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APTOPIX Wal-Mart-Going Native in China

Wal-Mart seeks overseas success by going native in China

SHENZHEN, China (AP) — Zhong Guoyan sifted through piles of fish at a Wal-Mart in Shenzhen, one of China’s largest cities. She studied the fins, to make sure they were bright red and firm. She peered at the eyeballs — were they bulging? “When I come here, I have a look,” she said. “If it’s good, then I will buy it. If it’s only cheap, I won’t buy it.” In American Wal-Marts, customers don’t get to fondle their fish. But America is not China, as the world’s biggest retailer has learned. If the Arkansas-based company wants to win over foreign consumers, it has to shed some of its American ways, and cater to very different customs and conventions that are fast changing. Zhong eventually tossed a couple of fish into a plastic bag — a small victory in Wal-Mart’s struggle to build an international empire. The stakes are high: The company can’t count on much growth in the U.S. — it’s facing challenges at home with intense competition from Amazon.com and dollar stores — so the retailer is depending more on its operations overseas. China is the ultimate prize. The Chinese grocery market, already the world’s largest at $1.1 trillion a year, is expected to grow to $1.5 trillion in sales in just the next four years, says IGD, a global consumer products research firm. “China remains a strategic market for our future,” Doug McMillon, CEO of Wal-Mart Stores Inc. recently told investors. Getting the food business right is critical for Wal-Mart. Shoppers buy groceries more often than anything else. If Wal-Mart can get them in the door to buy food regularly, perhaps they will visit more frequently for items like pajamas and coffee makers — and eventually become loyal online customers, too. The company has taken some lumps trying to cross borders in food retailing. Overall international sales growth dropped 9.4 percent last year largely because of the strong dollar. And while Wal-Mart’s overseas business had a strong start to this year, it faces long-term challenges. Wal-Mart gave up in Germany and South Korea in 2006. It’s closing stores in Brazil. Overseas, Wal-Mart lacks the scale to squeeze local suppliers on price as it does in the U.S. It also faces nimble competitors. And it has struggled to duplicate its bedrock strategy of constant bargains. But Wal-Mart has learned over the years from its missteps, discovering that it needs to adapt to local ways and that patience pays off. In Mexico, Canada and Japan, it’s won shoppers over time. In Chile, it launched a corporate culture campaign and worked closely with suppliers to coax them into its way of doing business. “Wal-Mart,” says Bryan Roberts of the London retail consultancy TCC Global, “is a very determined organization.” WINNING OVER PICKY CONSUMERS In the unruly Chinese market, some competitors cut corners, mislabeling products or even selling tainted foods. The risks have made Chinese consumers unusually wary. Sean Clarke, CEO of Wal-Mart China, based in Shenzhen, previously worked in Britain, Japan, Germany, and Canada. China, he says, “is easily the most challenging market to operate ... There is a huge level of distrust.” Wal-Mart had a difficult time promoting “everyday low prices” — promising the lowest prices on a basket of goods every time consumers shop. Some rivals poached the “everyday low price” message, confusing customers. Wal-Mart scrambled to find the right slogan. In 2012, it introduced “Worry Free” — implying quality and reassuring shoppers who worry that deals will expire before they get to the store. The company’s message: Efficiency and good management, not cutting corners, make everyday low prices possible. The message has sometimes been muddled. When Wal-Mart came to China, it was slow to tailor its offerings to local tastes. Realizing its mistake, Wal-Mart gave local managers more leeway to run their businesses. But that approach backfired, leading to a series of food-safety violations. In one particularly embarrassing episode, Wal-Mart had to recall donkey meat — a delicacy in China — after DNA testing showed it contained traces of fox meat. In response, Wal-Mart slashed nearly two-thirds of its 20,000 suppliers. Now, Wal-Mart knows exactly where each product comes from. Wal-Mart also took back some of the responsibilities from local managers and increased its investment in food safety. It introduced mobile testing labs that check for pesticides on vegetables and fruit and employed handheld devices to check temperatures of meat products. GAINING CONTROL OVER SUPPLIERS, COSTS In America, Wal-Mart has the clout — 25 percent of the U.S. grocery business— to force suppliers to do things the Wal-Mart way. That means cutting costs to the bone. In return, the suppliers enjoy steady demand from Wal-Mart, so they don’t have to spend so much on advertising or worry about paying extra costs to staff their factories to meet unexpected peaks in demand. In China, things are tougher. Wal-Mart accounts for just 2.3 percent of the grocery market. Ninety-five percent of all products Wal-Mart sells in China are supplied by local companies. The Chinese supply chain is also notoriously inefficient. For years, Wal-Mart and other foreign companies didn’t deal directly with their suppliers, working mostly instead through a labyrinth of middlemen. Three years ago, Wal-Mart decided to cut out the middlemen and route as many goods as possible through 20 of its own distribution centers. By eliminating the go-betweens, Wal-Mart could negotiate directly with suppliers and knock down costs — often by 10 percent or more. The change also gives Wal-Mart more control over the quality of the food being sent to its stores and the efficiency with which it gets to them. Before the switch, only about 75 percent of orders would actually reach Wal-Mart stores; now 95 percent do. FIGHTING COMPETITORS Wal-Mart landed in China in 1996, a year behind Carrefour, opening two stores in Shenzhen— a Wal-Mart supercenter and a Sam’s Club. They were the first foreign retailers to offer the big-box shopping experience, which offers everything from clothing to food. After investing in a Taiwanese-owned retail chain in 2007, Wal-Mart became China’s biggest super-sized store chain and expanded its lead for the next two years. But local and regional competitors quickly closed the gap, sometimes undercutting Wal-Mart prices because they have closer ties to local suppliers and can negotiate better deals. Wal-Mart insists its market share for the big-store sector has increased over the past three years. But Euromonitor says Wal-Mart’s market share has fallen to 9.6 percent (No. 3 in the market) after peaking at 11.6 percent in 2009. Wal-Mart last year announced plans to add 115 stores in China by 2017, bringing the store count to 530. It’s concentrating in markets where it’s already established, including its stronghold in the south. And it has given up on about 30 lackluster stores. Meanwhile, Wal-Mart faces another challenge in China, and it is not from other big box stores. Across the globe, shoppers are increasingly buying online or at small stores. But in China, that trend is more dramatic. It has already overtaken the U.S. as the world’s biggest online marketplace. AP Business Writer Paul Wiseman reported from Washington, D.C. Follow Anne D’Innocenzio at http://www.Twitter.com/adinnocenzio Her work can be found at http://bigstory.ap.org/content/anne-dinnocenzio Follow Paul Wiseman at https://twitter.com/PaulWisemanAP His work can be found at http://bigstory.ap.org/content/paul-wiseman

Financial Markets Wall Street

US stock indexes flat as investors weigh economic data

U.S. stock indexes were little changed in early trading Tuesday as investors weighed new economic data, including figures showing that spending by consumers in the U.S. increased last month by the largest amount in more than six years. Energy companies were among the biggest gainers as the price of crude oil rose. KEEPING SCORE: The Dow Jones industrial average slipped six points to 17,866 as of 10:03 a.m. Eastern time. The Standard & Poor’s 500 index added two points, or 0.1 percent, to 2,101. The Nasdaq composite index gained 12 points, or 0.2 percent, to 4,945. EYE ON CONSUMERS: The Commerce Department said that U.S. consumer spending rose 1 percent in April, led by a big jump in purchases of autos and other durable goods. Wages and salaries, the most important component of incomes, gained 0.5 percent. The strong gain for consumer spending, which accounts for 70 percent of economic activity, is a good sign that the economy is doing better in the current quarter after nearly stalling out at the start of the year. HOME PRICES: The Standard & Poor’s/Case-Shiller 20-city home price index increased 5.4 percent in March versus a year earlier. A limited supply of homes for sale in many markets has helped push up prices. So far, the higher costs haven’t thwarted sales, however. ENERGIZED: Several natural gas and oil companies were riding the latest gain in energy prices. Southwestern Energy jumped 79 cents, or 6 percent, to $13.85, while Williams Cos. rose $1.15, or 5.4 percent, to $22.63. Marathon Oil added 63 cents, or 4.9 percent, to $13.53. POWER DEAL: Westar Energy, the biggest utility company in Kansas, surged 6.5 percent after Great Plains Energy agreed to buy it for $8.5 billion, or $60 per share in cash and stock. The deal will give Great Plains a total of 1.5 million customers in Kansas and Missouri. Westar climbed $3.42 to $56.34. Great Plains Energy slid $1.92, or 6.2 percent, to $28.09. GLOBAL OUTLOOK: A Japanese report showed factory output and consumer spending data improving in April from the previous month, though they remained weak. In Europe, the data was more downbeat, with inflation remaining below zero in May. That is a sign of economic weakness but is not considered bad enough to prompt the European Central Bank to consider more stimulus at its next meeting Thursday, analysts say. MARKETS OVERSEAS: In Europe, Germany’s DAX edged 0.2 percent lower, while France’s CAC 40 slipped 0.2 percent. Britain’s FTSE 100 was roughly flat. Earlier in Asia, Japan’s benchmark Nikkei 225 closed 1 percent higher, while South Korea’s Kospi added 0.8 percent. Hong Kong’s Hang Seng climbed 0.9 percent. Sydney’s S&P/ASX 200 fell 0.5 percent. Shares in Taiwan and Southeast Asia were mostly lower. ENERGY: Benchmark U.S. crude oil was up 56 cents, or 1.1 percent, at $49.89 a barrel in New York. Brent crude, used to price international oils, was up 11 cents at $50.47 a barrel in London. Natural gas was up 8 cents, or 3.8 percent, at $2.25 per 1,000 cubic feet. BONDS AND CURRENCIES: Bond prices fell. The yield on the 10-year Treasury note rose to 1.88 percent from 1.86 late Friday. U.S. markets were closed Monday for the Memorial Day holiday. In currency markets, the dollar strengthened to 111.18 yen from 110.38 yen in Friday’s trading. The euro rose to $1.1168 from $1.1114.

APTOPIX Wal-Mart-Going Native in China

Wal-Mart needs to grow overseas, and China's the big prize

SHENZHEN, China (AP) — Zhong Guoyan sifted through piles of fish at a Wal-Mart in Shenzhen, one of China’s largest cities. She studied the fins, to make sure they were bright red and firm. She peered at the eyeballs — were they bulging? “I like when the products are fresh, and the quality is good,” she said. “When I come here, I have a look. If it’s good, then I will buy it. If it’s only cheap, I won’t buy it.” In American Wal-Marts, customers are not offered the opportunity to fondle their fish. But America is not China, as the world’s biggest retailer has learned. If the Arkansas-based company wanted to win over foreign consumers like Zhong, it would have to shed some of its American ways, and cater to very different customs and conventions that are fast changing. In the U.S., Wal-Mart conquered the marketplace by offering “everyday low prices” to penny-pinching, bulk-buying customers, but Chinese shoppers have good reason to look for quality first, bargains second after scandals involving tainted and mislabeled food. And Chinese shoppers seek fresh food daily because their tiny refrigerators don’t give them room to stock up. Zhong eventually tossed a couple of fish into a plastic bag — a small victory in this massive retailer’s struggle to build an international empire. The stakes are high: Wal-Mart can’t count on much sales growth from its U.S. business — it’s facing challenges at home with intense competition from online leader Amazon.com and dollar stores, which offer low prices and convenience — so the retailer is depending more on its operations overseas. China, the world’s most-populous country, is the ultimate prize. Right now, it represents just 3 percent of Wal-Mart’s global sales of $478.6 billion, according to estimates from IBISWorld, a research firm. And the company has just over 400 stores in China, compared with more than 5,000 in the U.S. But the Chinese grocery market, already the world’s largest at $1.1 trillion a year, is expected to grow to nearly $1.5 trillion in just the next four years, says IGD, a global consumer products research firm. “China remains a strategic market for our future,” Doug McMillon, CEO of Wal-Mart Stores Inc. recently told investors. Getting the food business right is critical for Wal-Mart. Shoppers buy groceries more often than anything else. If Wal-Mart can get them in the door to buy food regularly, perhaps they will visit more frequently for items like pajamas and coffee makers — and eventually become loyal online customers, too. Still, markets in China and elsewhere in the world will not surrender to Wal-Mart, just because it’s Wal-Mart. In particular, global players like Wal-Mart have found that food retailing doesn’t cross borders easily because it’s a largely local business. After struggling on its own in China, Britain’s Tesco PLC decided two years ago to team up with China Resources Enterprise, a state-owned company. Wal-Mart has also taken some lumps. Overall international sales growth has been uneven, dropping 9.4 percent last year largely because of the strong dollar. And while Wal-Mart’s overseas business had a strong start to this year, it faces long-term challenges. Wal-Mart gave up in Germany and South Korea, abandoning those markets back in 2006 in the face of tough competition. It’s closing 10 percent of its stores in Brazil. And it’s locked in a price war in the United Kingdom, slugging it out with no-frills German discounters Aldi and Lidl. Overseas, Wal-Mart lacks the scale to squeeze local suppliers on price as it does in the U.S. It also faces nimble competitors who are entrenched in foreign markets. It has not always found it easy to duplicate its bedrock strategy of constant bargains outside the United States. But Wal-Mart has learned over the years from its missteps, discovering that it can’t just impose its culture on the world, that it needs to adapt to local ways, that patience does pay off. In countries like Mexico, Canada and Japan, Wal-Mart has won shoppers over time. After the setbacks in Germany and South Korea, the company established a team to ensure it does a better job integrating international acquisitions, while avoiding the impulse to force employees overseas to adopt all its ways. In Chile, it launched a corporate culture campaign and worked closely with suppliers to coax them into its way of doing business. It’s using its global clout to find and import products from around the world, catering to increasingly sophisticated and demanding middle class consumers. Wal-Mart also has come to realize that it can thrive without being the biggest player in every market, says Bryan Roberts, global insights director at TCC Global, a London-based marketing consultancy for grocery retailers. But the company also knows that it needs to succeed in China, now the company’s fourth largest international market by sales. And he believes it will do just that. “Wal-Mart,” Roberts says, “is a very determined organization.” WINNING OVER PICKY CONSUMERS Except for the signs, most Americans wouldn’t recognize a Wal-Mart in China. At a store in Shenzhen, shoppers sniff bins of rice or use tongs or their hands to examine the piles of local sausage, whole chickens and pigs’ feet. Nearby, tanks brim with live fish, frogs and crabs. Americans may like to touch products, but in China, many want to buy live fish, or smell the meat. “It has to smell like fresh blood,” said Lina Wang as she examined loose pork. Meanwhile, Huang Xiulian stood at a nearby Snickers display, studying the expiration date and where the candy was produced. In the massive, unruly Chinese market, some competitors have cut corners, mislabeling products or even selling tainted foods. The risks have made Chinese consumers unusually wary: If a carton of milk or a piece of fish seems too cheap, Chinese shoppers wonder if it’s safe. If items stay on sale day after day, they worry if there’s something wrong with them. Sean Clarke, CEO of Wal-Mart China, based in Shenzhen, previously worked in Britain, Japan, Germany, and Canada. China, he says, “is easily the most challenging market to operate.” “There is a huge level of distrust in this market,” Clarke says. “Is it fresh? Is the price right?” Although China still has plenty of bargain-conscious shoppers, overplaying the price message can also “alienate the increasingly affluent middle-class shoppers, less sensitive on price but (who) value more the quality and assortment of merchandise,” says Jason Yu, general manager of Kantar Worldpanel China, which specializes in research on Chinese shopping habits. In particular, Wal-Mart had a difficult time promoting “everyday low prices” — promising the lowest prices on a basket of goods every time consumers shop. Early on, Wal-Mart undermined its own claims for consistently low prices by running lots of short-term promotional gimmicks. Then some rivals poached the “everyday low price” message, confusing customers. Wal-Mart scrambled to find the right slogan. In 2010, it switched to “Low Prices.” Two years later, it trotted out “Worry Free” — a message that employs the Chinese characters for “save, heart, price,” implying quality and reassuring shoppers who worry that deals will expire before they get to the store. “Worry Free” is Wal-Mart’s key weapon to lure shoppers: 85 percent of the discounts in the Wal-Mart stores in China now last anywhere from four weeks to six months, said Clarke. Unlike in the U.S., Wal-Mart had to build trust by spelling out in signs how long the low prices last. The company’s message: Efficiency and good management, not cutting corners, make everyday low prices possible. When Wal-Mart came to China, it was slow to tailor its offerings to local tastes. Southern Chinese like rice. Northern Chinese like noodles. Folks from Hunan like their chili peppers. The Cantonese crave chicken feet. Realizing its mistake, Wal-Mart gave local managers more leeway to run their businesses. For example, it let them decide when hot deli food was past its sell-by date and gave them free rein in ordering from different local suppliers. But that approach backfired, leading to a series of food-safety violations. In one particularly embarrassing episode, Wal-Mart had to recall donkey meat — a delicacy in China — after DNA testing showed it contained traces of fox meat. The misstep came at a time when Chinese consumers were especially wary, because tainted baby formula had sickened hundreds of thousands of infants. In response, Wal-Mart slashed nearly two-thirds of its 20,000 suppliers, including food. Now, Wal-Mart knows exactly where each product comes from. Wal-Mart also took back some of the responsibilities from local managers, though they are allowed to decide on such issues as whether meat should be loose or packaged in their stores. Wal-Mart increased its investment in food safety. It broke new ground in China by adding mobile testing labs that go around from store to store in both the Southern and Eastern regions of China, checking for pesticides on vegetables and fruits. It’s using handheld devices in South China to check temperatures of meat products. “It’s quality first,” Clarke said, “and then we will have the lowest price.” GAINING CONTROL OVER SUPPLIERS, COSTS In America, Wal-Mart consistently delivers low prices to shoppers largely because it has the clout — 25 percent of the U.S. grocery business— to force suppliers to do things the Wal-Mart way. That means cutting costs to the bone. In return, the suppliers enjoy steady demand from Wal-Mart, so they don’t have to spend so much on advertising or worry about staffing their factories. Wal-Mart’s pull is so strong that more than 1,500 suppliers have opened offices near its headquarters in Bentonville, Arkansas. But replicating that model has proven tough overseas, partly because it takes time to work with new suppliers to cut costs. In Brazil, for instance, it’s still a work in progress after two decades. In China, things are tougher still. Wal-Mart accounts for just 2.3 percent of the overall grocery market. In fact, the top 10 grocery retailers in China account for just 18.5 percent of the market, says Euromonitor International, a global market research firm. Suppliers are scattered, too. Ninety-five percent of all products Wal-Mart sells in China are supplied by local companies. It’s tough for retailers to have influence over their network of Chinese suppliers. The Chinese supply chain is also notoriously inefficient. For years, Wal-Mart and other foreign companies haven’t dealt directly with their suppliers, working mostly instead through a labyrinth of middlemen who handle distribution. One supplier could potentially have 100 distributors, handling delivery to just three or four stores. Wal-Mart would have to work with each distributor. Wal-Mart had been making some efforts in centralizing its food distribution. But it didn’t get serious about breaking up the system until three years ago. It decided to cut out, or at least reduce, the middlemen and route as many goods as possible through 20 of its own distribution centers. It built 11 centers for fresh food, and increased its packaged-food distribution centers from five to nine. Now, 85 percent of packaged goods is being sent through distribution centers. For fresh food, that figure is about 50 percent. Wal-Mart says it was a challenge to convince many suppliers to unravel their way of doing business. But by eliminating the go-betweens, Wal-Mart could negotiate directly with suppliers and knock down costs — often by 10 percent to 12 percent, says Lesley Smith, senior vice president of the supply chain at Wal-Mart China and the woman behind the move. The change also gives Wal-Mart more control over the quality of the food being sent to its stores and the efficiency with which it gets to them. Before the switch, only about 75 percent of orders would actually reach Wal-Mart stores; now 95 percent do. Before, it took three days for products to arrive; now it takes a day and a half, Smith says. Nestle S.A., for instance, used to go through 81 Chinese distributors to reach 400 Wal-Marts. Now it’s using Wal-Mart’s national distribution network, which it says is resulting in fresher quality of goods at the store, higher sales and lower costs. Another supplier, Beijing-based noodle and flour maker Cofco, is also coming to appreciate the Wal-Mart way. In 2003, it started supplying 11 Wal-Marts. Now it’s selling to 398. Wal-Mart demands that state-owned Cofco keep prices low and stable. “At first, we had concerns, especially when the raw material costs had some ups and downs,” says Cofco general manager Liu Hongwei says. But Cofco has learned to be more efficient. And Wal-Mart stocks Cofco products in the busiest parts of the stores and markets them under the “worry free” slogan. Cofco sales to Wal-Mart rose 40 percent last year, compared to 10 percent to 20 percent increases for other customers. Liu says he negotiates prices with his other customers every two weeks. With Wal-Mart? Twice a year. FIGHTING COMPETITORS Often, Wal-Mart enters new markets by acquiring competitors, but that doesn’t guarantee success. Buying the top player, as it did in Chile and Mexico, seems to work best. In Chile, Wal-Mart’s intense marketing paid off. Chileans are so sold on Wal-Mart’s supercenter, Lider, that they believe the gap between its prices and rivals is twice what it actually is. But in the United Kingdom, Wal-Mart’s Asda and traditional British supermarkets like Tesco and Sainsbury’s are all being undercut by the rapidly expanding Aldi and Lidl chains. In response, Asda is stepping up sustained price cuts and joined the European Marketing Distribution, which pools the buying power of 250 supermarket chains. In vast China, Wal-Mart competes with a swarm of regional rivals. At first Wal-Mart and France’s Carrefour had China’s big-box retail business pretty much to themselves. But Chinese rivals, learning fast and exploiting close ties to local suppliers, erased their lead. Wal-Mart landed in China in 1996, a year behind Carrefour, opening two stores in Shenzhen — a Wal-Mart supercenter and a Sam’s Club. They were the first foreign retailers to offer the big-box shopping experience, which offers everything from clothing to food. That’s a big change from traditional wet markets and mom-and-pop stores filled with counterfeit goods. After investing in a Taiwanese-owned retail chain in 2007, Wal-Mart became China’s biggest super-sized store chain and expanded its lead for over the next two years. But Wal-Mart and Carrefour were hobbled. The government restricted foreigners to opening three stores per city. But even after China dropped the store limit in 2001, Wal-Mart and other foreign retailers have faced unfavorable treatment. Government officials have investigated the foreign retailers’ pricing and highlighted their food scandals. Meanwhile, local and regional competitors quickly closed the gap. The local players can sometimes undercut Wal-Mart prices because they have closer ties to local suppliers and can negotiate better deals, says Kantar’s Yu in Shanghai. Wal-Mart insists its share of the big-store sector has increased three years in a row. But Euromonitor says Wal-Mart’s market share has fallen steadily since peaking at 11.6 percent in 2009. By last year, Wal-Mart held 9.6 percent of the market, good for No. 3. Wal-Mart closed about 30 lackluster stores, but it has spent millions to renovate 50 it thinks are promising. Last year, it announced that it plans to add 115 stores by 2017, bringing the total store count to 530. It’s concentrating in markets where it’s already established, including the west, central China and its stronghold in the south. From the start, Wal-Mart has had some advantages, including its global clout. It’s able to stock its shelves with foreign imports and sell them at a bigger discount than its rivals can. And it’s been pressing that advantage in the wake of a changing consumer mindset. Three years ago, Wal-Mart imported 212 containers of products into China. Last year, it imported 2,800, including milk sold under its Asda brand — popular with the exploding ranks of middle-class Chinese who can afford to buy better goods. But, Wal-Mart faces another challenge in China, and it is not from other big box stores. Across the globe, shoppers who are increasingly shifting away from buying at big stores and toward buying online or at small stores. But in China, that trend is more dramatic. It has overtaken the U.S. as the world’s biggest online marketplace. That’s meant declines in traffic at Wal-Mart and other big-store rivals, both local and foreign. So Wal-Mart is expanding offerings at its website, which is run by Yihaodian, a Chinese startup Wal-Mart fully took over last year. And it’s blending its online services with its own stores and adding hubs in key cities to deliver goods to shoppers’ homes. Sissy Xiao, a journalist, represents the future. Xiao had her hands and nose in the bins of rice at a Wal-Mart store in Beijing. She compared the scents. Her elderly mother was elsewhere in the store, buying food. Xiao, however, was not planning to take any home. She’ll do her shopping later, online. “I am spending less time at big stores,” Xiao says. “I usually buy things online. It’s more convenient.” AP Business Writer Paul Wiseman reported from Washington, D.C. Follow Anne D’Innocenzio at http://www.Twitter.com/adinnocenzio Her work can be found at http://bigstory.ap.org/content/anne-dinnocenzio Follow Paul Wiseman at https://twitter.com/PaulWisemanAP His work can be found at http://bigstory.ap.org/content/paul-wiseman

Campaign 2016 Trump China

As in US, Trump draws strong reactions in China

BEIJING (AP) — China features prominently in the rhetoric of presumed Republican presidential candidate Donald Trump, who accuses the country of stealing American jobs and cheating at global trade. In China though, he’s only just emerging as a public figure, despite fame elsewhere for his voluble utterances, high-profile businesses and reality TV shows. Although the government has denounced Trump’s threats of economic retaliation, many Chinese observers see a silver lining in his focus on economic issues instead of human rights and political freedoms. That could make him an attractive alternative to his likely rival, Democrat Hillary Clinton. Trump “could in fact be the best president for China,” Hong Kong Phoenix Television political commentator Wu Jun said during a recent on-air discussion. “That’s because the Republican Party is more practical and Trump is a businessman who puts his commercial interests above everything else,” Wu said. Clinton, on the other hand, “might be the least friendly president toward China.” It’s not clear how familiar Trump actually is with China. While he’s claimed to have made “billions of dollars dealing with China,” he has no known investments in the nation. Chinese, however, are customers for Trump’s hotel, golf course and real estate ventures, while Trump-branded clothing and accessories have been made in China. Trump mentions the country so often that a popular YouTube compilation video exists in which he says the word China more than 200 times in just over 3 minutes. Still, Trump was largely unknown in China until his campaign for the Republican nomination began gathering momentum last year. Trump’s call for a 45 percent tariff on imports that would hit China hard has been lambasted by Finance Minister Lou Jiwei, who said enacting such a tariff would cost the U.S. its global leadership. Still, Chinese are used to American candidates making strong comments about their country during elections, only to moderate their positions once in office, said Nanjing University foreign relations expert Zhu Feng. “The most important thing is that he or she be solid in their knowledge about China and know how to strike the right balance,” Zhu said. Many Chinese may also be relieved that Trump is focused so relentlessly on China’s role in the U.S. economy, rather than on human rights and similar issues. Trump’s questioning of U.S. foreign military commitments is also sweet music to the ears of Chinese nationalists who want China to be top dog in Asia and challenge U.S. dominance in the rest of the world. His opposition to the Trans-Pacific Partnership trade deal, which seeks to offset Chinese influence, also goes down well in Beijing. The Chinese public, meanwhile, seems unfazed by Trump’s anti-immigration stance, with its overwhelming focus on Mexico, and the candidate’s vow to bar Muslims from entering the U.S. In contrast, many Chinese have qualms about Clinton, who as a former secretary of state under Barack Obama is closely associated with Washington’s “pivot” to Asia that has been heavily criticized by Beijing. Overall, Chinese public sentiment toward Trump appears mixed. Comparing him to a figure from folklore known for sowing chaos, the official Global Times newspaper proclaimed him a symptom of an “American disease.” “I don’t think many people knew him as a businessman before the campaign,” said Shanghai IT engineer Kong Kong, who was unimpressed with Trump’s vaunted political outsider status. “Politics is not entertainment and simply being fresh may not be a good thing,” Kong said. “A lack of political experience and an excess of personality may lead to an imbalance among interest groups and an abuse of authority, which are not good things for America.” Zhong Heng, a Shanghai paralegal, said she regards much of what Trump says as bluster. “He’s like an artificial performance-enhancing drug being fed to the American people,” Zhong said. Trump, though, does seem to have won some Chinese supporters, particularly online. There, chat groups such as “Donald Trump Super Fans Club” and “God Emperor Trump” have popped up in recent months. One posting in a Weibo messaging service chat group was unrestrained in its enthusiasm. “The more I know about Donald Trump,” it said, “the more I feel that he’s not only saving the U.S., but also the entire world.” Associated Press researchers Dong Tongjian in Beijing and Fu Ting in Shanghai contributed to this report.

National Business

Campaign 2016 Trump China

As in US, Trump draws strong reactions in China

BEIJING (AP) — China features prominently in the rhetoric of presumed Republican presidential candidate Donald Trump, who accuses the country of stealing American jobs and cheating at global trade. In China itself, though, he’s only now emerging as a public figure, despite fame elsewhere for his voluble utterances, high-profile businesses and reality TV show. And although Chinese officials and state media have denounced Trump’s threats of economic retaliation, many Chinese observers see a silver lining in his focus on economic issues to the near-total exclusion of human rights and political freedoms. That appears to make him an attractive alternative to his likely rival, Democrat Hillary Clinton, who is regarded as far more critical of China’s communist system. Trump “could in fact be the best president for China,” Hong Kong Phoenix Television political commentator Wu Jun said during a recent on-air discussion. “That’s because the Republican Party is more practical and Trump is a businessman who puts his commercial interests above everything else,” Wu said. Clinton, on the other hand, “might be the least friendly president toward China.” Despite his frequent evocations of China, it’s not clear how familiar Trump actually is with the country. While he’s claimed to have made “billions of dollars dealing with China,” he has no known investments in the nation, and it isn’t clear what influential figures he knows in the Chinese political and business realms. Chinese are, however, customers for Trump’s hotel, golf course and real estate ventures, while Trump-branded clothing and accessories have been made in China. Trump mentions the country so often that a popular YouTube compilation video exists in which he says the word China more than 200 times in just over 3 minutes. His various statements on China range from the blunt (“We can’t continue to allow China to rape our country”) to the anodyne (“I like China very much”). Still, Trump was largely unknown in China until his campaign for the Republican nomination began gathering momentum last year. Though China’s government rarely comments on American political campaigns, Trump’s advocacy of a 45 percent tariff on imports that would hit China hard has been lambasted by Finance Minister Lou Jiwei, who called Trump “one of those irrational types” and said enacting such a tariff would cost the U.S. its global leadership. “Don’t even think of being the big boss anymore,” Lou said in April. Trump’s comments might’ve sparked a stronger response if Chinese hadn’t already grown accustomed to American candidates making strong statements about their country during elections, only to moderate their positions once in office, said Nanjing University foreign relations expert Zhu Feng. “The most important thing is that he or she be solid in their knowledge about China and know how to strike the right balance,” Zhu said. Many Chinese may also be relieved that Trump is focused so relentlessly on China’s role in the U.S. economy, rather on the country’s authoritarian political system, human rights record or policies toward Tibet and the northwestern region of Xinjiang. Trump’s questioning of U.S. foreign military commitments is also sweet music to the ears of Chinese nationalists who want China to dominate in Asia and challenge U.S. dominance in the rest of the world. His opposition to the Trans-Pacific Partnership trade deal, which excludes China and seeks to offset Chinese influence, also goes down well in Beijing, though he has also criticized China’s construction of man-made islands in the South China Sea. The Chinese public, meanwhile, seems unfazed by Trump’s anti-immigration stance, with its overwhelming focus on Mexico, and the candidate’s vow to bar Muslims from entering the U.S. That could reflect anti-Islamic sentiments that have grown in China following a series of deadly attacks by radicals from the Muslim Uighur minority, even while the government promotes ties with the Islamic world. In contrast, many Chinese have qualms about Clinton that date from a speech she gave at a U.N. conference in Beijing in 1995 that focused heavily on human rights, to the displeasure of the hosts. As a former secretary of state under Barack Obama, Clinton is also closely associated with Washington’s “pivot” to Asia that includes an increase in the U.S. military presence in the region. Beijing has been strongly critical of the policy shift, which was largely seen as prompted by China’s robust assertions of its South China Sea maritime claims. Interest in Trump here is rising. Why? Because Chinese have long regarded American elections as a particularly dramatic type of spectator sport. The process of working for a candidate and taking part in rallies and political campaigns doesn’t exist within China’s staid, authoritarian political system. U.S. politics is also a topic on which the tightly leashed state media is relatively free to report, so discussion of Trump, Clinton and Democratic candidate Bernie Sanders rages on social media platforms and podcasts. Many have also noted that Trump’s personality-driven, publicity-fed style is also a familiar archetype for Chinese known for their love of high-profile business moguls such as Alibaba’s Jack Ma. Although no polls have been taken, Chinese public sentiment toward Trump appears mixed. Comparing him to a figure from folklore known for sowing chaos, the official Global Times newspaper proclaimed him a symptom of an “American disease.” “I don’t think many people knew him as a businessman before the campaign,” said Shanghai IT engineer Kong Kong, who is unimpressed with Trump’s vaunted political outsider status. “Politics is not entertainment and simply being fresh may not be a good thing,” Kong said. “A lack of political experience and an excess of personality may lead to an imbalance among interest groups and an abuse of authority, which are not good things for America.” Zhong Heng, a Shanghai paralegal, says she regards much of what Trump says as bluster. “He’s like an artificial performance-enhancing drug being fed to the American people,” Zhong said. Trump, though, does seem to have won some Chinese supporters, particularly online. There, chat groups such as “Donald Trump Super Fans Club” and “God Emperor Trump” have popped up in recent months. One posting in a Weibo messaging service chat group was unrestrained in its enthusiasm. “The more I know about Donald Trump,” it said, “the more I feel that he’s not only saving the U.S., but also the entire world.” Associated Press researchers Dong Tongjian in Beijing and Fu Ting in Shanghai contributed to this report.

Food and Farm Science of Agriculture

4-H program aims to grow next generation of ag scientists

ST. PAUL, Minn. (AP) — One team is developing GPS ear tags so cattle farmers can track herds from afar. Another thinks drones can protect livestock from predators. Yet another is developing a rechargeable portable warmer to prevent vaccines from freezing when dairy producers inoculate their herds in the winter. These aren’t corporate or university researchers, but teenagers in Minnesota’s 4-H Science of Agriculture Challenge, which aims to nurture the next generation of agricultural scientists for a country facing a critical shortage. A study last year by the U.S. Department of Agriculture and Purdue University found that nearly 60,000 high-skilled agriculture-related jobs open up annually, but there are only about 35,000 college graduates available to fill them. University of Minnesota Extension is developing the challenge, which is now in its second year and already attracting interest from other 4-H programs, such as Michigan’s. Extension specialist Josh Rice says his team will present a workshop for national 4-H officials in October, and recently gave a presentation to youth development officials in Bangladesh. “This program is going to have an extremely positive impact on getting young people to think about agricultural careers,” Rice said. In preparation for the finals on June 21-23, teams from across the state have spent months with coaches and mentors. Recently, judges helped them refine their presentations. The ear tags are property of the Meeker County Ag Squad. Members Abbey and Bailee Schiefelbein, 16 and 13 respectively, said their family members were in church last year when their phones started ringing — the cows were loose. But the pasture was about a four-hour drive from their home in Kimball in central Minnesota. So, the team of five girls and boys devised a system that farmers could use to track their livestock from far away, speaking with researchers who track moose with GPS radio collars. While the $2,500 collars were “a little expensive for a cowboy,” they learned about a small transmitter in a $70 tracking collar for hunting dogs, and attached them to ear tags that cattle wear. The South St. Louis County team from northeastern Minnesota wanted to find out whether drones could protect livestock from predators such as coyotes, wolves and bears. The three girls live in the transition area between farmland and forests, and they’ve all had predators threaten the animals they show for 4-H. They visited the drone program at the University of North Dakota for advice, and then developed a concept using fixed-wing drones that would fly on autopilot for long periods to detect predators. Once found, electric helicopter drones would chase the predators away. “There are some challenges we have to overcome. But we know with time and effort we can make it happen,” said Ilsa Johnson, 14, of Duluth. The judges were excited by the commercial potential in the vaccine warmer, and urged the Hot Shots from Dakota County in southeastern Minnesota to protect their commercial rights. Vaccines can lose effectiveness and even become toxic if they get too cold while the milk production booster rBST thickens up, the four boys from Eagan and Northfield said. That can make shots more painful for the cow and harder for the farmer to push through the syringe, especially when giving 100 or more in quick succession. They showed off a prototype battery-powered shoulder bag with a thermal reflective layer that keeps medications at the optimal temperature. All the hardware is off-the-shelf for about $86, and farmers get the outer bags free from a veterinary drug company. So, they said it should be possible to produce them at a price farmers will pay. The Science of Agriculture Challenge is the brainchild of Dorothy Freeman, Minnesota’s 4-H director, who said it helps young people identify problems and create solutions, while developing entrepreneurship, teamwork and presentation skills. “Eventually, I believe that it will become a national program,” Freeman said. “That’s how 4-H tends to do it. They let one state drive it, work out the kinks, and then we start teaching other states.” Online: Science of Agriculture Challenge: http://www.extension.umn.edu/youth/mn4-H/events/science-of-ag-response

Sugar Daddies Tuition

Students seeking sugar daddies for tuition, rent

Candice Kashani graduated from law school debt-free this spring, thanks to a modern twist on an age-old arrangement. During her first year, she faced tuition and expenses that ran nearly $50,000, even after a scholarship. So she decided to check out a dating website that connected women looking for financial help with men willing to provide it, in exchange for companionship and sex — a “sugar daddy” relationship as they are known. Now, almost three years and several sugar daddies later, Kashani is set to graduate from Villanova University free and clear, while some of her peers are burdened with six-digit debts. As the cost of tuition and rent rises, so does the apparent popularity of such sites among students. But are they really providing financial relief, or signing women up for something more exploitative and dangerous than debt? Kashani believes such sites are a “great resource” for young women, but others say these arrangements smack of prostitution and take advantage of women in a vulnerable situation. Lynn Comella, an associate professor of gender and sexuality studies at University of Nevada Las Vegas, said that it is not unusual for students to turn to sex work such as stripping, prostitution or webcam work to pay for school. But the sugar daddy sites are relatively new, and she says not entirely upfront about what they are really about. These arrangements are more vague than prostitution— there is an expectation of material benefit but it is not always specified and sex is not guaranteed. Ron Weitzer, a professor of sociology at George Washington University and criminologist with an expertise in the sex industry describes it as “prostitution light.” “Sugar Daddy” arrangements have existed for ages, and it’s unclear if they are becoming more common because the phenomenon is not well studied. But experts say at the very least the internet has made these transactions far easier to arrange and negotiate. “It allows you to hone in on what you want,” said Kevin Lewis, an assistant professor of sociology at University of California San Diego who studies online dating. “You could argue it is just making the market more efficient.” Kashani says she sifted through many potential suitors before finding one she clicked with. She says she considers her sugar daddy one of her best friends and that they care deeply for each other. “The people who have a stigma, or associate a negative connotation with it, don’t understand how it works,” she says. But unlike most relationships, she is paid a sizeable monthly allowance that helps her pay for school. U.S. undergraduate students last year finished school with an average of $35,000 in student debt — a figure that has risen steadily every year, according to Mark Kantrowitz, a financial aid expert. The average graduate debt load is $75,000, and some longer programs force students into much deeper debt. Many students say their loans don’t cover the cost of living, and with rent skyrocketing in most major cities, they are left scrambling to make up the difference. One graduate student at Columbia University in New York had a scholarship that covered almost all of her tuition, but not her living expenses. She spoke on the condition of anonymity because of the potential impact on her job prospects. She tried to make do — sharing a room with a classmate and working a minimum wage job, plus any freelance work she could get. But still she struggled to pay her rent and utilities, and her grades suffered. “That’s just not why I am here,” she said. “I wanted to find the most amount of money I could make for the least amount of effort.” So she found herself surfing Craigslist and Backpage.com and later, SeekingArrangement.com, the largest of the sugar daddy websites. Now she has two sugar daddies, one she sees occasionally and another who is more like a conventional boyfriend, except that he pays her a monthly allowance and helps rent her an apartment closer to him. SeekingArrangement.com said it is most popular in Los Angeles and New York. The average rent in both areas is well over $2,000 a month, according to Zillow research. The Columbia student says she plans to continue “sugaring” after she graduates to buy herself time to find a more traditional job and remain officially unemployed so she can defer repaying the roughly $70,000 in loans she had already racked up. “There is a lot of moral panic about it,” she said. “But what are the real estate and academic funding situations that led to this?” Brandon Wade, creator of the site, touts it as an “alternative to financial aid” but says the company did not set out to target students when it launched in 2006. It stumbled on this niche and began in 2011 offering students a free premium membership, which usually costs $30 a month. It charges sugar daddies $70 to $180 a month, depending on the membership level. Seekingarrangement.com also offers to connect same-sex couples looking for such arrangements, or “sugar mommies” for men. But the male-female “sugar daddy” dynamic makes up the bulk of its business. It’s difficult to pin down exactly how many students are involved in such situations, because they are private transactions. And it’s a niche rarely studied by academics. SeekingArrangement.com says student users on the site jumped from 79,400 worldwide in 2010 to 1.9 million this year and students make up one-third of its users. And while it sees thousands of signups on any given day, the company says enrollment jumps during August and January when tuition is typically due, sometimes to more than double its normal levels. Women who have used the site report experiences that run the gamut — from respectful chaste dates all the way to aggressive solicitation online, even though it is forbidden on the site. Sex is not guaranteed although most users say it is implied. The company says a few arrangements have even led to marriage, although it is rare. Some of the women say they feel respected and cared for, but remain aware that it is an arrangement, not traditional romantic love. “It benefits me in many ways — we have a healthy relationship, we travel together, I’m able to enjoy the city more,” said the New York graduate student. Still, she said, it is a job. “It does kind of rub me the wrong way that some people don’t see it as sex work,” she said. Comella warns that unlike sex workers, many women doing this put their true identities online, and that could put them at risk. While Seeking Arrangement runs background checks, there have been reports of violence against both men and women stemming from sugar daddy websites. Kristen Houser of the National Sexual Violence Resource Center says that violence is common any time money is exchanged for sex. “You need to pay attention that there is a power imbalance,” she said. Wade says there are risks inherent in any dating website. He should know; he runs several, including one that allows users to bid on dates and another focused on open relationships. He said he created SeekingArrangement.com out of his own frustration with women. An MIT graduate, he had difficulty meeting women and realized a site such as this would highlight what set him apart — money. “Money and sex are things that people want,” he said. “I think the controversy comes into play on seeking arrangement because we are so upfront about it.”

Priciest NYC Apartment

Sky high: NYC 'trophy apartment' could list for $250 million

NEW YORK (AP) — Billionaires’ Row. That’s what New York real estate experts have dubbed a lineup of a half-dozen new superluxury skyscrapers overlooking Central Park that are home to some of the world’s most expensive apartments. One penthouse on the 89th and 90th floors of a skyscraper near Carnegie Hall that went for more than $100 million seems almost a bargain compared to what will appear next year in a high-rise being built on Central Park South: a 23,000-square-foot, four-story apartment offered at $250 million. That jaw-dropping price was contained in documents the developer filed with the state attorney general’s office. Floor plans show 16 bedrooms, 17 bathrooms, five balconies and a massive terrace. The multi-million dollar question is: Who can afford to buy these places? “These are the trophy buildings of our era, and the foreign buyer clearly fuels this very, very high-end condominium tower market,” says John Burger, a broker for such properties with the Brown Harris Stevens real estate firm. The novelty is the prestige of living in sleek, breathtaking skyscrapers with 360-degree views of New York City, thanks to advanced engineering that allows residential buildings to stay skinny while soaring to dizzying heights. Coming in 2018 is the Central Park Tower at 111 West 57th St., which at 1,438 feet aims to become the tallest residential edifice in the western hemisphere. The 54-story tower at 520 Park Ave. — also set for a 2018 completion — will be what its architect, Robert A.M. Stern, describes as “an elegant spear of asparagus rising out of the ground.” On the financial front, such properties often serve as a “safe haven” for investors from turbulent regions of the world with shaky economies, says Richard Jordan, vice president of global markets for Douglas Elliman, New York’s largest residential real estate brokerage. “They believe in the U.S. market, they love New York and they like privacy,” Jordan says. Other global buyers consider these properties as “the new Swiss bank account” — a discreet, private way of stashing away a fortune, says Burger. The $250 million mansion in the Manhattan sky is the prize property in the 70-story building that is still under construction at 220 Central Park South. Monthly common charges will be more than $45,000, with annual taxes of about $675,000, the documents show. For most New Yorkers, there’s a downside to the exclusive real estate phenomenon. These properties are helping push up already record-breaking real estate prices, with a current average of $2 million for a Manhattan apartment. The most expensive New York condo went for $100.5 million in 2014 — the penthouse in the 90-story One57 high-rise where many owners are wealthy Russians. Those prices eclipse a previous, high-profile sale of $88 million for a penthouse just a walk away at 15 Central Park West. That was sold in 2012 to a Russian mogul by Sanford Weill, the American financier and philanthropist who had purchased the apartment four years earlier for half that. Other residents included Goldman Sachs CEO Lloyd Blankfein and Yankees slugger Alex Rodriguez. “That $88 million sale triggered the sense that there was this yet-to-be-harvested, nine-digit New York housing market,” says Jonathan Miller, an independent appraiser. “We started to see a frenzy of $100 million listings — what I call aspirational pricing.” In addition, new high-rises are even sprouting in Queens and Brooklyn. Several real estate experts credit former billionaire Mayor Michael Bloomberg for pushing city rezoning laws that allowed these to be built in previously restricted areas. Says Burger: “He positioned New York as the capital of the world.” This story has been corrected to show that Rodriguez was a resident of the penthouse, not an owner.