China’s securities regulator unveiled revised guidelines on qualifications for listings on the NASDAQ-style sci-tech board in Shanghai, which set limits on fintech IPOs and bar financial investment firms from seeking a listing in the market. The regulator wants to align the Shanghai market with China’s push for breakthroughs in cutthroat technologies, market watchers said. The updated guidelines might sink hopes for Ant Group to rekindle its pulled IPO under its current organizational structure, but the financial holding firm could still list its sci-tech part in the market. The revised system for evaluating the sci-tech attributes of firms filing for an IPO in the STAR Market in Shanghai creates a negative list, and imposes strict limits on industries eligible for Star Market listings, Li Weiyou, Deputy Director of the Department of Public Offering Supervision at the China Securities Regulatory Commission (CSRC), said at a press conference.

Firms engaging in six industries including new-generation information systems and high-end equipment will be supported to float on the market. Companies falling under fintech innovation will have their IPO plans combed through and their listings in the Shanghai market will be restricted, according to the CSRC official. Real estate firms and those principally engaging in financial investment will be banned from floating on the Shanghai market. The revised guidelines took effect on a trial basis on April 16 as an update to the rules that were initially announced in March 2020. The revision suggests Ant’s suspended IPO may never be rekindled, judging by its existing business lineup, Dong Shaopeng, Senior Research Fellow at the Chongyang Institute for Financial Studies of Renmin University of China, told the Global Times. The Alibaba fintech offshoot’s dual IPOs in Shanghai’s STAR Market and Hong Kong were suspended in early November ahead of their planned debut, after Alibaba’s management was grilled by financial regulators.

Ant will apply to transform itself into a financial holding company as part of a multifaceted rectification plan, Pan Gongsheng, Vice Governor of the People’s Bank of China (PBOC), announced. In a sign that it is becoming more difficult for fintechs to list on the Shanghai board, Chinese online retailer JD.com’s fintech unit withdrew its filing for an IPO in the STAR market earlier in April. The Hong Kong market is still open to fintech IPOs, although Chinese fintech firm Bairong’s debut in Hong Kong at the end of March turned out to be a disappointment with its shares plunging 16% on IPO day, rendering it the worst debut among IPOs topping USD500 million in the Hong Kong market in three years, the Global Times reports. 

Geneva’s international expo of fine watches is switching to Shanghai on April 21 for a physical version after staging an online edition to keep the prestigious fair going during the pandemic. The Salon International de la Haute Horlogerie, now restyled as Watches and Wonders, was canceled last year due to the Covid-19 pandemic. This year, with Europe battling a third wave of the pandemic, the fair – one of the major annual gatherings for luxury watchmakers – opened online on April 7, closing on April 20. But an in-person version will run from April 21 to 25 in Shanghai, where Covid-19 is under control. Several new products were already unveiled by some of the 38 brands participating on the salon’s digital platform. Chanel has produced watches in pop colors inspired by 1990s electro music; Rolex made a dial from a fragment of a meteorite, while Cartier has produced a watch strap from 40% plant material taken from waste apples. Nineteen brands will participate in the physical event in Shanghai.

The virtual version is “a great opportunity to learn”, Edouard Meylan, the head of luxury watchmaker H. Moser, said. Even once the crisis is over, online events will become more commonplace, he predicted. “It will never replace the salons and making contact in person,” he added. “But it is in tune with the times.” H. Moser produces around 1,500 pieces per year intended for collectors, which cost €31,800 on average. When Meylan realized that the pandemic was not going away any time soon, he invested in digital technology, shifting the brand into a new era. “We bought cameras, lights and set up a whole studio in the workshop, with decor. It looks like a movie set,” he said. That allowed them to produce slick content for Instagram and organize virtual tours of the factory. For Hermes Director Guillaume de Seynes the digital salon cannot quite replicate the traditional in-person set-up. The Parisian house set itself up in Geneva’s Batiment des Forces Motrices, a grand entertainment venue on the River Rhone, and let two young French artists create an installation featuring the flagship H08 model presented at the salon.

Jean-Daniel Pasche, President of the Federation of the Swiss Watch Industry, is just happy the salon could be held in any format following a tough year for the industry. Switzerland’s third-largest export sector has been hit hard by the Covid-19 crisis, with boutiques shuttered due to virus control measures, and the collapse of the tourism industry on which the luxury sector depends. In 2020, Swiss watch exports fell by 21.8% to €15.8 billion compared with 2019. China became the biggest export market for Swiss watches in 2020 as exports to Hong Kong dropped by 36.9% and to the U.S. by 17.5%. China was the only major growth market for Swiss watchmakers, with exports up 20% to almost CHF2.4 billion, the Global Times reports. 

Several marathons in China’s major cities have abandoned foreign brands – including Adidas and ASICS – that  had incited outrage on Chinese social media for their discriminating stance against Xinjiang’s cotton. The organizers have replaced the brands with local ones as the provider of the runners’ resources such as T-shirts. The Shanghai Half Marathon – held on April 18 – which had originally appointed Adidas as the provider of the players’ resources, told its players no sports clothing would be promoted at this event. The organizers of the Xi’an Marathon on April 17 have replaced one of their brand partners ASICS with Xtep, a Chinese sportswear brand. Participants received a message saying that the organizers are not able to provide the clothing for the marathon before the event as the materials provided by ASICS cannot be used any more. ASICS was also ditched by the Wuxi Marathon, which was held in Wuxi, Jiangsu province, on April 11. According to a statement on April 1 by Hui Pao, a Chinese sports operating company, the Wuxi marathon has decided to terminate its cooperation with ASICS for the event, cancel its advertising rights and stop using all the materials and products of the brand.

None of the event organizers gave a specific reasons for replacing Adidas and ASICS, but it is widely known that it is due to the companies’ statements that they will not source cotton from Xinjiang. Adidas has been subject to boycotts in China after making statements discriminating cotton from Xinjiang, while the Japanese brand ASICS also enraged Chinese people for actions regarding this issue. “Chinese people should have a backbone. Our domestic products now are as good as and even better than international brands,” a Wuxi Marathon player, who asked not to be named, told the Global Times. “It is now the best time promoting a domestic sports brand.” 

As China’s domestic brands catch up with foreign brands in the Chinese market in terms of quality and marketing, they are emerging as stronger competitors to global brands and may eventually replace them as major sponsors, said Zhang Qing, CEO of Key Solution Sports Co., a consulting firm for the sports industry in China. “In selecting the sponsor for a public sports event, it is key to consider the brand’s reputation,” Zhang said. “When brands like Nike and Adidas have offended the public’s feeling, they are not likely to be chosen to represent the event.” According to Zhang, while foreign brands are losing ground among Chinese consumers over Xinjiang, domestic brands have been gaining market share for improved quality and design. For example, Anta Sports, a Chinese sportswear brand, accounted for 15.4% of total market share in 2020, ranking third after Nike and Adidas. Out of the top 10 biggest sportswear companies, four are Chinese brands, including Li-Ning, Xtep and 361 Degree, Zhang said, as reported by the Global Times.

Breakfast at STEFANY’S by DALDEWOLF is organizing a webinar on “Trade Secrets Protection in Belgium and China: Recent Evolutions”, on 20 April 2021 from 10:00 am to 11:00 am. EU businesses should understand China’s new protection regime to better protect their trade secrets when doing business with China.

Introduction

In our current globalized and hyper-competitive market, trade secrets are playing a key role in the protection of a company’s business knowledge and competitive advantage. Literally all innovative businesses, whatever their size, sector or activity, use confidentiality as a competitiveness and innovation management tool. This has led legislators around the globe to strengthen their trade secrets protection regimes, including in the EU and in China.

In this Breakfast at Stefany’s, Valentin de le COURT (DALDEWOLF – BE) will team up with Yingcong XU (Watson & Band – CN) to review some recent evolutions in the current Belgian and Chinese trade secrets legal landscapes. They will highlight differences and similarities between the two regimes, present some emerging case law, and identify a set of practical steps companies should take to best protect and enforce their trade secrets in China.

Speakers

Valentin de le COURT co-heads DALDEWOLF’s IP/Digital team and focuses his practice on patent law, trade secrets protection strategies and litigation, open innovation, and China related IP strategies. He used to live and work in China and is a China IP SME Helpdesk expert since 2012.

Yingcong XU is a Senior Patent Attorney and Deputy General Manager of Watson & Band, one of China’s oldest and most prominent law firms with a well-known intellectual property practice. Mr Xu’s practice covers all aspects of Chinese patent prosecution and enforcement. He regularly assists his clients with their trade secrets matters in China.

Practical info

When Tuesday 20 April from 10:00 am to 11:00 am

Acces Once your presence has been confirmed you will receive an invitation that can be opened via the Microsoft Teams application via your web browser (Microsoft Edge, Google Chrome or Mozilla Firefox)

Operating Mode Instructions for attending this webinar will be sent to you in pdf format.

Price Participation in this webinar is free of charge

Please confirm your presence prior to 16 April by email to breakfast@daldewolf.com 

Areté, an Italian consulting firm has been contracted by DG AGRI of the European Commission to complete a study on EU agri-food exports via e-commerce to China. The ultimate aim of this study is to help boost EU agri-food exports through e-commerce to China. 

We are now in the main phase of the study and are kindly requesting your assistance in the data collection process. In particular, two separate surveys have been launched with the aim of collecting the experiences and perspective of both business operators and promotion agencies / chambers of commerce:

1. A survey of chambers of commerce, trade promotion agencies and competent authorities, available at the following link: https://www.surveymonkey.com/r/EcommerceCNchambersagencies.

2. A survey of EU agri-food operators and sector organisations, available at the following link: https://www.surveymonkey.com/r/EcommerceCNbusiness The survey is available in multiple languages and is relevant to both to sectors/operators which export to China via e-commerce and those which do not. Replies to the survey will be used for the purpose of this study only and will not be made available to the public, except in an aggregated form that will ensure anonymity.

Replies are expected by May 4. Thank you in advance for your contribution to the study.