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The richest delivery man
Mar 3, 2017 (WiC 356)

Courier firms from Zhejiang’s Tonglu county provide the logistical backbone for China’s booming e-commerce industry but having crowded out much of the local competition, cracks are beginning to emerge in the Tonglu Gang’s franchisee-based growth model (see WiC355).

This has not been a problem for SF Express, the main rival of the Tonglu companies such as YTO, ZTO and STO. SF Express focuses more on business-to-business deliveries but more importantly the Shenzhen firm also owns its entire courier network. The NASDAQ-listed ZTO, in comparison, has more than 7,000 service centres or branches run by external franchisees.

SF Express’ business model seems to have made it a favourite with investors. The company officially completed a backdoor listing on Shenzhen’s stock exchange last week. The stock climbed the maximum 10% daily limit for four consecutive sessions. As of Tuesday, its market value had reached Rmb280 billion ($40 billion) – making it the biggest Shenzhen-listed firm by market capitalisation.

The successful debut has also made SF Express’ boss Wang Wei (see WiC183 for our first profile of the low key delivery man) China’s third richest man. Thanks to his 65% stake, Wang is worth $26 billion. The news portal Sina Finance says Wang is now even richer than Pony Ma, the chairman of Shenzhen-based internet giant Tencent.

“If SF continues its current bull run, Wang is only five trading days away from overtaking Jack Ma [of Alibaba] and Wang Jianlian [of Wanda] to become China’s richest man,” Sina says.

Hong Kong media reckoned on Wednesday he’d already surpassed Li Ka-shing, the Hongkonger who once ranked as Asia’s richest man.

One at a time
Feb 24, 2017 (WiC 355)

Call for an Uber in London and you’ll likely get a driver turning up in a Prius – a car favoured for its fuel efficiency. Toyota’s hybrid vehicle has been a worldwide success story except in one place: China.

Sina Finance pointed out in a recent article that only one Prius was sold in China in December. Yes, one. Sina says that consumers are “lukewarm” on the vehicle, noting that the single car sold was the first to leave a Toyota forecourt since May. Citing Bloomberg Intelligence data, it also said Toyota sold just 76 Prius cars in the whole of last year, down from 700 the year before.

Auto analyst Wen Xuhui explains that the Prius does not conform to a design that Chinese consumers are comfortable with. Their familiarity is more with other Toyota models like the Camry and the Corolla – both of which they associate with high quality – and Wen adds that many Chinese consumers are smitten with larger SUVs too.

Making life tougher for the Prius is that Toyota now sells hybrid versions of the Camry and the Corolla in the Chinese market at a similar price to the Prius.

Indeed, Toyota sold 47,000 of the hybrid versions last year out of almost 72,076 hybrids it sold nationwide in 2016 (a record amount).

To reiterate: that’s about 72,000 Toyota hybrids, plus 76 of the Prius.

Another case, perhaps, of what works elsewhere, doesn’t always work in China.

Trump toes the line
Feb 17, 2017 (WiC 354)

“At your request, I will do that,” promised President Trump – meekly, and out of character – in a call last Friday with his Chinese counterpart.

According to the Wall Street Journal, Xi Jinping had just asked him to “uphold” the One China Policy.

The news caused some relief, as Xi had made plain that sticking to the framework was an inviolable precondition for Sino-US relations.

That said, Trump was not giving much away by agreeing to Xi’s request. After all, he was only confirming what every US administration has adhered to since the 1970s – Washington’s agreement to withhold diplomatic recognition of Taiwan. The shock was that Trump had previously questioned this bedrock assumption (see WiC349).

While Trump was drawing praise in Beijing for stepping back from his Taipei threat, not all the authorities were delighted by The Donald. As TVB News points out, a judge with China’s Supreme People’s Court took the unusual step of going on social media to criticise the American leader. This time it was not about Taiwan, but Trump’s Twitter-fuelled rant against a Seattle judge who had smacked down Trump’s executive order banning travel from seven Muslim nations.

Judge He is an expert on the US legal system, says TVB, having translated many books about the Supreme Court into Chinese. He said the American president was entirely wrong to publicly question the ruling as it violated the principle separating the powers of the executive and judicial branches in the American system. And in his online post, the Chinese judge connected the Trump incident with a case that occurred in Guangxi last month where a judge was murdered after a divorce case got messy.

“The president who scolds judges and the thugs who kill judges are both public enemies of the rule of law,” wrote He.

Such is the topsy-turvy world we live in today: in this case of Trump versus He, the leader of the free world has just been chastised for undercutting the rule of law by a judicial representative of a one-party state.