Walmart’s China chief executive and a senior human resources executive for the country are leaving the group, the latest upheaval to hit the US retailer’s operations in China.
The company on Monday said Ed Chan, chief executive for China, and Clara Wong, senior vice-president for human resources in China, had resigned “for personal reasons”.
Walmart said Scott Price, president and chief executive of Walmart Asia, would serve “as interim leader” of Walmart China, where the US retailer has 353 stores in 130 cities. Walmart declined to give any further detail.
The latest departures at the top of Walmart’s China operations follow the equally abrupt resignations in May of the company’s chief financial officer and chief operating officer in China. Walmart said those two executives, Roland Lawrence and Rob Cissell, also had resigned for personal reasons.
Monday’s announcement followed the arrests last week of two Walmart junior store managers and the detention of 35 employees by authorities in Chongqing, where Walmart stores were found to be selling ordinary pork labelled as organic. Walmart said there was “no correlation” between the resignations and the case in Chongqing. The company said last week it was co-operating with authorities and had closed its 13 stores in the city for a fortnight.
A number of US executives in the business community in Beijing have privately voiced concerns that Walmart could be the target of retaliation for proposed US legislation aimed at punishing China for keeping its currency undervalued.
No Chinese officials or media have suggested any link but some US executives fear the singling out of Walmart could be intended to send a message that Beijing can retaliate in the face of American actions it considers tantamount to launching a “trade war”.
Chongqing’s Communist Party boss, Bo Xilai, is a prominent member of the party’s 25-member ruling Politburo and as a former commerce minister is closely associated with China’s trade and currency policies. Walmart’s Chongqing operations have had run-ins with local authorities three times this year.
Paul French, founder of Shanghai-based research company Access Asia, said Walmart might be a target because it is a foreign company. He noted that several retailers, Chinese and foreign, had previously been caught selling meat products past their sell-by dates.
European stocks plunged Monday and the euro tumbled, as investors piled into safe-haven assets amid rising fears over Europe’s sovereign debt crisis and economic growth on both sides of the Atlantic.
The Stoxx Europe 600 index slumped 4.1% to close at 223.45 on Monday, a day when U.S. markets were shuttererd for the Labor Day holiday.
The yield on the benchmark 10-year German government bond plunged to well below 2%,Balenciaga bags a new record, while Italian yields rose on fears the government’s commitment to austerity and reform is weakening.
Europe’ beleaguered banking sector was battered over concerns about growth as well as lawsuits filed against 17 lenders Friday by the top U.S. federal housing regulator, saying they sold $196 billion of risky home loans over four years to Fannie Mae and Freddie Mac without adequately disclosing the risks.
Further evidence of the weakness of the European economy came in weak purchasing managers index data from France, Germany and the euro zone as whole.
‘The banking sector continues to [be] under pressure,’ Balenciaga handbags said Manoj Ladwa, senior trader at ETX Capital, in emailed comments. ‘The chances of a near-term recovery remain slim as euro-zone debt concerns, structural reform and a lawsuit for allegedly mis-selling mortgage debt all weigh heavy on the sector.’
Shares of Royal Bank of Scotland Group, one of the banks named in the U.S. lawsuit, plunged 12%, while Deutsche Bank, another one of the banks, tumbled 8.9%. Among others, Société Générale skidded 8.6%, Barclays slumped 6.7%, and HSBC Holdings declined 3.8%.
Political and economic issues also weighed in Italy, where the government has been coming under increasing pressure to step up approval of its austerity package, which some say is being watered down. Investors have become increasingly concerned about the finances of the country, one of the biggest economies in the 17-member euro zone. Italy’s FTSE MIB index sank 4.8% to 14333.91, with shares of Intesa Sanpaolo dropping 7%.
That focus on Italy comes after negotiations between Greece and international lenders stalled on Friday amid disagreement over the nation’s progress on reducing its budget deficit.hermes birkin Greece’s top central banker called on the government to speed up efforts to close the budget gap amid growing concerns elsewhere in Europe that Athens can’t pull itself out of its debt spiral. The Athens General Index on Monday fell 3.1% to 863.90, aided by a 9.9% slide in EFG Eurobank Ergasias.
In Germany, Chancellor Angela Merkel’s Christian Democratic Union was trounced Sunday in state elections in Mecklenburg-Vorpommern, the latest in a string of election defeats. Some analysts believe the results are a sign of voters venting their frustration at how the government has handled the European debt crisis.
Economic news wasn’t much better. Private-sector activity across the euro zone grew at the slowest rate in two years in August;hermes kelly the Markit composite purchasing managers index dropped to 50.7 from 51.1 in July and is the latest in a string of data that suggest the region’s economy is faltering. That follows Friday’s dismal U.S. jobs report, which showed a net zero jobs were created in August.
The day’s biggest decliner among Stoxx 600 components was Swiss specialty-chemical group Clariant, which plummeted 16% after it cut its full-year sales and profit outlook because of the strong Swiss franc and the global economic slowdown.
Other chemical stocks followed Clariant lower, including BASF, down 5.6%, and Bayer, down 4.6%, both in Frankfurt. Overall, the German DAX 30 index sank 5.3% to 5246.18.
The French CAC 40 index finished 4.7% lower at 2999.54. BNP Paribas slumped 6.3% and Crédit Agricole slid 5.5%.
The Spanish IBEX 35 index dropped 4.7% to 8066.50, as Banco Santander stumbled 5.9%.
Banks and resource stocks fell on concerns about global growth, driving the FTSE 100 down 3.6% to 5102.58. Royal Dutch Shell skidded 4.3% and miner Rio Tinto slumped 5%.
In the currency markets traders took their cues accordingly. hermes handbags The euro fell below $1.41 for the first time in a month, to $1.4094, from $1.4206 late Friday in New York, and drove investors to the safety of the Swiss franc. The euro was fetching 1.1066 franc, from 1.1203 late Friday in New York. The dollar was at 0.7853 franc, compared with 0.7886 franc, and at ¥76.86, from ¥76.82.
A group of die-hard anti-Thaksin activists is stepping up its campaign for authorities to charge Thailand’s new leader with perjury in a sign that tensions could resurface in one of Southeast Asia’s most volatile nations despite last weekend’s decisive election.
The critics said Tuesday that they will launch new protests to press the country’s anticorruption watchdog to investigate Yingluck Shinawatra, the presumptive next prime minister, for allegedly concealing assets of her fugitive brother, ousted leader Thaksin Shinawatra.
While the political temperature in Thailand has eased considerably since the vote, which Ms. Yingluck’s party won in a landslide, the proposed protests is a reminder of the hazards that may lie ahead for her once she takes power, analysts said.
If any protests gained momentum in the months to come, they could complicate Thailand’s delicate political balancing act just as it is showing signs of stabilizing after several years of turmoil.
Anti-Thaksin protests paved the way for a military coup that toppled Mr. Thaksin in 2006, and a blockade in 2008 shut down Bangkok’s international airports.
Led by Tul Sitthisomwong, a medical lecturer, the activists say that Ms. Yingluck perjured herself when she told Thailand’s Supreme Court last year that she had bought 20 million baht, or around $660,000, of shares several years earlier in the telecommunications company that Mr. Thaksin founded, Shin Corp.
The Supreme Court later ruled that Mr. Thaksin had attempted to conceal ownership of his shares in Shin Corp.─later sold to Singapore’s Temasek Holdings Pte. Ltd.─by claiming to distribute them among his family in order to circumvent rules prohibiting politicians from owning stock.
It also confiscated $1.46 billion of Mr. Thaksin’s assets, infuriating the businessman, who later described the ruling as a way to curb his political reach after the army forced him from office.
Ms. Yingluck and her aides in the pro-Thaksin Puea Thai, or For Thais, Party, couldn’t immediately be reached to comment, but she has previously denied any wrongdoing. Mr. Thaksin has always maintained his innocence.
A prominent Puea Thai candidate, Nattawut Saikua, said Dr. Tul should reconsider his protest plans because the people of Thailand have already voted. ‘It’s time to move on,’ Mr. Nattawut said.
Officials at Thailand’s Department of Special Investigations are probing the allegations to decide whether to pursue a case.
The Puea Thai Party won a solid majority in Sunday’s election in Thailand, and with Prime Minister Abhisit Vejjajiva conceding defeat, markets are hoping the result will bring some much-needed stability to the country. In the run-up to the election, investors dumped Thai shares, but according to some early indicators, sentiment is positive. The benchmark SET index is up more than 3% at Monday’s open, the baht is surging and spreads on Thai credit default swaps are tighter. Here’s a round-up of what the street is saying about the post-election:
Mark Tan, Goldman Sachs
“[T]he various [populist] programs in place will almost certainly add to further inflationary pressures. Our current CPI inflation forecast for 2011 is at 4.1%, above the consensus expectation of 3.9%…We wait for greater clarity on these programs. Second, there will likely be rising pressure for a wider fiscal deficit (the deficit was previously expected to come in at around 3% of GDP for FY2011 from 2.5% in FY2010). The rising deficit by itself isn’t critical, given the low level of public debt at around 40% of GDP. However, what is more important is the nature of the bulk of spending (current expenditure rather than capital expenditure) diverts fiscal space away from the already lacklustre infrastructure spending. As we have been highlighting, the decline in infrastructure spending over the years have added to supply-side constraints, which threatens to undermine Thailand’s longer-term growth potential.”
Suchart Techaposai, Citi
“[Puea Thai] won an absolute majority in the general election; we believe this should remove any political risk premium capping upside potential…PT policies should drive strong consumption and investment spending. Its key policies during the campaign are 300 baht/day minimum wage (+40% with no time horizon commitment), raising monthly support for retirees to 600 baht (+20%), intervention for higher rice prices, credit cards to farmers as pre-crop financing, corporate income tax cut (from 30% to 23% and 20% in the second year), tax cut for first home and first car buyers, anti-flooding dam for Bangkok, high-speed trains, and special administrative status for three Southern Muslim provinces.”
Wellian Wiranto and Tushar Arora, HSBC
“Dr. Olarn Chaipravat, the party’s chief economic strategist, looks likely to be leading the economic policy formulation team in one way or another. He holds a doctorate in economics from the MIT, spent time as a director of the Bank of Thailand and served as a Deputy PM in late 2008…In terms of policy platform, the incoming administration is likely to adopt a fairly populist set of measures…Overall, the increased government spending is something to watch closely. Already, the central bank has been rather explicitly warning against it. It has highlighted the risk of a creep-up in debt-to-GDP ratio from about 42% now to above 60% in six years. The central bank chief warned there is no need to add economic stimulus, since the economy has sound growth momentum, but inflation risks persist.”
Mark Matthews, Julius Baer
“Thailand’s stock market is flat year-to-date while the rest of Southeast Asia is up. I think it would have been up too without this political overhang so the fact that it has been resolved means the market should go up, too, particularly domestically-sensitive companies like banks and property. The incoming government’s platform appears both pro-business and populist, both of which are inflationary.”
Sriyan Pietersz and Adrian Mowat, JP Morgan
“We believe that the poll trends prior to the election had flagged the potential result to investors and, as such, this should already be discounted in the market. We do not expect a strong reaction in the early stages following the election, as investors wait on the sidelines to observe the [Election Commission]‘s rulings and the final shape of the government…We are positive on the outlook for the Thai market in 2H11 with a turn in macro momentum, and a potential orderly transition of power.”
World Cup champion Spain has declined an invitation to replace Japan at this summer’s Copa America.
The Spanish football federation said on its website that a board of directors meeting decided not to send a team at the July 1-24 tournament in Argentina due to “conflicts with the calendar.”
The federation said a dense schedule of fixtures makes the World Cup and European champion’s participation “impossible”.
Japan withdrew last week because of the devastating earthquake and tsunami that struck the country on March 11.
Government and industry safety officials haven’t pinpointed the cause of a five-foot gash that opened in the fuselage of a midair Southwest Airlines Co. jet, and the carrier said Sunday it expects many of its oldest Boeing 737 models to stay grounded for inspections for at least two more days.
Southwest voluntarily stopped flying 79 of its oldest 737 models, which account for nearly 15% of its fleet, in the wake of the frightening incident on the Friday afternoon flight. The rupture prompted the pilots to put the 15-year-old jet into an emergency nose dive, dropping more than 25,000 feet in a little more than four minutes, while passengers hurriedly donned oxygen masks.
Nobody was seriously injured, but the event prompted a joint industry and government investigation, with experts scrambling to understand what happened and establish inspection procedures to clear the grounded aircraft to resume operations.
Southwest, aircraft manufacturer Boeing Co. and the Federal Aviation Administration switched the focus of the inspections Sunday, according to people familiar with the matter, after experts discarded initial theories that scratches stemming from preparation for routine painting appeared to be a likely cause of the metal fracture.
Southwest spokeswoman Linda Rutherford said 19 of the grounded Southwest Boeing 737-300 models were returned to service by Sunday afternoon, but that two aircraft with ‘small, subsurface cracks’ would require further evaluation and possibly repairs. She said the current round of inspections was slated to be finished by ‘late Tuesday.’
Each inspection takes about four to five hours.
One of the more memorable sound bites from China’s annual policy review, which closed on Monday, was the description by Wen Jiabao, the prime minister, of inflation as a tiger that “once set free will be very difficult to put back into its cage”. Lending data continues to suggest that the tiger is not just uncaged, but pacing about.
New loans were Rmb534bn in February, about double the pre-crisis run rate. Total system-wide loans outstanding rose to just shy of Rmb49,000bn at the end of the month, more than double the total of February 2007. Rampant credit growth is not a menace, in itself, as growth in deposits has more than kept pace. But what is worrying is the behavioural effect. The annual consumer price inflation rate was 4.9 per cent in both January and February, exceeding the government’s 4 per cent target. Property, meanwhile, continues its relentless march upwards. Prices of new homes rose in January from a year earlier in all but two of 70 cities monitored by central planners. Households, fearing shrinking purchasing power, are keeping more cash close at hand. Over the course of last year the share of household savings locked up in time, rather than demand, deposits fell from 62 per cent to 60.
The central bank has tried to dampen spirits with three increases in interest rates and five rises in reserve requirements since mid-October. But these are manifestly ineffectual dabs at the brakes. The Conference Board’s economic index for China, a measure of current activity spanning raw-material supplies to construction, increased 1.4 per cent in January, after gaining a revised 0.1 per cent in December. In other pronouncements at the National People’s Congress premier Wen talked of the importance of China reining in its credit and investment-led growth. As yet, there is no evidence of that.
Lady Gaga’s got a new album coming out, which is why you are seeing her face a lot lately (even Anderson Cooper wasn’t safe). Now hitting newsstands in March: the Fame Monster’s Vogue cover. Doesn’t it look like she went for a cross between Vogue editrix Anna Wintour and Frenchie from Grease for her look? (Which is not a good look, by the way, but we’re guessing Gaga knows that and is going for some rebel-fashion ugly-chic attitude here).
Anywho, inside the issue she talks about her roots, which are firmly planted in the glistening sidewalks of the Upper West Side. Or as she sees it, in “grassroots, downtown New York.” She says she owes her success to the “blood, sweat, and tears, dancing, music, whiskey, pummeling the streets. It was the hustle and the grind and the traffic of New York that propelled me to where I am today.” (You know, the blood, sweat and tears so many endure from living a charmed life of private schools on the Upper West Side。) She added, “I don’t in any way associate my past with anything other than the hunger and the starvation for success that I still feel. It was the most beautiful time in my life.”
She also told the magazine, “funnily enough, I still live in the same apartment, hang out with the same friends, drink at the same bars, and I dance in the same studios with the same dancers. Really, nothing has changed.” Well, not the same apartment she lived in while struggling, you know, the one after that. After that, nothing has changed.
Last Friday’s Nobel Peace cost ceremony was widely interpreted as an embarrassment for China’s leadership. But it was more outstanding as the latest example of China’s growing ability to persuade other countries to support it in international forums, and in particular in the multinational institutions that set the world’s rules.
Some 20 countries declined an invitation to send their ambassador to the ceremonial in the Oslo City Hall last week. True, most have long-standing scepticism of human rights. Their decisions to stay away came after Chinese lobbying and with an awareness of their growing dependence on the Chinese market. China has also long opposed interference in its internal affairs and sought support from developing countries. What has changed, however, is the effectiveness with which Beijing is using these alliances to counterbalance the minority of developed countries.
Chinese influence at the United Nations is one obvious example. It has recently sought to prevent a US-backed probe in to war crimes in Burma. Behind the scenes it has also been cleverly forming alliances to stymie the UN’s Human Rights Council, with Chinese diplomats spearheading efforts to limit the mandate of its “special rapporteurs” tasked with inquiring in to specific human rights issues. Beijing also formed coalitions to block the expansion of the “universal periodic review”, an audit all states are supposed to undergo.
Facing emerging economic powers, the west had expected to be able to make use of international organisations to promote liberal standards, and advance its own economic interests. It thought the challenge was to “socialise” China in to the existing order. Chinese diplomats took some time to get to grips with the their memberships of the most important of these international and regional institutions. But now they are becoming ever more effective in exploiting them to defend China’s vital interests and political norms.
Yet China’s efforts to influence international norms go well beyond the issue of human rights. The climate summit in Cancún, which concluded this weekend, was also substantially shaped by the People’s Republic. Since the 2009 talks in Copenhagen, Beijing has both acted as ringleader of a heterogeneous grouping of developing nations and pushed vehemently for more assistance to poorer countries, expertise transfer and common but diversified responsibilities. The draft decisions of the Cancún meeting included most of these louis vuitton handbags, while western countries fell short of hammering out a strong monitoring mechanism.
Beijing?is also going to great lengths to shape international trade regimes in a way that suits its interests. Last week, the World Trade Organisation rebuked the European Union for unlawfully imposing antidumping tariffs on imports of Chinese screws. The announcement followed China’s dispatching of a little army of trade lawyers to get to grips with the WTO’s legal framework combating anti-dumping procedures. Recently it also won WTO backing in a dispute over American tariffs on chicken. This legal offensive against tariffs on goods notwithstanding, Beijing still opposes international rules that would liberalise its services sector and government procurement, but this is another area in which it may also get its way.
This is not an entirely negative story. The more China recognises that the rules of international organisations aren’t stacked against it, the more it will be inclined to engage. The People’s Republic is also not always going to be against the economic standards that the west champions – it will seek to uphold them only in countries or sectors where it already has a competitive advantage
Finally, China seems increasingly determined to mould standards for new technologies in fields from semiconductors and electric cars to wind energy and mobile telephony. Most of these changes are designed to help Chinese companies maintain domestic market share, but the success of Chinese national champions in other parts of the world might also pave the way for promoting them beyond China’s borders. China Mobile, for example, has started using the china mobile multimedia broadcasting standard in other Asian countries.
Yet the challenge for the west remains. International standards reflect the world’s distribution of power. Some see them as a way to overcome competition between great powers; in fact they are a continuation of these power politics by different means. China will form more alliances with developing countries, allowing economic opening-up only when its suits the development of its industries. From now on the west will shape the rules of international politics only to the extent it speaks with one voice, and works harder to be a role model for the developing nations China current courts.
The writer is a research fellow at the Institute of Contemporary China Studies in Brussels.
It was the best of times, it was the worst of times: Such seems to be the lament of foreign insurance companies operating in China.
China was supposed to be the new Eldorado for foreign insurers back in 2001 when Beijing agreed to open up the market as a condition of World Trade Organization accession. Almost ten years later foreign insurers have barely made any inroads at all, stymied by administrative roadblocks and regulations that have complied with the letter of the WTO agreement if not the spirit.
For a long time foreign insurers held firm to the belief that things would get better. According to a report released by PricewaterhouseCoopers last week, that’s no longer the case.
Based on a survey of 31 foreign insurers operating in China, PwC found that the companies expected their combined market share in 2013 to be largely unchanged from where is today. For life insurers that means a paltry 5%, and property and casualty insurers around 1%.
‘That is a dramatic lowering of expectations from our survey in 2008 in which participants anticipated their market share to reach 10% by 2011,’ the report said.
While the overall share of the pie isn’t likely to get any bigger, respondents tipped the pie itself to grow a lot faster than they had previously anticipated. More than 80% of life insurers surveyed in the report forecast their premiums to grow by at least 30% a year from 2010 to 2013, while only 35% saw premiums growing as fast last year.
Similarly, life insurers expected their number of individual policyholders to double by the end of 2013 from the end of 2009. Last year the group expected only a 74% rise.
P&C insurers, however, were only marginally more optimistic this year than last.
While those numbers don’t look bad, the firms are likely to face stronger competition is coming years with the recent entrance of local banks into the market.
Added to that, a higher number of firms said their joint venture partners â ‘ all foreign life insurance companies are required to have a local company as a partner â ‘ would like to leave the relationship. And more than a quarter said they expect there to be fewer foreign firms to survey next year as some consolidate and others leave, a significantly higher percentage than previous years.
Foreign firms may have accepted their lot at the margins of China’s insurance industry, but they still have plenty to worry about.
