going to come back,” says Skadden’s Gao.
But Chen thinks that market may never come back to what it was. He thinks China and Hong Kong have more of their own sophisticated tech investors now, including some relocated from outside the region. Moreover, Chinese companies now realize that U.S. IPOs aren’t just easy money but also carry high compliance costs and considerable litigation risk.
“I am not saying that the Chinese companies will stop considering U.S. IPOs,” he says, “but I don't see that U.S. IPOs will be the mainstream going forward.”
Instead, he thinks more competition in the future will focus on Hong Kong listings. Wilson Sonsini, like most of the Wall Street firms, has recently launched a Hong Kong law practice with the addition in September of partner Khoon Jin Tan, who most recently was a managing director in the China investment banking group of Macquarie Capital.
Cooley’s Peck notes, however, that all markets are cyclical, and Chinese companies’ concerns about the U.S. may eventually be replaced by those about Hong Kong as the region goes through its own ups and downs. As a result, U.S. IPOs may return in popularity again.
“People love to predict,” he says. “We just finished a [U.S.] election cycle where a lot of people ended up with egg on their faces because of their predictions.”
Email: tbrennan@alm.com.
Update, 11/28/12: Beginning in the 20th paragraph of this story, comments from an anonymous source have been replaced with comments from an additional interview with Carmen Chang.
Update, 11/19/12 2:30 EST: Comments from Carmen Chang have been added to the 22nd paragraph of this story.
Originally Posted November 19, 2012
http://www.americanlawyer.com/PubArticleAL.jsp?id=1202578781078&Silicon_Valley_Firms_Seek_a_Bigger_Piece_of_Chinas_Technology_Pie&slreturn=20121130135717
China Venture Capital Assoc. Governors Study Ministries of China
The Board of Governors of China Venture Capital and Private Equity Association (CVCA) concluded a two-day study tour to 8 ministry-level administrations of China on November 1st 2012. It is the fourth of such hi-end visit since 2009. The annual visit has laid a good foundation for building a smooth dialogue platform between CVCA and the VC/PE policy makers, and for helping VC/PE players get heard by the right people.
The eight national administrations meeting CVCA governors during this year's study tour are National Development and Reform Commission (NDRC), China Securities Regulatory Commission (CSRC), China Insurance Regulatory Commission (CIRC), Ministry of Commerce of the People's Republic of China (MOFCOM), State Administration of Taxation (SAT), State-owned Assets Supervision, Administration Commission of the State Council (SASAC) and The national social security fund council (SSF). Key topics discussed range from the newly released VC/PE policies and regulations, the logic and thoughts behind, to the next steps as well as the future policy preference from the angle of each administration.
The CVCA delegation was co-led by Mr. Yichen Zhang, Chairman of CVCA and CEO of CITIC Capital, and Mr. John Zhao, Chairman Elect of CVCA and CEO of Hony Capital. The delegation is composed of CVCA governors, selective partners of CVCA members and guests from 18 top-tier GPs and LPs.
According to incomplete statistics, the AUM of the delegation is roughly RMB 1,900 billion. They have invested in mainland China RMB 152.6 billion in over 1,000 Chinese enterprises which have produced over 4 million employment opportunities. 60% of their investees fall into the strategic emerging industries category as defined in China's 12th 5-year plan. With the investment, the CVCA delegation has played an active and indispensable part in the transformation and upgrade of China's real economy, improving the proprietary innovation capability and corporate governance of the Chinese enterprises, incubating potential candidates for capital markets, contributing to the formation of multi-level capital markets, and helping Chinese enterprises going abroad.
As a nationwide organization focused on VC/PE industry, CVCA devotes to building a communication platform between China governments and VC/PE industry to drive the sustainable development of the VC/PE industry in the great China region.
The eight national administrations meeting CVCA governors during this year's study tour are National Development and Reform Commission (NDRC), China Securities Regulatory Commission (CSRC), China Insurance Regulatory Commission (CIRC), Ministry of Commerce of the People's Republic of China (MOFCOM), State Administration of Taxation (SAT), State-owned Assets Supervision, Administration Commission of the State Council (SASAC) and The national social security fund council (SSF). Key topics discussed range from the newly released VC/PE policies and regulations, the logic and thoughts behind, to the next steps as well as the future policy preference from the angle of each administration.
The CVCA delegation was co-led by Mr. Yichen Zhang, Chairman of CVCA and CEO of CITIC Capital, and Mr. John Zhao, Chairman Elect of CVCA and CEO of Hony Capital. The delegation is composed of CVCA governors, selective partners of CVCA members and guests from 18 top-tier GPs and LPs.
According to incomplete statistics, the AUM of the delegation is roughly RMB 1,900 billion. They have invested in mainland China RMB 152.6 billion in over 1,000 Chinese enterprises which have produced over 4 million employment opportunities. 60% of their investees fall into the strategic emerging industries category as defined in China's 12th 5-year plan. With the investment, the CVCA delegation has played an active and indispensable part in the transformation and upgrade of China's real economy, improving the proprietary innovation capability and corporate governance of the Chinese enterprises, incubating potential candidates for capital markets, contributing to the formation of multi-level capital markets, and helping Chinese enterprises going abroad.
As a nationwide organization focused on VC/PE industry, CVCA devotes to building a communication platform between China governments and VC/PE industry to drive the sustainable development of the VC/PE industry in the great China region.
source: http://www.cvca.org.cn/mail2012/20121101/index_en.htm
Who is Xi Jinping?
By Elizabeth Yuan, CNN
STORY HIGHLIGHTS
As with all Chinese leaders, government tightly controls details of Xi's life
Xi is the son of a revolutionary hero, grew up a "princeling"
Xi has military ties that predecessors Hu, Jiang don't, one observer notes
Xi received high marks during Washington trip for desire to engage United States
Hong Kong (CNN) -- When Xi Jinping, 59, and his "Fifth Generation" of leaders assume power, it will mark a first for China's post-1949 generation and those who spent their formative years during the Cultural Revolution.
In a series of steps, Xi, the current vice president since 2008, is expected to be named general secretary of the Communist Party during its 18th Congress, which opens Thursday, and then president next March, succeeding incumbent Hu Jintao.
As with all Chinese leaders, details of Xi's life are tightly controlled by the government, creating a gap that biographies -- some written under pseudonyms, given the political sensitivities -- have sought to fill. China watchers meanwhile try to discern how he would lead.
"Chinese leaders don't rise to the top telegraphing what changes they'll do," said Bruce J. Dickson, a political science professor at George Washington University's Elliott School of International Affairs. "They rise to the top showing how loyal they are to the incumbent. What they'll do when they rise to the top -- that's the big question."
Xi was born in 1953, four years after the Chinese Communist Party defeated the ruling Nationalists and established the People's Republic of China. He is the son of the second marriage of Xi Zhongxun, a revolutionary hero whom then-paramount leader Mao Zedong would appoint minister of propaganda and education.
Xi Zhongxun would later become vice premier under Zhou Enlai and secretary general of the State Council, China's highest administrative body, before being purged in 1962.
Until then, Xi Jinping had grown up a "princeling" in the enclave of power, Zhongnanhai, with other children of China's first generation of leaders. One childhood peer was Bo Xilai, son of Bo Yibo, the first finance minister who was also purged during the Cultural Revolution. Life was comfortable and far removed from the mass starvation during Mao's disastrous "Great Leap Forward" campaign (1958-1962), which was designed to transform the nation into an industrial society.
China's National Congress meets
China prepares for political transition
However, a few years later, Xi -- his father by then deposed -- would be among 30 million "sent-down youth," forced to leave cities for the countryside and mountains under another of Mao's policies. From 1969-1975, or most of the Cultural Revolution, Xi was an agricultural laborer in Liangjiahe, Shaanxi, his ancestral province.
"That generation went through a lot of difficulties," said Cheng Li, director of research at the John L. Thornton Center at the Brookings Institution. "Idealism and pragmatism in a very unique way combined in this generation."
The experience had a positive influence on Xi's view of China and the world, according to Guo Yanjun, chairman of CNHK Media, the publisher of "China's Future: A Biography of Xi Jinping." "Even after he became a leader, he helped farmers," Guo said. His favorite story was of the Tsinghua University-bound Xi in 1975 being accompanied by villagers who walked 60 li (30 km) to send him off at a train station.
Mao died in 1976, and Xi's father was subsequently rehabilitated and became party secretary of Guangdong, where he oversaw China's first special economic zones near Hong Kong -- reforms that would define then paramount leader Deng Xiaoping's economic legacy.
The elder Xi's connections proved critical. After graduating from Tsinghua with a chemical engineering degree in 1979, Xi Jinping became the personal secretary to his father's former comrade-in-arms, Geng Biao, and became an active military service member. As vice premier, a member of the Communist Party's Politburo Standing Committee and secretary general of the Central Military Commission, Geng "dominated the Party, government and the army," according to "China's Future," affording Xi a rare vantage point.
Such military ties -- familial and professional -- give him what neither Hu nor his predecessor Jiang Zemin had, said Chi Wang, president of the U.S.-China Policy Foundation.
"The military takes him as one of the family members." It was around this period that Xi was married to his first wife, Ke Lingling, the daughter of Ke Hua, China's ambassador to Great Britain and a former underling of Xi Zhongxun, according to "China's Future." Idealism and pragmatism in a very unique way combined in this generation said Cheng Li, Brookings Institution. Not much is known about the marriage except that it ended in divorce within a few years. (In 1987, Xi would marry his current wife, Peng Liyuan, a popular folk singer for the People's Liberation Army.)
In 1982, when his father entered the ruling Politburo and the Secretariat, Xi became county deputy secretary in Zhengding, Hebei province, his first experience in rural politics. In this role, he took his first trip to the United States -- as part of an agricultural delegation in 1985 to Hebei's "sister state" of Iowa -- and brought back knowledge of farming technology as well as tourism.
This trip had a great impact on Xi, who stayed with a family in Muscatine, said Pin Ho, chairman of Mirror Books, which published a separate "Biography of Xi Jinping" this year. "Vocally, he's a nationalist. Psychologically, he greatly hopes to keep good relations with the West, especially the U.S.," Ho said, noting that Xi's daughter, Xi Mingze, studies there -- at Harvard -- under a pseudonym.
In a major policy speech in Washington in February Xi called for increasing strategic trust and reducing suspicions while respecting each other's core interests, such as the "one-China policy" that opposes Taiwan and Tibetan independence.
In an indirect reference to the Obama administration's "rebalancing" strategy toward Asia, Xi said, "We hope the United States will respect the interests and concerns of China and other countries in the region."
Nonetheless, Xi got high marks for his desire to engage with the United States, and his trip included meetings with President Barack Obama, Vice President Joe Biden, Secretary of State Hillary Clinton and Defense Secretary Leon Panetta. Also not overlooked was the fact Xi chose to make a nostalgic stop in Iowa, in addition to Los Angeles, during his five-day U.S. tour.
"From my conversations with people in the United States, the reigning understanding is, 'This is a guy we can work with,'" said David Lampton, director of the China Studies Program at Johns Hopkins School of Advanced International Studies.
Wang of the U.S.-China Policy Foundation echoed the sentiments, calling Xi "relaxed, very at ease to talk with people" and a departure from Communist leaders who tend to be "very cautious" when talking.
Meanwhile, "Xi's leadership experience [after Zhengding] in running Fujian, Zhejiang, and Shanghai, three economically-advanced regions, has prepared him well for pursuing policies to promote the development of the private sector, foreign investment and trade, and the liberalization of China's financial system," wrote Cheng Li of Brookings for the Washington Quarterly in its winter 2012 edition.
The run-up to Xi's ascension as China's next leader has nonetheless been bumpy.
In September, his nearly two-week "disappearance" -- and canceled meetings with Clinton and other foreign officials -- fueled speculation over his health and factional infighting.
This is a guy we can work with David Lampton, Johns Hopkins School of Advanced International Studies. In an interview with CNN's Christiane Amanpour, former Hong Kong Chief Executive Tung Chee-hwa said Xi had suffered a back injury while swimming.
Even so, the Chinese media's "default mode" of not speaking about its leaders, coupled with the lack of a constitutional basis for the regime's transfer of power, left people wondering, "What's the Plan B if something were to happen?" Lampton said.
Also of note were two reports released by Xinhua on September 28 within three minutes of each other: the Congress' November 8 opening date -- after much speculation it would fall in October -- and the expulsion of Bo Xilai from the Communist Party. Bo now faces criminal prosecution in the wake of a scandal that saw his wife convicted of murder.
Given the turbulent lead-up to the Communist Party Congress, Lampton says he, like other China watchers, will be trying to glean clues as to China's political direction. He says a longer-than-expected Congress could hint at an inability to reach decisions. Also important will be the make-up of the Politburo Standing Committee, what happens to the key portfolios -- and crucially, whether Hu will relinquish his chairmanship of the Central Military Commission to Xi.
"Having two centers -- the predecessor heading the military and the new leader second-in-command -- is not a healthy signal to the world," Lampton said.
The flipside of having a more collective leadership as opposed to a dominant leader like Mao or Deng is that the "system has been set up to prevent a strong leader," Dickson of George Washington University said. All the more reason that the charismatic Bo, who had been tipped for the Standing Committee and is said to have led a ruthless anti-crime campaign in Chongqing, drew some concern before his downfall.
The clean reputation of Xi -- who had become Shanghai's leader after his predecessor, Chen Liangyu, was dismissed over a social security fund scandal -- took a hit in June when Bloomberg reported on the wealth of his extended family.
Although no assets were traced to Xi, his wife or daughter, Bloomberg found that his extended family had business interests in minerals, real estate and mobile-phone equipment, with assets in the hundreds of millions.
Last month the New York Times gave a similar treatment to Premier Wen Jiabao, reporting on the
staggering wealth of his relatives -- a review that found assets of at least $2.7 billion.
Xi and the new leaders will have to demonstrate to the public how serious they are in fighting widespread corruption, Lampton said, or face "huge problems."
CNN's Shao Tian contributed to this report.
http://www.cnn.com/2012/11/07/world/asia/china-xi-jinping-profile/index.html
updated 12:43 PM EST, Fri November 9, 2012
STORY HIGHLIGHTS
As with all Chinese leaders, government tightly controls details of Xi's life
Xi is the son of a revolutionary hero, grew up a "princeling"
Xi has military ties that predecessors Hu, Jiang don't, one observer notes
Xi received high marks during Washington trip for desire to engage United States
Hong Kong (CNN) -- When Xi Jinping, 59, and his "Fifth Generation" of leaders assume power, it will mark a first for China's post-1949 generation and those who spent their formative years during the Cultural Revolution.
In a series of steps, Xi, the current vice president since 2008, is expected to be named general secretary of the Communist Party during its 18th Congress, which opens Thursday, and then president next March, succeeding incumbent Hu Jintao.
As with all Chinese leaders, details of Xi's life are tightly controlled by the government, creating a gap that biographies -- some written under pseudonyms, given the political sensitivities -- have sought to fill. China watchers meanwhile try to discern how he would lead.
"Chinese leaders don't rise to the top telegraphing what changes they'll do," said Bruce J. Dickson, a political science professor at George Washington University's Elliott School of International Affairs. "They rise to the top showing how loyal they are to the incumbent. What they'll do when they rise to the top -- that's the big question."
Xi was born in 1953, four years after the Chinese Communist Party defeated the ruling Nationalists and established the People's Republic of China. He is the son of the second marriage of Xi Zhongxun, a revolutionary hero whom then-paramount leader Mao Zedong would appoint minister of propaganda and education.
Xi Zhongxun would later become vice premier under Zhou Enlai and secretary general of the State Council, China's highest administrative body, before being purged in 1962.
Until then, Xi Jinping had grown up a "princeling" in the enclave of power, Zhongnanhai, with other children of China's first generation of leaders. One childhood peer was Bo Xilai, son of Bo Yibo, the first finance minister who was also purged during the Cultural Revolution. Life was comfortable and far removed from the mass starvation during Mao's disastrous "Great Leap Forward" campaign (1958-1962), which was designed to transform the nation into an industrial society.
China's National Congress meets
China prepares for political transition
However, a few years later, Xi -- his father by then deposed -- would be among 30 million "sent-down youth," forced to leave cities for the countryside and mountains under another of Mao's policies. From 1969-1975, or most of the Cultural Revolution, Xi was an agricultural laborer in Liangjiahe, Shaanxi, his ancestral province.
"That generation went through a lot of difficulties," said Cheng Li, director of research at the John L. Thornton Center at the Brookings Institution. "Idealism and pragmatism in a very unique way combined in this generation."
The experience had a positive influence on Xi's view of China and the world, according to Guo Yanjun, chairman of CNHK Media, the publisher of "China's Future: A Biography of Xi Jinping." "Even after he became a leader, he helped farmers," Guo said. His favorite story was of the Tsinghua University-bound Xi in 1975 being accompanied by villagers who walked 60 li (30 km) to send him off at a train station.
Mao died in 1976, and Xi's father was subsequently rehabilitated and became party secretary of Guangdong, where he oversaw China's first special economic zones near Hong Kong -- reforms that would define then paramount leader Deng Xiaoping's economic legacy.
The elder Xi's connections proved critical. After graduating from Tsinghua with a chemical engineering degree in 1979, Xi Jinping became the personal secretary to his father's former comrade-in-arms, Geng Biao, and became an active military service member. As vice premier, a member of the Communist Party's Politburo Standing Committee and secretary general of the Central Military Commission, Geng "dominated the Party, government and the army," according to "China's Future," affording Xi a rare vantage point.
Such military ties -- familial and professional -- give him what neither Hu nor his predecessor Jiang Zemin had, said Chi Wang, president of the U.S.-China Policy Foundation.
"The military takes him as one of the family members." It was around this period that Xi was married to his first wife, Ke Lingling, the daughter of Ke Hua, China's ambassador to Great Britain and a former underling of Xi Zhongxun, according to "China's Future." Idealism and pragmatism in a very unique way combined in this generation said Cheng Li, Brookings Institution. Not much is known about the marriage except that it ended in divorce within a few years. (In 1987, Xi would marry his current wife, Peng Liyuan, a popular folk singer for the People's Liberation Army.)
In 1982, when his father entered the ruling Politburo and the Secretariat, Xi became county deputy secretary in Zhengding, Hebei province, his first experience in rural politics. In this role, he took his first trip to the United States -- as part of an agricultural delegation in 1985 to Hebei's "sister state" of Iowa -- and brought back knowledge of farming technology as well as tourism.
This trip had a great impact on Xi, who stayed with a family in Muscatine, said Pin Ho, chairman of Mirror Books, which published a separate "Biography of Xi Jinping" this year. "Vocally, he's a nationalist. Psychologically, he greatly hopes to keep good relations with the West, especially the U.S.," Ho said, noting that Xi's daughter, Xi Mingze, studies there -- at Harvard -- under a pseudonym.
In a major policy speech in Washington in February Xi called for increasing strategic trust and reducing suspicions while respecting each other's core interests, such as the "one-China policy" that opposes Taiwan and Tibetan independence.
In an indirect reference to the Obama administration's "rebalancing" strategy toward Asia, Xi said, "We hope the United States will respect the interests and concerns of China and other countries in the region."
Nonetheless, Xi got high marks for his desire to engage with the United States, and his trip included meetings with President Barack Obama, Vice President Joe Biden, Secretary of State Hillary Clinton and Defense Secretary Leon Panetta. Also not overlooked was the fact Xi chose to make a nostalgic stop in Iowa, in addition to Los Angeles, during his five-day U.S. tour.
"From my conversations with people in the United States, the reigning understanding is, 'This is a guy we can work with,'" said David Lampton, director of the China Studies Program at Johns Hopkins School of Advanced International Studies.
Wang of the U.S.-China Policy Foundation echoed the sentiments, calling Xi "relaxed, very at ease to talk with people" and a departure from Communist leaders who tend to be "very cautious" when talking.
Meanwhile, "Xi's leadership experience [after Zhengding] in running Fujian, Zhejiang, and Shanghai, three economically-advanced regions, has prepared him well for pursuing policies to promote the development of the private sector, foreign investment and trade, and the liberalization of China's financial system," wrote Cheng Li of Brookings for the Washington Quarterly in its winter 2012 edition.
The run-up to Xi's ascension as China's next leader has nonetheless been bumpy.
In September, his nearly two-week "disappearance" -- and canceled meetings with Clinton and other foreign officials -- fueled speculation over his health and factional infighting.
This is a guy we can work with David Lampton, Johns Hopkins School of Advanced International Studies. In an interview with CNN's Christiane Amanpour, former Hong Kong Chief Executive Tung Chee-hwa said Xi had suffered a back injury while swimming.
Even so, the Chinese media's "default mode" of not speaking about its leaders, coupled with the lack of a constitutional basis for the regime's transfer of power, left people wondering, "What's the Plan B if something were to happen?" Lampton said.
Also of note were two reports released by Xinhua on September 28 within three minutes of each other: the Congress' November 8 opening date -- after much speculation it would fall in October -- and the expulsion of Bo Xilai from the Communist Party. Bo now faces criminal prosecution in the wake of a scandal that saw his wife convicted of murder.
Given the turbulent lead-up to the Communist Party Congress, Lampton says he, like other China watchers, will be trying to glean clues as to China's political direction. He says a longer-than-expected Congress could hint at an inability to reach decisions. Also important will be the make-up of the Politburo Standing Committee, what happens to the key portfolios -- and crucially, whether Hu will relinquish his chairmanship of the Central Military Commission to Xi.
"Having two centers -- the predecessor heading the military and the new leader second-in-command -- is not a healthy signal to the world," Lampton said.
The flipside of having a more collective leadership as opposed to a dominant leader like Mao or Deng is that the "system has been set up to prevent a strong leader," Dickson of George Washington University said. All the more reason that the charismatic Bo, who had been tipped for the Standing Committee and is said to have led a ruthless anti-crime campaign in Chongqing, drew some concern before his downfall.
The clean reputation of Xi -- who had become Shanghai's leader after his predecessor, Chen Liangyu, was dismissed over a social security fund scandal -- took a hit in June when Bloomberg reported on the wealth of his extended family.
Although no assets were traced to Xi, his wife or daughter, Bloomberg found that his extended family had business interests in minerals, real estate and mobile-phone equipment, with assets in the hundreds of millions.
Last month the New York Times gave a similar treatment to Premier Wen Jiabao, reporting on the
staggering wealth of his relatives -- a review that found assets of at least $2.7 billion.
Xi and the new leaders will have to demonstrate to the public how serious they are in fighting widespread corruption, Lampton said, or face "huge problems."
CNN's Shao Tian contributed to this report.
http://www.cnn.com/2012/11/07/world/asia/china-xi-jinping-profile/index.html
updated 12:43 PM EST, Fri November 9, 2012
Saturday, December 29, 2012
China's Next Export: Venture Capital-
By John Tozzi.
In April, Empower Micro Systems became one of the first tenants of InnoSpring, a new startup incubator in Santa Clara, Calif., backed largely by Chinese investors. Less than two weeks after Empower’s move-in date, InnoSpring helped the young company—which develops technology that converts electricity between AC and DC—set up meetings with 22 China-based venture capital firms in preparation for a trip to Shanghai in May. “To have that network working on our behalf is priceless,” says Jon Bonanno, Empower’s president.
As more U.S. tech startups see China as an essential place to do business, increasing numbers of Chinese investors are funding them and helping them expand to the mainland. Chinese venture capital firms backed 28 U.S. companies in 2011, nearly double the number two years earlier, according to Dow Jones VentureSource. China’s growing wealth and the government’s desire to attract tech companies have set the stage for more deals, says Gavin Ni, founder of Zero2IPO Group, which advises venture capitalists in China.
Much of the activity is driven by Chinese-born entrepreneurs who made their fortunes abroad, such as InnoSpring President Eugene Zhang. A graduate of Beijing’s elite Tsinghua University, sometimes called the MIT of China, Zhang started his career at Sun Microsystems and Cisco Systems (CSCO) before founding semiconductor company JEDA Technologies in Silicon Valley in 2002. Two years ago he helped form a $5 million angel investment fund with 24 fellow Tsinghua alumni. The fund is one of several groups that will back companies from InnoSpring. Chinese entrepreneurs “are entering into the Silicon Valley ecosystem not only as startups but as investors,” Zhang says.
Though Empower’s founders are from the U.S. and Europe, most of InnoSpring’s companies already have ties to China. Xuyang Li, founder of mobile antivirus app maker TrustGo, emigrated from China in 1993. His year-old venture has four employees in the U.S. and 40 in China, where software development is done. TrustGo’s English-language app launched in March, and a Chinese version is expected soon. “We’re trying to build an American company, but I have a deep connection to China, so we’re able to cover both markets,” Li says.
InnoSpring today is home to more than 20 companies and expects to eventually double that number. By establishing a foothold in Silicon Valley, the group says it can strengthen the ties Chinese-born entrepreneurs have with their homeland. “If you look in the Valley, there are a few hundred thousand Chinese and Indian immigrants who are some of the brightest, most motivated people in those countries,” says Richard Lim, managing director of GSR Ventures, which has offices in China and Silicon Valley. The firm has funded dozens of Chinese startups and will invest in InnoSpring companies. The incubator, Lim says, can “attract people to go back and set up enterprises in China.”
Even the Chinese government is betting on foreign startups, via WestSummit Capital, a venture firm backed by the country’s sovereign wealth fund. Formed in 2009, WestSummit invests primarily outside China, and its six partners are all U.S. citizens. WestSummit promises to help its portfolio companies navigate China’s bureaucracy, particularly in energy, telecommunications, media, and other industries that are heavily regulated or dominated by state-owned enterprises.
One of WestSummit’s companies is trying to sell technology used in credit cards and ID badges to state-owned banks and government bureaucracies. While such contracts in China rarely go to outsiders, WestSummit can help foreigners form partnerships with locals—though the government has no control over investment decisions, says Raymond Yang, WestSummit’s managing director. “We leverage government influence and [our] background to help our portfolio companies,” he says.
For entrepreneurs, the benefits of investors with strong ties to China are clear. Breaking into the Chinese market can be daunting even for multinationals with decades of experience in countries around the globe. “There are very few places where relationships are as pivotal to your success or failure,” says Chris Hartshorn, vice president at tech advisory firm Lux Research. “If someone likes you in China, paperwork disappears pretty quickly.”
While funding U.S. startups may be attractive to growing numbers of Chinese, successful venture investing requires management skills and experience that remain in short supply in China, says Feng Deng, co-founder of Northern Light Venture Capital, a Hong Kong firm that has invested in InnoSpring. “It’s not like, ‘You have money, you can do this,’ ” Deng says. “Especially for early-stage investors, you need to really understand how companies grow.”
The bottom line: As China’s wealth increases, Chinese investments in U.S. startups have almost doubled in the past two years.
Article published May 17, 2012 Bloomberg Businessweek
http://www.businessweek.com/articles/2012-05-17/chinas-next-export-venture-capital
Employer Q&A: the insider tips on Deloitte's graduate program
Arthur Wang, recruitment director at Deloitte, China
45,000. That's the number of graduate CVs their China business receives each year. 20%. That's the % of their annual graduate intake that's made up of haigui. Here, Arthur Wang, recruitment director at Deloitte China, talks to Silu about what the consulting and accounting giant looks for in its potential grad-level recruits...
45,000. That's the number of graduate CVs their China business receives each year. 20%. That's the % of their annual graduate intake that's made up of haigui. Here, Arthur Wang, recruitment director at Deloitte China, talks to Silu about what the consulting and accounting giant looks for in its potential grad-level recruits...
How do you typically filter candidates?
We have a standard set of ten factors that are most important to us and against which all candidates will be assessed. These are honesty, communication skills, degree of 'preparedness', active learning ability, problem solving, team work, positive behavior, adaptability, managing emotions and leadership.
What do you particularly expect from oversea graduates?
About 30% of our work is on an international level, and involves liaising with global clients. Returnees have an advantage in terms of their degree of international exposure, so we welcome applications from them.
Since they have typically spent one year or more in a foreign country, we expect them to show how they have developed themselves in the highly diversified environment in which they studied, and how sensitive they are to different cultures as a result. For example, we probe them to establish if they can view a problem from a different angle or have an overall understanding of the global business environment. Independent judgment is also very important.
Candidates are also expected to have excellent communication skills, and here again returnees should be at an advantage, as an important part of their overseas education is to deliver presentations in class and to engage in group discussions.
How many selection stages do graduates typically face before receiving an offer?
Four. First, have the resume selection stage, in which applicants' academic background and performance, internship experience, involvement in students’ associations and fluency in English will all be assessed.
Those who pass this screening stage will then take a written test on their language ability, numerical logic and career preference. The third round is a case study and group discussion. Eight people in each group will discuss a business case and its possible solutions. Those who make it through that will then go to interview stage, and the final decision will be made after an interview with the partners.
Any preference for particular student majors?
Mostly, we prefer students with business-related majors - such as accounting, finance, taxation, economic, law, management, plus computer science and information systems.
Do you have any target universities?
Yes - in principle we want the top students from the top universities. In practice, there are 13 universities in the UK which are our main targets: University of Warwick, London School of Economics, Imperial College London, University College London, Manchester Business School, City University London, University of Nottingham, King's College London, University of Cambridge, Lancaster University, University of Liverpool, University of Leeds, and University of Glasgow.
How important is an internship or work experience?
Those who have such an experience will, of course, have some advantage. But we understand that for some masters students, especially those in the UK, term time is quite a short, intense experience, which doesn’t allow much spare time to find an internship. So it’s not a compulsory requirement.
What proportion of your graduate intake is haigui?
20% of our graduate program every year are returnees.
And which departments do they mostly join?
Most graduate hires prefer a job in consulting rather than audit, which makes it much tougher to land a job in the consulting division than on the auditing side - competition for consulting new starter roles is very fierce.
But not everyone is suited to the work of a consultant, and in many cases, students don’t actually know what the audit side does, so things change once they join and become more familiar with the work we do.
What advice would you give to Chinese students applying to Deloitte?
It’s better to have a clear career plan before the applying for a graduate job randomly. We ask them to choose which division they want most in the first place when filing their online application. Then their resumes will be handled by different people based on their choices. So figuring out what they want to do and what fits them first will help us to assess them more effectively. Good luck!
We have a standard set of ten factors that are most important to us and against which all candidates will be assessed. These are honesty, communication skills, degree of 'preparedness', active learning ability, problem solving, team work, positive behavior, adaptability, managing emotions and leadership.
What do you particularly expect from oversea graduates?
About 30% of our work is on an international level, and involves liaising with global clients. Returnees have an advantage in terms of their degree of international exposure, so we welcome applications from them.
Since they have typically spent one year or more in a foreign country, we expect them to show how they have developed themselves in the highly diversified environment in which they studied, and how sensitive they are to different cultures as a result. For example, we probe them to establish if they can view a problem from a different angle or have an overall understanding of the global business environment. Independent judgment is also very important.
Candidates are also expected to have excellent communication skills, and here again returnees should be at an advantage, as an important part of their overseas education is to deliver presentations in class and to engage in group discussions.
How many selection stages do graduates typically face before receiving an offer?
Four. First, have the resume selection stage, in which applicants' academic background and performance, internship experience, involvement in students’ associations and fluency in English will all be assessed.
Those who pass this screening stage will then take a written test on their language ability, numerical logic and career preference. The third round is a case study and group discussion. Eight people in each group will discuss a business case and its possible solutions. Those who make it through that will then go to interview stage, and the final decision will be made after an interview with the partners.
Any preference for particular student majors?
Mostly, we prefer students with business-related majors - such as accounting, finance, taxation, economic, law, management, plus computer science and information systems.
Do you have any target universities?
Yes - in principle we want the top students from the top universities. In practice, there are 13 universities in the UK which are our main targets: University of Warwick, London School of Economics, Imperial College London, University College London, Manchester Business School, City University London, University of Nottingham, King's College London, University of Cambridge, Lancaster University, University of Liverpool, University of Leeds, and University of Glasgow.
How important is an internship or work experience?
Those who have such an experience will, of course, have some advantage. But we understand that for some masters students, especially those in the UK, term time is quite a short, intense experience, which doesn’t allow much spare time to find an internship. So it’s not a compulsory requirement.
What proportion of your graduate intake is haigui?
20% of our graduate program every year are returnees.
And which departments do they mostly join?
Most graduate hires prefer a job in consulting rather than audit, which makes it much tougher to land a job in the consulting division than on the auditing side - competition for consulting new starter roles is very fierce.
But not everyone is suited to the work of a consultant, and in many cases, students don’t actually know what the audit side does, so things change once they join and become more familiar with the work we do.
What advice would you give to Chinese students applying to Deloitte?
It’s better to have a clear career plan before the applying for a graduate job randomly. We ask them to choose which division they want most in the first place when filing their online application. Then their resumes will be handled by different people based on their choices. So figuring out what they want to do and what fits them first will help us to assess them more effectively. Good luck!
Silicon Valley China Conference First Place Winner 2012
http://translateabroad.com/
Financial Services In China 2013: How Much Are They Going To Pay You?
Morgan McKinley 2013 Salary Report - Financial Services
(From Silu.com): Salary-wise in 2013 there will definitely be gold medal winners - insurance and asset management; runners-up - financial leasing, private equity, risk management, accounting and finance, and 'also rans' - corporate & retail banking and banking operations. Here's Silu's summary of the report...
Booming: Insurance + Asset Management
Reasons: regulations loosening up and market conditions becoming more favorable.
Results: products being more diversified, performance management being reformed, and ultimately - more jobs with better pay.
Recruitment opps:
*Insurance - non-life insurance are where the hot roles are with 20%-40% salary increase expected; top-paying role - Portfolio Managing Director (RMB 100K+ per month).
*Asset Management - it's true that research/analyst/securities teams are shrinking, but worry not, they are moving on to corporate finance and M&A; 20-25% salary bump expected; top-paying role - Actuarial Director (RMB 50K-80K per month).
Stable: Accounting + Finance + Risk Management
Reasons: regulatory burden should make for more opps, but economy is unstable, so they cancel each other out in terms of hiring.
Results: employer reluctance when it comes to signing off on new recruits.
Recruitment opps:
*Accounting and Finance - knowledge of local regulations and connections with regulators highly sought after. 15-20% salary increase on average while 30% for financial control and reporting people; highest salary goes to Financial Control/Reporting Director (RMB 70K+ per month).
*Risk management- asset management, leasing and PE firms want more risk professionals; salaries for junior-level professionals not changing much but senior level should see 20% growth; highest salary goes to Legal Director (RMB 85K-150K per month).
Booming sector, tough job market: Private Equity + Financial Leasing
Reasons: China's twelfth Five-year Development Plan is favoring this area - it specifically states that the financial leasing industry will be further developed and the Ministry of Commerce and the National Development and Reform Commission are revising regulations accordingly to support it; meanwhile, investment banking not doing well - giving more opportunities to PE.
Results: booming - and supposedly hiring, but the hiring actually slowed down in the second half of 2012 due to global economic uncertainty and capital market cooling down.
Recruitment opps:
*PE - lengthy interviews as usual, requirements being higher - asking for experience in local operations and M&A; salaries to remain the same in general; highest salary goes to PE Managing Director (RMB 120K-200K+ per month).
*Financial Leasing - mid--to-senior-level needs both global and local experience - tough one, hiring slowed down lately but still a 20% salary increase expected; highest salary goes to Project Management/Legal Compliance Director (RMB 55K+ per month).
Unstable sector, bleak job market: Corporate + Retail Banking + Banking Operations
Reasons: global economic recession affects everyone, but to make things worse for banks here, China doesn't have strong policies designed to support them int eh way they are doing for other sectors e.g. insurance, financial leasing, etc.
Results: business slowing down and headcount being frozen; focus on talent retention.
Recruitment opps:
*Corporate & Retail Banking - middle and front-office not hiring, but it's a different story if you have client resources in SOEs (state-owned enterprises] and MNCs - they want you; no big salary bump expected in general except for junior front-office professionals - a 15% increase expected; highest salary goes to Trade Finance/Marketing Director (RMB 60K-75K per month).
*Banking Operations - foreign banks not hiring, junior operational bankers wanted - to cut costs; product management functions are doing ok; highest salary winner: Treasury Operations Director (RMB 50K-100K per month).
(From Silu.com): Salary-wise in 2013 there will definitely be gold medal winners - insurance and asset management; runners-up - financial leasing, private equity, risk management, accounting and finance, and 'also rans' - corporate & retail banking and banking operations. Here's Silu's summary of the report...
Booming: Insurance + Asset Management
Reasons: regulations loosening up and market conditions becoming more favorable.
Results: products being more diversified, performance management being reformed, and ultimately - more jobs with better pay.
Recruitment opps:
*Insurance - non-life insurance are where the hot roles are with 20%-40% salary increase expected; top-paying role - Portfolio Managing Director (RMB 100K+ per month).
*Asset Management - it's true that research/analyst/securities teams are shrinking, but worry not, they are moving on to corporate finance and M&A; 20-25% salary bump expected; top-paying role - Actuarial Director (RMB 50K-80K per month).
Stable: Accounting + Finance + Risk Management
Reasons: regulatory burden should make for more opps, but economy is unstable, so they cancel each other out in terms of hiring.
Results: employer reluctance when it comes to signing off on new recruits.
Recruitment opps:
*Accounting and Finance - knowledge of local regulations and connections with regulators highly sought after. 15-20% salary increase on average while 30% for financial control and reporting people; highest salary goes to Financial Control/Reporting Director (RMB 70K+ per month).
*Risk management- asset management, leasing and PE firms want more risk professionals; salaries for junior-level professionals not changing much but senior level should see 20% growth; highest salary goes to Legal Director (RMB 85K-150K per month).
Booming sector, tough job market: Private Equity + Financial Leasing
Reasons: China's twelfth Five-year Development Plan is favoring this area - it specifically states that the financial leasing industry will be further developed and the Ministry of Commerce and the National Development and Reform Commission are revising regulations accordingly to support it; meanwhile, investment banking not doing well - giving more opportunities to PE.
Results: booming - and supposedly hiring, but the hiring actually slowed down in the second half of 2012 due to global economic uncertainty and capital market cooling down.
Recruitment opps:
*PE - lengthy interviews as usual, requirements being higher - asking for experience in local operations and M&A; salaries to remain the same in general; highest salary goes to PE Managing Director (RMB 120K-200K+ per month).
*Financial Leasing - mid--to-senior-level needs both global and local experience - tough one, hiring slowed down lately but still a 20% salary increase expected; highest salary goes to Project Management/Legal Compliance Director (RMB 55K+ per month).
Unstable sector, bleak job market: Corporate + Retail Banking + Banking Operations
Reasons: global economic recession affects everyone, but to make things worse for banks here, China doesn't have strong policies designed to support them int eh way they are doing for other sectors e.g. insurance, financial leasing, etc.
Results: business slowing down and headcount being frozen; focus on talent retention.
Recruitment opps:
*Corporate & Retail Banking - middle and front-office not hiring, but it's a different story if you have client resources in SOEs (state-owned enterprises] and MNCs - they want you; no big salary bump expected in general except for junior front-office professionals - a 15% increase expected; highest salary goes to Trade Finance/Marketing Director (RMB 60K-75K per month).
*Banking Operations - foreign banks not hiring, junior operational bankers wanted - to cut costs; product management functions are doing ok; highest salary winner: Treasury Operations Director (RMB 50K-100K per month).
Upcoming VC Conference in Beijing: Silicon Valley Wireless: 1/5/13
Speakers:
Victor Tong, Founding Partner, Webplus Investment
Xiaobo Wang, GM, eTown International Investment
Yuan Liao, GM BDA Fiber Communication
Leo Zhou, VP, Limei
Yiwei Liu, BD Manager, Google Admob
Ramon Zeng, Investment Principal, DCM
Steve Lau, Entrepreneur, Angel Investor and Founder of Eagle Fund
Jianzhong Ni, Executive VP, CMCA
Mark Beckford, Founder and CEO，NetBridgeGlobal
Qiming Huang, Director, Silicon Valley China Wireless Technology Association
Innovation Angel is an incubation center designed to provide full services to help early-stage hi-tech startups.
Innovation Angel has professional Angel Mentors home and abroad in the high-tech mobile industrial innovation. With the best and brilliant mentors, each startup can get general and tailor-made services that help the entrepreneurs develop many products with market value and commercial potential and also improve the success rate of startups. Innovation Angel provides R&D working space with communication and collaboration as its theme. Every corner here breeds new and excellent ideas, improving the efficiency of their work.
http://www.svcwireless.org/svcw/index.php/events-list/svcwireless-events
About SVCWireless
Silicon Valley-China Wireless Technology Association (SVCWireless), founded in 2000, is the leading non-profit, non-bias independent professional association bridging the technology industries between China and the United States. With 30+ alliance and 5000+ members, SVCWireless is an open association that promotes innovation, entrepreneurship, venture investment, and networking to benefit its members.
http://svcwireless.org
Victor Tong, Founding Partner, Webplus Investment
Xiaobo Wang, GM, eTown International Investment
Yuan Liao, GM BDA Fiber Communication
Leo Zhou, VP, Limei
Yiwei Liu, BD Manager, Google Admob
Ramon Zeng, Investment Principal, DCM
Steve Lau, Entrepreneur, Angel Investor and Founder of Eagle Fund
Jianzhong Ni, Executive VP, CMCA
Mark Beckford, Founder and CEO，NetBridgeGlobal
Qiming Huang, Director, Silicon Valley China Wireless Technology Association
Innovation Angel is an incubation center designed to provide full services to help early-stage hi-tech startups.
Innovation Angel has professional Angel Mentors home and abroad in the high-tech mobile industrial innovation. With the best and brilliant mentors, each startup can get general and tailor-made services that help the entrepreneurs develop many products with market value and commercial potential and also improve the success rate of startups. Innovation Angel provides R&D working space with communication and collaboration as its theme. Every corner here breeds new and excellent ideas, improving the efficiency of their work.
http://www.svcwireless.org/svcw/index.php/events-list/svcwireless-events
About SVCWireless
Silicon Valley-China Wireless Technology Association (SVCWireless), founded in 2000, is the leading non-profit, non-bias independent professional association bridging the technology industries between China and the United States. With 30+ alliance and 5000+ members, SVCWireless is an open association that promotes innovation, entrepreneurship, venture investment, and networking to benefit its members.
http://svcwireless.org
San Jose and Silicon Valley want Chinese companies to know the investment door is wide open
by Nathan Donato-Weinstein, Real Estate Reporter
Silicon Valley / San Jose Business Journal
That was the message at a closing forum Friday during the 2012 US China Economic & Technology Summit, a daylong event at San Jose City Hall focused on technology, economic trends and international investment.The event came weeks after a new report from the Asia Society Northern California showing the state should become a top China summit: Silicon Valley welcomes investment destination for Chinese direct investment by 2020. San Jose officials want that money to come here. Kim Walesh, economic development director for San Jose, touted the large number of Chinese firms that have set up shop in recent years, noting the city's growth is slated to outpace San Francisco and Oakland combined.
"We've definitely seen more and more Chinese companies coming into our community, and we welcome them," she said. "The real estate here is a good value because of the growth that's projected." Still, Chinese investment here is in its infancy, said Bruce Pickering, executive director of Asia Society Northern California.
"At this point in time, New Zealand has more money in California than China. But that will change," he said.
Skip Whitney, a broker with Kidder Mathews in San Francisco who has worked closely with Chinese individuals and companies on real estate transactions, said service providers -- accountants, attorneys, brokers bankers and others -- need to educate themselves on how to work effectively with Chinese investors.
"You've got to understand the culture," he said.
Nathan Donato-Weinstein covers commercial real estate and transportation for the Silicon Valley Business Journal.
"We've definitely seen more and more Chinese companies coming into our community, and we welcome them," she said. "The real estate here is a good value because of the growth that's projected." Still, Chinese investment here is in its infancy, said Bruce Pickering, executive director of Asia Society Northern California.
"At this point in time, New Zealand has more money in California than China. But that will change," he said.
Skip Whitney, a broker with Kidder Mathews in San Francisco who has worked closely with Chinese individuals and companies on real estate transactions, said service providers -- accountants, attorneys, brokers bankers and others -- need to educate themselves on how to work effectively with Chinese investors.
"You've got to understand the culture," he said.
Nathan Donato-Weinstein covers commercial real estate and transportation for the Silicon Valley Business Journal.
Originally Published Friday, October 26, 2012
Friday, December 28, 2012
Muhammmad, UCLA stun No. 7 Mizzou in overtime
Highly touted freshman Shabazz Muhammad hit a go-ahead 3-pointer with 1:01 left in overtime to help them upset No. 7 Missouri 97-94 on Friday night and extend their winning streak to five games.
http://sportsillustrated.cnn.com/basketball/ncaa/men/gameflash/2012/12/28/79202_recap.html?sct=hp_t2_a4&eref=sihp
http://sportsillustrated.cnn.com/basketball/ncaa/men/gameflash/2012/12/28/79202_recap.html?sct=hp_t2_a4&eref=sihp
The Forbidden City
AsianArtMuseum
In 1420, in an effort to consolidate his control over the throne, the emperor of the Ming Dynasty moved China's capital to a site in the North, now known as Bejing. There, he built a vast complex of palaces and administrative buildings now covering 178 acres. Because access was restricted to the imperial family and to those who had business with them, it came to be known as the Forbidden City.
Snapshot for Shanghai Stock Exchange Composite Index
http://www.bloomberg.com/quote/SHCOMP:IND
Top Gainers & Losers In SHCOMP
| TOP GAINERS | % Change |
|---|---|
| Shanghai Waigaoqiao ... | +10.06% |
| Tianjing Global Magn... | +10.03% |
| Jinlin Ji En Nickel ... | +10.03% |
| Sinolink Securities ... | +10.02% |
| Shanghai Jinqiao Exp... | +10.01% |
| Shanghai Jinqiao Exp... | +9.99% |
| Shanghai Jiabao Indu... | +9.98% |
| Guangzhou Pearl Rive... | +9.98% |
| Xinjiang Tianhong Pa... | +9.96% |
| Zhejiang Guangsha Co... | +9.95% |
| TOP LOSERS | % Change |
|---|---|
| Jiangxi Changjiu Bio... | -9.99% |
| Ningbo Construction ... | -3.10% |
| Wuxi Taiji Industry ... | -2.53% |
| Black Peony Group Co... | -2.45% |
| Sichuan Minjiang Hyd... | -2.22% |
| Shandong Hiking Inte... | -2.08% |
| Datang Huayin Electr... | -2.04% |
| Yantai Xinchao Indus... | -1.91% |
| Fujian Xiamen Xiangy... | -1.91% |
| Beiren Printing Mach... | -1.75% |
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