EngagingChina

Many people would balk at the idea of having a consultation with a physician by videoconference. Not in China, apparently. Drug retailer China Yongxin Pharmaceuticals has launched an “electronic diagnosis system” to provide instant albeit remote diagnosis for consumers who enter one of its pharmacies, which are all in Jilin province.

As in other countries, many drugs in China can only be sold against a prescription from a licenced physician. The system connects stores with a centralised service centre where licensed medical doctors provide diagnosis services to patients through an integrated video and audio system.

This service, which is free of charge, enables customers to immediately purchase prescription drugs in one of Yongxin's drugstores instead of having to schedule an appointment with a physician beforehand and potentially going to a competing drugstore.

The company, quoted on the OTC Bulletin Board market in the US, began retail operations in 2004, and in 2005, it gained franchise rights from one of the world's largest drug chains for Jilin province. By the end of 2007, the Company had a retail chain of 93 drug outlets as well as wholesale distribution and manufacturing operations in Northeastern China.

Technorati : china, computers, healthcare, pharmaceuticals

Should governments give consumers money to buy cars? Its a controversial topic in the west where troubled carmakers are lobbying governments to use public funds to restart stalled car markets.

In China, the government has just unveiled its own “economic stimulus package” for the car industry but, wisely, it is targeted at rural areas. Under the scheme, outlined by Finance Ministry on Monday, farmers who buy light trucks and minivans can get 10 rebate on the price of the vehicle up to a maximum payment of 5,000 yuan.

China intends to spend 5bn yuan on rural vehicle sales subsidies and another 20bn yuan on rebates to farmers for purchases of electrical appliances as part of an effort to stimulate demand in the vast but impoverished countryside, where the majority of its 1.3 billion people live.

The rural vehicles scheme is expected to boost vehicle sales by more than 1m units this year.

General Motors could be one of the biggest beneficiaries as its SAIC-GM-Wuling joint venture concentrates on the vehicle types covered by the plan.

In the west, market conditions are unfortunately quite different to those of rural China. Even if a case could be made for helping farmers in rural Wisconsin or Wales buy new pick-ups, the impact would be minimal. The carmakers thus want western governments to offer incentives to all car buyers.

But environmentalists and free-market economists — unlikely bedfellows in other issues — have joined in opposing the increasingly vocal demands of carmakers.

Several European countries already offer cash incentives of up to €2,500 for consumers who trade in their older vehicles for cleaner, fuel-efficient models.

Nevertheless, these programmes walk the tightrope between subsidy and incentive, and in the current market conditions, carmakers are calling on the sometimes stringent conditions to be relaxed so that they can clear their vast stocks of unsold vehicles.

Critics counter that it is not the job of the government to subsidise inefficient carmakers, particularly if it involves encouraging consumers to buy vehicles that offer no real advance in either fuel efficiency or environmental emissions over existing vehicles.

More on GM's Chinese ambitions here. More on China's new measures in this Time story.

Technorati : GM, automotive, china, environment, manufacturing

Coca-Cola hopes this week to cement the next stage of its China strategy with the $2.4bn acquisition of HK-listed China Huiyuan Juice Group.

The government is expected to rule on the controversial acquisition, which was announced back in September, later this week. While Coca-Cola is already an established player in China's soft drinks market, the acquisition has attracted much opposition as it would be the largest foreign takeover of a Chinese company.

In a thinly-veiled attempt to influence decision, the US company announced it was planning to raise its ante in China by investing $2bn in the country over the next three years, which it is more than it has invested in the past twenty years.

The US consumer giant also recently opened a $90m “innovation and technology centre” in Shanghai, presumably in a bid to convince authorities that it is sensitive to charges of cultural imperialism. The new research centre, Coke's largest in Asia, will develop new products for China, where drinks like juices and teas are preferred over Coke's traditional mainstay, carbonated beverages.

No to be outdone, arch-rival Pepsi plans to invest $1bn in China in the next four years.

Needless to say, China offers huge potential for western consumer brands particularly now that their home markets are mired in recession. In Coke's case, its North American sales declined by 1 percent in 2008, while case in China rose by a mouthwatering 29 percent. There is still a lot to go for, as per capita consumption of Coke is just 24 units per person per annum, compared to over 400 in North America.

Western marketing professionals say Coca-Cola is one of the few multinationals that seem to understand the Chinese market. The US company built its first bottling plant in China in the decade following World War I and was the first US company to distribute its products in China after Deng Xiaoping opened the country to foreign investors in 1979.

More history of Coca-Cola in China here.

Technorati : Coca-Cola, china, consumer, manufacturing, marketing

Remember China's much-vaunted scheme to butter up the west by encouraging investment in foreign capital markets? Private investors mostly gave the scheme the cold shoulder but the Chinese government put its money where its mouth was — and with disastrous results.

The State Administration of Foreign Exchange, an opaque manager of nearly $2,000bn of reserves, started making huge bets on global stocks early in 2007.

According to the Financial Times, subsequent falls in global stock prices have caused Safe to rack up losses that may exceed over $80bn.

As well as equities, of its high-profile disasters where

An annual survey by the US Treasury reveals that China became a big buyer of US equities just as the markets were about to turn. In the 12 months to June 2008, the total value of US equities held by China soared three-fold to reach $100bn.As well as US equities, Safe also had huge holdings in US bonds and was hit particularly hard by the failure of Freddie Mac and Freddie Mae.

As Safe never never discloses its holdings except to China's political leaders, it is impossible to know exactly how much has been lost. But the country's political leaders are now waking up what the scale of the recent diversification into much riskier foreign assets.

Last Friday, Chinese premier Wen Jiabao called on Washington to ease worries Beijing has about the safety of its vast US assets.

In 2007, the Chinese government tried to encourage domestic investors to follow its lead by diversifying into foreign equities using a scheme called the Qualified Domestic Institution Investor programme. But they preferred to take their chances with China's overheating domestic equity markets and given the dismal investment performance of Safe who can blame them?

More on QDII in these EngagingChina stories.

Technorati : QDII, US, china, fund managers, investment, investment banks