In the news: Walmart takes full control of China JV, Tsinghua Unicom bids for Micron and the SPC stops debtors from taking trains

Walmart acquires full ownership of Yihaodian

Wal-Mart Stores has taken 100% ownership of Yihaodian, its Chinese e-commerce venture. The co-founders of Yihaodian announced their departures earlier this month. Walmart acquired the remaining 49% shares from Ping An and the co-founders and plans to invest up to US$1.5 billion in e-commerce globally. Its store operations in China have been falling and it is now trying to link Yihaodian with its physical stores to allow customers to make mobile purchases. Expanding online is critical for the company as China's e-commerce market, dominated by Alibaba and JD.com, increased 49% last year. It looks like Walmart has taken advantage of the pilot programme that now permits 100% foreign ownership in e-commerce nationwide, after a trial in the Shanghai FTZ. Though the new rules need to clarify its application scope and the definition of e-commerce, it appears Walmart is safe. It will be interesting to see how its global competitor Amazon, which uses the VIE structure in China, responds to the move.

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PRC Foreign Investment Law (Draft for Comments)
Announcement on Relaxing the Restriction on the Equity Percentage of Foreign Investors in Online Data Processing and Transaction Processing Services (For-profit Electronic Commerce) in the China (Shanghai) Pilot Free Trade Zone


Tsinghua Unicom bids for Micron

State-owned Tsinghua Unicom's US$23 billion takeover offer for US memory chipmaker Micron has triggered much cybersecurity concerns in the US. Around 40% of Micron's sales already are to Chinese manufacturers. There have been some significant high tech deals that reaffirm strategies on both sides: IBM sold its x86 server business to Lenovo and is offering to license its tech to Chinese makers, Qualcomm announced a joint venture with SMIC and Intel invested US$1.5 billion into working with two Chinese chip makers, one of them Tsinghua Unicom. A full-blown acquisition of Micron is a far more ambitious plan, although the slow progress made so far by China to establish its domestic chip industry may explain the bold move. But even if Micron agrees to the deal, it just doesn't seem likely that the US (CFIUS) will approve it.

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Debtors can't take bullet trains

On July 21 the Supreme People's Court (SPC) banned people who do not make payments ordered by judges from riding on China's bullet trains, adding to the list of services off limits to those who fail to make child support payments or repay debts. The order came into effect on July 22. In 2010, the SPC ruled that individuals who did not make court-ordered payments cannot buy airplane tickets, ride sleeper trains or stay at rated hotels and resorts. To aid enforcement, the judicial system provides a list of these individuals to airlines, train ticket offices and hotels. Lower courts have also been urged to hand out stiffer punishments for failing to repay debts. In a country where court enforcement is known to be difficult due to the challenges of uncovering debtors' assets, this initiative marks good progress. The SPC's decision confirms that the courts are increasingly realising the need to protect the rights of creditors and that enforcement – the last mile challenge – is indeed improving. CLP has pinned down how to get orders enforced in China: identify the assets, locate them, bring the debtors to the table and select the best region to pursue the case.

More from CLP:
Five ways to get your order enforced
Enforcing arbitral awards: a guide
A review of litigation, arbitration and mediation
Chinese buyers focus on JV enforceability