Hong Kong (CNN Business)Amazon is partially retreating from the world’s biggest market for online shopping.
SHANGHAI: Richard Liu, the founder of Chinese e-commerce giant JD.com Inc, has weighed in on an ongoing debate about the Chinese tech industry’s gruelling overtime work culture, lamenting that years of growth had increased the number of “slackers” in his firm who are not his “brothers.”
Liu’s comments, which Chinese media said were posted on his personal WeChat feed on Friday, are the latest contribution to a growing discussion about work-life balance in the tech industry as the sector slows after years of breakneck growth.
They also come amid reports this week that the company is in the throes of widespread layoffs. Three company sources told Reuters that cuts began earlier this year and had become more extensive in recent weeks.
A JD.com spokesman confirmed the authenticity of Liu’s note. He declined to comment on layoffs but said some adjustments were happening as a normal part of business.
“JD.com is a competitive workplace that rewards initiative and hard work, which is consistent with our entrepreneurial roots,” the spokesman said. “We’re getting back to those roots as we seek, develop and reward staff who share the same hunger and values.”
Liu, who started the company that would become JD.com in 1998, in the note spoke about how in the firm’s earliest days he would set his alarm clock to wake him up every two hours to ensure he could offer his customers 24-hour service – a step he said was crucial to JD’s success.
“JD in the last four, five years has not made any eliminations, so the number of staff has expanded rapidly, the number of people giving orders has grown and grown, while the those who are working have fallen,” Liu wrote. “Instead, the number of slackers has rapidly grown!”
“If this carries on, JD will have no hope! And the company will only be heartlessly kicked out of the market! Slackers are not my brothers!” he added
The term he used, which is commonly translated in China as “slackers” can be directly translated as people who drift along aimlessly or waste time.
The contents of his note were reported by major Chinese media outlets such as financial magazine Caijing and the 21st Century Herald newspaper on Saturday as well as widely shared on Twitter-like platform Weibo, where it was read more than 400 million times.
CUTS AND SLOWDOWN
Three JD employees, who declined to be named as they were not permitted to speak to the media, told Reuters that morale at the company was low after several senior executive departures and layoffs across the firm in recent weeks. One said the cuts also affected vice-president level staff.
Tech website The Information reported this week that JD.com could cut up to 8 percent of its workforce. JD, which had more than 178,000 full-time employees at the end of last year, said the figure was incorrect.
“Now is kind of an inflection point, where too many people and too many business leaders or department leaders have been laid off. No one is safe,” one of the sources said.
He added that it had affected productivity in his department and that many workers checked Weibo, the stock markets or played games rather than focus on work.
The layoffs “are pretty much all JD employees can talk about,” he said.
The JD spokesman, when asked about morale, said most of the team was highly committed.
“Change – while uncomfortable for some – can be encouraging for most, who are dedicated to our shared future.”
JD, which is backed by Walmart Inc, Alphabet Inc’s Google and China’s Tencent Holdings, in February posted its lowest quarterly revenue growth rate since its 2015 initial public offering.
Other Chinese tech giants have lowered growth forecasts and cut staff bonuses amid the slowdown, which has driven calls for better work conditions for its workers.
The ‘996’ work schedule, which refers to a 9 a.m. to 9 p.m. workday, six days a week, has in particular become the target of online debate and protests on some coding platforms, where workers have swapped examples of excessive overtime demands at some firms.
Alibaba Group founder and billionaire Jack Ma also weighed in on Friday, telling the company’s employees in a speech that the opportunity to work such hours was a “blessing”.
Liu said JD did not force its staff to work the “996” or even a “995” overtime schedule.
“But every person must have the desire to push oneself to the limit!” he said.
(Additional Reporting by Cate Cadell and Zhang Min in BEIJING; Editing by Gerry Doyle)
Nelson Ching | Bloomberg | Getty Images
Workers manufacture cotton yarn at a factory in Dali county, Shaanxi province, China.
China’s exports for the month of March came in much higher than expected, while its imports came in much lower than expected, according to customs data released on Friday.
International Monetary Fund this week cutting its forecast for global economic growth for 2019 to 3.3 percent, from 3.5 percent. However, it upgraded its 2019 growth forecast for China in a Tuesday report, citing Beijing’s efforts to support the economy and an improved outlook for the Asian giant’s tariff fight with the U.S.
The IMF said in its latest World Economic Outlook report that China is projected to grow by 6.3 percent this year, higher than the fund’s previous forecast of 6.2 percent.
Meanwhile, hopes are high that the U.S. and China could be close to a trade deal, with Treasury Secretary Steven Mnuchin telling CNBC that Washington and Beijing have “pretty much agreed on an enforcement mechanism” for when a deal is struck.
— Reuters and CNBC’s Yen Nee Lee and Eustance Huang contributed to this report.
HONG KONG/FRANKFURT (Reuters) – Volkswagen AG is exploring purchasing a big stake in its Chinese electric vehicle joint venture partner JAC Motors and has tapped Goldman Sachs as an adviser on the plan, people with direct knowledge of the matter said.
FILE PHOTO: FILE PHOTO: A Volkswagen badge on a production line at the Volkswagen plant in Wolfsburg, Germany, March 1, 2019. REUTERS/Fabian Bimmer/File Photo
The move by VW, the largest foreign automaker in China, to buy into Anhui Jianghuai Automobile Group (JAC Motors) is the latest by foreign automakers to boost ownership in the world’s biggest car market since Beijing relaxed rules last year.
Rival German automaker BMW agreed in October to buy control of its main joint venture in the country for 3.6 billion euros ($4.05 billion). And Daimler AG also plans to increase its stake in local partner BAIC Motor.
The stake purchase move shows that JAC would be a key player in VW’s big global bet on EVs and on strong Chinese demand for such vehicles. VW plans to shift a large part of its planned EV production in China to JAC if it ends up getting control of JAC, said one of the people.
Foreigners were previously prevented from controlling any Chinese automaker or joint venture. Beijing last year removed such caps for firms making fully electric and plug-in hybrid vehicles. Limits on commercial vehicles makers ease in 2020 and by 2022 for the wider car market.
Chinese Premier Li Keqiang promised the European Union on Tuesday that Beijing would no longer force foreign companies to share sensitive know-how when operating in China and was ready to discuss new global trading rules on industrial subsidies.
VW, which has a market capitalization of nearly $85 billion, does not currently own shares in Shanghai-listed JAC, which has a market value of more than $1.7 billion, according to Refinitiv data.
The German car giant’s plans are at an early stage but it is keen to take a big stake, said three of the people. Two of them said it will seek to buy shares from JAC’s major shareholders, which, Refinitiv data showed, are mainly state-backed firms owning over 40 percent.
JAC’s parent, Anhui Jianghuai Automobile Group Holding, holds a 24 percent stake and is fully controlled by the local government.
When contacted by Reuters, VW said: “We are carefully watching what the implications are for our business and for our joint venture partners. In this regard we will explore all possible options together with all stakeholders to secure long-term success in China.”
JAC and its parent didn’t respond to requests for comment. Goldman declined to comment. The people declined to be identified as the matter was confidential.
JAC is trading at a price-to-book ratio of 0.93, which means VW would have to pay a premium for shares since JAC’s state shareholders cannot sell shares for less than their book value.
The Chinese automaker’s shares jumped and hit the daily 10 percent maximum increase limit on Wednesday afternoon. VW shares were slightly lower in early trading.
“The news shows the bargaining power of companies like JAC and BAIC is stronger, and Volkswagen’s and Daimler’s determination to cooperate with Chinese partners in the long-term is also firm,” said Patrick Yuan, a Hong Kong-based analyst at Jefferies.
VW IN CHINA
Wolfsburg-based VW, which delivered 4.21 million cars in mainland China and Hong Kong last year, has operated in China for decades. Besides JAC, it has joint ventures with state-owned FAW Group and SAIC Motor.
It formed its 50:50 JV with JAC in 2017 to research and develop zero-emission passenger cars as the German automaker has committed almost one-third of the industry’s EV spending, about $91 billion. Separately, South Korea’s SK Innovation Co said it is in talks to set up separate battery-making JVs with VW and Chinese partners, Reuters reported on Wednesday.
JAC, China’s 11th largest local automaker by group sales, makes a range of commercial vehicles including pickup trucks and heavy duty trucks. It also produces vehicles for electric car maker NIO Inc.
JAC warned in January of a 770 million yuan net loss for 2018 mainly due to a drop in car sales, compared to a 432 million yuan profit in 2017. Excluding exceptional items such as government subsidies, losses would reach 1.9 billion yuan, the company said. It will release annual results on April 30.
Reporting by Julie Zhu, Arno Schuetze and Yilei Sun; Additional reporting by Edward Taylor in Frankfurt and Kane Wu in Hong Kong; Editing by Jennifer Hughes and Muralikumar Anantharaman
© Reuters. FILE PHOTO: Pro-Brexit yellow vest protesters demonstrate, in London
By Helen Reid
World stocks paused on Monday after a strong recent run, as potential flashpoints including a crucial Brexit summit and central bank meetings loomed, and investors began to look ahead to an earnings season that may be disappointing.
Signs of further stimulus from China helped Asian shares touch seven-month highs, but investors’ enthusiasm was fleeting.
MSCI’s world equity index was flat and European stocks slipped 0.2 percent as weak data from Germany and investor caution ahead of a string of political and monetary policy events held the market back.
In a document published on the central government’s website late on Sunday, Beijing said it would step up a policy of targeted cuts to banks’ required reserve ratios to encourage financing for small and medium-sized businesses.
German exports and imports both fell more than expected in February, data showed on Monday, in the latest sign that Europe’s largest economy will likely have meager growth in the first quarter amid increased headwinds from abroad.
Futures for the and Nasdaq eased 0.2 percent, indicating a weaker start on Wall Street.
Globally, stock markets have had a stellar first quarter. The had its best quarter in more than eight years.
“Today’s very minor move down has to be seen in light of recent developments,” said Britta Weidenbach, head of European equities at DWS.
“We’re back at the levels where the correction started last year. So now the question certainly is, what’s next?”
The European Central Bank will update the market on Wednesday, the same day as a crucial European Union Summit on Brexit, while China and the EU will hold a summit on trade on Tuesday.
“European institutions will be under the spotlight in the coming days as they attempt to display proactivity in trade negotiations, on Brexit and in monetary policy,” wrote economists at Swiss private bank Landolt & Cie in a note to clients.
Bond markets were being squeezed by investors’ search for yield after benchmark German Bunds fell into negative territory.
Greece’s 10-year government bond yields were within a shade of their lowest level in over 13 years as a cocktail of positive headlines boosted sentiment towards the country and zero percent Bund yields push investors to riskier investments.
German bund yields traded at 1 basis point, just holding in positive territory.
The upcoming earnings season, which kicks off at the end of this week with U.S. banks reporting, is likely to be a reality check for markets.
Analysts have already slashed their earnings expectations for this year, which are now stabilising around 4.2 percent growth for world stocks.
“Q1 will definitely not be a good quarter for corporates, and it might well be that the market turns back to fundamentals whereas a lot of hope on China/U.S. trade deals and developments on the interest rate front had driven markets up year-to-date,” said DWS’ Weidenbach.
Currency markets were also distinctly risk-averse.
The dollar slipped 0.1 percent to 97.269 against a basket of currencies. The euro inched up 0.1 percent, but hovered near a one-month low at $1.1229 ahead of the ECB meeting later this week.
Sterling inched up 0.2 percent to $1.3057 as a crucial week for Britain’s negotiations to exit the European Union loomed. Prime Minister Theresa May must come up with a new plan to secure a delay from EU leaders at a summit on Wednesday as a deadline of this Friday draws ever closer.
Commodities markets were the exception, rallying strongly.
London prices rose as much as 1 percent on Monday, snapping two days of declines, on expectations of more stimulus measures in top metals consumer China and optimism over Sino-U.S. trade talks. [MET/L]
Oil prices rose to their highest levels since Nov. 2018, driven by OPEC’s ongoing supply cuts, U.S. sanctions against Iran and Venezuela, and fighting in Libya.
was last up 39 cents at $63.45 a barrel, while futures rose 42 cents to $70.76.
(GRAPHIC: Earnings growth April 8 – https://tmsnrt.rs/2I5yaRq)
- Secretary of State Mike Pompeo suggested a woman who breached security at President Donald Trump’s Mar-a-Lago, Florida club may have been a Chinese spy.
- Yujing Zhang passed Secret Service checks and made it onto the Mar-a-Lago property after showing staff Taiwanese passports and being mistaken for the daughter of a member who shared her last name.
- The incident has set off concerns about security across multiple agencies as a federal investigation is probing Zhang’s possible ties to Chinese intelligence.
- Visit Business Insider’s homepage for more stories.
Secretary of State Mike Pompeo suggested Friday that Yujing Zhang, the woman who breached security at President Donald Trump’s Mar-a-Lago, Florida club, may have been a Chinese spy.
Pompeo said on “CBS This Morning” that there was an active investigation into the incident where 32-year-old Zhang was arrested.
“I think this tells the American people the threat that China poses, the efforts they’re making inside the United States, not only against government officials but more broadly,” Pompeo said.
Zhang’s arrest has surfaced broader security concerns across several law enforcement agencies, as she has reportedly been charged by federal prosecutors and is under investigation by the FBI’s Counterintelligence Division in South Florida for possible ties to Chinese intelligence services, according to the Miami Herald.
Zhang was on resort property after showing two Taiwanese passports to Secret Service agents and telling them she was a club member trying to use the pool, Secret Service Agent Samuel Ivanovich said in a Saturday court filing.
Upon her arrest, agents discovered she was carrying a laptop, a hard drive, and a thumb drive containing “malicious malware” and spoke better English than she had initially presented to security.
The private property presents a unique security challenge to federal agents, as Trump has previously hosted official visits on the property, in close proximity to resort guests.
The Secret Service said in a statement after Zhang’s arrest that it “does not determine who is invited or welcome at Mar-a-Lago; this is the responsibility of the host entity. The Mar-a-Lago club management determines which members and guests are granted access to the property.”
Zhang is due to appear in court next week
Watch Pompeo’s full interview below »
The centre of the Milky Way galaxy. Photo: AFP/ESA/Nasa
The centre of the Milky Way galaxy. Photo: AFP/ESA/Nasa
Hong Kong (CNN)Philippine President Rodrigo Duterte has threatened to send his troops on a “suicide mission” if Beijing doesn’t “lay off” a Manila-occupied island in the South China Sea.
Diplomacy and intimidation
Fishing vessels and naval ships
Mark Schiefelbein | AFP | Getty Images
(L-R) US Treasury Secretary Steven Mnuchin, US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He pose for a group photo at the Diaoyutai State Guesthouse in Beijing on February 15, 2019.
American and Chinese officials negotiating a trade deal have resolved most of the outstanding issues but are still haggling over how to implement and enforce such an agreement, the Financial Times reported late Tuesday.
Both countries have yet to agree on a number of important issues.
Beijing wants Washington to remove existing U.S. tariffs on Chinese goods, while the United States wants China to agree to terms of an enforcement mechanism ensuring it abides by the deal, the FT said.
Myron Brilliant, executive vice president for international affairs at the U.S. Chamber of Commerce told reporters that 90 percent of the deal is done, but the final 10 percent remains the trickiest part of the negotiations and would require trade-offs on both sides, according to the FT.
The U.S. and China have levied tariffs on billions of dollars worth of each other’s goods since last year, which disrupted supply chains and raised costs for companies.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are set to resume talks with Chinese Vice Premier Liu He on Wednesday, days after both sides reported progress in talks that took place in Beijing.
If the discussions prove fruitful, the FT said it’s possible that U.S. President Donald Trump will meet with Chinese president Xi Jinping to formally sign an agreement. In the event the world’s two largest economies are unable to reach a trade deal soon, some analysts have warned that a global recession could follow.
Hong Kong (CNN)The Philippines government has filed a diplomatic protest with China over the presence of hundreds of Chinese vessels near a Philippines-administered island in the South China Sea.