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Continental Revives Airline with the Help of Few Million Shanghainese

Tino La Shaw — Sun, 01 Jun 2008 21:06:08 +0000

Last week I reported that American Airlines would be offering non-stop service between Chicago and Shanghai. Now, Continental Airlines is hoping to service Shanghai as well; an effort that would not only give consumers choice but might bring Continental out of the red.

Last year the U.S. Government approved Continental for offering flights to Beijing. And Continental Airlines is currently the only U.S. carrier to offer daily non-stop service from their New York area hub, Newark Liberty International Airport, and Beijing, China. Now they are hoping that, come March, they will be increasing their presence in China where economic growth is fueling passenger demand.

Having added Beijing to their Asia Pacific region in June –- Continental has been servicing Hong Kong since 2001 – the airline is confident that by expanding to China’s southern metropolis they will be within reach of their goal of profitability in Fiscal ’06. Flying domestically is no longer a profitable business. Asia Pacific president Mark Erwin declined to say when the company might see a turnaround. However he did indicate that for each U.S. dollar of profit in the oil price, Continental Airlines paid out 42 million U.S. dollars annually. Asia Pacific currently makes up about 8 percent of Continental’s total revenue and the data shows that adding a Shanghai route may be just what the airline needs.

Asia’s low-cost airline industry has begun to take off, with Qantas Airways discount affiliate Jetstar Asia and AirAsia Bhd trying to emulate their U.S. peers. Erwin indicated that Continental does not plan to follow a budget airline model, stating, “We don’t believe that we need to be the cheapest out there.” Erwin continued with an analogy that gives this reporter pause, “We can take so much cheese off the pizza that people won’t buy the pizza,” I think Mr. Erwin must have skipped lunch because that analogy does not speak well for Continental. I’m sure he meant his competitor airlines, but it is not my job to interpret, only to report.

Continental’s application to the U.S. Department of Transportation to launch direct flights between New York and Shanghai has not received approval at date of this reporting, however Erwin is hopeful it will arrive soon.

Shanghai’s Historic Peace Hotel Undergoing Major Renovations

Tino La Shaw — Sat, 15 Mar 2008 02:49:47 +0000

Shanghai’s historic Peace Hotel has closed for renovations and is expected to remain closed for the next two years while construction work is completed. Jinjiang International Hotel Management, the owner of the hotel, has signed a deal with Fairmont Hotels & Resorts and the Swiss watchmaker Swatch to do the renovations.

Jianjiang will work with Fairmont Hotels & Resorts on the northern wing of the hotel, which is near Nanjing Road and the Bund, and the company will work with Swatch on the southern wing. The southern part of the hotel will be renamed the Shanghai Swatch Art Center, and it will be turned into an art center and will house flagship stores for international-brand watches.

Jianjiang owns some of the top hotels in Shanghai, but it has faced stiff competition lately from international companies opening up businesses in Shanghai. The competition is especially fierce along the Bund. The company hopes that the renovations will help it to compete more effectively against the foreign companies.

The Peace Hotel first opened in 1929 as the Cathay, and is was considered to be one of the top hotels in Shanghai, attracting guests such as Charlie Chaplin, U.S. General George Marshall, and playwright Noel Coward. It was renamed in 1949 following the Communist takeover to get rid of any colonialistic overtones.

McDonalds and KFC Under Fire in China

Ted Masterson — Sat, 16 Feb 2008 11:00:15 +0000

McDonalds and KFC have come under fire in China for underpaying their part-time employees. Labor bureaus in the Guangdong province began an investigation upon hearing that McDonalds, KFC, and Pizza Hut (which is owned by Yum Brands Inc., the same company that owns KFC) are paying their part-time employess less than the minimum wage of 7.5 RMB (97 cents) an hour.

A New Express Daily report stated that McDonalds employees earned 4 RMB (52 cents) an hour, those at KFC made 61 cents, and employees at Pizza Hut made 65 cents. The report also said that part-time employees were asked to work the hours of full-time staff but without earning full-time benefits.

McDonalds and Yum Brands have denied any wrongdoing and say that they have always followed all national and local laws and regulations. They have asked for clarification of China’s labor laws. An official at the Shanghai Labor and Social Security Bureau has promised legal action if the allegations turn out to be true.

The All-China Federation of Trade Unions, which is in the middle of a campaign to boost its presence in foreign companies, has said that it expects the fast-food restaurants to set up union branches in some outlets in southern China. The ACFTU succeeded in establishing union branches in Wal-Mart last year.

RMB Counterfeiters Captured

Ted Masterson — Tue, 05 Feb 2008 04:05:31 +0000

Shanghai police arrested three men suspected of producing and purchasing 30,000 counterfeit 100RMB bills.

Zhang Jiguo and Liang Qi stand accused of purchasing the counterfeit RMB with 60,000 yuan (7400 USD) within south China’s Guangdong Province on January 2, 2006, wrapping the counterfeit bills and sending them on to Shanghai where Zhang would pass the bills on to Liang. The two men were caught during the exchange with Diao Zhongiun being taken into custody thereafter. Shanghai police were able to retrieve the counterfeit funds, preventing the distribution of the fraudulent bills.

Further investigation is still underway. This is the largest counterfeiting operation tracked down in the eastern metropolis in the past 55 years, according to the city’s Yangpu District Procuratorate who said that the last time their was a counterfeiting operation of this magnitude it was 1949.

Plaza 66 to Become Home to Tiffany & Co.

Lisa Thompson — Mon, 28 Jan 2008 08:00:09 +0000

Tiffany & Co. announced plans today to open a 700-square-foot store in Shanghai’s prestigious luxury shopping center Plaza 66 this fall; it will be the city’s second store. The new store will offer an array of renowned Tiffany & Co. collections including the diamonds that have established Tiffany’s as a premier jeweler.

Darren Chen, Tiffany & Co. Group Vice President of International Sales indicated that Plaza 66 in Shanghai is an “ideal environment for a Tiffany & Co. store.” He further stated that the location will “expand our presence” in a city of “growing importance as global business centers and as destinations for both domestic and overseas tourists. We look forward to giving our customers in both cities greater access to Tiffany’s heritage of design excellence and outstanding service, qualities that together create a unique and memorable shopping experience.”

Tiffany’s will also be opening a second store in the Oriental Plaza in Beijing as part of this plan to expand their presence in Asia.

Starbucks Coming to a City Near You

Jerry Hu — Sun, 20 Jan 2008 08:00:38 +0000

Starbucks entered the Chinese market in the late 1990s by partnering with mainland and Taiwanese food and beverage companies. The US company currently has 165 stores across 18 mainland Chinese cities, about 120 of which lie in the capital or around Shanghai. And now they are embarking on an expansion into the second-tier markets the medium sized cities offer.

Starbucks Chairman, Howard Schultz’s ambitions for China — which he labeled the single most important market outside North America — suggest many lesser known cities in the country are quickly developing considerable spending power as well as Western drinking habits. “China has emerged as the strategic priority within the company today and in the long term,” he said. “The opportunity we have in China is like no other.”

Please check out the full-resolution images for this article by clicking here.

Mr. Schultz went on to say that, just as US fast food chains have done, Starbucks is looking at new ways to tailor the menu to local tastes. Additionally, it is Starbucks’ goal to consolidate ownership of their stores rather than continuing to partnership with other companies.

The northeast cities of Dalian, Qingdao, and Shenyang, as well as the southwest cities of Chengdu and Chongqing are the first recipients have newly opened stores in a process Mr. Schultz described as “Embryonic.” So lookout citizens, Starbucks may be coming to a city near you!

Think Bank of America China is Bank of America, America? Think Again

Jerry Hu — Mon, 12 Nov 2007 22:44:28 +0000

Walking down the streets of Shanghai, you’ll see many signs of home. McDonalds, Pizza Hut, KFC and yes, even Bank of America. But if you are thinking this might have any connection beyond the name to the Bank of America you know from back home, think again. It’s an entirely separate entity ruled by very, very different guidelines. Banking laws differ from one state to another within the United States, so you can imagine how different they must be in another country.

If you doubt this, try going into a Bank of America branch in Oregon to draw or deposit your account opened in the state of California. It doesn’t work, does it? No, the two states are on different federal charters: one is a Federal Savings Bank (FSB) and the other is a Bank (BA). Now try doing this same transaction outside the country, and you’ll see how strange things can really get.

Better still, walk in to one of those familiar banks in Shanghai and try to open an account. You know how it works back home; you need proper identification, a pulse and maybe $100 for your minimum balance. Not so in China, where you’ll need anywhere from $1,000 to $2,000, and maybe as much as $10,000 to open an account. Even though that’s as much as eight years of income to a Chinese national, it’s their minimum opening balance.

Oh, and don’t think you can easily transfer money in and out of the country. The Chinese banking system is wrought with guidelines, rules and regulations, most of which are designed to prevent the sorts of fraud so prevalent in the United States. American banks lose literally billions of dollars each year in order to insure that the transactions you and I so freely enjoy go off unencumbered, but there’s a hidden cost that is absent in China.

If you’re looking to live, work, do business or launch a small venture in China, there’s only one bank I recommend as strongly as Bank of America, and that is Bank of China, if you can get an account there. Securing an account with one of these two banks may insure a long, trouble-free legacy of banking for you as long as you are in China. But if you are a tourist briefly vacationing in China, don’t waste your time with Bank of America.

If you need to have funds wired in, you’ll be better off receiving them at Bank of China or the Agricultural Bank of China. If you just need to pull a couple hundred bucks out of your account with your debit card, use Bank of America, Bank of China, or any other ATM machine with the Visa logo and you’ll do just fine.