Economist 2/13/15

  1. in the past few months extraordinary revelations have appeared in the Chinese media about corruption in the highest ranks of the People’s Liberation Army (PLA): a deputy chief of logistics built a mansion for himself modelled on the Forbidden City, the country’s most senior uniformed officer had a basement stacked high with cash; and in January it emerged that no fewer than 15 generals, including a former deputy chief of the nuclear arsenal, were being investigated for graft.Mr Xi should now use his grip over the PLA to achieve more than just suppress the rampant corruption.The army remains largely unchanged in two important, and worrying, ways. First, it is still deeply wary of contacts with its Western counterparts.Secondly, the PLA fosters a paranoid fear within its ranks that America is bent on China’s destruction.
  2. WANG JIANLIN After 17 years in the army, he decided that the future belonged not to generals but to businessmen. So in 1988, after a stint as a bureaucrat, he formed a property company in the north-eastern city of Dalian, using $80,000 of borrowed money.His firm, Dalian Wanda, is now China’s biggest private property developer, with shopping centres opened, or coming soon, in 100 cities. Last year its revenues rose to 243 billion yuan ($40 billion), up by 30% on a year earlier. The $3.7 billion flotation of its property division in December sent his personal fortune soaring past $25 billion: he vies with Alibaba’s Jack Ma for the title of the country’s richest man. He signed a $1.2 billion deal to buy InFront Sports & Media, which holds some of the marketing rights to FIFA’s World Cup. The previous month he took a 20% stake in Atlético Madrid football club. He also bought bought AMC, a big but struggling American cinema chain, for $2.6 billion in 2012.
  3. Take the threat to his core property business first, where Wanda’s bricks-and-mortar empire faces the twin dangers of a weak property market and rising online competition.In August it launched a 5 billion yuan venture with Baidu and Tencent, two leading internet firms, to devise “online to offline” services, in which consumers use their smartphones to choose products but are then led to a physical shop, where they buy them.As part of this plan, Wanda is now wiring up all of its shopping centres with Wi-Fi and Bluetooth sensors so that shoppers can be monitored intensely.One analyst who studies the group thinks its strategy of building malls only in the heart of secondary cities, compared with that of rivals who chose (or were stuck with) cheaper plots on the periphery.His diversification into theme parks, film-making and other entertainment services follows a similar logic. As the country’s investment-driven model of growth gives way to one focused on consumption, the services sector seems certain to rise.Wanda’s malls have remarkably high occupancy rates. The firm also compares favourably to its rivals on the income generated by its investment properties.
  4. On February 10th, Coca-Cola announced that its profits fell by 55% in the fourth quarter of 2014. The next day, PepsiCo, Coke’s rival, revealed that it performed only slightly better, with profits dropping by a quarter.Many commentators point to falling sales of fizzy drinks in North America for Coca-Cola and PepsiCo’s woes, as consumers become more interested in healthy eating and drinking.Sales of Coke in terms of volume started to rise last year, with revenues from fizzy drinks now growing at both firms due to the increased popularity of smaller (and higher priced) cans.Coke makes 75% of its revenues outside the United States and PepsiCo 42%, but these sales are now worth less in dollar terms due to other currencies weakening against the greenback.Mr Buffett’s investment firm, Berkshire Hathaway, still owns around 9% of Coca-Cola’s shares in spite of the firm’s current problems.
  5. PICTURES of pets adorn the façades and menus of restaurants in Nam Dinh, a city in a part of northern Vietnam where cats and dogs are commonly consumed.Animal-cruelty scandals are myriad in Vietnam. Gangs of thieves steal dogs and sell them to restaurants. Tuan Bendixsen of Animals Asia, an NGO in Hong Kong, reckons that dog thieving for this purpose has become even more widespread in Vietnam since 2013. Neighbouring China cracked down on dog-eating in Beijing when it hosted the Olympic games in 2008, but it remains popular in some parts of the country, especially in winter when it is considered to help keep the body warm.Cats in Vietnam are also on the back paw. In January the police seized three tons of them as they were being smuggled from China to fill soup pots in Hanoi, the Vietnamese capital.
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