Richard Brubaker

Implications of Yum and McDonald's Foreign Labor Policy

Dan,

In response you your comment, we found not only a Chinese version of the original article, we also found the original source <strong>Sina Poll here</strong>.

I have also update my original posting on <strong>All Roads</strong>.

Implications of Yum and McDonald's Foreign Labor Policy

Saul,

What I think we are going to find (and the final word is not in yet), is that MCD and YUM violated the laws of China. However, for the context of this discussion, put all that aside and focus on the fact that 94% of 46,739 people believe that they were wrong.

For me, it is not about whether or not they were wrong, and more over whether or not MCD student employees live in the best dormitories in town. The important issue is the effect a student led China-wide boycott could have on a company's stock price, be it MCD, YUM, or any one of the reported 90,000 firms in China.

there have been a number of cases recently that have sparked controversy, and in the case of P&amp;G their Shanghai office was ransacked; in the case of Dell, a single student created such on online uproar that the computer company had to publicly acknowledge their error and replace not a single laptop but hundreds; and at some point, these forces could come together against a firm who is seen to exploit one group or another.

Again, paying your student employees in China a third of the minimum wage may not be illegal in the U.S. , but at some point it will become an issue for U.S. investors.

Implications of Yum and McDonald's Foreign Labor Policy

Dan, As I posted on All Roads it appears that the article was edited after I posted this, and I will work on finding the original source to the WSJ article tomorrow.

If you google 47,839 respondents you will find that there are two hits for WSJ, and both of them link to the article you are currently seeing.

So, until tomorrow.

China Passes Law Bolstering Private Property Rights

The test of this new law is currently being held in Chongqing as I type this.

the "Nailhouse" story has really gained some steam in Blogosphere as the gov't has ended coverage on what will be a landmark decision (i.e. either they uphold the law or the law becomes worthless in a week).

For background, visit www.globalvoicesonline.../

Chinese Discontent Only Minor Setback in Starbucks Growth Potential

Siwei,

As someone who frequents Starbucks on a daily basis in Shanghai, I would say that the trend has not changed. there are now 6 Starbucks on Nanjing Road, and business is very good right now.. and primarily rooted in local Chinese consumers (I would wonder what number are returning vs. first and only timers).

one thing I would point out with regard to the Forbidden City is that they have enjoyed 7 years business in that store, and that in and of itself proves that the decision to move in there was the right one. Sure, there have been some flare-ups, and it may be time to go now, however 7 years in a single location is very respectable in the retail world... and even more so when you have hundreds of thousands of people walking by on a daily basis.

No doubt, the Asia market as a whole is one that Starbucks views at strategically very important, and I will be interested to see how the recent flare-up plays out. It may fizzle, it may lead to the shop being closed, but I do not think that it will have a long term impact unless something drastic happens.

Wal-Mart Goes For the Gold In China

Amit,

There does seem to be some confusion on the numbers, and I think the reported numbers/ figures are a mix of original report in November stating a billion (percentages were not mentioned then) and then this recent report.

When I mentioned that WMT does not need a partner, I was speaking from the legal side, not the strategy side. Carrefour, B&amp;Q, and others are all running wholly owned operations, and are doing so successfully.

With regards to importance of China &amp; India, there is no doubt that will be the major push for a lot of industries. Fortunately for WMT it has deep pockets and can make big moves if they see an opportunity.

There are a number of firms who are not so fortunate.

The Inevitable Collapse of China's Banks

Aparently, the banks have not really learned much in the 5 years since they have "turned around".

Is China Growing Old Before It Grows Rich?

Richard,

sorry, I am not very tech savvy.

allroadsleadtochina.co... is the general site
allroadsleadtochina.co... is the site for Going Big on Going Gray
allroadsleadtochina.co... is the site for the map of graying trends in China

Thanks
rich

The Inevitable Collapse of China's Banks

As Lei points out, the people in Beijing are neither idiots nor are they going to always get it right... but they are trying.

This is an excellent post, and I commend Nicholas on his write up.

Through my previous work, I was involved on several of the early NPL project valuations and it was just plan scary. What has always been the biggest concern since that point is how a bank can go from 40% bad debt to 11% in just under 12 months. Well, in the middle of a property boom where the middle class looks for leverage, it is not difficult to see how the denominator on the equation was able to ridiculously fatten itself and bring those numbers down.

Remember that while the government did assign each big 4 bank a AMC to help clean up that bank's balance sheets, those AMCs are under PBOC. It is a shell game really where the PBOC, the AMCs, and the big 4 just hide their non-performing loans and wait for the day that they just magically disappear.

The first three years of resolving these assets properly (i.e. through public auction and private placement) were a mess. the data provided through the cautions was often incomplete and that drove valuations through the floor. Match that with the rule that you cannot sell State owned assets below book value, and you end up with failed auctions. CCB magically got around this by offering a buy back on assets without clean title 30 days after the auction. What happened? investors weighted those as 90% valuation levels (knowing the courts would never clean the assets) just to drive the 5% valuation to 45%. Amazingly, all three closed.

The problem root of the problem, as suggested above is that the banks do not have the internal structures in place for effective risk analysis and management, and that is before political favors are called in.
If the banks are unable to root out the rot, China is in for a rude awakening. At some point they will run out of lifelines.

Kudos to Nicholas

Is China Growing Old Before It Grows Rich?

China is an aging society, and many may be surprised to know that Shanghai is one of China's oldest with 18%+ of the population over the age of 60.

If you are interested in a raw look, please visit to see our recent article . We also have a map of China's aging population

It is an issue that everyone in China, yes.. that includes multinational companies, will have to worry about as the central government looks for solutions (look at new labor law, reform of health care system, clean up of pension scandals).