NEWS BRIEFS
News briefs
Gome plans move into e-commerce
Gome Electrical Appliances reported a 39% increase in 2010 net profit to US$298.9 million, just weeks after the company’s chairman, Chen Xiao, resigned. Zhang Dazhong, the new chairman, said Gome would set up an e-commerce operation and develop or acquire online sales platforms. He added that the company would open at least 100 stores in 2011 to the 826 in operation at the end of 2010. Chen’s departure marked the end of a power struggle with Huang Guangyu, Gome’s jailed founder. Zhang is said to have strong ties to Huang, but he played down the relationship, saying it was professional rather than personal.
US launches probe of Chinese reverse mergers
Te US Securities and Exchange Commission (SEC) has launched a fraud investigation into
Chinese companies that have listed in the US via reverse mergers rather than full initial public offerings. Since January 2007, over 150 Chinese firms have gone public by purchasing dormant, listed companies and injecting their assets into the corporate structures, taking advantage of lower disclosure requirements. A number of these companies have subsequently been hit by accounting scandals.
Battery plant manager arrested over lead leak
Te general manager of a battery plant in Zhejiang province was detained after lead emissions poisoned 168 villagers, including 53 children. Production at Taizhou Suqi Storage Bat- tery in Shangtao village, near Taizhou city, has been halted until the pollution problem is remedied. Villagers have been advised to avoid eating food grown in the area as the lead has likely contaminated groundwater. Tis is the lat-
est in a recent spate of heavy metal pollution cases in China. In January, more than 200 children in another east- ern province were poisoned by lead from battery plants located too close to homes.
Swedish school to offer family business classes
Sweden’s Jönköping Inter- national Business School ( JIBS) announced that it is looking to provide educa- tion programs on family enterprises in China. Te school said it is in talks with Nanjing University, but is still on the lookout for other partners. JIBS’ Center for Family Enterprise and Own- ership was ranked No. 1 in Europe in the field of family business research in 2009. “China has huge market potential for family busi- ness education since China’s family enterprises mush- roomed in recent years along with the rapid development of the country’s private busi- ness,” said Johan Larsson, JIBS’ director of studies,
marketing and logistics.
Shanghai rises as head- quarters location
Shanghai has become the preferred location for multinational companies looking to set up Asia- Pacific headquarters. A survey commissioned by the EU Chamber of Commerce in China of more than 60 executives shows Shanghai in first place, followed by Hong Kong and Singapore. Te city now hosts 319 re- gional headquarters of foreign companies, still well short of Hong Kong’s 1,200. But over the last 10 years a growing number of firms have moved to Shanghai. In 2010 alone, 24 multinationals – including Walt Disney and Kraft Foods – announced plans to move their regional headquarters to the city. Piter de Jong, the chamber’s vice president, said that Shanghai still had ground to make up on Hong Kong and Singapore on issues including its legal and regulatory environment.
China Economic Review • May 2011 5
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